Tag Archive: marketing



trouble-brewing-walmart

This is a reaction to this article originally reported by the Akron Beacon Journal and expounded upon best (so far) by Food & Wine here.

The premise of the suit is that WalMart willfully deceived customers into believing that their private-label beer brand, Trouble Brewing (get it?!?), actually brewed by Genesee is a true “craft beer” brand justifying a higher price point than non-craft beers. The shock here is not that WalMart took this circuitous route around forthrightness but, rather, that it wasn’t presumed to be the case from everyone from the start. I believe that there is a huge measure of caveat emptor in play here.

Keep in mind, that private label beer, wine, and spirits have been made for Costco, 7-11, Total Wine, Walgreen’s, Trader Joe’s, and many huge or widespread domestic retailers selling any alcohol throughout the US. This is nothing new. There is a measure of subverting the truth with nearly all of them, generally lies of omission. Where is the line drawn for true deception, though?

If I were a craft beer drinker in Boise Idaho shopping the beer aisle at the Overland Road WalMart Supercenter the first thing that would come to my mind when seeing Trouble Brewing (made in 2,285 miles away in Rochester, NY) is economy of scale—that in order to feed WalMart’s massive empire, this beer can not likely be a true “craft beer” made in a small brewery run by a couple of bushy-bearded beer-lovers chasing a dream. I have accepted these products in in practice and, to some degree, in theory because the waters have been muddy for a long time now. “Craft beer styles” (read: non-American adjunct lagers) are produced by several large, otherwise uninteresting breweries—from SABMiller to Sam Adams—to under the guise of being truly “craft”. It is largely a semantic argument at that scale. These Trouble Brewing beers are, at this stage in the game, virtually no different from the relatively high-production stuff that their sister brands, Pyramid and Magic Hat, foist upon the public from neither a quality nor truth in marketing perspective. These beers are simply a product of economy of scale to feed the vast WalMart supply chain and, I am sure, everything about them speaks to that, from the sophomoric packaging and marketing to the reportedly uninspired flavor profiles.

Make no mistake, this suit was not brought forth by innocent consumers who were shocked into action when they discovered they were duped. Craft beer drinkers are largely one of the most discerning, self-informed, and vigilant consumer segments in the world and this suit was brought forth by a craft beer consumer bent on enforcing transparency. As anyone who has ever read this blog will attest, I am absolutely for fighting for transparency in marketing, but I don’t genuinely believe that the wool was really being pulled over anyone’s eyes in this instance.

The core consumer that may toss these beers into their cart along with small appliances, housewares, toys, diapers, cookies, and cleaning supplies is probably not largely the core craft consumer up-in-arms over this. Most consumers outside the craft beer enthusiast market likely don’t care if it’s really a “craft beer”, only that it provides a favorable experience for the price. The argument in the suit that Walmart inflated the prices for the beers to put them in line with other craft beers as a deceptive practice is spurious. Honestly, many large-scale “genuine” craft beers have inflated pricing. All that matters is what the market will bear. If consumers feel they are getting good QPR from this stuff, what does it matter how much profit WalMart makes on it? Profit margin is their business.

To the larger part of the claim—the deception of craft provenance —WalMart may be trying to emulate craft beer, but nowhere on the packaging do they directly claim “craft” or its similars in any way.  The brewery is listed as Trouble Brewing with the same Rochester, NY address as many of Genesee’s other contract brewed products. This is all pretty easy to discern if you are a consumer who cares about that stuff. And that brings me back to my point that the vast majority of people inclined to even consider buying this stuff do not care about provenance as long as they don’t find out that it was made by poor children with a heavy metal-laden water source next to an electronic parts reclamation farm.

The clues of provenance, and scale, and, ultimately, honesty are all there in front of us with these beers and many other products that we just don’t care enough to be cognizant of and reactive to. No one can deceive you unless you are open and available to the deceit.

