How can French winegrowers benefit from "Reputation Tapping"?

Reputation is a complex phenomenon that is built over relatively long periods of time. As the literature review indicates, the reputation of French wine-producing regions has seen its development favoured by various historical and political factors that have reinforced the visibility and cognitive presence of these regions in the world.

In this part, we will show that the exploitation of reputation, generally considered as an illegitimate practice that could harm French winegrowers, is also a factor of popularity and legitimacy of French regions.

After defining the importance of cognitive presence in building a competitive brand, this section describes how reputation tapping practices contribute to the popularity of French wine regions. Finally, this analysis will show that despite the visibility offered by the exploitation of reputation, some French wine regions are right to monitor this phenomenon closely in order to protect the commercial potential of their appellation.

1) The importance of mental availability

"The decision to buy a branded product in a competitive market is influenced by countless variables, but demand itself depends on two factors combined: people's recognition of the existence of brands and their physical ability to buy the product.

Mental availability is initiated and maintained through promotion and marketing, while physical availability is defined by the company's distribution network.
The French wine-growing regions can already count on a significant cognitive presence on the international market, thanks to the advantage of being the first regions to export wines of sustained international quality, at the beginning of the Middle Ages. In this context, mental availability was a consequence of the increased physical availability of wines from these regions in other countries.

Today, French wines can rely on such a high mental availability that it has taken precedence over the physical availability of French wines. The demand for wines from prestigious French regions is greater than the supply, and the winegrowers of the regions concerned therefore have more freedom to increase their prices (the best example is Champagne, which produces only 4% of the volume of French wines, but accounts for more than 27% of the sales in value terms of French wines).

Although the global cognitive presence of French wine has long been established, it is not granted forever. Especially nowadays, when more and more countries with a variety of regions are beginning to produce high quality wines. Therefore, the mental availability of prestigious French appellations needs to be improved in the market, and sometimes promotion is not enough. "No marketing activity, including innovation, should be considered a goal in itself, its purpose is to maintain or improve physical and mental availability" (How Brands Grow - Byron Sharp, 2010).

Given the importance of mental availability, it is easy to understand the role that the tapping reputation plays for the sustainability of French wine regions :
When an American wine is linked to a French region as a reference of style, the phenomenon of reputation tapping ensures an almost permanent mental availability of French wine regions in exposed populations.

2) The effects of increased mental availability on French wine regions

The exposure that French wine-producing regions derive from the exploitation of their reputation has multiple possible commercial applications. Indeed, instead of seeking to ban these practices, French wine-producing regions could take advantage of the effects of these practices to increase the diversification of their activity: First, as mentioned above, mental availability is a key determinant of demand. The strength of French appellations is the brand image that has developed around geographical indications. The demand for French wines is therefore constantly increasing and French winegrowers often resort to exports rather than local distribution, as this is a good way of selling large volumes at a good price. The visibility of French appellations in the USA is more often the result of "notoriety tapping" practices such as those encountered in the BevMo! case study than the consequence of promotional campaigns initiated in France.

In this respect, "tapping notoriety" plays a key role in French exports to the United States: by keeping the French appellations as style references in the minds of consumers, sales of wines from these regions are naturally encouraged. Moreover, as the French regions are perceived as a reference in terms of wine-making know-how, French exports are much more valuable than those of other major producing countries :

In 2016, France alone accounted for more than 28% of world wine exports by value, occupying first place in the ranking, i.e. exactly 9 points above Italy. (Wine Export Report - WTEx)

Nevertheless, in the same year, French wine exports in volume terms were in third place with 14.1 million hectolitres, behind Italy (20.6 million hectolitres) and Spain (22.9 million hectolitres). (The world's leading wine export countries - Statistica)
This capacity to create value is the direct consequence of the scarcity effect, initiated by a significant difference between strong demand and controlled sales volumes.
In addition to the fact that it favours the export of French wines, the increased cognitive presence of the French regions granted by the practices of reputation tapping has another positive effect for the French wine regions, which are still very under-exploited today :

"Oenotourism is a term that defines the tourist activities that surround the world of wine. Despite the heritage that French regions have in the history of winemaking, wine tourism is still very underdeveloped in many prestigious wine regions. With the exception of Champagne, the Saint-Emilion Sub-Appellation in Bordeaux (the closest to the city of Bordeaux), and the large properties in Provence, there is still a lack of reception infrastructures for many wine-producing regions in France.
Although French appellations often behave like brands on the international wine market, they are above all geographical indications of origin. Thus, the reputation tapping does not only expose the wine of the region, but the name of the region itself.
Following the logic presented by Byron Sharp, wine tourism should be much easier to develop for French regions known from a marketing point of view.
French wine tourism is not underdeveloped because of a lack of demand, but rather because of a lack of supply: reception structures are still too rare in these regions. Nevertheless, the potential is there, and if the necessary investments are made, wine tourism could become a key activity for certain regions (as shown by the success story of the recently opened Cité du Vin in Bordeaux).

3) Are the French winegrowers right to denounce the damage to their reputation?

Positive or negative effects Considering the extent of the effects that reputation tapping can have on the reputation of French appellations, it is important to measure the positive and negative effects for each appellation before denouncing reputation tapping as a harmful practice. Given that the main positive effect of the exploitation of reputation is the exposure of the names of the appellations and the development of their mental availability throughout the world, this externality will not favour all French appellations in the same way :
Champagne and Bordeaux are two well-organized appellations, which can count on powerful regulatory bodies (respectively the CIVC and the CIVB). Their names are probably the best known appellations in the world, and major marketing campaigns are deployed throughout the world to maintain this popularity.
In this context, it is legitimate for these two regions to denounce the exploitation of reputation as a harmful practice : Their global cognitive presence is managed internally, their international distribution network, managed by major French exporters or foreign importers, already ensures them significant physical availability, and their oenotourism facilities are probably the most developed in the country (although progress can still be made in this sector). Thus, the positive effects of the exploitation of reputation (an increased cognitive presence abroad, encouragement for foreign demand, indirect promotion for wine tourism) do not benefit Champagne and Bordeaux. For these appellations, reputation tapping practices have more disadvantages than advantages (see Gruet case study).
Nevertheless, it would be interesting to measure the impact of the exploitation of reputation on the rarity effect of French wines, a consequence of the distortion between a strong demand and a limited supply. Even the big names in Bordeaux and Champagne could benefit from notoriety, which is a key condition of their value creation model. This situation does not apply to all French appellations. Smaller French regions, such as the Rhône, Languedoc and Alsace, which are much less present outside the French borders, could benefit from more positive effects than their larger neighbours mentioned above.

It is the reputation tapping that provides them:

Extensive international visibility
The exposure of these regions as references of style, creating a legitimacy
Exposure of geographical sites that would facilitate future wine tourism activities.
In addition, the exhibition of a variety of French appellations, not just the best known, would have a positive impact on the French country itself : The French conglomerate of the most famous wine regions would be strengthened, with a wide variety of styles, terroirs and know-how.

Charles Bonnay

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