As I sat in one of Dublin’s many new hipster bars a few nights ago (complete with frayed sofas and “aged” mirrors) I noticed a not so new trend. Five of the 10 tables had bottles of prosecco sitting on them with mandatory ice buckets and flutes. Customers were glugging the stuff bottle after bottle and no wonder, a bottle in this particular establishment was only €28 whereas the cheapest non-house chardonnay was coming in at €35. A bottle of champagne would have set me back €95 so when I want something a little more indulgent I proudly opt for prosecco to ensure my credit card won’t combust. Even in supermarkets this price gap is blatantly obvious with the cheapest champagne being €35 and the cheapest prosecco retailing at €8 per bottle.
Nobody seems to be able to pinpoint exactly when the prosecco trade began its boom in Ireland but one thing is for sure: business is booming. The 2015 grape harvest saw the equivalent of 450 million bottles of prosecco being produced with 70% of those bottles being exported to foreign markets, (Collins, 2016).
Fizzing to the Top:
Sadly there isn’t a huge amount of data out there on how prosecco is performing in the Irish market but if the UK market is anything to go by things are bubbling to the top (sorry) and will continue to do so. The UK drinks 35% of the world’s prosecco, which is significant when compared to the U.S. which only consumes 17%, (Collins, 2016). In an analysis of sales in major supermarkets between February 2015 and February 2016 research giant IRI found that prosecco sales saw a growth of 34% compared to champagne which grew 1%, (IRI Worldwide, 2016). The same analysis also found that supermarket’s own brand prosecco occupies 12% of sales whereas the most popular non-own brand prosecco accounted for only 6% of sales, (IRI Worldwide, 2016). Consumers are thirsty and not too fussed about brands it seems, making prosecco one of the wine industry’s leading products. Let’s see why.
Luxury at a Reasonable Price:
Historically champagne has always been a symbol of wealth, success and celebration. Advertisements for various champagne brands sell us a life of exclusivity and excess. As a society exposed to celebrities and TV shows and films that glorify excess we are conditioned to think that this is what we should aspire to. Champagne is a symbol of this lifestyle and is thus in high demand. I think that Maslow’s hierarchy of needs applies to this situation perfectly. Maslow (1943; 1954) suggested that once we meet our most basic physical and psychological needs (food, water, safety ect) we develop a drive to become better, to achieve mastery, status and prestige. As a nation out of recession but still in choppy waters many of us are ready to move from keeping things ticking over towards a sense of self-actualisation. Here is where society kicks in: we are fed the idea that our lifestyle is vital and that indulging in the finer things moves us up the pyramid. Although our economy is healing, we are not out of the woods yet and spending €95 on our weekly fizz is not doable for the vast majority of Irish people.
So what are we to do? Dan Hill, an expert in consumer behaviour states that when consumers are confronted with crazy prices our pride takes a blow and in an attempt to salvage it we settle for something else that is still a luxury but doesn’t carry the debt-inducing price tag, (Binkley, 2007). Ever notice how prosecco is sold right beside champagne? I imagine marketers have caught on to this this idea and placed €10 bottles of prosecco a few shelves down from champagnes ranging from €45 – €300. The result is brilliant news for retailers as they can help consumers save pride and climb the pyramid by giving them a reasonably priced luxury drink (flutes and buckets not included).
The Power of Bubbles:
Investing in prosecco is a no-brainer for Irish retailers given the success the UK market has enjoyed. A further factor worth a mention is Brexit. Coldiretti, the association of Italian food producers has expressed concern that Brexit may seriously harm trade relations between Italy and the UK as Britain consumes 1 out of every 5 bottles of prosecco produced, (Sheffield, 2016). Despite being traditionally seen as a beer drinking country Ireland consumes a significant amount of wine glugging 24 litres per capita which given the differences in our market power is comparable to the UK at 30 litres per capita, (Marian, 2014).This may open up the Irish market as a more attractive import destination for producers and enhance the Irish prosecco market significantly.
For marketers, investors and retailers however the main question is will the prosecco craze last? In terms of consumer psychology it seems that prosecco is here to stay. The main reason for this appears to be the association consumers draw between champagne and prosecco. If you have ever witnessed champagne advertising campaigns they are truly amazing: they unapologetically glorify wealth, excess and are far from shy when it comes to celebrity endorsements. The adverts are never just selling champagne: they are selling a lifestyle. Our climb towards prestige (and its associated wants) is an emotional journey and emotions themselves play a massive role in influencing our spending, (Murray, 2013). Champagne is out of many people’s price range but giving consumers a taste of the life they crave by selling them an image of luxury by using an alternative and visually identical product such as prosecco is a solid marketing practice.. In line with this theory, marketers may need to do more to ensure that prosecco isn’t thrown onto the heap with the other trends that have come and gone in Ireland. Using a more luxurious and exclusive image for prosecco may prove very effective as it taps into many consumer’s desires. Unless human psychology changes suddenly and significantly it seems that prosecco is indeed here to stay!
References:
Binkley, C. (2007). The Psychology of the $14,000 Handbag. WSJ. Retrieved from http://www.wsj.com/articles/SB118662048221792463
Collins, G. (2016). Prosecco 2016 Output Seen Up as Much as 20% as U.K. Sales Surge. Bloomberg.com. Retrieved 13 August 2016, from http://www.bloomberg.com/news/articles/2016-05-07/prosecco-2016-output-seen-up-as-much-as-20-as-u-k-sales-surge
IRI Wordwide,. (2016). Prosecco keeps its sparkle as sales grow by a third in one year, with retailer own labels taking the- IRI. Iriworldwide.com. Retrieved 13 August 2016, from http://www.iriworldwide.com/en-SA/Insights/news/Prosecco-keeps-its-sparkle-as-sales-grow-by-a-thir-en
Marian, J. (2014). Wine consumption in Europe by country per year per capita. Jakubmarian.com. Retrieved 13 August 2016, from https://jakubmarian.com/wine-consumption-in-europe-by-country-per-year-per-capita/
Maslow, A. H. (1943). A Theory of Human Motivation. Psychological Review, 50(4), 370-96.
Maslow, A. H. (1954). Motivation and personality. New York: Harper and Row.
Murray, P. (2013). How Emotions Influence What We Buy. Psychology Today. Retrieved 13 August 2016, from https://www.psychologytoday.com/blog/inside-the-consumer-mind/201302/how-emotions-influence-what-we-buy
Sheffield, H. (2016). EU referendum prompts prosecco panic in Italy. The Independent. Retrieved from http://www.independent.co.uk/news/business/news/eu-referendum-brexit-wine-prosecco-italy-exports-champagne-a7097166.html#gallery
