Mondavi: Using Humor to Solve a Drinking Problem

Mondavi's new ads show that they -- unlike the entire wine establishment -- get it.
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"Why does wine have to be so complicated?. Do I want a Pinot Grigio? A Ponte Vecchio? Maybe a nice Pinocchio? No, I'll tell you what I want. I want to buy a bottle of wine without worrying what kind of nose it has. In fact, I'm not sure wine should have a nose. Get your nose out of my glass and take your bouquet with you!" - Robert Mondavi radio spot #1

The wine industry's got a drinking problem -- and

Robert Mondavi

(MOND)

just might have part of the solution.

As this column has pointed out

previously, the industry's drinking problem is just the opposite of what vintners want: consumers just don't drink enough of the stuff. Half of Americans don't touch anything containing alcohol and almost three-quarters of the rest prefer beer and spirits to wine. As a result, 11% of wine drinkers consume 88% of the wine.

So what has the industry done? Mostly a lot of nothing. When times are good, the industry hasn't done much advertising because they believe the good times will last forever. When times are bad, wineries bellyache that they don't have the bucks to promote.

And when they promote, most ad dollars get funneled to wine-snob magazines where they reach the 11 percent who drink so much wine they

are

about ready for VA (Vinoholics Anonymous).

All this despite solid research from the

Wine Market Council

that says consumers stay away from wine because it is snobby, off-putting and to be saved for a special occasion. Why don't they realize that the industry will have won its battle for market share only once it starts arguing about the best wines to serve with tuna casserole and Hamburger Helper?

Now, along comes the Robert Mondavi Winery with some pretty hot radio commercials -- $2.8 million worth in 30 markets - for their

Woodbridge

brand. These commercials are funny; they are memorable. And they'll probably sell wine -- helluva concept if it catches on.

"Yes, we've pretty well bought off on the Market Council's research," said Martin Johnson, Mondavi's senior marketing v.p. He said that one reason wine advertising has been so snobbish is that the industry tends to make ads that they like, rather than trying to reach consumers. "We have to realize wine is a beverage and sell that in an entertaining, not teaching way."

The Woodbridge ads are also significant because they are a loud and visible signal that the shortage problems that massacred MOND's stock earlier this year are now over.

"We went through a severe shortage this spring," Johnson said. "For 45 days we were without Woodbridge Chardonnay."

And the stock was seemingly without a floor. As word of the shortage leaked out, the stock dropped almost immediately to 37 from 51. The implications that the shortage was indicative of leadership problems -- specifically with

President Michael Mondavi -- sent the stock into a power dive, reaching about 20 in late August.

Woodbridge lost a lot of shelf space to its competitors during this time, a loss that might have many thinking quick price reductions to regain lost market share. But industry experience with price reductions is that they result in a short-term gain that rapidly disappears after the sale ends.

"Prices are slightly lower now," Johnson said, "But we think the best strategy

to regain market share is to spend money on advertising rather than price reductions."

Overlooked by so many wineries is the overarching importance of branding to the average consumer, confronted as they are by a mind-boggling proliferation of wines and the legions of wine geeks warning about the dire consequences of making the wrong wine choice. No wonder the grand patron himself, Robert Mondavi, once observed: "The American consumer, when given all these rules says: 'To hell with it; give me a beer, a Scotch, a cup of coffee.' "

On the other hand, an average consumer is comforted by a brand -- such as Woodbridge or Mondavi -- where they can reasonably expect to avoid a mistake regardless of which wine they choose.

The Woodbridge radio campaign which began in mid-November and ends next week is accompanied by a $1.2 million campaign for its

Robert Mondavi Coastal

brand. Together, the $4 million spent on holiday radio ads is almost 60% of the company's entire FY 1999 ad budget of $7 million.

Like ads from other wineries, the Coastal ads, while humorous, fall into the familiar wine geek/wine snob trap, talking about oak,

Wine Spectator

ratings, cool vineyard climates, slow fog ripening of grapes and all the other things that drive people to a martini or a good microbrew. That's three strikes when compared with:

"Why is it so hard to order wine in a restaurant.Why can't I just order a nice glass of wine without having to know the soil conditions in San Gimignano? I mean, is this a night out or the bonus round on Jeopardy? I'll take loam for a thousand?" - Robert Mondavi radio spot #2.

Why indeed?

Lewis Perdue is the editor and publisher of

Wine Investment News

, a comprehensive site offering breaking news and analysis of the 22 publicly traded wine and liquor companies, and private wine partnerships. Perdue does not hold any positions in the companies discussed in this column. He can be reached at

lperdue@ideaworx.com

.