I’m sure many of you have heard the joke about how to make a million dollars in the wine industry … you start with 10 million dollars.   Lately, the news has been filled with stories of vineyards in Canada, USA and Europe slipping into foreclosure, often featuring an owner who loved their land, believed in their dream, worked hard and still watched the business collapse. What’s striking isn’t a lack of effort or passion – it’s the lack of a strategy.  No matter the industry, passion alone can’t out manoeuvre market forces.

A recent conversation with Allison Luvera, cofounder of Juliet Wines, felt in sharp contrast to what’s been happening recently in the wine industry.  Juliet Wines is challenging the stigma around boxed wines and they’re doing it with discipline, data, and a level of strategic clarity that’s rare in any category. Their story is a reminder that great brands aren’t created on emotion. They’re built on insight.

Juliet Wines began with a vision of serving a clear consumer segment; younger women who drink wine regularly.   A hard look at the wine aisle in the grocery store revealed a gap in the market.   Bottled wines often lack a cohesive brand identity and so called “Lifestyle” brands don’t always deliver on quality.   Additionally left-over bottled wine oxidizes after opening and the remainder tastes “off” after a few days.

Boxed wine is actually stored in an airtight bag which collapses as it is served so oxygen can’t enter and prematurely spoil the taste.  For those who imbibe only occasionally or in small amounts, boxed wine makes sense and enjoys strong adoption amongst women.  Notably, the available boxed wine products were all positioned as a “volume-value” purchase – a 3 L box vs a 0.75 L bottle of wine. According to Allison, a premium boxed wine intentionally designed for the young female consumer simply didn’t exist.  Hence the opportunity for Juliet Wines.

Backed by consumer data and armed with a strategy, that insight became the foundation of the company.  Juliet Wines would compete as a premium wine and communicate the higher quality over regular boxed wine.

To do that they made two strategic moves.  First Juliet Wines sized down their packaging to a two-bottle equivalent or 1.5 litres, half the size of most other boxes.   Next, they made the container pretty. Understanding that their product would likely remain on a countertop, they created a sleek, cylindrical design that appealed to younger women.  The function of the box remained unchanged, but the unique packaging became an expression of lifestyle, highlighting that the product inside was indeed a premium wine worthy of showing off.

Perhaps the most impressive part of Juliet’s approach is how they handled pricing.  Instead of assumptions based on existing products, they tested multiple price points to understand the consumers’ true willingness to pay for a premium boxed wine.  When creating a new tier within an existing category this is an essential step, easily overlooked when passionate founders fall in love with their own product.  What Juliet discovered was that consumers have a price point when it comes to a lifestyle purchase like wine.  In other words, cheaper isn’t always better.  It doesn’t necessarily sell more, and it can communicate the wrong message about your product. According to Juliet’s research, what people do anchor to is the perceived quality of what’s inside and that’s communicated by the branding, the packaging and the price.

What can we learn from Juliet Wines:

1. Start with the customer:  Juliet Wines found an under-served market in young women who enjoyed wine but didn’t want to sacrifice on quality, style, or convenience.
2. Positioning is important:  3 litre boxed wine screamed cheap.   Juliet went to a smaller attractively designed box to change that perception.
3. Test willingness to pay:  Most people guess the pricing based on hubris that they know the market.  Juliet set up the tests and found the ideal price point.
4. Passion needs a strategy:  Having passion is wonderful but it isn’t enough – you need a strategy to successfully bring your passion to market.

Juliet Wines is growing and can be found in stores in the USA.   Passion plus a sound strategy, aged to perfection and served from a designer box makes for a great tipple with friends!   Cheers everyone!!