Not just Granny’s tipple

With a new media agency, a promotional collaboration and TV sponsorship, Tio Pepe is making strides as a white wine alternative. But how long will the repositioning take? asks Rupi Gohlar

TiopepeSherry brand Tio Pepe last week appointed John Ayling & Associates to handle media planning and buying for the launch of its Midweek Dining Club (MW last week), in an attempt to raise awareness of the niche beverage and form an association with quality restaurants.

The agency already works with Tio Pepe owner Gonzales Byass and won the business without a pitch. It is now developing a campaign to support the club, which is being launched in association with The Rocket Marketing Group. It will offer members savings on restaurant bookings as it seeks to encourage consumers to eat out midweek and cross-promote Tio Pepe with restaurants offering free samples.

However, industry experts say the sherry category is a challenging market to operate in and has experienced difficulty for decades. It is still associated with the traditional idea of grandmothers’ aperitif and observers say it has a long way to go before it sheds this stereotypical image.

Matters are further confused by Tio Pepe’s assertion that the £50m global brand is a “very pale and dry-style of wine” – a fino, rather than a sherry. The brand encourages consumers to drink it just as they would a dry white wine – chilled and in a wine glass – but then its marketing informs drinkers the beverage can be located near the sherry aisle in the supermarket, putting a question mark over its position as both a wine and a sherry.

Gonzales Byass managing director Martin Skelton says Tio Pepe is an important part of the company’s business but admits that in the past many have viewed the drink as part of the lacklustre sherry sector. He claims this is no longer the case and says Tio Pepe’s marketing and advertising activity has firmly repositioned the brand in the food-wine drinks category since 2001.

The bottle was changed from dark brown to emerald green in order to position it as “a special style of white wine”, and relaunched in the on-trade and off-trade markets targeting more affluent, foodloving consumers, typically in their 30s and 40s. This was accompanied by a flurry of advertising in specialist magazines and partnerships with popular chefs to promote the fino as a food accompaniment.

In 2004 and 2005, Tio Pepe sponsored Hell’s Kitchen on ITV with a view to reposition the drink as a “portfolio” drink for white wine drinkers. Tio Pepe says the sponsorship was a success and that Sainsbury’s sold 24.7% more 75cl bottles during the first series than in the same period in the previous year. It also sponsored the 2005 ITV London Restaurant Awards.

However, observers wonder whether this achieved the success the brand was hoping for. Interbrand executive director Graham Hales says although Tio Pepe is trying to transform the demographics of its target market it still faces a “serious stretch” before it is seen as a strong contender for the white wine alternative. “Tio Pepe’s assertion that it is a white wine is a corporate aspiration rather than a reality. It is trying to do all the right things to change its image but it’s a question of what consumers will let it do,” he says.

Others agree the brand has made great efforts, some of which have paid off, but the old-fashioned perception of sherry has created barriers that Tio Pepe still has to overcome. Value Engineers senior consultant Amelia Bootham says it has to focus on the on-trade. Consumers can only buy the fino in glass measures in pubs and bars rather than in bottles, as they can a wine, which causes confusion about its strength. “People often think sherry is stronger than wine but, at 15% alcohol by volume, Tio Pepe has pretty much the same alcoholic content and this is something that the brand has to promote,” she says, and also suggests Tio Pepe could limit consumer confusion by explaining that it is different to conventional British sherries.

Although it is produced in a similar way to white wine, Tio Pepe comes from the Palamino grape and is aged for five years beneath a covering of yeast to give it a bready and nutty dry palette. In 1835, Manuel Maria Gonzalez and his uncle José Angel de la Pena created the fino and Manuel named it after “Uncle Joe”.

In 1999 and 2001, it won Gold Medal Awards in the International Wine Challenge, becoming the first fino to achieve gold status twice. In 2001, Gonzales Byass acquired the Croft Original brand, which was second in the market, and Skelton says it is now second only to Harveys Bristol Cream in the UK sherry market by volume, but claims to be the best-selling fino sherry in the world. According to Mintel’s most recent figures, the UK sherry market was worth £121m in 2002.

Sherry expert and writer John Radford says the idea behind the 2001 rebrand was to emphasise that Tio Pepe is a white wine alternative, as well as a sherry, and to double its penetration in the market within a year. Although it achieved around a 50% increase in sales, it still has not been accepted as a premium wine. Radford says: “It has taken a generation for quality sherry to regain its position in the market and it will take another generation to get Tio Pepe where it belongs – on the wine list, not behind the bar.”

Skelton confirms the fino company is looking to seal more promotional sponsorship deals. Maybe this will finally help it shift its conventional stuffy image.

Facts and figures

  • Tio Pepe 
  • Tio Pepe is a fino sherry produced in Jerez, Spain and exported across the globe. It is worth £50m in sales.
  • It was created in 1835 by Manuel Maria Gonzales and his uncle José Angel de la Pena. As a tribute to his uncle, Manuel named it Tio Pepe (Uncle Joe).
  • In 2001, Tio Pepe’s owner Gonzales Byass bought rival sherry brand Croft Original, which was the second biggest brand in the UK sherry market (volume) after Harveys Bristol Cream.
  • In 1999 and 2001, it won the Gold Medal Award in the International Wine Challenge, becoming the first fino to achieve gold status twice.
  • In 2004 and 2005, Tio Pepe sponsored ITV’s Hell’s Kitchen in a bid to reposition itself as a “portfolio” drink for white wine drinkers.

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