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The size of holdings is increasing, reflecting the pressure on producers to increase production to remain competitive. The number of Anjou-Saumur and Touraine (AST) producers declined 55% between 1988 and 2000; the average size of the survivors has tripled to 6 hectares (ha) (Recensement Gnral Agricole 2000); and just over a third of the properties have a holding of more than 10ha compared with only a quarter nationally. Increasing production requires increased consumption and effective distribution, but global consumption is declining and the prospects for AST producers on the domestic market (ranked third after Bordeaux and the Rhne for still wines) have worsened since changes to the French drink-driving laws.

The UK market

The Loire is performing well compared with France as a whole. Nevertheless, retailers paint a mixed picture: red sales are more difficult, while whites are on the increase thanks mainly to Sauvignon de Touraine. The strong performance of Ros d'Anjou and Cabernet d'Anjou is not surprising given the recent upturn in ros sales in the UK (+26.9% in 2002/03, AC Nielsen). Although AST wines overall are holding their own, it will take considerable effort to maintain market share as competition continues to sharpen.

Although the Loire is a popular tourist destination for Britons, and the home of Muscadet and Sancerre, the link is rarely made between the Loire and wine. Focus-group research carried out by Eureka for CorpBrand confirms this. Respondents revealed almost no knowledge of the style or quality of wine produced in the Loire, let alone in AST.

Total sales volume can be misleading. A glance at supermarket shelves reveals the preponderance of own-label within the AST ranges (eg three out of five in Tesco, two out of three in Asda), yet own-label wines generally do little for the image of a region or for the fortunes of its smaller producers.

The dominance of multiple grocers and the loss of market share for multiple specialists is particularly significant for AST wines: while very small producers of niche, premium wines find a market through agents or specialist independents, and ngociants and co-ops find outlets in the multiple grocers, access to market for small and medium-sized producers is diminishing, even though consolidation is enabling growers to increase their volumes while maintaining quality.

Consolidation has also given co-ops such as Alliance Loire the opportunity to select an agent with a track record of working with French co-ops in marketing and brand creation, demonstrated by the successful launch in May 2004 of Alliance Loire's Valle Loire range.

Many ngociants, who generally have less direct control over quality but better control over volume than co-ops, are struggling. Although they tend to have better-established distribution networks, they often lack marketing resources. Vinival, the largest Loire ngociant, bought by Les Grands Chais de France (LGCF) in July 2004, sold 2.95 million cases in 2003 (73% on export markets) and had a turnover of e51.21 million, but it made a loss of e500,000. It is to be hoped that LGCF's investment will support Vinival in the UK, especially in promoting its new brand, La Loire, through Thierry's.

Although the on-trade accounts for only 17% of total UK wine sales by volume, it represents 46% by value. Not only has consumption risen by a fifth in volume over the past five years but, more importantly, average prices have risen by 10%. Thanks to the established culture of French wine and food, the 'digestibility' of French styles, a preference for unbranded wines and the possibility of hand-selling, the on-trade offers great opportunities to AST producers if they can find a route to these market sectors.

Variety, style and recognition

The Loire is well placed to benefit from what Richard Kelley MW calls 'the current mode for Sauvignon' but, at 8.5% of the vineyard area (see table 2), its popularity is insufficient to rescue the region. Chenin has more significant volumes but is less fashionable and often poorly understood by the UK consumer. AST's black-skinned varieties are even less familiar. Varietal labelling, therefore, will not necessarily benefit AST reds or non-Sauvignon whites.

Recognition also involves style and fashion. As Hugh Johnson and Jancis Robinson MW note in The World Atlas of Wine, 'Loire Valley wines & are unwarranted casualties of the modern wine drinker's obsession with sheer mass.' UK consumers face two further stylistic hurdles, wines that are not ready for immediate drinking and vintage variation, which makes the wines unsuitable for an instant-consumption market and too unpredictable for the majority of UK wine consumers.

However, many agents and distributors in the UK mention small signs of change. Thresher's James Griswood believes that 'the Loire is in an ideal position to increase its market presence in the UK. Consumers are gradually moving towards fresher, crisper, drier styles.'

The AOC system is another frequent handicap. While producers such as Alexandre Monmousseau of Chteau Gaudrelle (Vouvray) use a specific UK back label to identify variety and wine style, others such as Vouvray appellation chief Philippe Brisbarre have turned obfuscation into an art form. 'Consumers must try the wine out for themselves. It is difficult for people to know if our wines are sec, demi-sec or moelleux, but this is the peculiarity of Vouvray,' (Harpers, 6 November 2003). Tanners' buyer Simon Jones has a better grasp on reality. 'Vouvray has an obvious identity crisis, a confusion not likely to endear it to the public,' he says.

