Positioning of wine regions, VDQS Colloquium, Trier 2007

Positioning of wine regions: Old or New World branding models?

Dr Chris Easingwood
Professor of Marketing
Manchester Business School
Booth St West
Manchester M15 6PB
00 44 (0)161 275 6482
c.easingwood@mbs.ac.uk

ABSTRACT
The subject of this research is the position or reputation that a wine region has and seeks to
have for itself. This is generally referred to as regionality in the wine literature, where
regionality is defined as the reputation a wine region has for producing wines with a
distinctive style
The research addresses the following question: should New World wine regions try to
position themselves narrowly on the basis of a particular grape or blend of grapes (the Old
World position) or more broadly on the basis of the red wines or the white wines that they
produce (the New World position)? The research examines an important topic as many New
World countries try to establish stronger regional identities.
This research was conducted in Australia, using perceptions of regional wine styles collected
from 95 owners and managers of a cross section of wineries.
The article examines perceptions of nine different regional wine styles and finds that in all
nine cases the individual grape style is seen as having a more distinctive style of wine than
the generic class of wines.
The conclusion is that the Old World has got it right all along. Majoring on a single wine
style, the traditional model in the best wine regions of the Old World such as Chablis,
Sancerre and Cte Rtie, will result in higher perceptions of distinctiveness.
The lesson for the New World is to lead with your best suit. If a region has a single varietal
or blend that it does well, that has some heritage, that is high quality across the range,
preferably with a few star wines that attract the attention of the media and win prizes at the
wine shows, then position the entire region around that style.

------------------------------------------------------Introduction
The subject of this research is the position or reputation that a wine region has and seeks to
have for itself. This is generally referred to as regionality in the wine literature, where
regionality is defined as the reputation a wine region has for producing wines with a
distinctive style. Regionality is perhaps particularly associated with the Old World regions
such as Chablis and Rioja and the Mosel-Saar-Ruwer which enjoy clearly defined profiles:

Positioning of wine regions, VDQS Colloquium, Trier 2007

Chablis: bone-dry, minerally, highly acidic white wines (Chardonnay)

Rioja: velvety reds with sweet vanilla oak (blend of Tempranillo, Garnacha,..)
Mosel-Saar-Ruwer: elegant, crisp, complex whites (Riesling)

Notice that the reputation of each of these wine regions is synonymous with a single wine
style, based on a single grape or a particular blend of grapes, and indeed this choice, if one
was ever deliberately made, can only be the correct one. Each of these regions produces just
one significant style of wine1. The region and the wine style by which the region is known
are one and the same. In that case the basis of the regionality claim could not be more
straightforward.
Whilst this is typical of many of the important wine regions of the Old World, it is far from
typical in the New World, and indeed it is virtually unknown in the New World where each
region cultivates many different grapes and produces many different wine styles. Mendoza in
Argentina may be well-known for its Malbec but also cultivates considerable volumes of
Bonarda, Tempranillo, Cabernet Sauvignon, Sangiovese, Merlot, Syrah and Barbera plus of
course Torronts. The Maipo Valley in Chile may be renowned for its Cabernet Sauvignon
or maybe that should be its Carmenre but also cultivates an equally broad range of grapes.
In these cases and virtually all New World wine regions the basis of the regionality claim
becomes contentious. Should Mendoza aim to be known for its Malbec or perhaps for its red
wines? Should Maipo position itself on its Carmenre or its red wines?

Purpose
This piece of research seeks to address this question. Should New World wine regions,
which have a choice, try to position themselves narrowly on the basis of a particular grape or
blend of grapes (to be called for simplicity the Old World position) or more broadly on the
basis of the red wines or the white wines that they produce (to be called the New World
position)?
Although it is argued that this sharp distinction between the old and new worlds is broadly
valid (more valid for the New World2, valid only for parts of the Old World but including
many of the most prestigious wine producing regions) it is interesting to note that even in
France there is an on-going debate about relaxing the AOC restrictions on grapes cultivated
in some special, as yet not specified, cases (Joy, 2004).
This research was conducted in Australia, using information collected from owners and
managers of a cross section of wineries on their perceptions of leading Australian wine
regions.
Should Yarra Valley (Victoria, Australia) project itself based on its Pinot Noir or on its red
wines? Would Margaret River (Western Australia) be best advised to seek to be known for
its Bordeaux blends or for all of its red wines which would include Cabernet Sauvignon,
Merlot, Syrah, Zinfandel and others? Of course that question is difficult, if not impossible, to
answer definitively, but it is possible to look at perceptions and use these as guidelines.
First, the Australian context to regionality is examined.
1
2

