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W.J. Deutsch Finding Success In Struggling French Category By Tapping New Consumers

June 21, 2011

While French wine has struggled in the U.S. market amid the economic downturn, W.J. Deutsch & Sons Ltd.—long one of the category’s biggest players—has enjoyed solid growth from its French portfolio, which includes the Georges Duboeuf range and fast-rising HobNob ($9.99-$10.99 per 750-ml.) and Patch Block ($7.99), as well as an array of other brands. In 2010, the importer’s top six French brands grew by an aggregate 22%, according to Impact Databank. Shanken News Daily recently spoke with Peter Deutsch, the company’s CEO, to gauge how its French wine business was performing amid the market’s challenging conditions.

SND: French wines still seem to be struggling in the U.S. How is this end of your portfolio performing?

Deutsch: French wines have started to come back a bit, it’s a slow crawl back. But we have focused very specifically on that one particular SKU—Georges Duboeuf Beaujolais-Villages. It’s been rising by around 30% this year. We brought the consumer price point into a situation in most markets now where it’s under $10. We’ve had a fabulous vintage in 2009, and we’ve seen tremendous growth in a category that is still down overall.

SND: How are your other French offerings faring?

Deutsch: Believe it or not, we’re doing unbelievably well with our branded Bordeaux, Château Bonnet ($12.99-$14.99). That’s a red-and-white line that’s tracking up over 25%. That’s a difficult category overall in this market, but we’ve got a taste profile and a style and a price point that’s château-oriented as opposed to just branded. So that’s been a real positive for us as well. We see continued double-digit growth with HobNob, which we launched about four years ago. It continues to ratchet up in terms of its prominence in this country, as we’re now doing well over 150,000 cases. HobNob is a New World-positioned brand, driven primarily through Pinot Noir and Chardonnay. But we think we’ve put together all the components for success and we’re spending aggressively against it to make it into a superstar brand in this country.

SND: As you mentioned, the French wine category is struggling, but a number of your brands are experiencing solid growth. How much of that is coming from new French wine consumers?

Deutsch: With a brand like HobNob, we’re reaching a totally different consumer than has historically purchased French wine. It’s a French-origination brand, and it’s positioned in the French section today, but its packaging and its marketing and its name are really all about New World. Its taste profile is New World. We think that’s a much bigger opportunity for us as we continue to drive volumes and distribution on HobNob. And while France is slowly creeping back, I think the bigger play, knowing it’s a varietal brand, is to go after the New World consumer that’s looking for something different than what’s coming from the traditional French category.

W.J. Deutsch & Sons Ltd – Leading French Wine Brands
(thousands of nine-liter case depletions)
Percent Change2
Brand 2008 2009 2010 2008-2009 2009-2010
Georges Duboeuf Beaujolais Nouveau 150 158 163 5.4% 3.0%
HobNob 85 119 160 40.0% 34.5%
Georges Duboeuf Beaujolais Villages 109 81 88 -25.8% 8.5%
Patch Block 18 48 + 159.4%
Andre Lurton Château Bonnet 35 30 37 -13.9% 22.9%
Georges Duboeuf Beaujolais Crus 26 19 25 -25.8% 28.4%
Total Leading French Brands1 405 426 520 5.1% 22.1%
1 addition of columna may not agree due to rounding
2 based on unrounded data 

Source: IMPACT DATABANK

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