Case Studies in the Wine Industry

Case Studies in the Wine Industry

First Edition

Cristina Santini

Alessio Cavicchi

Table of Contents

Cover image

Title page

Copyright

Contributors

Foreword

Series Preface

1: Introduction

Part One: Market Outlook, Consumer Behavior and the Relevance of Consumer Science

2: Wine sector: Definitions and nuances from global to country analysis—A comparison between Old World, New World, and emerging wine countries from 2005 to current

Abstract

2.1 Introduction

2.2 Overview of the world market: Analysis of the OIV annual report

2.3 Regional analysis

2.4 Definition of wine categories

2.5 Grape varietals diversity

2.6 Conclusions

2.7 Further research

To make in-depth analysis per country

3: Consumer behavior toward wine products

Abstract

3.1 Introduction

3.2 Culture, age and gender as drivers in purchasing wine

3.3 Retails or alternative stores what wine consumers prefer

3.4 How packaging, wine characteristics and region of origin influence the consumer choice

3.5 Wine consumers behavior on holiday

3.6 Conclusions and discussion

4: Sensory and consumer sciences: What is their role as a business tool in the wine sector?

Abstract

4.1 Introduction

4.2 Methodology

4.3 Results

4.4 Conclusions and implications

Part Two: New and Innovative Products: The Role of Consumer Science

5: Ignoring consumer science? Three cases from Austria about innovation, philosophies, gut feeling, and intuitive decision-making

Abstract

5.1 Introduction

5.2 Innovation management

5.3 Intuitive decision making

5.4 Three cases from Austria

5.5 Conclusion

6: Sensory sciences and competitiveness in the wine business

Abstract

6.1 Sensory science as a tool for improving competitiveness: An introduction

6.2 Product and process development

6.3 Understanding the consumer

6.4 A case study

6.5 Conclusions

Part Three: Sustaining the Growth: Consumer Science and Market Growth

7: How consumer science can be employed in a terroir-based market strategy?

Abstract

7.1 Introduction

7.2 Aims

7.3 Material and methods

7.4 Sensory information, communication strategy and the main activities carried out by the consortia

7.5 The need for a new communication strategy

7.6 Future challenges

7.7 Conclusion

8: Emotion in the glass: An innovative study to understand unconscious reactions in wine tasting

Abstract

Acknowledgments

8.1 Introduction

8.2 Aims

8.3 Materials and methods

8.4 Results and discussion

8.5 Conclusion

9: Rebranding wine using sensory profiling data: A case study

Abstract

9.1 Methodology

9.2 Experimental results

9.3 Expert insights and its implications

Appendix 1

Appendix 2

10: The case of resveratrol-enriched wines: Is it possible to create a new niche or to revitalize mature products?

Abstract

10.1 Introduction

10.2 An outlook for the industry: The healthy trend

10.3 The resveratrol debate

10.4 Consumer orientation

10.5 The response of the market

10.6 Examples of REWs

10.7 Conclusions

Part Four: Interpreting Market Dynamics and Demand: Consumer Science as a Means to Achieve Strategic Information

11: Current trends and consumer motivation in the Ukrainian wine market

Abstract

Acknowledgment

11.1 Introduction

11.2 Method

11.3 Current trends in the Ukrainian wine market based on secondary data

11.4 Primary research of consumer motivation: Survey-based quantitative research

11.5 Primary research of consumer motivation: Key-informant-based qualitative research

11.6 Conclusions

12: How CS can be used for gaining info about consumers and the market?

Abstract

12.1 Introduction

12.2 Sustainable wine, consumers’ perceptions and market segmentation

12.3 Sustainable wine from the winemaker’s perspective

12.4 Conclusion

Appendix

13: Preliminary thoughts on the importance of sensory profiling for strategic decision-making in Canadian wineries

Abstract

Acknowledgments

13.1 Introduction

13.2 Expertise acquisition and the wine world

13.3 Philosophical considerations of sensory assessments

13.4 Findings and discussion

13.5 Conclusions

14: Evaluating the validity of consumer insights into the wine business

Abstract

14.1 Introduction

14.2 Objectives, materials and methods

14.3 Results

14.4 Final remarks

15: Conclusions

Index

Copyright

Woodhead Publishing is an imprint of Elsevier

The Officers’ Mess Business Centre, Royston Road, Duxford, CB22 4QH, United Kingdom

50 Hampshire Street, 5th Floor, Cambridge, MA 02139, United States

The Boulevard, Langford Lane, Kidlington, OX5 1GB, United Kingdom

Copyright © 2019 Elsevier Ltd. All rights reserved.