Rioja does have a white blend as well but this is of far less importance than the red blend.
Marlborough and Sauvignon Blanc in New Zealand might be closest to a New World exception

Positioning of wine regions, VDQS Colloquium, Trier 2007

The Australian context

The Australian wine industry has achieved some notable successes. It has come from
virtually nowhere to become the fourth largest exporter by volume in the world. In the UK
retail market, it has done what only a few years ago appeared impossible, namely to unseat
France in both volume and value terms, and has recently enjoyed significant share gains in
the US market. However, much of this growth, particularly in the UK, has been driven by
heavy discounting. The industry has recognised that sales growth is slowing and has
suspended new plantings whilst demand catches up with supply, which may take some years.
Increasingly the solution to these problems is seen to lie in the development of stronger
regional identities which can stimulate sales and resist price pressures. For instance it is
argued that Australia must educate customers on regional names, styles, varieties and
flavours if it is to achieve differentiation within the overarching Brand Australia (Howland,
2002; Dean, 2002; Bulleid, 2001) and it must produce more icon wines to lend a halo to the
Australian image (Lockshin, 2001, p123). Australia must differentiate its regions if it is to
retain the custom of its increasingly informed customers at home and abroad as they trade up
to more expensive wines (Dean, 2002). Customers in export markets such as the UK are said
to be ready for this step up in understanding (Bruwer & House, 2003)
So stronger regional identities may help Australian and other New World wine regions create
more loyalty for their wines. But what is to be the basis of these stronger regional identities?
Old or New World models?
It should be made clear that regionality is not the same as terroir. Terroir captures the
potential that a particular area has in terms of soil, climate, altitude, viticulture and
vinification for producing wines that are unique to that area, and is essentially a local
concept, in other words is specific to an individual site (Robinson, 1999). Regionality
represents the reputation the region has garnered for itself and is a product of many factors
(Easingwood, 2006), only one of which is terroir. To put this another way, Aglianico del
Vulture has a good terroir (Johnson & Robinson, 2001), but struggles to establish its
regionality, except perhaps close to home. Regionality is much more all-embracing and is
likely to be a consequence of producing quality wines in significant volumes over a lengthy
period of time in which it has a significant presence in a market allowing time for its
reputation to insinuate itself into the collective psyche.

Old World thinking

Ironically, as the New World puzzles how to take more regionality on board, the Old World
is considering how it might back off. The strict Appellation dOrigine Contrle (AOC)
type-systems in the Old World are thought to be too restrictive in some areas. Some members
of the French wine industry are wondering if they have embraced the concept of regionality
and terroir too passionately in the various AOC systems. For instance, with sales down at
home and abroad, serious consideration is given in France to a relaxation of the AOC rules to
allow individual producers the choice of either staying within the existing, stringent AOC
rules or taking a new option of electing for greater winemaking and labelling flexibility
within new, less stringent rules, yet to be defined (Joy, 2004). Wider sourcing of grapes, as

Positioning of wine regions, VDQS Colloquium, Trier 2007

with wines labelled as South East Australia, might help create brands big enough to take on
the New World brands.
And having a regional identity is of incalculable value. As has been commented: How much
would it cost to build something like Beaujolais today for a new wine region? (Duboeuf,
2004).