Fortunately, many producers are responding to UK buyers and consumers by focusing on drier styles; changing viticultural practices to improve ripeness; and making wines that can be drunk earlier. One example (of many) is Emanuelle Delaille of Domaine du Salvard in Cheverny. Delaille produces a quality product from a little-known appellation and wishes to stay small enough (up to 30ha) to remain a family business. Key to his success in the UK is his relationship with export broker Charles Sydney (his broker in the US is Kermit Lynch). The wines are listed by a wide range of retailers and in the on-trade, and are all reputed for careful selection. The wines are neither niche nor mass market, but have found an excellent route to market, thanks to quality and value for money.

Marketing and promotion

Pamela Gregory, former purchasing director at Mitchells & Butlers, summarises the situation. 'Fundamentally, neither the wines nor the prices are the problem, the marketing is!' she says. InterLoire's generic promotional activity (see below) has had neither the foundation nor the reinforcement provided by producer-specific marketing or by a positive image and widespread understanding of wine styles. As with all generic agencies, InterLoire can influence only one element of the marketing mix: promotion. Product, placement and price are in the hands of the producers, their agents and UK buyers.

The combined advertising expenditure of the top five brands in the UK for 2002 was 1.59 million (AC Nielsen 2004). By contrast, none of the AST producers interviewed was making enough margin to invest in marketing. This has been exacerbated by the need to keep retail prices constant despite recent duty rises, the strength of the euro and the small and generally high-quality 2003 harvest.

Luc Monnereau, UK sales director at Ackerman-Rmy Pannier, laments the fact that he cannot afford to advertise on the London Underground without adding 1 per bottle to the retail price, thus exceeding the multiple grocers' glass ceiling for the product.

Producers are divided in their views on InterLoire, AST's promotional body, seeing it as 'tinkering' (Stphane Branchereau, Domaine des Forges) or as 'an essential tool' (Jacques Couly, Maison Couly-Dutheil). Its UK campaign for 2004, in partnership with Sopexa, took 'freshness and elegance' as its keys. Its collective aspect was centred on a garden and tasting at the Hampton Court Flower Show. The 'Red Collection' aimed to increase awareness of AST's five red appellations, and the ros segment used a print campaign to promote pink as the ideal picnic wine. The white segment used women's magazines and websites to position Vouvray, Anjou Blanc and Touraine whites as 'celebration wines aimed at women'. Hilkka Chartier, head of export at InterLoire, reluctantly admitted that all this had to be done within a total budget of e750,000 (up from e653,000 in 2003).

But if InterLoire's reach is limited, it is not entirely to blame, given the effort needed to raise consumer awareness of AST wines with limited funds. Although generic campaigns may not be appropriate to the more intense, complex wines of AST, they may introduce new consumers to the region.

In contrast, generic promotion for Bordeaux in 2002 was approximately e1.25 million, and in 2003 Inter-Rhne's budget for advertising alone was e1.1 million. Recent proposals for reform by Herv Gaymard, French minister of agriculture, included a 50% increase in government aid for wine promotion overseas much needed in regions such as AST.

Tastings and retailer promotions

The main disadvantage of trade tastings such as the annual Salon des Vins de Loire in Angers, or the generic Loire tasting in the UK in the autumn, is that there is no pre-selection process. Buyers have to taste their way through many mediocre wines before they find the pearl of great price. This may tarnish the reputation of an appellation as a whole and reinforce the primacy of producer over terroir.

In-store tastings in the UK may be effective but are more limited in their sphere of influence. InterLoire funded and Sopexa co-ordinated two consumer tastings for AST whites in 2003. Both were judged a success, with sales at the Tesco tasting equivalent to a conversion-to-purchase rate of 28%. The Waitrose tastings were so successful that one branch had to do an emergency order, and the sales uplift in the week of the tasting was about 30% for the Vouvray and the Anjou Blanc and nearly 50% for the Touraine Sauvignon.

In addition to such tastings, in 2004 Laytons, Majestic and Direct Wines all ran successful promotions. However, although they raised awareness of the Loire as a whole, none was specific to AST and they mainly emphasised the summer/Sauvignon theme.

Brands

Much has been written about France's apparent (or historical) inability to create brands due to product-led attitudes, restrictive regulations, a fragmented production base and vintage variation. AST is no exception, with production polarised between small family businesses and volume-led ngociants and co-ops, but some recent attempts are encouraging.

In addition to the brands mentioned above, there are brands initiated by UK agents and suppliers. For example Guy Anderson Wines was looking for a source for a branded Sauvignon Blanc that was less expensive than a New Zealand Sauvignon. The search led to the Loire and Atlantique, a brand name that avoids the straitjacket of regionality but also forsakes its possible advantages. However, the front label reveals the Loire as the origin and (for the sake of buyers rather than consumers) indicates Touraine as the appellation. The Sauvignon has been very successful and the range now includes a Muscadet and a Cabernet Franc.

The agent controls sourcing and product placement from the centre of the chain, providing acute market responsiveness. Flexible sourcing is demonstrated by the fact that the Sauvignon is supplied by Pierre Chainier, whereas the Cabernet Franc is supplied by Donatien Bahuaud.