No part of this publication may be reproduced or transmitted in any form or by any means, electronic or mechanical, including photocopying, recording, or any information storage and retrieval system, without permission in writing from the publisher. Details on how to seek permission, further information about the Publisher’s permissions policies and our arrangements with organizations such as the Copyright Clearance Center and the Copyright Licensing Agency, can be found at our website: www.elsevier.com/permissions.

This book and the individual contributions contained in it are protected under copyright by the Publisher (other than as may be noted herein).

Notices

Knowledge and best practice in this field are constantly changing. As new research and experience broaden our understanding, changes in research methods, professional practices, or medical treatment may become necessary.

Practitioners and researchers must always rely on their own experience and knowledge in evaluating and using any information, methods, compounds, or experiments described herein. In using such information or methods they should be mindful of their own safety and the safety of others, including parties for whom they have a professional responsibility.

To the fullest extent of the law, neither the Publisher nor the authors, contributors, or editors, assume any liability for any injury and/or damage to persons or property as a matter of products liability, negligence or otherwise, or from any use or operation of any methods, products, instructions, or ideas contained in the material herein.

Library of Congress Cataloging-in-Publication Data

A catalog record for this book is available from the Library of Congress

British Library Cataloguing-in-Publication Data

A catalogue record for this book is available from the British Library

ISBN: 978-0-08-100944-4 (print)

ISBN: 978-0-08-101046-4 (online)

For information on all Woodhead publications visit our website at https://www.elsevier.com/books-and-journals

Publisher: Charlotte Cockle

Acquisition Editor: Megan R. Ball

Editorial Project Manager: Karen R. Miller

Production Project Manager: Joy Christel Neumarin Honest Thangiah

Cover Designer: Greg Harris

Typeset by SPi Global, India

Contributors

Lindsay Ferrara Adrienne     Wine and Viticulture Department, California Polytechnic State University, San Luis Obispo, CA, United States

Lucia Irene Bailetti

Department of Education, Cultural Heritage and Tourism, University of Macerata, Macerata

Santa Chiara Lab, Università degli Studi di Siena, Siena

CIAS Innovation, Centro Italiano di Analisi Sensoriale, Matelica (MC), Italy

Diego Begalli     University of Verona, Verona, Italy

Lecat Benoît     Wine and Viticulture Department, California Polytechnic State University, San Luis Obispo, CA, United States

Matteo Bonfini     CIAS Innovation, Centro Italiano di Analisi Sensoriale, Matelica (MC), Italy

Roberta Capitello     University of Verona, Verona, Italy

Elena Casprini     Department of Business and Law, University of Siena, Siena, Italy

Alessio Cavicchi     Department of Education, Cultural Heritage and Tourism, University of Macerata, Macerata, Italy

Maria de Salvo     University of Verona, Verona, Italy

Matteo Devigili

Department of Business and Law, University of Siena, Siena

Doctoral School of Social Sciences, University of Trento, Trento, Italy

Bianca Grohmann     Concordia University, Montreal, QC, Canada

Annamma Joy     The University of British Columbia—Okanagan, Kelowna, BC, Canada

Natalia Kochkina     Department of International Economic and Marketing, Taras Shevchenko National University of Kyiv, Kyiv, Ukraine

Maria Bonaria Lai     Associazione Scientifica Centro di Portici, Napoli, Italy

Karine Lawrence     Sirocco Consulting, Kelowna, BC, Canada

Michael Lee     IMC Krems University of Applied Sciences, Krems, Austria

Higgins Lindsey     Wine and Viticulture Department, California Polytechnic State University, San Luis Obispo, CA, United States

Larry Lockshin     Ehrenberg Bass Institute for Marketing Science, University of South Australia, Adelaide, SA, Australia

McGarry Wolf Marianne     Wine and Viticulture Department, California Polytechnic State University, San Luis Obispo, CA, United States

Venerucci Matteo     Brain Propaganda, Beograd, Serbia

Chiara Mignani

Department of Education, Cultural Heritage and Tourism, University of Macerata, Macerata

Santa Chiara Lab, Università degli Studi di Siena, Siena, Italy

Camilo Peña     The University of British Columbia—Okanagan, Kelowna, BC, Canada

Giuseppe Potentini     Istituto Istruzione Superiore Giuseppe Garibaldi, Macerata, Italy

