A magical marketing potion

Move over critter wines and mommy tipples, there’s a new blockbuster in town. Larry Walker takes a look at Apothic, a red blend phenomenon that’s sweeping the US market.

Wilfred Wong, Paul Wagner
Wilfred Wong, Paul Wagner

More than 800 years ago vintners blended and stored their most coveted concoctions in a mysterious place called Apotheca.

Is this the beginning of a new Dan Brown novel? Part of a tourist brochure devoted to mediaeval viticulture? Wrong and wrong. It’s the first sentence of the website for Apothic, the latest blockbuster wine success launched by E&J Gallo. The bottle continues the Dan Brown motif with label art more usually found on the covers of fantasy novels found in airport newsstands.

However, there is nothing mysterious about how Gallo has identified a developing market trend, made a wine to fit the trend and come up with a strong back story – and the right price. Gallo is also building a franchise around Apothic. Consumers can buy T-shirts, wine glasses, scented candles and even mobile phone cases at the ‘Shop Apothic’ website.

Despite the public buzz, no one at Gallo would comment on Apothic for this story – perhaps fanning the fumes of mystery. But it’s possible that Apothic was inspired by the success of The Prisoner, an instant Napa cult wine developed by Dave Phinney in 2002 and sold under the Orin Swift label. A quick glance at the label of Apothic Red, launched in 2006, is a clear echo of the dark and ­tortured label of The Prisoner.

The similarity doesn’t end with the ­label. The key to both wines is that they are a blend of red varietals and the blend changes with each vintage, depending on grape availability and pricing. Nothing new, of course, about red wine blends. The basic jug red of California in the mid-20th century was a blend. What’s new is The Prisoner is a red blend selling at a premium price, usually in the mid-$30s. Gallo’s Apothic, on the other hand, sells in the $10.00 to $12.00 range, or even less.

Dean Alexander, now sales and marketing manager with Atherton Wine Imports, a Burgundy and Bordeaux specialist in the San Francisco Bay Area, observed on his Diary of a Winebuyer blog: “Apothic is enormously successful. It has made a massive mark on the industry, because it sells for under ten bucks and it is available everywhere. It is a baby. It is a baby The Prisoner, for the masses. From Apothic’s huge success, the copycats have sprouted like weeds. They are made from anything and everything, as long as they are big, thick, juicy, and faintly sweet.”

When he wrote that in May 2013, ­Alexander was buyer for The Wine Club, a large retail store in San Jose. He observed a flood of wines appearing: “They are remark­ably uniform in style and flavour. To attain that thick, almost sticky richness, undoub­tedly they have to use a good dose of grape concentrate to boost concentration, giving the wines their similar flavour profile. They are all tasty, some bordering on delicious, but as a retail buyer, it begs these questions:  Do you buy them, and if you do buy them, how many do you really need?”  

According to Danny Brager at the Nielsen Company, retail buyers may need more than they think. “Wine blends are one of the hottest wine segments out there, with double-digit growth rates continuing through 2013. ­I do believe that they represent a significant departure from traditional single varietal styles and marketing – even to the point where many do not specify the contents on the label at all.  And consumers seem to be latching on in increasing proportions,” Brager said.

Brager said that according to Nielsen tracking for the 52 weeks ending 7 December, 2013, all table wine grew in dollars 4.6% while blended table wine was up 13.2%. Blended domestic table wine was even stronger at 17.2%.
The question naturally arises, who is buying these blends? Brager said that a recent Nielsen consumer survey revealed that of all wine buyers, about 13% said they bought only wine blends, while 44% said they bought both blends and single-variety wines, about the same number as those who said they bought only single-variety wines.

“That would seem to suggest that it’s not an either/or situation. Suppliers should consider offering both in their range,” he said. “The highest percentages of those who bought wine blends only were found within African American and Hispanic wine purchasers. The highest percentages by far of those who bought both wine blends and single-variety wines were Millennials. So in appealing to Millennials in particular, wineries should consider including blends in their portfolio,” he added. “Our research also showed that of all the reasons given that blends are purchased, the one that rose to the top most frequently was that blends represent a ‘great way to experiment with wine.” Another frequent answer was that the blends were more interesting.

Finally, said Brager: “I’d conclude that blends represent a further way to appeal to that experimental/adventurous nature of the wine consumer, with great entry appeal to some... and represents strong growth potential.”

Wilfred Wong, a wine buyer and cellar master for the 150-store BevMo! chain in the western US believes that Apothic has been a success “because it addresses the category of easy-drinking wines that are a cut above sweet white Zins of the past and sugary Chardonnays of the present.”

