The United States of America's Market

The United States is a country of the North American continent that represents an important role in the global business of wine. In addition to being the largest wine market in the world, it behaves very distinctly in its 50 States.

There's a lot to be described about each one of the States, in the style of wine and their sales behaviour. However, I will make a market approach of the United States - USA - as a whole, in order to give a real view of the complexity of this market.

The American market currently goes through a social context that has a high potential of opportunity via the Millennial generation, and growth for the brands of wine. There are about 316,000,000 people in the United States of America, spread across 50 States, but the vast majority of wine consumers is located in the East and West coastal areas.

It is so important that, within the 50 consenting States, only about 20 will have a real potential for a turnover of wine and in positioning of quality wines.

The USA market has developed in a very particular and different way from other markets. One of the main advantages to create regarding wine is the bet on the story teller's, the art of telling the wine's history, engaging the consumer with the product, which I have already mentioned.

 USA consumers accord a value to everything that is related to the wine; its history, the details around it, when properly communicated, can position the wine above its quality.

This explains why wines from regions with a lot of history, which mark the difference facing more commercial wines or so-called "commercials", are fairly valued in the market. I can give the Portuguese example of the Vinho da Madeira (Madeira wine), recognized in the United States as a wine of superior quality, with historic surroundings enjoyed by American consumers.

In the USA market, communication is a decisive factor in sales of wine and in setting the target price in the market. Telling the wine's history, betting on the image, the critical feedback or communication for medals or points awarded by its critics, can be instrumental in the sale of the brands of wine.

At this time the positioning of Portuguese wines in the global market of the United States presents itself, in my view, fairly weak, a factor that I attach to the lack of communication around it. A clear example of this issue is the lack of perception from the national producers about the rise of a new trend of red wine consumption in this market, in particular the association of several grape varieties, the typical cuts or blend. The market of the United States behaviour is linked to consumers trend's and fashions. The consumer is easily influenced by the criticism of wine that he/she reads or comments from friends, constantly adjusting their consumer profile.

Right now the tendency to seek and consume wine made from red grape varieties, more or less known, associated with one another, with cuts or original and surprising blends, is thriving in the North American market. Herein lays a potential opportunity for national wines. The red wines are often prepared only with Portuguese grape varieties, producing blends of several grape varieties that American consumers do not know, and may therefore constitute a factor of interest.

If the American consumer is exposed to the history of Portugal, as a typical wine producing country, where it has been working for several centuries the "art" of grape varieties association, the blending, adding worldwide unique grape varieties, there will be an increase in demand of such wines, which will result in a higher turnover and an increase in the added value index. The stories associated with each country, region or producer, are crucial information in this market, and can be determining factors of market entry as shown above.

Various positioning strategies can be taken into account for the USA market; however, considering its size and the large number of consumers, the most logical move for a producer would be the focus in some States or in a single one. Except for a few exceptions, wine producers in Portugal have a relatively low production volume, so it makes more sense to assure the recognition of their brands of wines in States considered to be strategic, rather than consume resources trying to cover several of them. A concentration of efforts and a marketing strategy and sustained positioning allow a greater strengthening of brands.

In the late 80, the creation of wine magazines in the United States signalled the consumption mode in this market, and a little all over the world. The scores and comments that these magazines were attributing to wines were decisive to define the market, to the point they were able to destroy some wine sales in favour of others. Since its inception, the magazines have influenced the American consumer, and today a good review of these media is crucial in the wine trade in this market.

The constant changes that occur in the business world have forced organizations to be inserted in the context of new technologies, a basic premise to strengthen relations with the target audience. The wine industry is no exception. It is clear that the social networks as a communication strategy obtain better results and a significant competitive advantage in the market. It is therefore essential for a producer who wants to enter into the market of the United States to hold a very strong communication strategy in this area.

This readiness of the USA market for communication, together with the fact that it is the largest world market for wines, makes it highly competitive and highly segmented regarding prices. The positioning of wines regarding the price is of the utmost importance because it is what dictates the success or drop of sales.

The quality and unique character that is attributed to Portuguese wines, along with an excellent relation quality-price, very valued by the consumer, makes a positive contribution to the bet from producers on this market.

Regarding the gastronomy of the United States, where the amount always overshadows the quality, the later is currently undergoing a paradigm shift, beginning to focus more on the natural side of food. This trend follows the guidelines of the Mediterranean diet where the consumption of wine is associated with a healthier diet. The presence of many culinary cultures in the country, without any connection to the American cuisine, is also a very present reality in this market. The Portuguese community in the United States can contribute a lot to the positioning of national wines in this market, showing how a Portuguese wine can accompany several types of dishes.

In my opinion, the Portuguese wine prices are a bit below the cost that would do justice to their quality, therefore there is an openingto an increase in the price per bottle, as well as sales volume. It only takes that the marketing strategy is planned on a long-term basis.

It will also important to develop a communication strategy focusing on the country - its location and differentiating factors – given that there are still American consumers who can't find Portugal on a map. I can tell you, out of curiosity, that I was confronted with this issue when I worked at the Château Montelena, in California. Every time I identified myself as being of Portuguese nationality, it was immediately confused with Brazil since they tought that Portugal bordered on this country. They were even more surprised when I explained them that in fact the Portuguese navigators named for the first time the State of California and that we share a history and Portuguese language whit Brazil.
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