None of this is to suggest that I have grown less vigilant in my own pursuit of transparency in marketing. I strongly believe that there is a pervasive problem in marketing within an industry where the only regulations of import have to do with taxes and very little of substance to do with consumer protection. But this is another instance where we do not seem to take enough personal responsibility for our consuming habits. It is incumbent upon us to engage ourselves a bit more in our buying habits if we care about this stuff. Once we have made that commitment, the mere subterfuge becomes white noise and we can zero-in on the genuine deceit. Otherwise, all of the after-the-fact griping and class-action suits hold no water when real hard-core deception that actually hurts people comes along.

Mike and Ike in Pastels


The New York Times broke a story yesterday about the new $15M marketing strategy by Elevator Group for candy maker, Just Born’s venerable Mike and Ike brand. It got me thinking about corollaries statements I made in my last post here:

“Hopefully, as a result, I will live to see a day when beverage purchase decisions are made by virtue of real choice between one honest product over another rather than having to sift through what is lab-generated and cleverly marketed to even get to the “real stuff”.”

and:

“The winners of this new consumer model will be those that don’t have to spend millions constantly sourcing new fruit contracts and creating new brands and ridiculous back-stories for wineries that don’t really exist.”

The new Mike and Ike campaign uses, essentially, the same tactics that the large wine conglomerates are using to capture millenial drinkers. The specific premise of the campaign is to create a back-story about Mike and Ike (two non-existent characters) as long-time friends whose relationship has gone sour and are openly vocal about their disagreements. This will play out in traditional print and billboard media as well as, most importantly, via carefully orchestrated social media flamewars on Facebook, Twitter, Pinterest and whatever the kids are into these days.

Large national and international wine concerns—Constellation Brands, Diageo, E & J Gallo, Treasury Wine Estates, and a host of others (I’m sure I’ll post lists of the household-name brands owned by the major conglomerates at some point)—create brands every year. This is done, in large part, to profit dramatically on excess juice produced by same-owned vineyards or purchased/contracted fruit from other growers. Let me be clear: there is nothing wrong with this. In essence, these products fill a void for cheap, everyday wine for a large base of consumers for whom a low price outweighs any measure of quality and help those companies keep their premier brands afloat. My concern with many of these pop-up products is the way they are marketed.

The conglomerates know that most consumers simply do not pay attention to where their favorite wine comes from, who owns it, or how it is made. This connects to what I always say is the greatest wine lie ever sold: wine is a natural product (a topic for a dedicated future post, to be sure). Very little about these wines is natural from production to sales. Part of the fabrication process is the marketing. This often starts with focus groups to get some sort of feel for what a specific demographic wants, is followed by brand creation, image development, and target marketing. Somewhere in there, the least important step, wine formulation (don’t be fooled, many of these wine products include flavorants and colorants), takes place.

The latest example of that methodology is Beringer’s (via owner, Treasury wine Estates) new Be. brand. This clever bit of board-room wine making is meant to appeal to millenial women—theoretically, young, impressionable, easy-to-capitalize-upon 20-somethings who respond to simple, emotional cues like “flirty” and “radiant” and, apparently, wines that only come in pastel colors. And it will work, because Beringer had a focus group of their core audience for this stuff pretty much create the brand image from scratch. But what happens when that core audience grows out of the brand in a couple of years? Another with a different image will take its place.

Mike and Ike is doing the same thing. Realizing that their core audience has forgotten them, they are throwing an extra 120-times the cash over last year at capturing a similarly impressionable demographic (slightly younger on the whole, and slanted toward male, but there is some overlap into consumers in their early 20’s).

As I said, it’s all fair-play in my book, but at some point this teeters on the edge of flat-out lying to get your business. Personally, I prefer a wine from a specific place, made by a specific person with no agenda other than making a good product at a fair price. The best I can hope for with these target brands is that they will be gateways to something better as the consumer grows.

How do you feel about being pandered to in this way?


Those of us born in the USA from the mid-60’s through late-’70’s have always been viewed as a lost generation. It has become an increasingly inaccurate assessment as this generation of “slackers” slip into our 40’s and quietly lead future generations by example. From a drink perspective, we are the generation that fed the craft beer boom, revived cocktail culture, and created a sizable market for organic options.