As to who is buying Apothic, Wong agreed that Millennial drinkers were an important group. “They are younger adults who are not foodies, and are not hung up in the wine and food lifestyle group. This group of ‘new’ consumers enjoys the reality that wine has ­become more mainstream in recent years. They enjoy food, but are not zealots about the category,” he said. The interest spans all groups that “are not particularly hung up with geekism and the ‘somm’ way of life,” he added.

Wong believes the red blends are a ­lasting trend, unlike the white Zinfandel bubble. “It satisfies many who cut their teeth on cocktail Chardonnays with residual sugar and gives them more choices of wines to drink and enjoy. Also one has to see where food is going, many of the most popular West Coast dishes dovetail right into these kinds of wines,” he said, referring to the Asian and Mexican fusion fashion.

Many wine critics, especially in the UK, have trashed Apothic Red because of the sweetness. John Gillespie, founder and CEO of Wine Opinions, believes they might be missing the point. “There are so many good quality wines from every corner of the globe made in a vast array of styles that I’m more inclined to believe that people gravitate to what they most naturally like – and many have ‘plural’ tastes, ­liking sweet wines now and then, or just for sipping, and drier wines for other occasions,” he said.

Gillespie referenced an August 2013 survey of a Wine Opinions consumer panel of high frequency wine drinkers – those who, on average, drink wine either daily or several times a week, and says, “we found that those with a preference for red blends are well spread across age and gender segments. Remember, too, that there is a popular Apothic white wine, so the brand is not just about the sweeter red wine trend.”

Gillespie is also doubtful about pain­ting Apothic as an entry-level wine, like White Zinfandel. “I have never believed in the ­“entry level” theory and we know from recent years that Millennials have largely entered the wine market with a preference for red wines from the start,” he said. 

Paul Wagner, a public relations and marketing consultant based in Napa (Balzac Communications), said the booming cocktail culture was a key to the success of Apothic. “Cocktails are extremely popular with Millennials, God bless them. Remember that much of the wine in America is opened before dinner as a cocktail – and the flavour profile of Apothic matches that of cocktails far better than most other wines. And at the same time, if you are eating spicy Mexican food, or sweet barbecue, the wine matches quite well with both.” Wagner said that Apothic was also a very good example of how wineries are understanding today’s market. “This market is more adventurous than any generation in the past, and smart wineries are giving them new directions to explore.”
 

Popular wines have changed the market

In the early 1960s, Americans were just beginning to discover wine. It was no longer a drink for effete snobs or ‘foreigners’, nor was it limited to a few annual special ­occasions. The marketing team at E&J ­Gallo saw what was happening and in 1964 Hearty Burgundy was introduced. The varietal blend varied, but was chiefly Zinfandel, Syrah, Merlot and Cabernet Sauvignon. Beginning wine drinkers recognized ‘Burgundy’ as being something special and ‘Hearty’ was an appealing modifier, suggesting big flavours and a certain macho swagger. At that time, Gallo was sourcing grapes from California’s North Coast and the quality of the wine was good and won praise from some of the top wine critics, just as Apothic has today. Hearty Burgundy offered the novice wine drinker a fruity, easy-drinking wine that didn’t challenge the palate. It was priced in the range of today’s fighting varietal wines and sold more than a million cases annually at its peak.  Hearty Burgundy is still around, sold under the Gallo Twin ­Valley label at $5.00 for a 750ml bottle.

 

An Apothic of a Different Color

Apothic White, a­ blend of Chardonnay, Riesling and Moscato­ went on market in 2011, followed by Apothic Rosé, made from Zinfandel and­ Cabernet Sauvignon, in 2013. Gallo isn’t talking about sales of the new wines, but in general red blends are outpacing white blends. Apothic Dark, a more concentrated take on Apothic Red, was in limited release last year.
 

 

Red Blend From Argentina

The latest entry in the ‘red blend’ category is an import from Argentina, Doña Paula Wines Black Edition Red Blend, imported by Trinchero Family Estates (TFE). The 2012 ‘Black Edition’ is in national distribution priced at $14.99. The wine is a blend of Malbec, Cabernet Sauvignon and Petit Verdot. 

It seems likely that Black Edition is a response to Nielsen numbers, which show Argentine red wine blends up 84% in retail dollar sales in the US for the 26 weeks ending 17 August 2013. On the domestic side TFE’s Ménage à Trois Red is one of the top-selling red wine blends.

“Our ‘Black Edition’ Red Blend is well-balanced and complex with a dry finish,” according to Doña Paula head viticulturist Martin Kaiser.
 

 

 

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