What now for Old World brands??

25 June, 2010

Made in France, enjoyed every­where,” runs the tag line on Chamarré’s appropriately colourful website. At the time of writing, both parts of this statement remain true, but for how much longer? The French wine brand that promised to say “no to wine arrogance, yes to simplicity and enjoyment” went into receivership on June 11 after its shares were suspended on the Paris Stock Exchange.

The brand may survive – there are rumours of a rescue package in France – but it seems unlikely. Losses in 2007 and 2008 (£4.3 million and £3.3 million, respectively), and a crisis affecting the co-operative sector from which Chamarré sources most of its wine, were so severe prospective buyers must be thin on the ground.

It all began so well four and half years ago, when Chamarré was launched in the UK by start-up company OVS, with the support of the French government, the backing of some of the country’s most powerful co-operatives and a substantial marketing and promotional budget. The idea was to create a brand to rival the New World, blending across regional boundaries to source large quantities of (reasonably) well-priced wine.

Chamarré has enjoyed more than a little measure of success since 2005. Even if you don’t like the designed-by-focus-group name (French for “bursting with colours”, in case you were wondering), its wines are generally well made and easy to drink. Put them up against JP Chenet and Le Piat d’Or and the contrast is striking in terms of quality.

The sentiments behind the brand make sense, too. As OVS’s founder and president Pascal Renaudat told the Guardian in 2006, France “has to simplify its products and reject an arrogant approach perhaps natural to us. It’s important to produce wine that corresponds to what people want to drink and at a good price”.

In a country riven by inter and intra-regional rivalries, where local political advantage is frequently considered more important than the good of the wine industry as a whole, Chamarré challenged the notion of origin and terroir, producing wines that generally eschewed appellations and even vins de pays.

The irony is that its two best wines to date – from Bordeaux and from the Jurançon – are both appellation wines.

If Chamarré fails – and the prognosis is not good – then it’s hard to see anything similar taking its place. The brand was dynamic and well-funded, with a decent portfolio of wines sourced from good co-operatives. What it failed to do was engage the palates of enough wine drinkers and, just as importantly, supermarket buyers and bean counters. Part of the reason Chamarré flopped is that its promotional resources weren’t deep enough.

What does Chamarré’s demise teach us? First, that France in particular and Europe generally, still find it very difficult to compete in the branded sphere. Take out JP Chenet and a couple of Italian Pinot Grigio “brands” (where the variety is paramount) and it’s the New World that dominates this increasingly powerful sector of the market. Of the 15 brands that sell more than 1 million cases, only one (Chenet) is European.

Steve Barton, director of Brand Phoenix, whose South African First Cape has become a 3.2 million-case brand in less than a decade, says consumers identify with European regions and (sometimes) grape varieties such as Rioja, Chablis, Bordeaux, Chianti and Pinot Grigio, rather than a brand name. “It’s impossible to build a French brand from scratch as it’s already been done. The regions are the brands,” he says.

Barton can talk from bitter experience here, having tried to launch a French brand called Renaissance in 2005. The name researched well, he says, but the wines just didn’t sell.

“We tried to build Renaissance like a New World brand and failed. We came up with a good brand name, but consumers had no desire to buy into that kind of thing from the Old World, even at an attractive price. They will happily purchase a brand from the New World, but not from the Old.”?Renaissance sold, or rather didn’t sell, at £3.99, which was at least £1 cheaper than Chamarré, whose two tiers retail at £4.99 and £6.99 off promotion. In Barton’s view, the latter is too expensive. “You have to get people to try your product, almost on a risk-free basis,” he says.

“You need to spend money on giving people a good price, rather than a fanfare-style launch with bold statements about how much wine you are going to shift. Chamarré started in an inflammatory way and didn’t get the retail support it needed.”?There are some good French brands out there – Blason de Bourgogne, La Différence, Dourthe Numéro 1, Paul Mas and Gérard Bertrand are examples – but none has cleared the 1 million-case barrier like JP Chenet. Why has Chenet succeeded? A memorable package is surely most of the answer.

If Chamarré is to come back from the dead, maybe it should switch to a funny-shaped bottle.


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