Tommaso Pucci     Department of Business and Law, University of Siena, Siena, Italy

Sergio Puccioni     CREA—Research Centre for Viticulture and Enology, Arezzo, Italy

Cristina Santini     Dipartimento di Scienze Umane e Promozione della Qualità della Vita, Università San Raffaele, Rome, Italy

Giovanni Sogari

Department of Food and Drug, University of Parma, Parma, Italy

Dyson School of Applied Economics and Management, Cornell University, Ithaca, NY, United States

Albert Franz Stöckl     IMC Krems University of Applied Sciences, Krems, Austria

Paolo Storchi     CREA—Research Centre for Viticulture and Enology, Arezzo, Italy

Stefania Supino     Dipartimento di Scienze Umane e Promozione della Qualità della Vita, Università San Raffaele, Rome, Italy

Ernesto Tavoletti     Department of Political Science, Communications and International Relations, University of Macerata, Macerata, Italy

Stephanie Tischler     IMC Krems University of Applied Sciences, Krems, Austria

Amspacher William     Wine and Viticulture Department, California Polytechnic State University, San Luis Obispo, CA, United States

Foreword

Larry Lockshin, Ehrenberg Bass Institute for Marketing Science, University of South Australia, Adelaide, SA, Australia

Case Studies in the Wine Industry takes a slightly different viewpoint to most books about wine business and wine marketing. The viewpoint is one of understanding consumer behavior and related sciences around wine, but it combines both research and case studies. Most wine marketing research books focus on research studies and interpret them for both academics and practitioners often with a focus on practitioners. This new book adds case studies in each chapter to help clarify the research and highlight how it has been adopted in the real world. This is a more useful approach for practitioners.

Another benefit of this book is the scope of the material. The book starts with an overview of the world wine market and a focus on consumer behavior and consumer science. A unique part is to discuss sensory science as a part of wine marketing rather than as a science related to production. There are a number of chapters linking different aspects of sensory science to areas usually not considered together, such as sensory science and strategy and profiling consumers using sensory techniques including neuroscience measurements. Consumer science is also used in new ways in developing strategy and market analysis and even in how firms process information.

This book adds to our understanding of how to improve wine marketing in a practical sense by focusing on some new viewpoints and emphasizing their practicality with case studies.

Series Preface

Alessio Cavicchi¹; Cristina Santini², Series editors ¹ University of Macerata, Italy, ² University San Raffaele Roma, Rome, Italy

The recent background document, published by the European Commission for the High-level event on FOOD 2030: Research & Innovation for Tomorrow’s Nutrition & Food Systems held in 2016, underlines how the European food sector unites centuries of know-how with innovation in areas such as packaging, storage, transportation and marketing. Thanks to its size and importance, the EU food sector acts as a global benchmark. It is diversified yet standardized, traditional yet highly innovative, local but integrated and consumer-driven.

This description well explains the complexity of a sector in which many challenges for all the stakeholders stand on a tradition-innovation continuum. According to several market research companies, consumers’ trends in the next years will be affected by changes driven by different motivations, such as health awareness and preference for niche products, and by a growing influence of new technologies for both food processing and communication.

Thus, today’s food and beverage companies have to face multifaceted consumers’ demand. Recently Forbes, in its State of the Wine Industry 2018, stated that companies should be vigilant, market savvy, and adaptable. In fact, a renewed attention to consumers’ emerging needs and trends is motivating the profound industry transformations at various levels. Innovation can be a leverage for meeting customer’s demand; the market can also create the chance for a rejuvenation of mature products. Companies should understand how to optimize the flow of information and the inputs they gain from the market.

Thus, a synchronized combination of different disciplines like economics, psychology, sociology, marketing, management, anthropology, neuroscience, and statistics (just to cite the most relevant) as well as their relations to sensory analysis is necessary to increase the accuracy of forecasting and detecting the probability of consumers’ food choice by adopting a huge variety of qualitative and quantitative research methods. According to the DG-RTD of the European Commission, this combination of different fields, addressed to understand how people think, perceive, and behave about food and its production, is part of a multidisciplinary area of research of increasing importance that crosses both social and natural sciences: consumer science.

This series, focused on consumer science and strategic marketing, provides practical information, through real cases and field-based research, to support practitioners in understanding how research in the field of consumer science is relevant for marketing strategies.

