Published on March 26th, 2024.
Premiumisation of Wine Made Simple
Everything You Need to Know!
In today’s market, consumers are all about value-driven satisfaction. They’re ready to invest a little extra for products and experiences that truly resonate with their values. Enter the era of “premiumisation” – where companies are stepping up their game, offering top-notch goods and services that not only meet needs but also align seamlessly with what customers hold dear. It’s a trend where people happily invest more for products that align with their values.
What is premiumisation of wine?
Premiumisation is about adding more value to a product. It’s the opposite of commoditisation, which is competition to lower prices for a standard level of quality. This causes both prices and quality to quickly hit a minimum acceptable level. With premiumisation, the competition is all about creating higher quality items, and over time, average prices tend to go up.
But remember, it’s not just about charging more for the sake of it. Instead, it’s a strategy that revolves around highlighting a product’s unique qualities, special features, and inherent traits to create a positive image in the minds of your customers. This positive perception then boosts their willingness to pay a bit more for the product.
Creating this premium involves a myriad of factors, and one of the most crucial is how they’re made. Nowadays, customers prefer products with genuine stories, rooted in history and provenance, and the more artisanal qualities, the better. It’s all about appreciating craftsmanship and unique attributes.
How does the premiumisation of wine affect the wine industry?
The wine industry is bouncing back after the pandemic thanks to the premiumisation strategy. According to Mintel’s “Wine Market Report 2021,” even with the on-premises closures impacting the wine market in 2020, the circumstances during the pandemic reinforced wines position for at-home casual and relaxing occasions. This shift helped make wine more accessible and less intimidating to many.
However, the wine industry faces a challenge as consumers worldwide are increasingly prioritising health. Mintel’s report highlights that three in 10 retail alcohol shoppers aged 22 and above believe reducing alcohol intake is the quickest way to improve health. OIV data reveals a 6% global decline in wine consumption from 2017 to 2022, equating to nearly 1.9 billion fewer wine bottles consumed last year. This shift is largely driven by consumers altering their drinking habits to enhance their well-being.
Premiumisation helps mitigate this. The rise in interest and purchase of low-alcohol and alcohol-free wine, along with offerings emphasising less-but-better choices, natural ingredients, and a clean label, is gaining traction among those curbing their consumption.
Additionally, the focus on health has led to a growing demand for organic wine. Organic wines adhere to specific standards that prohibit the use of synthetic fertilizers, pesticides, and various other additives in their production and processing.
How can I make the premiumisation of wine work for me?
Unlocking the premiumisation trend is as simple as curating a diverse wine portfolio that caters to varying price points, ensuring a gradual elevation for premium offerings. Whether it’s a couple celebrating a special occasion or a group sharing a moment over an exceptional bottle, this approach appeals to diverse customer preferences.
In your wine marketing endeavours, focus on spotlighting superior fruit quality, heightened labour input, and extended aging processes. These elements resonate with customers actively seeking an elevated standard of product excellence.
When it comes to spirits, don’t just settle for a basic selection – curate it to match the preferences of your neighbourhood. Dive into premium options, offering a unique touch, especially in the ecommerce realm. Opting for distinctive craft brands, rather than widely available mainstream ones, adds significant value for consumers.
Connect with your Key Account Manager today to explore the finest selections from our Sheridan Coopers range. Remember, you can craft a special menu with wine prices frozen at their 2023 rates, extending all the way to 2025. Elevate your offerings and secure the loyalty of discerning customers.
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