This set-up involves potential pitfalls for the producer loss of control, intervention by the agent's flying winemaker and insecurity from vintage to vintage because the agent may choose to switch supplier. The agent has to deal with the unpredictability of volumes coupled with the need to reserve volumes of the required quality in advance and the risk of making a loss when reserved wine has to be sold back. Consistent quality has to be maintained for the credibility of the brand, but volume is essential for growth.

Paul Boutinot's creation of brands such as Les Tuffiers Sauvignon and Vouvray Les Nouys demonstrates a distinctive commitment to the region and its appellations. There is tight control over winemaking, long-standing relationships with growers and the ability to place the product appropriately in both the on- and off-trades. Boutinot's reputation in the trade as a winemaker is a clear advantage in gaining listings.

Kiwi Cuve offers another successful model of agent-led brand creation. As Western Wines' Claire Whitehead explains, 'The aim was to create a French brand with a twist, the USP in this case being that it was made in France by a New World winemaker in a New World style.' A Chardonnay, a Sauvignon and a ros are produced by ngociant LaCheteau and sold through multiple grocers. Sales of the Sauvignon have fluctuated around 30,000 cases, but the volumes have been limited by the ability to source sufficient volumes of the required quality.

A producer-led brand such as Alliance Loire's Valle Loire looks promising, especially if it follows in the footsteps of Blason de Bourgogne. Vinival's La Loire brand is perhaps in a more delicate position, given the recent change of ownership, though the agency remains with Thierry's. As with Valle Loire, the brand name draws on consumers' awareness of the region and could help drive forward sales of the category as a whole. One critical issue is whether UK buyers (and consumers) are prepared to pay for the quality of the product, which offers an excellent stepping stone between entry level and niche especially given the large 2004 harvest.

Smaller growers do not produce the volumes needed for commercial brands, though Charles Sydney's recent, innovative and well-designed scheme for an umbrella brand, using a brand name (La Grille) as well as the producer's name on the label, may be a way forward. Listings have already been agreed with Waitrose, Sainsbury's, Tesco, Oddbins and Thresher.

AST brands are a relatively new phenomenon, so their success is yet to be proven. However, the very attempt to create brands that correspond to the UK market is a great stride forward in providing a stepping stone for Loire wines between price-capped own-label and premium wines produced in quantities too small for anyone but independents and the on-trade. Sales success will depend on brand owners having either their own UK presence or an agent with passion for the product and region and a proven influential relationship with buyers as well as the resources to market and promote their wines. Whether such sales are profitable has a lot to do with improving the image of the Loire as a whole, so that prices and quality can spiral upwards, as well as with efficient logistics.

Conclusions

Certain routes to market seem to be generally more effective for certain market sectors. A large co-operative or ngociant is best served by an agency with good connections to multiple grocers and retailers, as well as the ability and willingness to help producers grow their business beyond entry-level or own-label wines, potentially through brand creation. For small producers in the mid-market and premium sectors, an export broker such as Charles Sydney provides a route to market that allows the producer to establish a direct relationship with a buyer and a reputation for quality to secure long-term business.

Product quality and style, market responsiveness on the part of all links in the chain but especially the producer, and the need to promote the Loire region as a whole are the most influential factors in the success of AST wines on the UK market. Some elements of progress are within reach of producers (though probably only for those who are already exporting their wine at a profit or have generous backers). These include investment in quality in the vineyard and winery, for example to eliminate green flavours, dilution and hard tannins, thus slightly adapting styles to the fashion and taste of the UK market without loss of identity; greater awareness of the world's wines and an openness to buyers' feedback; and more attractive packaging incorporating consumer-friendly information. Other changes depend on greater flexibility in the AOC system, for example allowing varietal labelling for any wine.

Other measures are collaborative: astuteness and investment in promotion and marketing, with a clear strategy, place demands on all stages along the route to market, as well as on generic bodies such as InterLoire and on French regional/national government. The unification of the various Loire interprofessions might help, as long as the increased diversity and size of the region do not lead to an inability to agree on strategy and resource deployment. Branding that supports and reinforces the image of the region as a whole will benefit all producers, not only the brand owners. More negatively, the withdrawal from the market of poor-quality wines, and an evolutionary reduction in the number of producers, would contribute to the more coherent and consistent product offering that buyers and consumers seek.

AST has a long way to go to convince UK buyers and consumers to choose a Cheverny over a New Zealand Sauvignon or a Chinon over an Australian Cabernet/Merlot. However, with consumption in the UK constantly increasing, quality improvements in AST wines and a growing fashion for fresher wine styles, there is an opportunity for AST producers to increase their exports to the UK at a time when declining consumption and reduced on-trade sales in France have made the need to do so more urgent. The style of product, appropriate promotion and an understanding of the marketplace are critical to the sustained success of AST wines on the UK market.

This article is an extract from an MW dissertation, October 2004, courtesy of the Institute of Masters of Wine.[i/]