Interview: Viña Concha y Toro aims to lead the way for South American wines in travel retail

Viña Concha y Toro underlined its travel retail ambitions with its debut at the TFWA Asia Pacific Exhibition earlier this month, where it presented its first channel-exclusive range and diverse wine portfolio.

Asian ambition: Viña Concha y Toro makes a statement with its TFWA Asia Pacific stand.

The company, which has its Asia Pacific headquarters in Singapore, was founded in 1883 and is today Latin America’s leading wine producer and one of the world’s top five wine companies. Its family of wineries – Concha y Toro, Fetzer and Trivento – holds around 11,000 hectares of vineyards across the Americas. Its portfolio comprises more than 160 brands, including Chilean wine brands Casillero del Diablo, Don Melchor and Almaviva; Argentine wine brand Trivento; organic wine brand Bonterra; and Californian wine brands 1000 Stories and Adorada.

Speaking to The Moodie Davitt Report, Viña Concha y Toro Head of Marketing Asia Pacific Nani Mulet said the TFWA Asia Pacific was “very, very positive” for the company, thanks to the pre-show buzz created by the launch of Casillero del Diablo’s Route of Cabernet Sauvignon at Changi Airport*.

Route of Cabernet Sauvignon was launched exclusively at Changi Airport in the run-up to the TFWA Asia Pacific, offering travelling delegates a chance to experience it first hand.

“It’s our first time taking part in the show but it was very busy. The Route of Cabernet Sauvignon game activation drove a lot of traffic to the stand as it has been doing in-store. People were stopping by and asking about the game which drove a lot of awareness about our presence at the show. We wanted to replicate the game activation here because we are now looking to really expand the concept, and it was a great opportunity to showcase how it looks in-store and for people to try the game and see how engaging it is,” she said.

Mulet continued: “We had very positive meetings – all the suppliers and retailers were really excited about our new project, and the feedback we have received on our new launch has been fantastic. We also did a nice wine tasting for the media across our range and our three different origins.

“I think everyone was very surprised by the wide range we have as a winery and the potential and opportunities we offer within travel retail. We have more than just wines; we have very strong brands and concepts, and a lot of added value for the consumer. It’s been a good platform to show what we have and what we can do, and also to get ideas on where we are heading to. Throughout this whole process, the most important thing has been the feedback and how we are going to incorporate this feedback to build on what we have for the next stage of Route of Cabernet Sauvignon,” she said.

Tasting journey: The Moodie Davitt Report’s Martin Moodie at the TFWA media tasting.
Devil’s Playground: For its TFWA Asia Pacific debut, Concha y Toro recreated the Route of Cabernet Sauvignon activation (above), including a giant version of the game (below).

The range is expected to be a key growth driver for Concha y Toro in travel retail, where the company has been steadily building up its presence.

Viña Concha y Toro Regional Commercial Director Asia Pacific Philip Sancto said: “As a company, we started to take a more strategic approach to travel retail from 2018, with Asia Pacific leading the way. We are the fourth largest winery in the world but at the moment we have close to zero presence in travel retail. Thanks to the launch of Route of Cabernet Sauvignon, we now foresee hyper-growth. It’s really game-changing and helping us catch up to the domestic success.

“We want to replicate our world position in the channel: we are the number one Chilean supplier across 30 countries in Asia and we want to be the number one Chilean supplier within travel retail. Through our research we know that South American wines are under-represented in travel retail – so we know there isn’t a lot of competition for us at the moment – and we believe we can be a top three supplier by 2022.

“We want to bring a fresh approach to the wine category and take a confident and bold step into travel retail. Our 1000 Stories launch in Hong Kong with Duty Zero by cdf [China Duty Free Group and Lagardère Travel Retail joint venture] was an appetiser, and now Casillero del Diablo’s Route of Cabernet Sauvignon range is the main course.”

Simplifying the wine-buying process

The decision to develop a travel retail exclusive under the company’s flagship Casillero del Diablo brand was a strategic one. As the world’s largest Chilean wine brand, Casillero del Diablo was already well established in the domestic markets of Asia Pacific, where it has built strong brand awareness. According to Concha y Toro, Cabernet Sauvignon is the most popular varietal in Asia, where it makes up more than 50% of red wine consumption.

