In today’s budget-conscious environment, developing a luxury product may seem difficult, let alone trying to make this product appeal to mainstream consumers. Yet Tayson Pierce Wines, based in the Napa Valley, and Champagne Eric Philippe, based in Ecueil, France are applying innovative ways of looking at luxury products with extensive experience in the wine and champagne business to successfully establish their emerging luxury brands, even in the over-saturated wine / champagne market with its increasing product differentiation. Through an interview, Taylor and Eric shared their family’s thoughts on luxury products, why ultra-premium wines are still worth the investment, and why the luxury market is still strong. The Rothchilds’ luxury market strategy offers a blueprint for success for luxury products in many other industries.
Unlike many of their competitors, the Rothchilds see their brand as a tool to bring superior products to the wine industry while providing an educational experience for their consumers. They feel that having a better understanding of what you drink and knowing when you have a superior product yields an unparalleled experience. Many would-be oenophiles have little access to the luxury wine market due to the outrageous price points, and many more are unaware of some of the subtle nuances in the wine industry, which separate the good from the great. For this reason, both Tayson Pierce and Champagne Eric Philippe established a broad range of price points, ranging from the $35 for their Rothchild Rosé (still wine) to the $125 Champagne Eric Philippe Vintage 2012 Extra Brut.
The result is an ultra-premium product that is very desirable for most consumers, thanks to Tayson Pierce’s strategy of producing a high-quality product in reserved quantities that still remains affordable. In contrast to other vineyards, which may supply grapes from a variety of other grape producers, Tayson Pierce is a single vineyard winery, meaning that the winery only uses grapes from a single source for each of their wines – even if doing so results in smaller production. Since winemaking is an industry with extremely high overhead and up-front costs, producing sufficient quantities to meet demand can be a delicate balancing act in order to remain profitable. However, Taylor and Eric’s mission to educate the consumer about what they are drinking while never “cutting corners” or accepting anything less than ultra-premium quality sets them apart from other wineries and Champagne houses. Their emphasis on quality over quantity differentiates the brand from its competitors who mass produce fair quality wines laced with heavy marketing and branding.
The dichotomy of quality vs. quantity segues into a bigger question: What do premium products do for consumers? A complex negotiation of emotions and self-image seem to define these products’ premium value. The Rothchilds explain their vision for their brands, which will seem familiar to many other firms providing luxury products: “We want people to feel special when they buy our wines because they are exceptional wines at a great price that are also hard to find due to our production volume. It’s like finding buried treasure.”
While some give their product this buried treasure identity through simply branding, this company focuses on differentiation via product quality and overall customer experience. For example, their Champagne products are crafted using a lower dosage (added sugars) than the majority of the industry, which produces sugary Bruts and Demi-Secs. Their “less is more” mentality allows the quality of the ingredients and their ninth generation winemaker’s technique in their product to speak for themselves instead of having the true flavor of the wine masked in sweetness. The result is an otherwise hard-to-find Extra Brut that more authentically replicates sophisticated French champagne-making techniques – and that gives consumers a literal taste of what top shelf-quality champagne should taste like. From a business perspective, a product that is scarce, hard-to-find, and that replicates something that had previously only been available to the upper classes helps to drive interest and, ultimately, the feeling of being special that allows customers to bond with products.
Luxury products, including Tayson Pierce Estate Wines and Champagne Eric Philippe, revolve around the relationship between scarcity and cost, with a layer of prestige, knowledge, and storytelling on top. A luxury product should have a good story behind it. Wine, according to the Rothchilds, is an investment in a sensory experience that can be shared with others. Given the emergence of the Millennial market demographic, and their penchant for spending more on experiences, there are both unique opportunities and challenges to market to this segment. In contrast to other market segments in which the luxury product is worn, displayed, or carried around for others to look at, wine is generally consumed with others to enjoy together. Further, not everyone possesses the product knowledge necessary to distinguish an excellent bottle of wine from simple table wine. However, with a little knowledge of what is in your glass, the experience can be much more enjoyable. Tayson Pierce Estate Wines and Champagne Eric Philippe are among the few wineries in the world that has most of their tastings curated by the actual owners (Eric and/or Taylor) at their facilities in Napa Valley. They can even provide occasional tastings with their own winemaker Jeff Ames, although they request at least two weeks’ notice for scheduling.
Tayson Pierce has been able to succeed over the years in the oversaturated (pun intended) wine market by combining a quality-oriented approach with accessible price points, and a mission that ties back to Corporate Social Responsibility. As Taylor and Eric Rothchild put it, “Great things are meant to be shared.” The company is on a mission to make great wines accessible to everyone. Eric mentions, “We make the kinds of wines that we love to drink, which can be enjoyed by everyone who appreciates the attention to quality in the products they purchase while maintaining a bit of exclusivity since we are not on the shelves of your local grocery store.” It is clear that the brand’s success has come from understanding the psychology of luxury brands and leveraging it into the kind of experience that Millennials are willing to pay for. For other entrepreneurs entering luxury markets, it is worth asking whether the product can work with the complex interplay of emotions, value, and status signaling that luxury products entail.