CrackingCrackingthe U.S. Marketthe U.S. Market

Portuguese Wines in Portuguese Wines in AmericaAmerica

February 1, 2011February 1, 2011PortoPorto

© 2011

Lettie Teague in the Lettie Teague in the JournalJournal

Home to Port... Otherwise almost identity-less Reasoning

– Food: no globally famous Portuguese chefs; popularity of a country's cuisine often precedes the popularity of its wines.

– Marketing: Contrast with South Africa and Chile; eclipsing Portugal in recognition and sales because they've done a much better job of promoting themselves.

– Image: "When you say 'Spain' to someone, it evokes all kinds of images. When you say 'Portugal' to someone, it doesn't conjure up anything at all."

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The U.S. MarketThe U.S. Market “Pull” Market

– A sign of its maturity is that after decades as a classic pull market, it has evolved.

– Push-Pull System: Once, consumers “pulled” product through their demand, while today suppliers “push” product toward the consumers.

– Result: Need to build a brand based on strength and simplicity of message. Those who exceed in this focus on message, quality, and doing what they do best.

U.S. Wine Trends - Good U.S. Wine Trends - Good News!News!

U.S. to become the largest wine market in the world by 2015.

Of the 753 million gallons of wine sold in the U.S. in 2008: Table wine= 657 million gallons (2.49 billion liters) Desert wine = 64 million gallons (242.3 million liters) Sparkling wine = 32 million gallons (121.1 million liters)

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A brand for everythingA brand for everythingin a crowded market?in a crowded market?

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Liquor stores do not have shelf space for more wine. That means a new wine must replace an existing wine. It will take an extremely low price, hot branding or varietals to push space.

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Sales are not in decline;only the sales growth

Decline in sales in wines $18+

– Wines priced below this have seen sales rise

Price of imports increasing

– Weakened dollar doesn’t buy as much abroad

– Increased cost of gas raises transportation costs

Through the RecessionThrough the Recession

StrengthsStrengths By the first six months of 2009, the amount of wine

imported by the United States reached nearly the same numbers as all of 2008

Table wine consumption has increased every year since 1994

#1 wine market if measured in dollars Portugal’s 2010 wine sales jumped by nearly 40%

Weakness: What does it Weakness: What does it matter if sales are up?matter if sales are up?

From a BRAND standpoint, an organization has to try to control everything. Everything an organization does reflects on the BRAND for better or for worse. Every decision should

be filtered through the promise of the BRAND.

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BrandingBranding

Your brand is everything The things you communicate to key

markets What the consumer thinks of when he or

she hears “Portuguese wines” A space in the mind that you own.

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What do YOU think of when you What do YOU think of when you hear:hear:

Australian wines Mercedes Apple FC Porto Licor Beirão

A BRAND is an unwritten contract of intrinsic value A BRAND is an expectation of performance A BRAND is a covenant of goodness with its users A BRAND is predictable A BRAND is an unwritten warrantee A BRAND is a mark of integrity A BRAND is a presentation of credentials A BRAND is a mark of trust and reduced risk A BRAND is a reputation A BRAND is a collection of memories

A Brand is a Space in the A Brand is a Space in the MindMind

A Branding Initiative A Branding Initiative Should . . .Should . . .

Resonate with its target markets Build on and leverage your existing reputation Capture the important elements that make your

product a unique experience. Raise your profile as a desirable product. "Focus is like courage: it doesn't work in half

measure. A BRAND that wants to be a little of everything will eventually amount to nothing.

– Barry Gibbons, former CEO of Burger King

What isWhat isPortugal’Portugal’

ssWineWine

Brand?Brand?

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Lots of grapes, lots of Lots of grapes, lots of regionsregions

Who is in charge?Who is in charge?

And where is the information?

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Wines of Portugal

The logo

Iconic images

Brand EquityBrand Equity

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OpportunitiesOpportunities The Recession

– Recessions can be Brand Builders

– American consumers are looking for good wines at a good price

– Focus on value in a period during which every brand is tested.

• Consumers abandon lesser brands to try Portuguese wines

• Creates a window to build a real brand

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What Makes a Strong What Makes a Strong Brand?Brand?

Logos are not brands

– Labels are not brands; they help to build a brand, but they are not a replacement for a promise

A brand is a concept and a preference Brands offer comfort, trust, convenience and identity Loyalty

– Tap water is free to most, but Evian water can cost almost 80% more than a Coke.

– We pay more for a brand we identify with: Diet coke versus Continente brand cola

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Problems with Selling on Problems with Selling on PricePrice

Consumers move on to luxury brands once they reach your perceived “ceiling”

– It is almost impossible to build a discount and a luxury brand side by side

Think long-term: when the recession ends, the market will leave you behind

Display character and focus: brands with strategic perspective come out of recessions stronger

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RecommendationsRecommendations Build an Implement Brand Focus on the Product

– Example: Australia came out of nowhere with across the board consistency

Keep it Simple Be Aware of Information you Want to Share

– Invest in Good Translation Work together for a common goal

– One message

– Consistency, marketing once voice

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Moving ForwardMoving Forward

Recession offers a rare opportunity

– Educate consumers about Portuguese wines

– Consumers accustomed to more expensive bottles can now be introduced

– A short window to build this brand Survive the recovery

– Create a powerful brand with a real promise

– Tough times don’t last - but tough brands do