Nielsen: Celebrity Drives Wine Sales

Discussion
Mar 11, 2008

By Tom Ryan

With established lines from film director Francis Ford Coppola, former NFL coach Mike Ditka and professional golfer Greg Norman recently joined by new releases from Martha Stewart and Paul Newman, celebrity-endorsed wines appear ripe for growth. According to The Nielsen Company, celebrity wines are up nearly 19 percent in grocery store sales since last year and now represent 0.9 percent ($41.8 million) of total wine sales.

Nielsen pointed to several factors fueling the growth. First, existing celebrity brands are expanding and gaining new distribution through new line extensions. Second, more celebrities have launched their own brands in the past year or have had suppliers launch lines under their names – stimulating and enlarging the overall opportunity. Finally, savvy marketers are leveraging “the ‘celebrity’ benefit into expanded marketing programs” via in-store advertising, outdoor events and traditional and online media.

“While some celebrities have had a long-standing personal affinity for these product categories, others view these products as extensions of their established ‘lifestyle brands’ and have connected with willing supplier partners to produce and market them,” said Richard Hurst, senior vice president, Beverage Alcohol at Nielsen, in a statement. “Some suppliers, particularly wine suppliers, do not have the resources to launch big advertising and promotional campaigns and a celebrity can lend a brand instant recognition. Ideally, the celebrity’s reputation also helps reinforce the company’s image in the marketplace.”


Nielsen’s research shows that while promotions, such as in-store advertising, are driving incremental sales, celebrity wines do not necessarily receive much more “retail paparazzi” support. Fifty percent of celebrity wine volume is sold on promotion – about the same as the table wine category as a whole. When it comes to pricing, however, consumers are paying an average of $8.50 per 750ml bottle of celebrity wine, versus $5.75 per bottle of table wine. Most celebrity wines are priced between $12 and $15.

Discussion Questions: Why do you think celebrity endorsements are working so well in the wine category? Is the dynamic different in wines than with other celebrity-endorsed products in the grocery channel?

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13 Comments on "Nielsen: Celebrity Drives Wine Sales"


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M. Jericho Banks PhD
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M. Jericho Banks PhD
14 years 2 months ago

Remember the Smothers Brothers’ award-winning “Refrigerator White” wine from the nineties? Gone now. Just another celebrity indulgence. Paul Newman is the only poobah to lend his name successfully to consistently-purchased consumables.

While working closely with Julia Child in the 80s when she was the spokesperson for the Winegrowers Of California and I was in charge of their advertising at BBDO in SanFran, I asked her why she didn’t put her name on a line of wines to benefit the American Institute of Wine & Food she founded (we paid her entire spokesperson fee to the AIWF). Her answer was profound and totally Julia: “People find joy in searching, experimenting, discovering, and sharing. This applies to wine almost as much as food and recipes, and I would never deprive anyone of that experience. We seem to enjoy searching even more than finding.” What a gal.

Ray Grikstas
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Ray Grikstas
14 years 2 months ago

I have no idea why “celebrity” wine should be so successful. Other than the comic effect of being able to say something like, “We’re having Martha Stewart for dinner” 🙂

Now, if the endorsing celebrity was someone with *literal* good taste (like a chef) then I might buy. I’m surprised the celebrity chefs aren’t in on this already.

Alison Chaltas
Guest
Alison Chaltas
14 years 2 months ago
Once upon a time, there were famous wine houses (like Chateau Margaux, Lafite and Haut-Brion) who entertained celebrities of their time (Thomas Jefferson and Napoleon) to spread the word of their amazing productions. Their success was based upon quality and have remained not only in distribution, but in high demand. Enter Mondavi and Gallo, who understood a whole republic of people that needed entry level options. They single-handedly created a new phenomenon of value-priced “wine.” For those who can’t afford to buy in a different price tier, or have simply not built up the knowledge base necessary to feel comfortable in purchasing higher priced wines, celebrity-endorsement is a great way for them to feel confident that their expenditure will be on something worthy. Let’s keep in mind, though, that even according to Nielsen, these modern day “celebrity-endorsed” wines are still less than 1% of total wine sales and over 50% are sold on promotion, with an average retail ring of $8.50. They have a little way to go to catch up to some of the… Read more »
Bill Clarke
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Bill Clarke
14 years 2 months ago

Many shoppers don’t know squat about wine so they rely on the status of the celebrity to ward off any potential feedback from family members or guests when they serve the wine. In effect, if it has a Greg Norman label, then it’s got to be a decent wine, which is true for his wine. It is the same psychology that comes into play with the Paul Newman line of products. The shopper relies more on the reputation of the celebrity than they do their own knowledge of the product.

