Prosecco Pop! The Psychology & Future of Prosecco’s Success

Prosecco Pop! The Psychology & Future of Prosecco’s Success

As I sat in one of Dublin’s many new hipster bars a few nights ago (complete with frayed sofas and “aged” mirrors) I noticed a not so new trend. Five of the 10 tables had bottles of prosecco sitting on them with mandatory ice buckets and flutes. Customers were glugging the stuff bottle after bottle and no wonder, a bottle in this particular establishment was only €28 whereas the cheapest non-house chardonnay was coming in at €35. A bottle of champagne would have set me back €95 so when I want something a little more indulgent I proudly opt for prosecco to ensure my credit card won’t combust. Even in supermarkets this price gap is blatantly obvious with the cheapest champagne being €35 and the cheapest prosecco retailing at €8 per bottle.

Nobody seems to be able to pinpoint exactly when the prosecco trade began its boom in Ireland but one thing is for sure: business is booming. The 2015 grape harvest saw the equivalent of 450 million bottles of prosecco being produced with 70% of those bottles being exported to foreign markets, (Collins, 2016).

Fizzing to the Top:

Sadly there isn’t a huge amount of data out there on how prosecco is performing in the Irish market but if the UK market is anything to go by things are bubbling to the top (sorry) and will continue to do so. The UK drinks 35% of the world’s prosecco, which is significant when compared to the U.S. which only consumes 17%, (Collins, 2016). In an analysis of sales in major supermarkets between February 2015 and February 2016 research giant IRI found that prosecco sales saw a growth of 34% compared to champagne which grew 1%, (IRI Worldwide, 2016). The same analysis also found that supermarket’s own brand prosecco occupies 12% of sales whereas the most popular non-own brand prosecco accounted for only 6% of sales, (IRI Worldwide, 2016). Consumers are thirsty and not too fussed about brands it seems, making prosecco one of the wine industry’s leading products. Let’s see why.

Luxury at a Reasonable Price:

Historically champagne has always been a symbol of wealth, success and celebration. Advertisements for various champagne brands sell us a life of exclusivity and excess. As a society exposed to celebrities and TV shows and films that glorify excess we are conditioned to think that this is what we should aspire to. Champagne is a symbol of this lifestyle and is thus in high demand. I think that Maslow’s hierarchy of needs applies to this situation perfectly. Maslow (1943; 1954) suggested that once we meet our most basic physical and psychological needs (food, water, safety ect) we develop a drive to become better, to achieve mastery, status and prestige. As a nation out of recession but still in choppy waters many of us are ready to move from keeping things ticking over towards a sense of self-actualisation. Here is where society kicks in: we are fed the idea that our lifestyle is vital and that indulging in the finer things moves us up the pyramid. Although our economy is healing, we are not out of the woods yet and spending €95 on our weekly fizz is not doable for the vast majority of Irish people.

So what are we to do? Dan Hill, an expert in consumer behaviour states that when consumers are confronted with crazy prices our pride takes a blow and in an attempt to salvage it we settle for something else that is still a luxury but doesn’t carry the debt-inducing price tag, (Binkley, 2007). Ever notice how prosecco is sold right beside champagne? I imagine marketers have caught on to this this idea and placed €10 bottles of prosecco a few shelves down from champagnes ranging from €45 – €300. The result is brilliant news for retailers as they can help consumers save pride and climb the pyramid by giving them a reasonably priced luxury drink (flutes and buckets not included).

The Power of Bubbles:

Investing in prosecco is a no-brainer for Irish retailers given the success the UK market has enjoyed. A further factor worth a mention is Brexit. Coldiretti, the association of Italian food producers has expressed concern that Brexit may seriously harm trade relations between Italy and the UK as Britain consumes 1 out of every 5 bottles of prosecco produced, (Sheffield, 2016). Despite being traditionally seen as a beer drinking country Ireland consumes a significant amount of wine glugging 24 litres per capita which given the differences in our market power is comparable to the UK at 30 litres per capita, (Marian, 2014).This may open up the Irish market as a more attractive import destination for producers and enhance the Irish prosecco market significantly.

For marketers, investors and retailers however the main question is will the prosecco craze last? In terms of consumer psychology it seems that prosecco is here to stay. The main reason for this appears to be the association consumers draw between champagne and prosecco. If you have ever witnessed champagne advertising campaigns they are truly amazing: they unapologetically glorify wealth, excess and are far from shy when it comes to celebrity endorsements. The adverts are never just selling champagne: they are selling a lifestyle. Our climb towards prestige (and its associated wants) is an emotional journey and emotions themselves play a massive role in influencing our spending, (Murray, 2013). Champagne is out of many people’s price range but giving consumers a taste of the life they crave by selling them an image of luxury by using an alternative and visually identical product such as prosecco is a solid marketing practice.. In line with this theory, marketers may need to do more to ensure that prosecco isn’t thrown onto the heap with the other trends that have come and gone in Ireland. Using a more luxurious and exclusive image for prosecco may prove very effective as it taps into many consumer’s desires. Unless human psychology changes suddenly and significantly it seems that prosecco is indeed here to stay!

