Sustainable brand strategy for the New Economy.

Wine Homogenization and the Long Tail

Adam Strum of Wine Enthusiast wrote in 2007, “Many industry experts point to America’s growing thirst for wine, as well as its fluency and dominance in the field of marketing, as the driving force influencing wine styles throughout the world. The rise of the fruit-forward style of wine, rather than the more nuanced, terroir-driven and ageable style championed by the Old World, is being laid at America’s door.”

No doubt there is a homogenization in the wine business. Step into some wine shops around where you live and you’re sure to see many of the same labels. The American palate is only part of the reason (not problem). Homogenization in general is more of a larger shift happening in the age of the internet. Music, movies, shopping, clothing or anything else sold online has been felt the effect of the Long Tail.

Chris Anderson wrote a book called The Long Tail describing “Head of Tail” players versus “Long Tail” players. Using music to illustrate, Head of Tail players like Walmart would only sell the top 1,000 albums. The tried and true albums earn physical shelf space. These albums are usually pop acts. An online Long Tail player like Rhapsody sells the top 1,000,000 songs although the number of unit sales is much lower. There is no physical shelf space to worry about. Head of Tail represents the blockbuster hits whereas the Long Tail represents the diverse interests of many. Surprisingly, there are buyers for even the smallest music groups online.

In the wine business the same is true. Head of Tail players such as Constellation Brands or Fosters dominate physical shelf space by selling tried and true brands like Mondavi, Toasted Head, Raveswood, Estancia, Penfold’s, Beringer and others. They sell large quantities of a small number of brands. On a chart these appear to be a “head”. The thousands of smaller wineries appear as a tail on the same chart. The point being is there are consumers out there looking for smaller brands. To say the American palate is the driving factor behind homogenization is not true. A more accurate statement would be the American wine critic, and their influence on wine styles around the world, have a homogenous effect. Head of Tail and Long Tail wineries are aware of wine critics influence on consumers. But they also know if they make their wine, there will be someone looking for it regardless of rating. Alice Feiring wrote a great book called The Battle for Wine and Love or How I Saved the World from Parkerization. The title references Robert Parker, a wine critic who has had a homogenous effect on global wine making styles in the past 10 years.

The good news is, no matter what wine making style a winery decides to go with, there will be a consumer looking for it. Whether it’s fruit-forward or terroir-driven or somewhere in between, there’s no right answer. Better yet, demand for smaller producers is growing thanks in part to their efforts of marketing online. Two of my favorite smaller producers who have done a great job marketing online are Jeff Stai (Eljefe) of Twisted Oak and Lisa De Bruin of Hahn Estate. They offer good wines at a fair price, but without the internet may not have exposed their brands to as many people.

As online sales continue to grow, savvy Long Tail wineries will continue to find an audience. I’d recommend The Long Tail to any winery feeling like David going up against Goliath in the eye of consumers. Here is a closing quote from the book that I hope will give perspective, “The Long Tail doesn’t cure obscurity, it just diminishes it. But tor the vast majority of us who live, work, or just play in the Tail, the cultural shift toward minority taste is already bringing a richer, more vibrant culture. How and when the money will follow something that the next few decades will reveal.”

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5 Responses

  1. Heidi says:

    As a consumer, I am disturbed by the prevelance of the same big brands seen everywhere. That said, I live in the mountains of Colorado, not exactly wine country. I’m willing to drive a few extra miles or even into the next town for a great wine selection including some of my favorite smaller players.

  2. And more often than not, what MOST consumers are looking for is not just value, but some combination of being engaged, part of something and a reflection of their personal style. Maybe overly psychological, but as wine is one of those lifestyle products, we can’t ignore that people buy what they believe to be an extension of themselves…Social Media is providing an amazing opportunity for consumers & industry to participate, together.

  3. Ian Griffith says:

    Rick, thanks for clarifying.

    Perhaps you would indulge a link to my column on this subject that shows retailers how to tap into the long tail: http://www.bevnetwork.com/talkingtech_issue_article.asp?ID=44

  4. rickbakas says:

    That’s right, Ian. Thanks for clarifying. The Long Tail is a good thing for smaller producers.

    The homogenization in the wine biz has more to do with the Head of Tail players dominating physical shelf space. Adam Strum suggested the American palate was a driving force behind the homogenization of wine making style. I argue that it’s the large players like Constellation brands. Head of Tail players, regardless of industry, seem to appeal to a lowest common denominator.

    What I didn’t say clearly was that because of that, Long Tail players will have consumers who are looking for something different.

  5. Ian Griffith says:

    Rick, I don’t quite follow the connection you make between the growing homogenization of wine and the effect of the long tail. Surely the long tail is exposing the less homogenous wines to a larger audience?

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