Lose the mystery, keep the magic

Speaking at the WSTA Annual Conference, Hegarty who has been a key figure in the global advertising world for six decades and now owns a vineyard in the Languedoc, is critical of how wine is marketed

Sir John Hegarty Bartle Bogle Hegarty

I have been in the business a very long time, in fact so long it’s almost slightly embarrassing; but the number of times I have sat in a new business meeting where a client has come in and said: “Of course you must understand that our business isn’t like anybody else’s”, and you are sitting there thinking: “Oh yes it bloody well is”. 

I must have worked on in the region of 300 to 400 brands during my time in advertising and I have never come across an industry so appalling as the wine industry. I always say to people that the first thing you have to understand about the wine industry and I am sorry if I am going to offend somebody here, but I don’t care - I work in advertising!) is the production – one year it goes up, the next year it goes down, but my costs remain vaguely the same. What other industry would accept this? None!

Another thing is – I am essentially selling a product that most people don’t know what quality it is. In fact, I would say 90% of the people out there do not understand wine quality. I could give somebody a glass of one of the greatest wines ever produced and I guarantee they would probably say “that’s bloody horrible, I don’t like that”.  If I parked a Ferrari outside, everybody would look at it and go “Wow! That’s an amazing car”, they may not want it but they know it’s an amazing car. That’s another reason why it’s completely daft.

The other reason of course is that there are no brand names. I have never worked in a category where there are no major brands that drive the market place. And, of course, the last point is that people think spending more than £6 per bottle of wine is completely mad and anybody who knows about wine production will agree that, by and large, and I don’t mind saying this, any wine retailing at £6 or under is shit.

So it’s not really a great business to be in is it?

At a dinner party with wine producers in France, when I suggested that the trouble with our industry is that to the average consumer wine and wine labelling is a complete mystery, they retorted awith “my God no, we want to keep the mystery!” To which my head hit my hands. That is what we are dealing with, people who believe that you can expand a market by increasing confusion.

I think we’ve moved from talking about people as consumers, as it assumes a consumer is someone who is there waiting to be sold something. I think those days are completely over. People are not sitting there waiting to be sold things as they were maybe 30 or 40 years ago; they are now an audience.  That’s a very important change; it implies a respect and that you will have to engage with them, entertain them, and involve them, because that’s what audiences want.

There has never been such a disruptive era in the history of marketing and advertising as there is right now.  And I can assure you, we are going to see some mighty names crumble, there is no doubt about it, I can see the signs on the wall. I am not going to mention names but look at Nokia - who would have believed it? Eight years ago Nokia was one of the top companies in the world; today it’s virtually worthless.  If you look at our industry, it is the industry and not the user that is at the centre. I have spent most of my time trying to get clients to understand that the world will go on without them, that they aren’t the most important people in the world. 

Important brands and companies become very egotistic about what they do and they think they are important. Well NO, it is the people who buy from them who are fundamentally important; and I know we all understand that, of course we do, but look at the wine industry and you realise that it does not understand.

The other thing that I think is very interesting is the way the old marketing and branding model used to work.  It was the classic triangle – as you went down the triangle there were more people. Well, of course, that has changed completely and now what is happening is that the middle has gone.  There is no middle market, forget it, there is no future.  The middle-market is disappearing. Look for example at what James Dyson has done in the vacuum cleaner market – this has proven that point absolutely. The middle market in vacuum cleaners has gone…there is luxury up there and value down here and he is charging about £100 more for a vacuum.  That is fairly remarkable when you consider it.

The other thing that I wanted to talk about is choice.  We are suffering a paralysis of choice.  There are all kinds of ways now for communication with blogs and websites, which people are navigating their way through.  I thought I might show you this example: imagine, you want to paint a wall white. You’d think to yourself “this is not very difficult; I can go and buy a pot of white Dulux and then paint the wall white”. Well, take a look at just how many Dulux whites there are. It’s incredible. There is a plethora of choice.

I come from a world where brands are kind of what drives marketing and, of course, to lot of people in the wine industry if you use the word 'brand' they kind of think I am the devil incarnate who has come to ‘destroy the market’. But brands came about because we could no longer buy everything we needed form people we know, from the people we live next door to.  Brands are about trust – that’s all – trust that that person will deliver that quality of product. So I tend to say to people “look, instead of using the word brand, use the word reputation”.  What kind of reputation do you want?  The answer is a good one, an interesting one, a distinctive one, one that people like, one that people admire, one that people will look up to. These are just words and what we have got to do is just stop being afraid of them and actually understand the value that they bring to whatever it is that they/we are doing.

The definition of brand that I really like is from the Marketing Society: ‘A brand is the most valuable piece of real estate in the world – a corner of somebody’s mind’; and that’s what you are aiming to get – just a piece in their mind so they will remember you and possibly purchase.  You can’t buy things you can’t remember; the first lesson of marketing ‘Will I be remembered?’.

The other thing that is fundamentally important is to understand is the power of fame.  Don’t get fame and celebrity confused.  We certainly live in a ‘celebrity culture’ but fame is fundamentally important because it shorthand’s the decision‑making process and allows the producer to charge a pretty good price. The dictionary definition of fame is ‘public renowned to great esteem’ – what brand or product would not want that? So fame is fundamentally important because it encourages a relationship with the people, the audience, that you are talking to.  They have an understanding of what you are about.

