Sterling Vintner’s Collection: building a winning brand
When the Sterling Vintner’s Collection wine brand was introduced Apr. 1, 2000, the initial rollout was about 50,000 cases. At the end of June this year, depletions of 525,000 cases were reported, according to Ray Chadwick, president of Diageo Chateau & Estate wines. That’s rather amazing growth. How did it happen?
The first wines released, a Merlot and a Cabernet Sauvignon from Central Coast grapes, were from the 1997 vintage, a good year for red wine in California, which gave Vintner’s Collection a leg up with quality in the bottle. The initial market was restaurants and that was really the first step in building the brand. A Chardonnay was added later. In the past year, the line has been extended with a Shiraz, a Pinot Noir and a Sauvignon Blanc.
“We were supply constrained,” Chadwick said in a recent interview with Wines & Vines. “We didn’t have enough supply to roll out across all trade channels, so we decided to concentrate on-premise. That’s where you build your image and prestige, anyway.”
About two years ago, Diageo (the brand was actually launched when Seagram owned Sterling) took the brand off-premise into retail stores. “That hasn’t hurt our on-premise sales at all. They are continuing to grow,” Chadwick said. “Our goal from the beginning was to be in all trade channels.”
Another important step in brand-building is picking a target audience. “We were looking for premium wine consumers who buy in the $10 to $15 category, the core group of high value wine consumers. Our primary mission is not to expand the market or attract new drinkers,” Chadwick said. The demographics for Vintner’s Collection are evenly split between male and female, and tend to be higher income consumers with a college education.
Chadwick added that the target audience selected also minimized competition between the Vintner’s Collection line and the Sterling Napa wines. “We believe that the wine consumer stays in his or her price category. If you ordinarily buy a $7 bottle of wine, you rarely go above that. The Sterling Napa wines are priced above the Vintner’s Collection, so we don’t feel there is competition between the two brands.” The numbers bear out Chadwick’s point. Sterling Napa is bigger now, with total annual sales of about 300,000 cases, than it was when the Vintner’s Collection was introduced.
Packaging, of course, also played an important role. “You go into a big Safeway and there might be over 300 brands of Chardonnay. How does the consumer choose? What’s in the bottle is important, but the package is a key part of building a brand,” Chadwick said. He added that packaging was another way to distinguish between the Vintner’s Collection wines and the Sterling Napa wines.
In brand-building, Chadwick said it is the other brands in the target price area that he considers the competition. In other words, he doesn’t consider “Australia” a competitor, except Australian wines in the $10 to $15 range. “I was in a supermarket in Atlanta recently, and the wine was entirely arranged by price and varietal. There was [yellow tail] next to Woodbridge and Merlots from Italy, France, California, Australia are shelved together. The wine consumer thrives on diversity.”
In general terms for brand-building, Chadwick said it is necessary to begin by satisfying the needs of the distributors. “These days, distributors are really serious wine people. We involved them early on in the development and packaging of the wine. Vintner’s Collection offered a specific wine with Sterling’s reputation for quality, and that opened a lot of doors for us.”
The next step was to get the trade involved. In the case of Vintner’s Collection, that meant the restaurant trade. “You need the critical acclaim of the door-keepers. There was also consumer research. You must cover all those bases to make it work,” Chadwick said.
“The market is much more competitive than it was. The focus is more on what you put in the bottle, not only in terms of overall quality, but how you differentiate the product. The wine needs to be more distinctive, and it needs to stand out on the shelf,” Chadwick said.
The wine itself is sourced almost entirely from the Central Coast–mostly Monterey County grapes from the Paris Ranch vineyard near King City. The winemakers are Chris Millard, in Monterey, and Rob Hunter, in Napa. It is made in a fruit-forward style, using standard premium winemaking techniques. One veteran observer of the California wine business commented about Vintner’s Collection: “There is the same commitment to quality with those wines as with the Napa wines. No difference.”
Chadwick has good credentials as a brand-builder. He was named president of Diageo’s wine operations in 2001, assuming responsibility for the integrated wine operations of Guinness UDV North America and Seagram Chateau & Estate Wines. He joined Seagram in 1974, and worked in several key positions there, including market research, sales and finance.
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