Literature
Region of origin is an important factor for consumers choosing wine in retail outlets in
Australia. It has been found to rank third in importance behind grape and personal
recommendations (Bruwer & House, 2003; Hall et al, 2001). Region of origin may count for
more in a wine producing country than in export markets probably due to consumers simply
having more awareness of regional factors in their own country. Certainly it has been found
that the valuation of French wines with geographical appellation in the UK is quite low
(Steiner, 2004).
The reputation of a wine region has been found to affect the price that the wine commands,
along with other variables such as grape variety and cellaring potential (Oczkowski, 1994;
Wade, 1999). It seems that the bigger brands from bigger companies do not need to rely on
regional identity, indeed they may have none, whereas smaller wineries are only too happy to
absorb some of the regional identity into their own brand identities (Bruwer & House, 2003).
In France regional identity is protected by highly detailed Appellation dOrigine Contrle
regulations. Regionality identity is just one tier that sits within the other branding layers of
country, producer and wine/grape, surely one of the more complex branding equations to be
found? This brings the discussion to the question of branding. What does the branding
literature have to say about this question of broad versus specific positioning of the brand?
First of all is regionality or regional identity a brand? To answer that look at what a brand is.
There are alternative definitions. The historical perspective, still the official definition of the
American Marketing Association, is that a brand is a name, term, sign, symbol, or design, or
a combination of them intended to identify the goods and services of one sellerand to
differentiate them from competition (Keller, 1998, p2). This is rather legalistic, but by that
narrow definition regional wines are brands. Champagne is a recognised and protected name;
it must be made according to certain regulations and only in the Champagne wine region and
the name and bottle and label do differentiate it from other sparkling wines, not necessarily
made in the same way.
A more modern interpretation of a brand might be that a brands value is what lies in the
consumers mind. It is the mental inventory resulting from all the actions by the company
together with the relevant experiences of the consumer (Davidson, 1997). According to this
perspective a wine region is also a brand. A wine regions brand is what exists in the wine
consumers mind with regard to that region and its wines. And, of course, awareness of a
brand is a basic prerequisite for brand knowledge (Keller, 2003) of wine regions which is
why awareness and perceptions are so assiduously researched (the Australian Wine Bureau
questions 60,000 consumers a year, Howland, 2002)
If a wine region can be interpreted as a brand what can the brand literature add? Perhaps the
most useful way to examine a brand and in particular to think about what it is that makes a
4

Positioning of wine regions, VDQS Colloquium, Trier 2007

strong brand has been put together by Keller (Keller, 2000). He presents a systematic way of
looking at the attributes which strong brands share, called a brand report card, listing the top
ten traits that successful brands exhibit.
One of the top traits to be managed is that the brand is properly positioned (Keller, 2000).
Well positioned brands occupy particular niches in consumers minds so that they think about
the brand in the right way (Keller, 1999). Being properly positioned implies identifying those
areas in which the brand merely keeps up with competing brands (points of parity), but also
identifying those areas in which it seeks to excel (points of difference). And one of the
fundamental choices that wine regions have to make in choosing the areas to excel in, the
areas to establish points of difference, is whether to chose to be known for a single varietal
(the Old World model) or a wider basis for instance red wines or white wines (the New
World model).
Most companies do not have just one brand but a portfolio and a hierarchy of brands that has
to make sense, another top ten trait (Keller, 2000). An illustration that is often used is BMW
with its clearly differentiated 3, 5, and 7 series. The same might be said of wine regions. At
the top of the hierarchy is the wine region itself and its overall reputation. Immediately under
might be its white wine reputation and its red wine reputation and then under its red wine
reputation might be its reputation for a particular black grape and under its white wine
reputation might be its reputation for particular white grape. Should a wine region aim to
establish its own hierarchy in the wine drinkers mind or is this too ambitious? This will be
discussed later.

Methodology
The research was conducted in two stages. The first comprised a total of 29 meetings in
Australia with leading players in the Australian wine industry, all chosen because of their
participation in the marketing of their wine regions. They were drawn from a wide range of
leading Australian wineries, large and small, located in many of Australias top wine regions
(Barossa Valley, Clare Valley, McLaren Vale, Coonawarra, Yarra Valley, Mornington
Peninsula, Pyrenees, Sunbury, Ballarat, Grampians, Margaret River, Pemberton, Mount
Barker, Cowra, Orange, Mudgee). The purpose of the meetings was to understand the
professionals perspective on regional identity.
The next stage involved completing a questionnaire on a number of topics including some
questions pertaining to regional wine styles. Using two acknowledged excellent sources on
Australian wines (Halliday 2003; Clarke 2004), a number of Australias top wine styles were
identified:

