Winemakers On Fire Manifesto: Issue #62

Hello, fellow wine lovers!

The question of whether the global wine industry has reached its peak in terms of growth is one that's been stirring the thoughts of wine lovers and industry insiders alike. Whether you’re a wine professional or a wine lover, this is an important question for the future of the wine world.

In response to these concerns, a new philosophy is emerging: Terroir 2.0. This forward-thinking approach to the wine industry combines innovation and technology with a deep respect for tradition, resulting in wines that not only respect the history and culture of the industry, but are also aligned with the preferences of modern consumers.

The Terroir 2.0 philosophy captures the essence of brilliant strategy in its simplicity. At its heart, Terroir 2.0 is about embracing technology and innovation to create wines that resonate with modern consumers while respecting tradition and history. It's about positioning wineries for success in a rapidly evolving world while building a more sustainable and equitable industry. It's about going beyond the textbook to find new and creative ways to engage with customers, regardless of their geographical location, and tell the story of wine’s rich cultural heritage.

Terroir 2.0 is more than just a strategy, it's a philosophy that embraces change, challenges the status quo, and charts a course for a brighter future for the world of wine.

In a world where consumers are demanding more authenticity, transparency, and sustainability, Terroir 2.0 offers a powerful, forward-thinking vision that speaks to these values. It’s a strategy that can be understood and executed by wineries of all sizes, which is a testament to its simplicity and elegance. 

Despite being a historically resilient sector, global wine consumption has been dropping gradually since 2007, and the trend is accelerating. This negative trend begs the question: Is the wine industry's growth potential starting to wane, and if so, what strategies can be implemented to reinvigorate the market? Terroir 2.0 offers a powerful vision that can help wineries tackle these challenges and grow in an increasingly competitive landscape.

“The wine world doesn’t need another textbook on wine marketing; it needs a new vision—a Terroir 2.0 philosophy—that champions innovation while respecting tradition.”

Let’s dive in.

THE STATE OF WINE: HAS THE GLOBAL INDUSTRY REACHED PEAK PERFORMANCE, OR ARE THE BEST VINTAGES YET TO COME?

The global wine industry faces a controversial question: has it reached its peak in terms of growth? Despite being a historically resilient sector, global wine consumption has been dropping gradually since 2007, and the trend is accelerating. This negative trend begs the question: Is the wine industry's growth potential starting to wane, and if so, what strategies can be implemented to reinvigorate the market? 

To answer this, we look beyond the numbers and delve into the underlying factors that could be contributing to this trend, exploring opportunities such as innovative branding and marketing approaches, product diversification, customer experience enhancements, and exploration of new markets to revitalise growth and engage new and existing consumers in the world of wine.

On one hand, it could be argued that the wine industry is at a critical juncture. The declining interest from younger generations and competition from other alcoholic and non-alcoholic beverages signal the need for innovation and adaptation within the industry. Additionally, climate change and shifting consumer preferences could make it challenging for wine producers to maintain the quality and production levels of past years.

On the other hand, the wine industry has a long and storied history, and it's possible that this downturn could be viewed as a temporary blip in an otherwise resilient market. It's worth considering that wine is a product deeply intertwined with culture, tradition, and hospitality, which could give it a level of resilience that other industries might lack.

I propose that the global wine industry is a classic example of a sector that may be afflicted by marketing myopia, which occurs when businesses focus too narrowly on their current product or market rather than considering the broader needs and wants of their customers.

Theodore Levitt, Professor Emeritus of Marketing at Harvard Business School, coined the term "Marketing Myopia." In his widely cited article, Levitt discusses how many industries have struggled to maintain growth due to narrow-minded, myopic, or short-term leadership. He advocates for a customer-centric approach, where companies should define their industries broadly to seize growth opportunities and address customer needs and desires. Levitt's concept underscores the importance of prioritising customer satisfaction and understanding over simply selling products and services.

At its core, marketing myopia refers to a company's narrow focus on its products or services, rather than the needs and desires of its customers. This short-term perspective can lead to missed opportunities, stagnation, and decline. When companies become inward-looking and neglect to see the bigger market picture, they stifle innovation, growth, and long-term success.

Short on time? Here are a few quick takeaways from this week's manifesto:

1. Despite a decline in global wine consumption since 2007, the industry can still achieve growth by adopting innovative strategies that prioritise customers over products. By avoiding marketing myopia and focusing on customer needs and preferences, wine brands can tap into new opportunities for success. 

2. To stand out in a competitive market, wine brands can differentiate themselves by offering unique experiences that go beyond the product, fostering customer loyalty through compelling storytelling and memorable encounters.

3. Wineries that focus solely on production may struggle to stay relevant. By embracing creativity, agility, and customer-centricity, and prioritising long-term growth over short-term gains, they can unlock new opportunities for success.

In the case of the wine industry, there may be some elements of marketing myopia at play.

1. Overemphasis on production: Wineries may prioritise increasing output over differentiating their products or catering to consumer preferences. This can lead to a homogenization of wines and a failure to meet evolving consumer tastes.

