Conjunctive Labeling: What and Why? Mendocino County Conjunctive Labeling Educational Forum November 29, 2018 Christian Miller Proprietor, Full Glass Research
What is Conjunctive Labeling? ücommon Definition: labelling of a wine to show both region and sub-regions of origin. ülegal Definition: wineries labelling a wine with a sub-ava are legally required to also include the larger AVA or County designation, if the sub-ava is entirely within the larger region; often with some constraints on size, placement, etc.
Why Conjunctive Labeling? 1) Why Geography/Origin/Appellations/AVA? Ø Can function as a filter for buyers and consumers Ø Affects consumer and trade expectations of a wine Ø Provides a memory hook for wine consumers 2) Consumers differ in scope of knowledge and associations with various appellations 3) Conjunctive labeling can combine the strengths of two regional designations while mitigating the weaknesses.
Trade: Importance of Geography When Considering New Products Attribute % rating it extremely important Producer Reputation 47% Region or Appellation 37% Package or Label 28% Varietal Labeling 25% Back Label Information 23% Importer 23% Source: Trade Survey 2013
Trade: Sales Expectations By Region Region Expect Strong Sales Gains Expect Moderate Gains Expect Not much change Expect Sales Decline Italian Region #1 8% 35% 52% 4% Spanish Region #1 20% 53% 26% 1% French Region #1 6% 22% 57% 15% Spanish Region #2 12% 54% 29% 5% Frenc Region #2 13% 54% 31% 3% French Region #3 7% 36% 51% 6% Spanish Region #3 5% 44% 48% 3% Source: Wine Opinions Trade Panel 2016
Consumer: Familiarity Varies by Region Regional Familiarity Region Drink Regularly Drink Occasionally Tried & Liked Tried & Disliked Heard of, not Tried Never Heard Of Sonoma County 39% 31% 23% 1% 4% 2% Paso Robles 20% 31% 24% 2% 12% 11% Monterey County 8% 29% 34% 3% 16% 10% Amador County 5% 15% 19% 3% 19% 39% Mendocino Cty 7% 27% 31% 2% 20% 13% High Ratio of Liked/Tried! Source: Wine Opinions 2017 6
Consumer Unaided Associations Vary by Region REGION ASSOCIATIONS (%) Napa Valley Cabernet (27%); Expensive (14%); Bold/rich/big wines (10%); Overpriced (14%) Sonoma County Pinot Noir (11%); Better value than Napa (11%); Variety of wines (7%); Chardonnay (7%) Willamette Valley Pinot Noir (44%); Pinot Gris/Riesling (5%) Walla Walla Mendocino (varieties only) Source: Full Glass Research Syrah (15%); Cabernet (14%); Red blends (6%); rising region (5%); Merlot (5%) Whites: 14% Chard, 7% SB, 22% many different, 37% DK Reds: 18% PN, 8% Cab, 24% many different, 32% DK Livermore, Lake, Amador > Mendo in % Don t Know Napa, Sonoma, Paso < Mendo in % Don t Know
Consumer: Quality Ratings Vary by Region Rated 6-7 out of 7 % Don t Know Rated 6-7 w/o Don t Know AVA Region 1 76% 5% 80% AVA Region 2 56% 11% 63% Region 2 Sub-AVA 1 55% 22% 71% Region 2 Sub-AVA 2 36% 37% 57% Region 2 Sub-AVA 3 13% 71% 46% Source: Wine Opinions 2017
Familiarity & Quality Ratings Vary by Type of Consumer MENDOCINO QUALITY RATING BY CONSUMER TYPE Excellent Good Fair Poor Don t Know HIGH END* 21% 52% 11% 1% 15% HIGH FREQUENCY* 18% 50% 8% 1% 23% NEITHER 10% 36% 7% 0% 44% CA RESIDENT 29% 49% 10% 1% 11% OTHER STATES 14% 46% 8% 1% 34% *High End = Purchase $20+ wine monthly or more often; High Frequency = Drink wine more often than once a week. Source: Wine Opinions 2017 Consumer Panel 9
Consumers: Quality & Value Ratings Shift Over Time VALUE RATING 4.5 4.3 4.1 3.9 3.7 3.5 3.3 3.1 2.9 2.7 Lake Lake Lodi Lodi Mntry Mntry Paso Paso Sonoma Napa Napa 2.5 2.5 3 3.5 4 4.5 5 Source: Full Glass Research 2015 QUALITY RATING Sonoma 2014 2008 10
Combining regional strengths while mitigating weaknesses: Sonoma County Example SCWC was worried that multiple sub-appellations were fragmenting Sonoma image; weakening Sonoma county appellation wines, Sonoma county grape farmers. Considered a conjunctive labeling law, but did not want to proceed if it damaged image/market position of smaller appellations or confused Sonoma consumers. Needed: a test of the impact of Sonoma County alone vs. sub-appellation alone vs. Sonoma County + sub-appellation Consumer & Trade components; quantitative.