The Woodhead Publishing Series in Consumer Science and Strategic Marketing presents the tangible economic and financial outcomes obtained by the joint work of sensory scientists, marketing researchers, and agribusiness managers and outlines communication methods and practices that support research and development in the food and beverage sectors. And, volumes in this series present successful examples and provide the foundation for further theoretical investigation.

Volumes in this series address the several research questions, including:

●Which market trends and challenges can be observed at international level?

●How did research in the field of consumer science become relevant for marketing strategies of SMEs?

●Which tangible economic outcomes have been obtained by the joint work of consumer scientists, researchers, and consultants in marketing field, agribusiness managers, and SMEs owners?

●Which challenges do these places face in order to make the most of R&D?

Practitioners in the food and beverage sectors of the food industry, including marketing, communication, and R&D managers, entrepreneurs, and managers of subject matter experts in food and beverage sectors, undergraduate and postgraduate students studying business, agriculture, food engineering and technology, and academics teaching courses in the fields of agribusiness, applied marketing, or business strategy are sure to find the Woodhead Publishing Series in Consumer Science and Strategic Marketing a useful reference.

1

Introduction

Cristina Santini*; Alessio Cavicchi†    ⁎ Dipartimento di Scienze Umane e Promozione della Qualità della Vita, Università San Raffaele, Rome, Italy

† Department of Education, Cultural Heritage and Tourism, University of Macerata, Macerata, Italy

Wine is a multifaceted and complex product, yet the wine business itself is complex too.

Some years ago, Orth et al. (2007) had admirably depicted the characteristics of the wine business: the emerging of new competitive scenario, the growing importance of retailing, and the availability of huge volumes of quality wines have made the marketing and management of a wine business extremely challenging.

Running a wine business means dealing with the following issues, among others: How to differentiate a product? How to succeed in a foreign market? How to turn terroir into a strategic leverage? How to deal with consumers more and more conscious of intrinsic and extrinsic attributes? And many other questions and problems emerge.

The role of consumers’ preferences has progressively gained importance.

This scenario has created a breeding ground for international research: researchers have investigated the relevance of consumers from multiple perspectives. Terms such as consumer behavior, preferences, expectation, and buying behavior became part of the vocabulary of the wine business. The advances in research and the accessibility of research insights have fostered the interest toward consumers. New tools have been designed for understanding consumers, markets, and emerging needs. The interest toward consumer science grew, and nowadays, it can be reasonably considered as a multidisciplinary area of research of increasing importance that crosses both social and natural sciences for supporting strategic planning.

This book is divided into four different sections. The first part of the book introduces the characteristics of the business, and it provides a framework for understanding the state of the art in consumer science. As previously outlined, the ongoing competitive challenges are reshaping the wine business. In Chapter 2, Lecat et al. illustrate the dynamics that are affecting the system of production and consumption in the wine business; the authors underline the change of the competitive scenario according to geographic location and countries’ lack of international awareness. Lecat et al. provide a deep understanding of the world wine market, and they underline the risk that some Old World countries are running: isolationism can represent a threat due to the fall of local market capacity to absorb wine production. The relationship with the market, the predominant role of consumers, and the need for interpreting market trends and needs emerge.

Chapter 3 explores the issue of consumer behavior toward wine product, and Chapter 4 introduces the reader to the importance of consumer science as a business tool. Lai, in Chapter 3, provides a comprehensive overview of the motivations behind the differences in wine purchasing according to emerging findings from the academic literature. The ongoing globalization of the wine business and the changes in the competitive scenario, as Lai underlines, contribute to the emerging of new characteristics in wine consumers, and consequently, new market needs occur. The interest in consumer behavior is fully motivated, as well as the awareness for the employability of consumer science tools.

Chapter 4 offers an overview of academic contributions to the issue of consumer and sensory science as a strategic marketing tool. This chapter underlines the importance for producers to adopt a consumer-oriented approach, and it highlights how consumer and sensory science can be adopted to this aim. Therefore, the relevance and usefulness of a multidisciplinary perspective emerge, and Chapter 4 underlines the emerging insights from background research that provides inputs for combining different tools and research methodologies.

In the second part of the book, the attention focuses on the role that consumer science has in the development of new products. Chapter 5 provides three cases from Austria and gives the reader the opportunity to reflect on the innovation process; although in this process intuition plays a relevant role, the employment of some specific analytic tools can be extremely fruitful. In this chapter, Stöckl et al. also introduce the motivations that limit the implementation of consumer science in wineries and explain the resistance that producers generally show.