Adelaide Hills Sauvignon Blanc

Barossa Valley Shiraz
Clare Valley Riesling
McLaren Vale Shiraz
Yarra Valley Pinot Noir
Yarra Valley Chardonnay
Hunter Valley Shiraz
Margaret River Bordeaux blend (Cabernet Sauvignon/Merlot/)
Margaret River SSBs (Semillon/Sauvignon Blanc blends)

Positioning of wine regions, VDQS Colloquium, Trier 2007

The respondent were recruited by first enlisting the support of the local chair persons of a
number of regional wine growers associations across Australia, who then agreed to pass the
questionnaires on to the owners/managers of a cross section of wineries in each of their
regions.
The respondents were asked to rate these wine styles on regionality, namely the extent to
which the wine exhibited a distinctive style, on a 1-7 scale, with 1 representing little or no
regionality, and 7 very high regionality. The respondents also rated the appropriate regional
white or red wines on regionality. That is, as well as rating Adelaide Hills Sauvignon Blanc,
they also rated Adelaide Hills white wines.

Findings
The findings are shown in Table 1, which is to be read as Adelaide Hills Sauvignon Blanc
rated 4.72 on regionality, Adelaide Hills whites rated 3.89, a difference of 0.83 which is
statistically significant.
The table shows that in all nine cases, the perceptions are that the individual grapes or grape
blends are found to have a more distinctive style of wine than white or red wines in general.

Discussion
What are the implications? Several points are presented, but it has to be realised that at this
stage these are merely ideas, some of them rather sweeping, that are suggested by the
findings. It is hoped some of them might be worthy of further investigation.

The Old World has got it right all along. Majoring on a single wine style, the
traditional model in the best wine regions of the Old World such as Chablis, Sancerre
and Cte Rtie, will result in higher perceptions of distinctiveness. Majoring on the
wine class, white or red wines, the most common model in the New World, will result
in lower perceptions of distinctiveness.

For the Old World, tinker with the AOC regulations carefully, especially at the top
end. The evidence seems to be that where the Old World, particularly France, has
stuck to the Old World model it has enjoyed success. Think Sancerre, Condrieu,
Cte Rtie, Chablis, Champagne, Chablis, all of which are enjoying sales success. It
is at the more mundane level that France is losing share to competition.

For the New World, lead with your best suit. If a region has a single varietal or blend
that it does well, that has some heritage, that is high quality across the range,
preferably with a few star wines that attract the attention of the media and win prizes
at the wine shows, then run with it.

If a wine region does not posses such a wine style around which to coalesce,
find/develop one.

Avoid the generic position. Based on this evidence, nine examples, admittedly as
seen by a select group of wine professionals, it does not seem wise to lay claim to a

Positioning of wine regions, VDQS Colloquium, Trier 2007

broad position, as does, in Australia, McLaren Vale for red wines and Yarra Valley
for both reds and whites, indeed as do most Australian wine regions.

Clare Valley Riesling was found to have the highest rating for its perceived
regionality, and also the highest difference compared to the generic wines, white in
this case. This is not because it produces only Riesling, it doesnt, it also produces
significant amounts of Chardonnay and Semillon, plus some highly regarded reds. It
is interesting to speculate why its Riesling is so highly regarded. Is it that its style of
Riesling is unique in Australia (Eden Valley is similar but it is smaller and is almost
next door so may share a similar perception) and in the world (German Riesling is
quite different)? Is it that in Grosset Wines it has a superlative example of the style
and in Jeffrey Grosset a renowned winemaker (one of Decanters top ten white
winemakers in the world)? All of this and more in all likelihood.

Based on this evidence, Barossa Shiraz and Clare Valley Riesling may claim to be
Australias outstanding and most distinctive wine styles. But hold on. Rutherglen
Muscats and Hunter Semillons were not included in the study, so all that can be said
is that the aforementioned two are likely to be amongst Australias most distinctive
wine styles.

