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Concha y Toro Breathing New Life Into Fetzer With Brand Revamp, Innovation Drive

July 16, 2013

After acquiring Fetzer Vineyards from Brown-Forman for $238 million in 2011, Concha y Toro set about reengaging distributors and redeveloping Fetzer and a number of its associated brands, which include Bonterra, Sanctuary, Bel Arbor and Jekel. Two years later, those efforts are bearing fruit. According to Impact Databank, the Fetzer brand was up 5% to 1.6 million cases in U.S. shipments in 2012, while Bonterra increased 18% to 310,000 cases. Bel Arbor was also up markedly, rising 33% to 80,000 cases, while Jekel posted a small decline to 32,000 cases.

This year, says the Fetzer unit’s global marketing director, Rodrigo Maturana, the group’s volume was up 16% in the first quarter, with Bonterra leading the way with 30% growth.

“Our first order of business was to reconnect with distributors on Fetzer,” Maturana tells SND, noting that the business wasn’t a priority for Brown-Forman in the last years leading up to the acquisition. The distributor outreach effort included a series of kickoff events at the local level, as well as a summit held for Fetzer distributors at the winery in Mendocino each of the past two years. Concha y Toro also bolstered the unit’s sales team as part of the overhaul with the hiring of about 50 sales and marketing personnel.

On the marketing side, all of Fetzer’s brands were revamped, excluding Bonterra, which had some existing momentum to draw on. In addition to a repackaging, the Fetzer brand itself has seen a spate of innovation recently, intended to expand its audience into new demographics and occasions. In January, Fetzer introduced a new tier to its line, Crimson and Quartz ($10 a 750-ml.), debuting with red and white blends. Now Crimson and Quartz is being extended with three new varietals, Chardonnay, Pinot Noir and Cabernet Sauvignon. Also new to the Fetzer range is a single-serve PET packaging format, Zipz, which debuted in April at Major League Baseball ballparks and will enter retailer channels this summer. Maturana sees Zipz as offering Fetzer entry into new outdoor consumption occasions, and says retailers like Safeway, Cost Plus and Target are enthusiastic about the concept.

“Fetzer’s core audience has been the Baby Boomer generation,” Maturana says. “We want to communicate that we’re able to innovate on the brand and make it more appealing to Millennials.”

While the Fetzer brand looks to continue its turnaround, Concha y Toro has also devoted significant resources to marketing Bonterra—whose signature is organic wines—boosting its ad spend in both trade and consumer print, as well as outdoor spots in cities like Chicago, San Francisco and Austin.

Looking ahead, Maturana says there will also be ample new product activity on the Fetzer group’s higher-end brands, like Sanctuary and Fetzer Mendo, the new identity of the parent brand’s upscale Mendocino-sourced tier. Sanctuary, selling in the $25-$35 range, already includes single-vineyard Napa Cabernet, Santa Maria Pinot Noir and Mendocino Zinfandel offerings. A Russian River Chardonnay and Paso Robles red blend will now join the lineup. Fetzer Mendo, meanwhile, will be adding a Chardonnay to a portfolio that already includes Sauvignon Blanc and Pinot Noir.

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