Marc Gordon
Guest
Marc Gordon
14 years 2 months ago

Nielsen missed one key component in their analysis: over the last number of years, wine has become a high end “every man’s” drink. No longer exclusive to the snobbish elite, now everyone can purchase a nice red to go along side their pork chops and baked beans. And with the introduction of Joe Average consumer to a new market, so follows his values and beliefs. In this case, those values easily fit in with those being presented by celebrities they can relate to.

Jeff Weitzman
Guest
Jeff Weitzman
14 years 2 months ago

I agree that a recognizable endorser provides some clue to consumers who otherwise have no idea what to buy. They at least know that someone’s reputation is on the line, so it’s something to go on.

But we should also be careful to distinguish between serious winemaking by someone who has made their fortune in other areas and a celebrity who lends their name to a label. Francis Ford Coppola bought the Gustav Neibaum vineyards, an estate that dates back to the 19th century and arguably first introduced quality winemaking to Napa Valley (regardless of its later incarnation making jug wines). He’s been making a variety of quality wines for decades, and has some top-rated bottles. No different is Fess Parker; Davy Crockett built a very well-regarded label with some bottles that score in the 90s.

Their celebrity no doubt helped them get attention, but the wines are the reason they are still in business.

Mark Lilien
Guest
14 years 2 months ago

$42 million is a figure so small as to be virtually meaningless, compared to total wine sales. A single movie directed by Francis Ford Coppola grosses a multiple of $42 million. The headline should have been “Celebrity Endorsements Don’t Drive Wine Sales.”

Gene Hoffman
Guest
Gene Hoffman
14 years 2 months ago

If a director Coppola can make homespun ingenues movie stars; if a great football player, Mike Ditka, can swill the grapes without wrath; if Greg Norman can tee off with straight shots after a bottle from his “Down Under” vines; if Paul Newman’s Own vino helps account for his blue-eyed allure; and if the ever-expanding designs of Miss Martha are enhanced by her endorsed Cabernets, how can we pedestrians resist exchanging our dollars for the magical visions engendered (even if the wines involved are not otherwise very compelling).

Ben Ball
Guest
14 years 2 months ago

Celebrity endorsements serve the same purpose as names like “Red Truck” and “Yellowtail” or as unique bottle shapes like “Corbett Canyon” or “Cinzano Chianti” (come on, you had one as a “candle holder” in college, didn’t you?). They provide a way to attract attention in a very cluttered environment where most products get only one or two facings.

The celebrity endorsement also provides a surrogate for quality in a category most people like a lot, but know very little about. Consumers assume that any one with that much money must know something about wine.

Max Goldberg
Guest
14 years 2 months ago

In our celebrity obsessed world, it’s no surprise that consumers would buy celebrity wines–at least to try them. If the wines deliver on the celebrity cache, and actually taste good, they will continue to buy them.

For years, wine makers have striven to put appealing labels on their bottles. Why shouldn’t known celebrity faces serve as a magnet for consumers? It will be interesting to see how many of these celebrity wines are still on the shelf 5 years from now.

Mike Osorio
Guest
Mike Osorio
14 years 2 months ago

The availability of affordable and pleasantly drinkable wines, as well as brilliant marketing of low priced wines like “Two Buck Chuck,” has driven huge growth in the category. It is not surprising, then, to see celebrity brands enter the fray.

The reason celebrity endorsements work so well in wine vs. other grocery categories is the aspirational nature of wine. It feels much more luxurious to sip a nice Cabernet than to eat a bowl of pasta. The celebrity wine category will likely experience significant growth for the next few years.

Warren Thayer
Guest
14 years 2 months ago

By and large, people don’t know squat about wine. It confuses and intimidates them. They’ll latch onto anything that provides a vague clue or seems like fun. That’s one basic reason why private label wines and wines named for cute little animals have done so well. There’s very little brand loyalty here, because nobody can remember the brands amidst the general jumble and in-and-outs on the shelf.

So sure, why not have celebrity brands of wine? They’re easier to remember, provide a clue, and are sort of fun. But since brand identities are already strong in other categories, I don’t expect we’ll be seeing Mike Ditka frozen quiche or Martha Stewart corn dogs anytime soon.

Odonna Mathews
Guest
Odonna Mathews
14 years 1 month ago

Celebrity wines represent a new category and another way to develop a relationship with consumers. They also add a “fun” element to wine consumption for consumers. This could be a small but growing category for increasing wine sales.

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