A shrinking consumer base requires a fresh brand strategy to open up to new demographics and regions, says Francis Perrin, CMO at the Ste Michelle Wine Estates.
Consumer spending on alcohol in the US is up – but the wine market is still tailing off. Legacy Washington State winery, Ste Michelle Wine Estates, knew it was time to go big or go home.
“Wine demand has traditionally been driven by Baby Boomers in America,” says Francis Perrin, chief marketing officer at Ste Michelle Wine Estates, a leading US premium wine producer located outside Seattle in Washington State.
“But Millennials have now surpassed Baby Boomers as the largest adult generation living in the US, so we were starting to see consumer numbers shrink. And when your customer pool starts drying up, you need to branch out and find new avenues.”
For the first time in 25 years, wine consumption in the US has fallen, according to global drinks market analyst IWSR. But while wine drinking is on the decline, Americans are spending more than ever on alcohol overall – around $167 billion. Which suggests that as new generations come up, they’re forking out on other drinks categories. Millennials and Generation Z are more likely to drink at home, and they’re buying premium spirits and RTDs.
“We needed to expand our demographic and up the brand’s global appeal,” says Francis. “And we knew that if we wanted a completely fresh perspective we’d be better off partnering with an external brand design agency, preferably one from outside the Pacific North West. To help us move forward, we needed to be challenged and encouraged to think outside the box. Denomination fitted the bill perfectly. It has studios in Sydney, London and San Francisco, and so was ideally positioned to give us objective international strategic advice, as well as having an understanding of the US wine industry.”
The Denomination team flew to Seattle and spent time with winery employees to get under Ste Michelle Wine Estates’ skin and fully understand its history, location and current market situation. The team discovered that Ste Michelle Wine Estates’ flagship brand, Chateau Ste Michelle, had experienced huge growth in the 1990s and early 2000s, and was a go-to brand for people in the 57-75 age bracket.
In order to achieve a more inclusive demographic profile and boost sales, it needed a fresher, younger and more relevant approach. But it was essential, too, not to alienate the existing loyal consumer base.
To achieve this, Denomination positioned Chateau Ste Michelle as a contemporary classic, with a tier structure that appeals to all levels, from novice to connoisseur. Leaning into the Pacific North West’s regional heritage provided differentiation in a sea of US competitors, as well as being more culturally relevant to foreign consumers. There’s a specific mindset in the Pacific North West that made sense for the brand. It’s aspirational but inclusive; premium but inviting; creative and forward-thinking. Recognising and celebrating those cultural dynamics meant that Denomination could remain true to the brand’s legacy while bringing it into the modern world.
“Our corner of the world is home to extraordinary innovation and entrepreneurialism, which is recognised all over the world – Starbucks, Amazon, Boeing and Microsoft came out of Seattle, for example,” says Francis, “We want Ste Michelle Wine Estates and Chateau Ste Michelle to be recognised all around the world as part of this great region of pioneers.”
A new take on tradition
To facilitate this modern take, the front labels were redrawn, so the sideways depiction of the château on the old label now appears front-on and in a contemporary, New World style. For the Columbia Valley SKU, the lush foliage in the impressive gardens at the château is conveyed through loose watercolours, giving a modern edge to the design. For the Indian Wells range, to represent its contemporary winemaking style, foliage is replaced with a dynamic and modern red brushstroke.
But it’s on the back label where some of the most important changes have been made, according to Francis. “If you want to appeal to younger generations you have to be completely transparent,” he says. So, for the first time, ingredients and nutritional facts are listed, along with a QR code so that people can access further information about the wine, its makers and the production processes.
“The QR code has made a big comeback during the pandemic, so it was exciting to be able to use this technology to communicate even more fully with our target consumers,” says Francis.
Covid-19 has had another, surprisingly positive impact on Ste Michelle Wine Estates. “Our business had a strong reliance on on-premise trade, which was badly affected. But we have an exploding ecommerce business now – we have made about five years of sales progress in one year! New sales channels, virtual wine tastings, large corporate events… The resilience and the creativity coming out of Ste Michelle Wine Estates has been wonderful to witness.
“With our new look and feel, the future’s looking pretty good at home and globally for Ste Michelle Wine Estates. Our whole brand identity has been refined to give it more modernity and sophistication while maintaining immediate recognition. Denomination managed to reimagine and modernise a brand that had a traditional feel, but without compromising a drop of its integrity.
“We showed the new design to both our current customers, and future consumers that were less familiar with Chateau Ste Michelle. In the end the design won both groups over, and we’re confident it will help with future growth. The Denomination team made it their business to get to know us and our customers – existing and potential – and they really listened.”