“Casillero del Diablo’s strong distribution, legendary story and strong marketing partnerships, such as our tie-up with Manchester United, have had fantastic global success in domestic markets,” said Sancto. In the last three years, the brand’s sales have grown by more than 90% in Japan, Korea and China – the latter being the number one country for Chilean wine exports globally.

He continued: “We spent around a year with [integrated retail marketing and design agency] FILTR researching travel retail to understand what the opportunity is and where it sits in terms of price points, and we knew it had to be a level above whatever we’ve done so far. We pushed our marketing team and said, scrap everything you’ve ever done with Casillero del Diablo, we need to be playing at these price points, what can we do, how can we add value, and what story can we tell?”

The result is the Route of Cabernet Sauvignon, a trio of high-quality wines from the Chilean wine valleys of Maule, Rapel and Maipo. The range is tiered by their ageing statements and price points: Maule, aged 10 months, retails in DFS Changi at S$35 (RRP: US$25); Rapel, aged 12 months, retails at S$55 (RRP: US$40); and Maipo, aged 16 months, retails at S$85 (US$65). The Changi activations also feature Casillero del Diablo’s limited-edition Leyenda Cabernet Sauvignon, sourced from Pirque in the heart of the Maipo Valley. Aged 20 months, it retails in DFS Changi at S$125.

Concha y Toro aims to replicate Casillero del Diablo’s domestic success in travel retail with the launch of the channel-exclusive Route of Cabernet Sauvignon in key markets.

The use of ageing statements was a deliberate move to signal the different qualities of the range, simplifying the buying process for consumers and encouraging them to trade up.

“Ageing statements is a way to define the quality of the wines,” Mulet explained. “It’s a cue that consumers will equate with other categories, such as malt whisky, where longer equals better, and the same is true here. Wines don’t usually focus on ageing statements on the front label – this is information which you can normally find on the back – but with this range we are innovating on the way we are communicating this quality to consumers, and helping them to understand the different qualities of Cabernet Sauvignon.

“Here in Asia, where consumers are more inexperienced but interested in learning about wines, it is good to facilitate that process and explain why one wine is more expensive than another. Even if you don’t know much about wine, you can perceive the difference in quality from the first to the last one. The Maipo (16 months) and Leyenda (20 months) have good ageing potential and can be held in bottles for quite a few years.”

The range has been designed to offer more value as consumers move up the tiers, from Maule to Leyenda, with increasingly refined flavours and more elaborate embellishments and presentation. The bottles are currently sold separately, but Concha y Toro will consider offering them as a set for the gifting seasons. For now, only the top-tier Maipo and Leyenda come in premium gift boxes.

Gifting cues: The top-tier Maipo bottle features an intricately designed band around the neck and comes in a premium gift box, incentivising travellers to buy it as a gift.

Sancto said: “Wines are a pretty complicated category to shop – so many brands, so many regions, and so many price points – but if you have four wines next to each other with clear distinctions in quality, presentation and price, you are giving the consumers strong reasons to shop.

“Gifting is obviously really important and it gives consumers a point of difference and a reason to trade up through the range. For a commercial brand like Casillero del Diablo, we want to be able to move consumers up into higher price points and quality levels, but we need to give them a reason to do it. What we hope for is to get that repeat purchase, recruiting new customers with the lowest tier, and trading them up to become repeat customers of the brand.

“Half the battle in retail is having the right price point in front of the customer, and we’ve kept the range in-store really consistent in terms of pricing. We want to make it as easy to shop as possible, and I think we’ve done that in terms of how it’s arranged and displayed, with all of the pricing and the promotions, and having the promoter, the tastings and the game. Everything works together to drive the consumer to do what we want them to do, which is to eventually work their way through the range.”

The range was designed to offer clear distinctions in quality, presentation and price between the bottles, making it as easy as possible for consumers to shop.

Mulet believes that the Route of Cabernet Sauvignon speaks to the demand of consumers in Asia, where millennials make up the majority of travellers. “Millennials are willing to explore and try wines from different terroirs and regions, not only those from Bordeaux and Burgundy, which is good for us. In Asia, consumers are also willing to pay more for wine, and are more into gifting than consumers in Europe. They also look for experience and something exclusive that they can’t buy in the domestic market; they want to understand the stories behind the brand.”

