Popped in to Asda today, and saw the Brancott Estate/Montana Estate Sauvignon Blanc at half price, just £4.24.
Montana Sauvignon Blanc was one of the strongest wine brands. It was the archetypal Marlborough Sauvignon Blanc, and in my time I have drunk quite a bit of it.
But Pernod Ricard decided they wanted to have a uniform name for the brand globally. In the USA this wine has been sold as Brancott (Montana is, of course, a US state), and so the decision was made to discard Montana in favour of Brancott.
So, on the shelf we have the Montana Sauvignon Blanc 2009 (the previous vintage) and the Brancott Sauvignon Blanc 2010 (the current vintage). And both are selling at half price.
I have two problems here. (1) The name change. (2) The pricing strategy.
The name change: why was this necessary? There’s considerable brand equity in ‘Montana’. This has taken a long time to build up. Consumers are likely to be confused. The new label bears both names, presumably in a bid to ease this transition. But it seems a shame to bleed hard-won brand equity, unless there is a significant long term gain in store.
The pricing strategy: this seems nuts. How much of it is down to Asda, and how much to Pernod Ricard? The wine is listed at £8.98. This is a somewhat inflated price point. A powerful brand like this doesn’t need deep discounting to sell, surely? It actually risks severe damage from the practice. Anyway, I’d have thought this is a price point that allows some discounting
The half-price deal, though? That’s nuts. Once someone has bought this wine at £4.24, they will never be inclined to spend £8.98 on it ever again. They’ll lose trust in the brand, and without trust, a brand is nothing. Yes, the wine will shift, but who is going to make money on this sort of deal? It’s wrong of a retailer to trash someone’s brand in order to drive footfall. If it’s the brand owner sanctioning this sort of activity, well, that’s foolish.
Wouldn’t it be better to have the wine sensibly priced, say at £7.49 or £6.99, and then sell it at that price? Or to use a less dramatic discounting, of £1 or £1.50? Asda will argue that at £4.24 the customer is getting a cracking deal.
That is true. But is it sustainable? Is it ethical?