References:

Binkley, C. (2007). The Psychology of the $14,000 Handbag. WSJ. Retrieved from http://www.wsj.com/articles/SB118662048221792463

Collins, G. (2016). Prosecco 2016 Output Seen Up as Much as 20% as U.K. Sales Surge. Bloomberg.com. Retrieved 13 August 2016, from http://www.bloomberg.com/news/articles/2016-05-07/prosecco-2016-output-seen-up-as-much-as-20-as-u-k-sales-surge

IRI Wordwide,. (2016). Prosecco keeps its sparkle as sales grow by a third in one year, with retailer own labels taking the- IRI. Iriworldwide.com. Retrieved 13 August 2016, from http://www.iriworldwide.com/en-SA/Insights/news/Prosecco-keeps-its-sparkle-as-sales-grow-by-a-thir-en

Marian, J. (2014). Wine consumption in Europe by country per year per capita. Jakubmarian.com. Retrieved 13 August 2016, from https://jakubmarian.com/wine-consumption-in-europe-by-country-per-year-per-capita/

Maslow, A. H. (1943). A Theory of Human Motivation. Psychological Review, 50(4), 370-96.

Maslow, A. H. (1954). Motivation and personality. New York: Harper and Row.

Murray, P. (2013). How Emotions Influence What We Buy. Psychology Today. Retrieved 13 August 2016, from https://www.psychologytoday.com/blog/inside-the-consumer-mind/201302/how-emotions-influence-what-we-buy

Sheffield, H. (2016). EU referendum prompts prosecco panic in Italy. The Independent. Retrieved from http://www.independent.co.uk/news/business/news/eu-referendum-brexit-wine-prosecco-italy-exports-champagne-a7097166.html#gallery

Strict Employers: When Workplace Discipline Goes Too Far

Strict Employers: When Workplace Discipline Goes Too Far

“Can I speak to you in my office for a moment?”

In a certain context this is the last thing an employee wants to hear. Recently I have come across numerous pieces which describe over-the-top “disciplinary procedures” in the workplace. These procedures range from a nasty court summons style letter to a hearing. Organisations attempt to justify pouring excessive resources into keeping employees in line as they believe it keeps them oprating at peak efficiency, but is this true? Excessive workplace discipline has become a major problem in Ireland with a 2013 report finding that 77% of employers had dismissed employees without even adhering to their own disciplinary procedures, (Hosford, 2013). This post examines when workplaces develop their own pseudo-legal system and the consequences of taking discipline too far.

Death by Paperwork:

Substantial evidence shows that when employees feel they have freedom at work they become more productive, committed and less likely to walk out of an organisation, (Gagné & Devasheesh as cited in Nauert, 2015). Despite this many employers ensure that on day one of employment employees sign a (usually) long winded contract and read an even more overwritten handbook which clearly outlines what happens when they put a toe out of line. While I accept that clear rules are needed to ensure employees aren’t stealing and coming in wasted many employers invoke harsh “procedures” for even the smallest mistakes. The problem with bombarding employees with rules and regulations on day one is simple: people hate being told what to do, (Jacobs, 2013). On day one of the job employees have lost that vital sense of autonomy (freedom) mentioned above which does not paint a positive picture of how they are likely to perform.

The Consequence of too much Authority:

“Absolute power corrupts absolutely”

When an organisation poorly versed in employee relations writes the over-the-top contract mentioned above somebody needs to enforce it. Enter the managers and supervisors. Most of these professionals are caring, empathetic and effective but some senior staff appear to have appointed themselves as workplace police and judges. Years of research in organisational psychology has shown us that nasty managers/supervisors are ineffective, (Hamel, 2016) and a thorn in the paw of any organisation.

So how does it happen? Psychologists have named this the “paradox of power”. To become a leader one must have certain traits such as politeness, being an outgoing person and honesty, but all good things must come to an end. The paradox of power shows us that when a person reaches a position of power they often lose these traits and become rude, reckless and impulsive, (Lehrer, 2010). Giving certain individuals excessive power in organisations is a dangerous move as those with a greater sense of power tend to advocate much harsher punishments in comparison to those who were more modest, (Wiltermuth & Flynn, 2013). To bluntly summarise: if certain managers and supervisors wish to act as if they are the law then perhaps they should hit the books once more and change careers.

