A rallying cry for the Rhône

20 August, 2010

Over the past couple of decades, the Rhône Valley has grown used to being seen as an exceptional case in the story of French wine imported into the UK.

While winemakers in other regions loudly despaired at their loss of market share, the Rhône quietly got on with growing its sales, earning a justified reputation for value, consistency and market awareness that sometimes made it feel more like an outpost of the New World. In the past year or so, however, some observers have begun to wonder if the Rhône’s fairytale has begun to turn sour. They point to recent sales figures that seem to suggest the Rhône has proved no more resilient to the perfect storm of unfavourable exchange rates and recessionary conditions in the UK economy than the rest of the French category. They worry that Inter Rhône, the generic body that has previously seemed beyond reproach, is losing interest in the UK market, with a reduced budget, changes in personnel and little in the way of activity at this year’s LIWF. Are they right to be concerned? Well, a quick glance at those sales stats might seem to suggest they are. In volume terms 2009 was not a great year for the Rhône, with a 13% drop in sales. Recent figures from Inter Rhône seem little better for a region accustomed to growth – a 5.8% drop in volume for the year to the end of May 2010. What’s more, Olivier Legrand, formerly the head of Inter Rhône’s UK operations, now the organisation’s general marketing manager, admits there has “been a slight reduction” of around £40,000 in the budget for 2010 compared with 2009, from just under £1.03 million to just under £990,000.

Look beyond the headline figures, however, and you get a rather different view of the Rhône’s current state of health – one which suggests it would be more than a little premature to write off what Robert Skalli, president of Skalli, one of the Rhône’s leading producers, calls “the most dynamic region in France”.

The right direction

Certainly, Legrand is convinced things are moving in the right direction and that the Rhône continues to set the standard for the rest of France. The reason for his optimism rests partly in the stabilisation of sales in the past six months. More important, however, is what he calls the “upscaling” of Rhône wines in the UK.

“Our fall in the past year is clearly not due to some disaffection from UK consumers,” Legrand says. “It’s down to the fact we have lost listings of entry-level wines, since our suppliers are no longer able to supply these products.

“This is because of the weakness of the pound versus the euro, the yearly increases of duties, the increase of raw materials and so on. We have been replaced by cheaper wines from countries where the FOB price has fallen considerably. This is a supply factor, and not a demand factor, which would have been much more worrying. At the same time, we have seen that consumers are ready to continue buying Rhône wines despite the price increase. It shows we have managed to build a consistent image of our wines for UK consumers, who don’t consider Rhône as ‘basic’ Côtes du Rhône only.”?Legrand points to the dramatic rise in sales of the Rhône’s more premium offers, the village and cru wines, including such high-end appellations as Côte-Rôtie (up 17.5%) and Hermitage (up 12%). He says a “focus on the awareness and visibility of premium wines” will continue to be a central part of Inter Rhône’s strategy for the next year in the UK – a market in which, he says, “we are still investing a lot”.

Other activities include a major focus on rugby, featuring sponsorship of the London Double Header event at Twickenham in September and a series of rugby-themed trade press ads.

The distinctive “Think Red” photo ad campaign will also continue, backed by a budget of £500,000. And the body has appointed a new UK export manager, Aurélie Mauchand, to replace Legrand, who will, he says, still take an active interest in the UK market himself.

In tune with the trade

“Inter Rhône is one of the most efficient inter-professions in France,” says Skalli. “The level of investment remains high. But the UK economic crisis meant it was more difficult to set up promotions and operations with supermarket chains as consumer behaviours were difficult to assess.

“The main priorities for the Rhône are to educate consumers on the Rhône Valley and build awareness for Côtes du Rhône and Rhône Valley appellations; to recruit consumers outside of French wine drinkers; and to accelerate premium/super-premium wines (priced £8-£12) as the Rhone’s offer is extremely rich and attractive in this segment,” Skalli adds.

Elizabeth Ferguson, marketing and PR director at Mentzendorff, which looks after Chapoutier in the UK, broadly agrees with Skalli, but would like to see Inter Rhône move even further in the premium direction. “We’re delighted it’s flying the flag for the region, but I think it’s still majoring a little on the volume end,” she says. “Personally, I don’t feel there’s a lot of activity going on around the northern Rhône AOCs, so it would be nice to see more in that respect.”

An increased focus on those AOCs would also be welcomed at Sainsbury’s, which is set to introduce a Saint-Joseph and a Crozes-Hermitage, both from Chapoutier, as well as a Gigondas into its Taste the Difference range this autumn. “Overall, I think the Rhône – with its diversity of styles – delivers great value at all price points for wine customers, both at entry level and at the more premium/appellation end,” says Sainsbury’s buyer Michelle Smith. “However, personally, as a positive message, I think the regional representatives for France could share their insights and work together to drive sales of French wine versus ‘wine from the rest of the world’, rather than perhaps duplicating the work they do. They should work towards a more New World model where they pool their knowledge and resources for a national benefit,” she adds.

It’s a nice idea. And in the unlikely event that this ever comes about, the rest of France could learn a lot from the still exceptional Rhône.

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