More than Malbec? Can Argentina Ward Off the Ghost of Public Perception before the Haunting?

Popular perception says Merlot wine sales shriveled on the vine after the movie Sideways was released in late 2004, a claim Merlot producers have vigorously denied since then.

A defense was never fully mounted (there is no Merlot marketing organizing body), until February of this year when Nielsen research, commissioned by Blackstone, a Constellation-owned winery who positions themselves as, “America’s favorite Merlot,” was released. 

Somebody had to step up and counter the so-called, “Sideways effect.” 

Seemingly, the Nielsen research nailed its historical analysis and current Merlot assessment:  Merlot was a red hot varietal in the 90s leading to significant growth in acreage under vine in California (from 4,000 acres in 1988 to over 50,000 acres in 2005) with much of the new Merlot planted in hot and dry areas ill-suited to the varietal.  As bottling’s increased while quality democratized to the lower end, trade insiders – Sommeliers, retailers and wine writers – were soon grumbling and turned off by the insipidness of much of the Merlot that was being produced; the varietal had taken a turn toward plonk in their eyes. 

This collective, yet non-unified sensibility about Merlot quality, again with no central organizing marketing body to message on behalf of the battered varietal, reached its nadir with a simple proclamation made on the silver screen, giving validation to the unorganized linkage of similar thought from influencers.

Of course, the media, no stranger to making a story instead of reporting a story, grasped onto a short-lived decline in Merlot sales giving significant legs to a sales dip that was, in actuality, as quick as a hiccup.  The numbers bear this out.  Over the last five years, Merlot has grown in both sales dollars and volume. 

Merlot may have been damaged by a cabal of insider opinion that trickled down to the court of public opinion, as personified in a movie, but it wasn’t damaged by dollars or deed at the cash register. 

Better to find this out late than never.  If you’re Blackstone, a winery that has a money back guarantee on its wine, the only such guarantee I know of in the wine industry, you’re well-served by trying to counter the opinion that Merlot is dead in the marketplace, even if five years later.

At this point, however, collateral impact has been wrought by the zeitgeist, a mercurial ghost comprised of circumstance and public perception that is more durable than the paper Obama’s birth certificate is printed on, or Richard Gere’s gerbil.

This background becomes important because of the looming storm clouds gathering for another varietal wine that starts with an “M” – Malbec.

As a friend and wine industry insider said to me this fall, “Malbec is on the same trajectory as Merlot.  It might be a couple of years, but the time is coming when there will be a Malbec backlash, too.”

This backlash my friend speaks of, in particular, is an Argentinean Malbec backlash.  Argentinean wine imports to the U.S., comprised predominantly of Malbec, are up 27.6% according to September ’09 to September ’10 Nielsen sales data, as presented in Wine Business Monthly. 

Malbec is starting to become the equivalent to, yes, Merlot in addition to Aussie Shiraz – cheap and indistinguishable from any other bottle, frequently bad, seldom good, never great, raising the ire of insiders who will thoroughly dismiss it in the future regardless of how much of it sells. 

Already, based on price and ubiquity, I’ve heard whispers from core wine drinkers that Malbec isn’t a wine for them; it’s for other people – presumably the same people that have held up Merlot wine sales the last five years.

So, if you’re the Wines of Argentina marketing team, what do you do to counteract this fomenting movement and ward off the ghost of public perception?

I’m as interested in the answer as anybody else and doubly so after receiving a “trade” survey from a research outfit called Wine Opinions alluding to the question:  How do you grow Argentinean share of market?

The brief survey goes through some quality-to-value ratings for red and white wines above and below $15 for Spain, Italy, New Zealand, Argentina, France and Australia before getting to the meat of the survey and that is:  What can a trade association representing Argentina do to build share of market in the U.S.?

The range of potential marketing tactics included in the survey are:

• Advertising in food and lifestyle print magazines

• Distribution of education materials at point-of-sale

• Organizing visits to Argentina for influential members of the wine trade

• Conducting tastings for consumers

• Provide wine samples to members of the wine press

• Organizing visits to Argentina for members of the wine press

• Develop Argentina wine bars in major cities

• Develop a presence in social media

• Conduct tastings and education sessions for members of the wine press

• Advertising online

• Advertise in wine consumer magazines like Wine Spectator

• Conduct trade tastings

• Develop an information rich web site

Ironically enough, what is not covered in the survey is any perception issues related to the country’s flagship—Malbec.

Apparently, with sales so robust things must be fantastic, right?

Not so.

If Malbec (and Argentina by proxy) want to ward off being haunted by the same ghost that haunted Merlot and also haunts Australia, they would do well to forsake reaching into the wine marketing 101 bag of tricks, as evidenced by the verbatim bullet list above while instead focusing on controlling exports to the U.S. while diversifying their wine lineup.

Growing Argentina market share in the U.S. isn’t a marketing equation it’s a branding equation.  More diversity in varietals from branded wineries at price points up and down the price ladder while limiting the export of Malbec is the necessary tactic … not journalist junkets.

You see, what Argentina is fighting isn’t a market share or an “influence the influencer” paradigm, the battle they are getting ready to fight is the ghosts of public perception led by influencers—influencers who are starting to sow the seeds of their discontent as we speak.

To answer the question posed by the headline, “More than Malbec? Can Argentina Ward Off the Ghost of Public Perception before the Haunting?”  The answer is yes, but, only if they know that the U.S. isn’t a conquest of caseload, but rather a battle against the unseen. 

Alexis Bledel Ali Campoverdi Ali Larter Alice Dodd Alicia Keys