Since its launch at Changi, the range has been positively received, Sancto revealed. The gifting strategy has paid off, with the 16 month-aged Maipo performing well above forecasts.

Sancto said: “Some wine commentators were surprised that we launched Route of Cabernet Sauvignon with such a high price positioning compared to our domestic range. But the range is selling incredibly well and has been met with great enthusiasm from consumers. It’s true that Casillero del Diablo has not tended to play in this price range (S$35–$85), but I think we’ve proven that with differentiation, high quality and excellent value in the total offer, there is opportunity for the brand at these higher price points.”

Storytelling, engagement and education

The success of the Changi launch has also been driven by an eye-catching in-store activation platform, with strong storytelling and gamification elements – a real draw for millennials.

Mulet said: “Wine is an exciting category but the way it has been presented in-store and explained to consumers is surprisingly uninspiring. Every bottle has a soul and a story to tell – stories about the region where the grapes were grown, the climate, the terroir, the ageing methods employed, even the winemaker. So together with FILTR, we decided to create something fun that captures the attention of consumers.

“We wanted to be bold and disruptive with the concept, attracting not only those who are already familiar with the Casillero del Diablo brand – which already carries strong recognition across Asia Pacific – but capturing the attention of travellers looking for something different, exclusive and memorable. We wanted the design of the pop-up to be high-impact – not something you would normally see from a wine brand.”

Breaking the mould: Concha y Toro capitalised on the strong brand awareness of Casillero del Diablo to create a ‘high-impact’ design for the Changi T4 pop-up.

The pop-up concept was inspired by Casillero del Diablo’s rich Chilean heritage. Each and every detail of the pop-up’s design and execution was intended to bring to life Casillero del Diablo’s legendary Devil’s Cellar in Pirque, with elements of slate, wrought iron gates and brickwork.

Unlike most wine brands which focus purely on provenance in their activations, Casillero del Diablo went a step further to create an interactive wire loop game. The game has been a driver for footfall and consumer engagement, challenging players to navigate the wine valleys of the Route of Cabernet Sauvignon while delivering a Sense of Place.

“It has been very rewarding to see travellers interact with the game,” Mulet said. “The players take it quite seriously and really commit to the challenge. It’s great, because not only are they engaging with the brand, but they are also learning about Chilean wines and the country’s storied wine valleys.”

Traffic-stopper: The Route of Cabernet Sauvignon game not only engages travellers but also educates them on the geography of the Chilean wine valleys, offering a Sense of Place.

She added: “Storytelling is an integral part of engaging travellers in an age where it’s become increasingly challenging to capture their attention in-store. But here we have the right combination – good products, super nice labels, strong storytelling and retail theatre – to attract consumers. Consumers, especially the millennials, are looking for something like this – something special, different and exciting.

“It is always the spirits brands who have the big activations, but we also have a lot of stories to tell. With our Route of Cabernet Sauvignon activations, we are proving that wine can be just as – if not more – exciting and engaging in-store. I think we’ve shown that it’s possible for wine to compete with other categories for the same space as spirits have, and we are proud to be leading this different and disruptive approach in-store.”

Partnership and collaboration

Concha y Toro recognised that launching into travel retail is “a whole different ballgame” which required the right partners and the right location.

Sancto said: “The fundamentals of the relationship we have developed with DFS are what really underpinned our decision to launch the Route of Cabernet Sauvignon first worldwide exclusively at Singapore Changi Airport. With more than 65.6 million passengers passing through annually from and to around 100 different countries, Changi offers both a strategic Asia Pacific and global showcase. It also has a thriving arrivals wine business, which adds to the scale of the opportunity.”

Singapore Changi Airport was a strategic choice for the worldwide exclusive launch.

Describing DFS as “forward-thinking and strategy-driven”, Sancto said: “DFS has been an amazing partner. This is our first big launch for travel retail and they’ve given us a lot of advice throughout the process. They really believed in the project and felt there was a massive opportunity for Chile in particular – from the start, their focus was on how to amplify it, how to make it better, and how to make it bigger. It’s very collaborative, the way we bounce ideas off each other and work out the best solutions together.