That’s a sort of little run-through very roughly of what’s going on out there in the world, the market, in this incredibly disruptive era where digital technology is revolutionising all kinds of businesses.

Wine is a product sector that is fragmented, confusing and impenetrable – a mystery. Well, that’ll get people turning up won’t it? They’ll be buying it by the bucket loads…No obviously not! And that is the real problem and you can see other industries where somebody has overcome that problem and taken all the prizes. A phrase we like is “complexity destroys product ability”. Simplicity is fundamentally important - by saying something profound and simplistic you can begin to own that valuable piece of real estate in the corner of someone’s mind.

Making someone look foolish is not a selling proposition.  You are like me I am sure when you go out for dinner with friends to a restaurant - who gets the wine list before anybody else? You. Nobody wants to choose the wine; it’s the first thing they offload on you because looking stupid, making people look stupid, is not really a very smart thing to do. I am not sure you will sell a product by making someone feel inferior - that they don’t know what they are talking about.

We have got to resolve all these issues. I am not going to come up with solutions to all this but I am going to make some suggestions and it’s up to the wine industry to try and address these things and look at how we solve them.

I am going to just make some observations that have struck me as peculiarly odd in this world.  It is about losing the mystery but keeping the magic.

People in the wine industry keep saying “there’s a glut… there is too much wine…” but nobody says “why don’t we grow the market?” But what I have a belief in is "how do I grow markets?"  Because that’s what I have been trying to do all my life in the advertising profession.  If we could grow the market we could do all kinds of things; we could begin to have a better conversation with the people we are talking to

What drives a market?  What makes people engage with it? It’s innovation that’s fundamentally important.  The iPhone is an example of that - differentiation, quality and access.  All those things drive the market.  You could also add on top of that desire – the desire drives the market; but you often have to create desire. Looking at Apple as one of the great product successes, when you get an iPhone you don’t need a product manual telling you how to use it; you just switch it on. If I look at our industry, the wine industry, how do we grow it? We must simplify. We have got to simplify the process of purchasing a bottle of wine, and how we get simple knowledge that will help that purchase. 

There has got to be innovation in the packaging. 

It really is pathetic when you look at it and realise that, actually, the only innovation is the difference between cork and screw‑cap. This is how people segment right now – they look at the price and then maybe the country, because they have had some of that “nice New Zealand Sauvignon Blanc or Australian Chardonnay”.  Great – a piece of genius that some people are allowed to put grape variety on a bottle! Isn’t it pathetic that in France they think it’s a retrograde move? Are these people living on another planet? 

How do I get into this market? Well, a simple way is saying “if like Chardonnay, start here”. It’s completely mad that about five years ago there were large ads in the UK colour supplements, two half-pages for the Burgundy region, that said: ‘Burgundy red is Pinot Noir; Burgundy white is Chardonnay’. They were taking vast amounts of money off the producers to run this advertising yet the producer wasn’t allowed to put it on their bottles…please…come on…the lunatics have taken over the asylum! 

The New World producers putting the grape variety on bottles helped the wine market enormously; but it still needs more. Obviously people say they buy by the label: “I like the label, I’ll buy that”. That I completely understand because, if there’s nothing else, they buy with their heart.  We always say that all the information goes in through the heart, so obviously, if you make something really attractive, it makes them feel better.

If we took for instance ‘occasion’ – people love weekends so why don’t we have a wine that’s called Weekend? Why doesn’t somebody brand that?  It would be a great one – why not?  Start the Weekend on Thursday. I like the weekend – it’s really good. Why isn’t there a Party Wine? What about Barbeque Wine?  What about Pizza Wine? Burger Wine? Indian wine. Indian food is very difficult to match wine to, we know that, yet this country eats a vast amount of it, why isn’t there a wine for it?  You know, a user might find that useful, helpful.  It would help and once you have got somebody into the market you then trade them up…ah…yes….that’s right. Asian food. All of a sudden you are growing the market and that’s what we are not doing. 

The craft beer market is going like a rocket…I wonder why that is?  Well have a look at how they have injected a kind of attraction into their labels and names…they have made it exciting.  That’s a very, very important element in the wine market… you could it exciting instead of saying sit back and revere this product. If I read another bloody wine review where they talk about black cherries and leather and liquorice, arghh! Somebody use some other words please…this wine is rock ‘n roll, or, if you like jazz you will love this.

When I was considering our wine labels, every time I thought of a name I found it had been done, done, done….so I turned the problem into an opportunity by thinking about what I want people to do with the wine. I wanted it to be a kind of gastro pub wine and I wanted it to be available and so I just put Open Now on the label and ‘well done’ on the side of the cork (visible when removed). It’s about making wine accessible, making it easier, talking to a different generation, talking to different users.

What I am saying here is: can we please put the user at the centre of everything.

We should be thinking about how people drink wine, who we are we providing a product for. Look at the car market… do you want to have a hatch back or do you want to have an estate car where you can carry lots of people? They have listened to what people are saying they want.  We are not doing that, we are just presenting what we make and expecting people to make decisions about how to drink it.

We need to understand how we can put the user at the centre of our wine, how we can make it easy to go in and purchase a bottle of wine; instead of making people look stupid, which, as I have said, is not a very good marketing. 

22 October 2014