It was mentioned in the discussion above that many companies (BMW for instance)
have a hierarchy of brands, so why should not a wine region also try to establish a
hierarchy of its own brands? Certainly such hierarchies are desirable if they can be
created. However it is debateable that such a hierarchy can ever be established for
wine regions. Consumer spending on the products of individual wine regions is
dwarfed by consumer spending for global brands such as BMW that do mange to
establish their own hierarchy of brands. Likewise advertising spends are also
dwarfed. So it may not be possible for wine regions to establish such hierarchies in
the minds of their target groups. If this is so, choices have to be made, the key one
being which layer of the hierarchy to major on. This article suggests it may lead to
more success if the wine region aims for the Old World model.

The limitations of this study are that the perceptions collected were taken from just one
group, wine professionals. The perceptions of other groups such as wine consumers are
obviously also relevant. However, presenting the views of the wine professionals may have
an advantage in that they are perhaps representative of a wider group of opinion formers and
that their perceptions are likely to influence other opinion formers all of whom may influence
other groups.

References
Bruwer, Johan and Michael House (2003), Has the era of regional branding arrived for the
Australian wine industry? Some perspectives, The Australian & New Zealand Grapegrower
& Winemaker, December, 56-61
Bulleid, Nick (2001), Big reds: Has the pendulum swung too far, Wine Industry Journal, 165, 13-15
Davidson, Hugh (1997), Even More Offensive Marketing, Penguin Books, London

Positioning of wine regions, VDQS Colloquium, Trier 2007

Dean, Rupert (2002), Australian wine in the UK the next step, Wine Industry Journal, 17-6,
94-97
Easingwood, Christopher J (2006), The drivers of wine reputation, Enometrics XIII,
Bordeaux, France
Joy, Rupert, (2004), Revolution in the making, Decanter, September, 10
Clarke, Oz (2004), Australian Wine Companion, Time Warner/Websters: London
Duboeuf, Frank (2004), Frankly speaking, Harpers, 9 July, 18
Halliday, James (2003), Wines of Australia, Mitchell Beazley: London
Hall, John, Barry OMahony and Larry Lockshin (2001), Wine attributes and consumption
occasions: An investigation of consumer perceptions, Wine Industry Journal, 16-6, 109-114
Howland, Andrew (2002), Time to show we have more to offer than supermarket brands,
Wine Industry Journal, 17-1, 88-89
Johnson, Hugh and Jancis Robinson (2001), The World Atlas of Wine, London: Mitchell
Beazley
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Equity Long Term, 2nd Edition, Upper Saddle River, N.J.: Prentice Hall
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Marketing Management, 15, 43-51
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Jan-Feb, 147-157
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Knowledge," Journal of Consumer Research, 29(4)
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Industry Journal, 16-5, 123-124
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Positioning of wine regions, VDQS Colloquium, Trier 2007

Positioning of wine regions, VDQS Colloquium, Trier 2007

Table 1: Old World vs. New World Regional Branding Models
Mean Regionality (N=95)
Significance
of
Old
New
Difference
Difference
World
World
(2 tailed
Model
Model
test)
SOUTH AUSTRALIA
Adelaide Hills: Sauvignon Blanc vs. Whites

4.716

3.885

0.831

.000

Barossa: Shiraz vs. Reds

6.406

5.245

1.161

.000

Clare Valley: Riesling vs. Whites

6.417

4.208

2.209

.000

McLaren Vale: Shiraz vs. Reds

VICTORIA
Yarra Valley: Pinot Noir vs. Reds

5.811

4.833

0.978

.000

5.094

3.823

1.271

.000

Yarra Valley: Chardonnay vs. Whites

4.854

3.771

1.083

.000

NEW SOUTH WALES

Hunter Valley: Shiraz vs. Reds
WESTERN AUSTRALIA
Margaret River: Cabernet Sauvignon
blends vs. Reds

5.094

3.833

1.261

.000

5.798

4.474

1.324

.000

Margaret River: SSBs (Semillon/

Sauvignon Blancs) vs. Whites

5.135

4.063

1.072

.000

10