Complexity can challenge ideas, suggests wine boss

09 March, 2007

Beer needs to make more of its complexity in order to build consumer interest, increase prices and restore margins, according to a leading wine trade expert.

Mike Paul, famous in the wine trade for leading Southcorp and Western Wines in the UK and now chairman of Wine Intelligence, told the International Beer Conference that beer producers needed to break out of the tiny price bracket in which they operate.

Although he said beer had much to teach wine companies about marketing and consumer insight, the industry had allowed itself to be commoditised and lacked the premium and super premium brands found among wines and spirits. "There could be as many beers out there as wines," he said. "You've got to create this idea that there are beers to aspire to.

"It's about enjoying the fact that you are marketing complexity. If you over-simplify and demystify too much you take away all that added value and that's what people who enjoy being in wine ­relish.

"Wine is a maze to many ," Paul added. "The route forward is to help people navigate the maze, not to flatten it. As Andrew Jefford once said, if young people don't get chess you don't give up and teach them draughts."

Paul warned the increasing power of the biggest brands was adding to the problems in the beer market. " You have the worst of both worlds. You have the big brands - which wine companies should be building - but you've got decreasing margins. It's forecast to be increasingly dominated by the top 10 brands. If that happens you'll be even further away from the maze. You've got to take this fantastic complexity of the beer market to challenge people's ideas radically.

"Beer can't be aspirational if big brands get bigger."

Paul said supermarkets typically made twice as big a margin on wine than on beer and pointed out that even shoppers who only bought mainstream brands such as Jacob's Creek or Blossom Hill preferred to buy them from shops with a wider selection.

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