Research Design Preliminary Questions Sorter Cell A (County) Cell B (County+AVA) Cell C (AVA alone) PN Sonoma Cty PN Russian River, Sonoma Cty PN Russian River Chard Sonoma Cty Chard Bennett Vlly, Sonoma Cty Chard Bennett Vlly Cab Sauv Sonoma Cty Cab Alexander Vlly, Sonoma Cty Cab Alexander Vlly Each cell balanced for demographics & wine habits. Each cell had the same label, varying varietal and geographic designation, then two questions: quality rating and estimated price.
Label Examples from 3-Celled Test A B C
Test Results: Price Estimation PINOT NOIR Over $30 $20-$30 $10-$20 Under $10 County only 8% 36% 49% 7% County and AVA 8% 44% 43% 4% AVA only 7% 47% 42% 4% CHARDONNAY Over $30 $20-$30 $10-$20 Under $10 County only 4% 28% 61% 7% County and AVA 5% 35% 53% 7% AVA only 3% 27% 60% 11% CABERNET Over $30 $20-$30 $10-$20 Under $10 County only 11% 40% 41% 8% County and AVA 16% 46% 33% 4% AVA only 14% 44% 36% 6% Source: Wine Opinions 2009
Price Estimates by Consumer Segment Sonoma Fans = those who drink Sonoma County and rated it excellent in preliminary questions. Ø Pricing estimations for Pinot Noir were highest for Sonoma+AVA and AVA alone, lower for Sonoma County alone. For Cab Sonoma+AVA was highest, followed closely by AVA alone (statistical tie) then County alone. Ø Pricing estimation for Chardonnay were highest for Sonoma County+Bennett Valley, with County and AVA alone in a statistical tie below. AVA-aware = those who are familiar with and drink at least occasionally the AVA. Ø Pinot Noir: rated AVA alone first, closely followed by Russian River+Sonoma Cty, then Sonoma County. Ø Chardonnay: not analyzed, too few highly familiar with Bennett Valley Ø Cabernet: rated Alexander Valley+Sonoma Cty highest, then AVA alone, then Sonoma County alone. Source: Wine Opinions 2009
Test Results: Quality Ratings Percentage rated excellent or good by cell/variety Cabernet Chardonnay Pinot Noir 70 88 90 85 84 82 89 90 84 AVA alone County+ AVA County alone Source: Wine Opinions 2009
Quality Ratings by Consumer Segments Sonoma Fans = those who rated Sonoma County Excellent in preliminary questions. Ø Pinot Noir: rated Russian River+Sonoma Cty highest, AVA alone and County alone roughly tied Ø Chardonnay: Rated County alone highest, followed closely by Bennett Vlly+Sonoma Cty, then AVA alone much lower. Ø Cabernet: Rated County+AVA highest, followed closely by AVA alone, then a drop to County alone. AVA-aware = those who are familiar with and drink at least occasionally the AVA. Ø Pinot Noir: rated Russian River+Sonoma Cty highest, then AVA alone, then Sonoma County. Ø Chardonnay: ratings for all three within margin of error. Ø Cabernet: rated Alexander Valley+Sonoma Cty highest, then AVA alone, then big drop to Sonoma County. Source: Wine Opinions 2009
Trade: Labeling Preferences Labeling Options Russian River Pinot Noir Bennett Valley Chardonnay Alexander Valley Cabernet Label the wine with just Sonoma County Label the wine with the AVA and Sonoma County listed below Label the wine with just the AVA 2% 25% 1% 81% 71% 83% 17% 4% 15% Source: Wine Opinions 2009
Conjunctive Label Test: Conclusions In general Sonoma County+AVA had the broadest appeal to core wine consumers Depending on the type of consumer, Sonoma County alone or AVA (sub-appellation) alone might be stronger, but never significantly higher than Sonoma County+AVA. Often Sonoma County + AVA was highest. These findings were consistent, even for wine consumers who were big fans of Sonoma County and for those who were very familiar with AVAs or sub-appellations. The appeal of the AVA alone varied by varietal-ava combination.
Closing Thoughts What does this mean for you? Similarities v Mendocino has a wide variety of terroirs with varying character and specialties v Mendocino wineries are not naturally clustered into one wine trail v Mendocino AVAs cover a wide spectrum of awareness and familiarity v Mendocino also has a flagship Pinot Noir region (Anderson Valley is to Mendocino as Russian River Valley is to Sonoma) Differences v Mendocino county is not as well known or highly regarded as Sonoma county for wine v Sonoma has a head start in publicity and consumer exposure v Less visitation (and lower conversion to winery visits?) v No confusing AVA names (Sonoma Valley/Coast/Mountain/County) Positives v Awareness good, natural attractions good v High quality at competitive prices, very low negatives v Substantial room for growth in trial and familiarity Caveats v No research specifically on Mendocino AVAs v Most Mendocino AVAs are more like Rockpile, Bennett Valley, Fort Ross than Dry Creek, Alexander Valley, Russian River, Sonoma Valley or Coast 20
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