2. Lack of innovation: Some wineries may be slow to adapt to new trends and technologies, such as sustainable farming practices or alternative packaging options. This can result in a stagnant product lineup and a missed opportunity to appeal to consumers who value innovation and sustainability.

3. Narrow target market: The wine industry has traditionally targeted a niche audience of wine enthusiasts, which may limit its growth potential. Focusing solely on this demographic can prevent wineries from reaching a broader audience and expanding their customer base.

4. Insufficient marketing and branding: Wineries may struggle to effectively communicate the unique qualities and value of their products to consumers, especially in the new digital economy, where younger consumers are getting most of their information online. This can result in a lack of brand recognition and customer loyalty, hindering a winery's ability to stand out in a crowded market.

Navigating Marketing Myopia with Customer Connection and Differentiation

Thought leader and expert in the field of marketing, Seth Godin, offers insights on selling products in hyper-competitive markets, emphasising the importance of differentiation and building a loyal customer base. Here are some perspectives from Godin on this topic:

1. Differentiate or die: Godin stresses the importance of creating a unique value proposition that sets your product apart from the competition. In a crowded market, it's essential to focus on what makes your product different and better, rather than just trying to compete on price.

2. Build a tribe: Godin emphasises the power of building a community of loyal fans who believe in your product and are willing to spread the word. By cultivating a dedicated following, you can create a powerful force that can help your product stand out in a competitive market.

3. Create a remarkable product: Godin's advice to make your product worth talking about is particularly relevant in a hyper-competitive market. Word-of-mouth marketing can be a powerful tool for generating buzz, and creating a remarkable product is key to achieving this. There are various ways to make your product stand out, such as unique packaging, highlighting the story behind the grapes used, offering special experiences, and more. By focusing on making your product remarkable, you can encourage customer loyalty and positive word-of-mouth, which can help you differentiate yourself in a crowded market.

4. Focus on the long-term: In a crowded market, it can be tempting to focus on short-term gains, but Godin encourages companies to think about the long-term. By building a sustainable, loyal customer base and continually innovating, you can establish a solid foundation for success in a competitive market.

Seth Godin's advice on selling products in hyper-competitive markets is highly relevant to the concept of marketing myopia. His insights on differentiation, building a tribe, creating a remarkable product, and focusing on the long-term all speak to the importance of avoiding a narrow, short-sighted approach to marketing.

Godin's emphasis on differentiation encourages companies to focus on the needs and desires of their customers, rather than just competing on price or other superficial factors. This aligns with Theodore Levitt's concept of marketing myopia, which warns against defining your market too narrowly and stresses the importance of understanding the broader customer experience.

Similarly, Godin's advice on building a tribe and creating a remarkable product speaks to the need for companies to establish a loyal customer base and develop a unique value proposition. By building a community of fans who believe in your product and creating a product that is worth talking about, you can break out of the narrow, product-focused mindset that Levitt warns against.

Finally, Godin's focus on long-term success aligns with Levitt's concept of looking beyond short-term gains and focusing on sustainable growth. By building a loyal customer base and continually innovating, companies can establish a solid foundation for success in a competitive market and avoid the pitfalls of marketing myopia.

Branding Insights: Crafting Customer Connections through Stories. 

Seth Godin is a big believer in the power of branding and has written extensively on the topic. He views brands as more than just logos or slogans; they are the sum total of the experiences, feelings, and stories that people associate with a company or product.

According to Godin, successful brands create an emotional connection with their customers by providing an experience that resonates with their values and needs. He also emphasises the importance of authenticity and craftsmanship in building strong brands, as consumers are increasingly drawn to companies that are transparent and genuine in their messaging.

In summary, Seth Godin sees branding as a vital part of any successful marketing strategy. He encourages companies to focus on creating experiences and stories that resonate with their customers and to build a strong brand identity that reflects their core values and beliefs.

Creating Memorable Experiences: The Role of Branding and Marketing 

The wine industry is all about creating experiences and telling stories, which makes the concepts of branding and marketing particularly relevant. Seth Godin's insights on branding, combined with Theodore Levitt's concept of marketing myopia, provide valuable guidance for wineries looking to succeed in a crowded market.

Godin emphasises the importance of creating an emotional connection with customers through experiences that resonate with their values and needs. For wineries, this could mean offering tours, tastings, and events that showcase the unique qualities of their wines and the stories behind them. By building a strong brand identity that reflects their commitment to quality, authenticity, and customer experience, wineries can differentiate themselves and stand out in a crowded market.

Levitt's concept of marketing myopia warns against focusing too narrowly on the product and ignoring the broader customer experience. In the wine industry, this could mean not just selling wine but creating a destination and an experience that consumers will want to return to and share with others. By taking a broader view of their market and focusing on building relationships with customers, wineries can avoid the pitfalls of marketing myopia and establish a loyal customer base.

In conclusion, the concepts of branding and marketing are crucial for wineries looking to succeed in a competitive market. By embracing Godin's insights on branding and Levitt's concept of marketing myopia, wineries can create unique and memorable experiences for their customers, build strong brands, and avoid the pitfalls of a narrow, product-focused approach.

A huge debt of gratitude goes to Priscilla Hennekam for proof-reading the original draft and suggesting improvements.