Perhaps, our next legacy will be passing on a desire for transparency, honesty, and integrity in consumer products (more specifically, for the purposes of this discussion: wine, beer, and spirits). We have touched on this issue with the trend toward organic/biodynamic products as well as with a tendency to seek out producers with our generational DIY ethic. We intuitively pursue products made by those who create their products in their back yards and market by word-of-mouth and (somewhat counter-intuitively) via the internet rather than in laboratories, by focus-group suggestion and traditional marketing media. While we embody this ideology, it will be the next generation—Generation Y or “Millenials”—that will have to pick up the mantle and make “integrity” the watch-word of beverage consumerism for the next 30+ years.

Why? Because millenials have (and will have) greater buying power. They already have far greater numbers (70+ million to Gen X’s 41 million). While income is currently terrible for both generations (largely due to unemployment), the outlook can only be brighter for millenials during their core, informed drinking years (those years after college when tastes are established and patterns emerge). This will be a generation that can change the practical functionality of a broken industry decisively for the long term.

Hopefully, as a result, I will live to see a day when beverage purchase decisions are made by virtue of real choice between one honest product over another rather than having to sift through what is lab-generated and cleverly marketed to even get to the “real stuff”. This is a subject that will persist throughout the life-span of this blog, so I felt it fitting that it be the first content post.

The impetus for this commentary was (as is often the case with me) a discussion on a LinkedIn forum regarding this article. Here is my response to the article:

“The Millenials will be the first true “explorer” generation that will not, as a general rule, get caught in a predictable wine-consuming pattern later in life and lean on one grape or brand for 30+ years as did boomers and, to a lesser extent, Xers.

The clearest example of that theory is being borne out in craft beer. I use the craft beer boom as the leading example because wine is a big-ticket start-up proposition and is still, largely, an “old money” (or generationally handed-down business) or a product of the less ideologically embraced acquisitional model of the beverage conglomerates. As such, the wine business is more proprietary/less open and ideologically cooperative as craft brewing.

As a backlash to boomers sticking with what their fathers drank and continually building the “big three” (Bud, Miller, and Coors), gen-Xers started brewing beers with flavor, honesty, and integrity borne out of a love of sharing good beer more than a love of its profit potential. They work together, often across oceans, to create new ideas and build an international understanding that there is something “more” to be had as producers and consumers through community acting together than by being insular and hiding factual information from peers and consumers (which is the long-held and current legacy of conglomerates like InBev and Constellation and is why they are in steady decline). This ideology of open access to ideas and information is most embraced by millenials and most craft brewers are smartly marketing primarily to them via social media and in-person interactions at beer festivals and such. That palpable honesty and openness is what will continue to grow craft beer’s market share driven by millenial consumers.

The principal difference between the growth of craft beer and the marketing analysis that tells us that Moscato is a growth varietal amongst millenials is that the former is ideologically rooted and sustainable while the latter is merely financially opportunistic and fleeting. Marketing Mosacto to millenials is the same as Malbec last year and Pinot Grigio the year before that and Kiwi Sauvignon Blanc the year before that. All it really accomplishes is giving bulk growers a means to sell off their excess fruit for a few years. In short order, millenial consumers will move on. In the short-term it may be to a different varietal or region, but, ultimately, they will begin moving in divergent directions.

Individual experience is what drives millenial consumerism more than any prior generation and there are few industries with as many avenues for exploration and tangential paths at wine. The abundant availability of information and opinions to be found and shared today will drive millenials in completely different pinball-like paths, crossing and bumping into each other seemingly randomly.

The winners of this new consumer model will be those that don’t have to spend millions constantly sourcing new fruit contracts and creating new brands and ridiculous back-stories for wineries that don’t really exist. Honest and true winemakers with a connection to their land and local history, and with passion for making good wine with the fruit that makes the most sense for where it is grown will return to prominence.

The lemming is drowned.”

What are your thoughts?

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