The Consequences:

So we have established that overwritten paperwork and nasty management is ineffective (and this is painfully obvious). Sadly this is only the start of the problem. Excessive discipline may cause excessive deviance. Lawrence & Robinson (2007) suggest that excessive organisational power leads to a loss of autonomy, identity and a sense of injustice among employees which in turn causes frustration among the workforce. The authors also suggest that this attempt to keep employees in line actually does the opposite: it motivates employees to engage in deviance to get retribution for injustice. This retribution could be as simple as employees intentionally being unproductive. Annoy enough employees with excessive discipline and you may just find yourself in hot water.

One deplorable way some organisations ensure employees are following the rule book is through excessive monitoring. While an eye does need to be kept on employees to ensure things are up to speed, is breathing down their necks really necessary? Not only is it a waste of resources and a little creepy, it paradoxically damages productivity. A wealth of circumstantial evidence shows that excessive monitoring results in significantly increased anxiety and stress, (Roberts, n.d.) which aside from causing a toxic work environment directly harms employee productivity and increases absenteeism, (Towers Watson, 2014).

The Real Law:

Excessive workplace discipline is not only counterproductive but it may bring the law knocking on an employer’s door. I am no solicitor or legal expert but some reading found that in Ireland employees are protected from this sort of behaviour by law and employers have a duty to “prevent any improper conduct or behaviour likely to put the safety, health and welfare of employees at risk”, (Health & Safety at Work Act, 2005, sec. 8). An employee could easily allege they were being intimidated by a superior through excessive monitoring or over the top procedures which impacted their health and welfare at work. Dismissals can also be disputed and employers may find themselves in hot water under the Unfair Dismissals Acts (1977-2015). This also applies to constructive dismissals (where an employee has elected to leave their job due to the conduct of an employer). To put it bluntly: if an organisation acts like it is the law, it might just attract the law.

Myths:

The idea that  running an organisation as a “tight ship” in regards to discipline is an outdated myth which has been shown to be very ineffective. Employees need a certain degree of freedom and respect if organisations wish to hold on to a productive workforce. Those enforcing codes of conduct must be carefully selected and monitored to ensure they are fit for purpose. The modern workplace is changing fast with employees becoming more critical and able to take real action against unfair treatment. This has become a priority for statutory organisations (who are the real law) so organisations attempting to put themselves in a position of excessive authority over employees may be simply overpowered and put in line.

References:

Hamel, G. (2016). What Is a Bully Management Style?. Chron. Retrieved 14 July 2016, from http://smallbusiness.chron.com/bully-management-style-35804.html

Hosford, P. (2013). 77 per cent of Irish bosses have sacked an employee without following procedures. The Journal. Retrieved from http://www.thejournal.ie/employers-admit-firing-staff-and-not-following-procedure-1123384-Oct2013/

ISB,. (2005). Safety, Health and Welfare at Work Act 2005. Irishstatutebook.ie. Retrieved 14 July 2016, from http://www.irishstatutebook.ie/eli/2005/act/10/enacted/en/html

Jacobs, C. (2013). Don’t Read This. Psychology Today. Retrieved 14 July 2016, from https://www.psychologytoday.com/blog/management-rewired/201305/dont-read

Law Reform Ireland,. (2016). Unfair Dismissals Act 1977. Lawreform.ie. Retrieved 14 July 2016, from http://www.lawreform.ie/_fileupload/RevisedActs/WithAnnotations/HTML/EN_ACT_1977_0010.htm

Lawrence, T. & Robinson, S. (2007). Ain’t Misbehavin: Workplace Deviance as Organizational Resistance. Journal Of Management, 33(3), 378-394. http://dx.doi.org/10.1177/0149206307300816

Lehrer, J. (2010). How Power Corrupts. WIRED. Retrieved 14 July 2016, from http://www.wired.com/2011/05/how-power-corrupts/

Nauert, R. (2011). Worker Autonomy Can Lead to Greater Productivity, Satisfaction | Psych Central News. Psych Central. Retrieved 14 July 2016, from http://psychcentral.com/news/2011/01/25/worker-autonomy-can-lead-to-greater-productivity-satisfaction/22885.html

Roberts, A. Monitoring In The Workplace: Health Concerns. Stanford University. Retrieved 14 July 2016, from http://cs.stanford.edu/people/eroberts/courses/cs181/projects/electronic-monitoring/health.html

Towers Watson,. (2014). Workplace stress leads to less productive employees. Towers Watson. Retrieved 14 July 2016, from https://www.towerswatson.com/en/Press/2014/09/Workplace-stress-leads-to-less-productive-employees

Wiltermuth, S. S., & Flynn, F. J. (2013). Power, Moral Clarity, And Punishment In The Workplace. Academy Of Management Journal, 56(4), 1002-1023. doi:10.5465/amj.2010.0960