Chapter 6 provides another case in the Marches Region (Italy), and it describes how small and medium companies can employ consumer science and sensory analysis for improving their competitiveness. Chapter 6 illustrates, in a sense, a solution to the critical issues that are described in Chapter 5 and that can inhibit the adoption of consumer science in strategic marketing.

The third section of this volume explores the relationship with the territory, and more specifically, it explores how consumer science can support strategies where a territory plays a relevant role.

Chapter 7 offers an interesting case study of an Italy-based company that has successfully promoted protected designation of origin (PDO) wines through a sensory-science-based strategy. From Chapter 7, an innovative approach to terroir characteristics emerges.

Chapter 8 focuses on the importance of managing information—and more specifically the information displayed on a label—by considering emotional values. The combination of consumer science and neuromarketing tools can provide useful insights for effective management of geographic indications on the label.

Chapter 9 explores the rise of locally produced wine in British Columbia (in Okanagan Valley), and it investigates the elements that contribute to creating a tasting culture among local consumers.

Thus, when producers are facing difficulties—due to the growing competition and a shift in demand—they should consider new ways of promoting and differentiating their products.

Chapter 10 focuses on this issue and proposes a reflection upon the usefulness of consumer science for the promotion and marketing of resveratrol-enriched wines or wines particularly rich of resveratrol, due to the pedoclimatic characteristics of production.

The last section of the book explores how consumer science can provide useful information when planning a strategy.

In particular, Chapter 11 explores the role that an in-depth knowledge of consumers can have for a successful development of a new market: the case of Ukraine surprisingly appears as one of the most dynamic and exciting wine market.

Chapter 12 provides a description of how consumer science is managed for gaining information about consumers and markets. This chapter also explores the topic of sustainability and the importance given by wine consumers to environmental or sustainable issues.

Chapter 13 contains a profound reflection on the management of information gained through sensory profiling for the development of a successful marketing strategy of Canadian wines. The issue is particularly interesting, given the importance that Canadian wines are gaining in the international market scenario.

The last chapter, Chapter 14, explores the determinants that facilitate the usage of consumer science for strategic marketing: Bonfini et al. have studied the behavior of a group of firms based in Italy and their relationship with consumer science.

This book provides an overview of the potentialities, the limits, and the relevance of consumer science to implement effective strategic marketing initiatives in the wine sector. The aim of the book is not only to provide insights for professionals and academics but also to foster a discussion on the examined topic and to stimulate further research.

Reference

Orth U.R., Lockshin L., d’Hauteville F. The global wine business as a research field. Int. J. Wine Bus. Res. 2007;19(1):5–13.

Part One

Market Outlook, Consumer Behavior and the Relevance of Consumer Science

2

Wine sector: Definitions and nuances from global to country analysis—A comparison between Old World, New World, and emerging wine countries from 2005 to current

Lecat Benoît; Amspacher William; Higgins Lindsey; Lindsay Ferrara Adrienne; McGarry Wolf Marianne    Wine and Viticulture Department, California Polytechnic State University, San Luis Obispo, CA, United States

Abstract

Consisting of wine, beer, cider, ready-to-drink (high-strength premixed alcohol), and spirits, the worldwide alcoholic drink market is a $1397 billion industry. In 2015, the size of alcoholic drink market value was spread as follows:

- $613 billion for the beer, cider, and perry (pear-based cider) market

- $472 billion for the spirit market

- $287 billion for the wine industry

- $24 billion for ready-to-drink beverages

The beer and spirit industries are highly concentrated. The 10 largest brewers have 60% market share, while the 10 largest distillers have a market share of 26%. On the other hand, the wine industry is not as concentrated with the 10 largest wine companies holding 14% market share (Easton Sally, 2015); most of these companies are American-based. On a volume basis, the worldwide wine and spirit industries are comparable, whereas the beer industry is nine times bigger. When we compare the categories, in volume, the market share for beer and cider is 44%, spirits is 39%, wine is 16%, and ready-to-drink is 1%.

Based on International Organization of Vine and Wine (OIV) data, wine production has been decreasing in the Old World, while the New World has been reporting increases in wine production. New players coming from emerging countries have also moved into this lucrative wine market with a focus on their local market for the moment. These changes will have several notable consequences for wine industry stakeholders: firstly, the increasing number of wineries in the New World (due to the market growth) and the associated competition; secondly, the decreasing vineyard area in the Old World and combined improvement in quality to maintain not only