“DFS gave us access to a multi-country launch with Changi as the first one to showcase what we can do, and we have been able to leverage their online communication platforms to generate awareness of the launch and drive traffic in-store. We are excited to further develop our partnership with our upcoming roll-outs of the range in Abu Dhabi International Airport [in June] and Vietnam [in July, at Tan Son Nhat International Airport in Ho Chi Minh and Noi Bai International Airport in Hanoi].

“Executing a fantastic launch at Changi also demonstrates to other travel retailers what Concha y Toro can deliver, which we hope will open up dialogue with them on how we can help growth the South American wine category in other locations.”

Changi Airport Group has also been instrumental in its support of the launch. Sancto said: “They are big enablers of global-first launches and create a best-in-class airport experience and environment for our brands to shine in. Their focus is to be the best airport in the world; they want their passengers to be excited, to see something new, and to be able to buy exciting products, so it’s very much a win-win situation for all three of us – Concha y Toro, DFS and Changi Airport – and the end consumer. These are the kinds of relationships we want to develop in the travel retail space, where everyone can work together and build something exciting for the customer.”

Travel retail expansion and next phase of growth

With the success of the Changi launch under its belt, Concha y Toro is now ready to further expand in Southeast Asia and enter North Asia – China, South Korea and Japan – as well as Australia and New Zealand. Following the Changi launch, Route of Cabernet Sauvignon was rolled out in Hong Kong International Airport with Duty Zero by cdf.

Sancto said: “Changi has given us such a unique opportunity to showcase what we can do, particularly before the TFWA Asia Pacific, where we had meetings booked with the rest of the retailers. It’s given us an amazing launch pad – we’re definitely ahead of plan in terms of sales – and now the focus is on trying to replicate that model in the other airports across the rest of Asia Pacific.”

Concha y Toro believes there is potential in travel retail for the rest of its diverse portfolio, which includes brands such as Don Melchor, Trivento and 1000 Stories.

The introduction of arrivals duty free in South Korea – with the first stores opening at Incheon International Airport at the end of May – is timely and augurs well for Concha y Toro, said Sancto. “We are very strong in the South Korean domestic market, so it is definitely a very good opportunity for us.”

On a broader scale, the company is also looking to expand its distribution beyond airports, targeting channels such as border stores and cruise lines.

“We want to keep pushing Route of Cabernet Sauvignon and bring new innovation across different locations and channels. Our aim is to spread our diverse portfolio across travel retail – we have more than 160 brands that we could really push with the right offer. It’s about building the full Americas proposal within travel retail and being the leader in that segment.”

*Note: The Moodie Davitt Report was invited to an exclusive tasting and tour of the Route of Cabernet Sauvignon launch activation at Changi T4 earlier this month. Check out our Instagram post and our Story Highlight ‘CasilleroDiablo’ below.

The Moodie Davitt Report with Viña Concha y Toro’s Regional Commercial Director Asia Pacific Philip Sancto (left) and Head of Marketing Asia Pacific Nani Mulet (right).

 

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@conchaytoro has partnered @dfsofficial to launch the new travel retail-exclusive Route of Cabernet Sauvignon from @casillero_diablo. The launch activations at @changiairport is being supported by a 360-degree marketing programme across all four terminals, including a pop-up at T4. At the heart of the pop-up is an interactive wire loop game designed to engage travellers in the legend of the Devil’s Cellar in Pirque. . The Moodie Davitt Report visited the T4 pop-up and spent an afternoon tasting the new range and learning about Concha y Toro’s travel retail ambitions. Check out our Instagram Story Highlight ‘CasilleroDiablo’ and look out for the full story on MoodieDavittReport.com. People images : @we_filtr . . . #conchaytoro #casillerodeldiablo #cabernetsauvignon #travelretailexclusive #chileanwine #chile #redwine #wine #wines #winelover #winelovers #winery #instawine #wineaddict #winetime #winesofinstagram #wineoclock #winemaker #winemaking #wineoftheday #winestagram #dfsofficial #dfsgroup #travelretail #dutyfree

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How our Instagram story unfolded – click on the image to view the full story.
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