A Blog by Jonathan Low


Apr 5, 2014

Millenials Are Drinking So Much Wine They're Changing the Way It's Sold

An impetuous but not presumptuous little vintage with a good nose. Hints of blackberry, leather and tobacco...

Most people are familiar with the pretentious, snobbish attitude that surrounds the marketing and drinking of wine. What may not be so apparent is that the Millenial generation sis drinking more than their fair share of the grape, demographically speaking, to the extent that the industry is reorienting itself around their demands and habits.

Among the changes is the elimination of so-called experts who focus on obscure minutiae of little interest to the casual drinker. Millenials are more focused on taste than how many medals a wine may have won, the degree to which it was produced - and packaged - in an environmentally friendly manner, and to what extent the grapes from which it comes were grown in a way that enhances its healthful qualities.

Boomers may have the money and the historical perspective, but they are not the market of the future. Millenials have different attitudes, desires - and budgets. The industry sees an opportunity, but in the customer's terms, not necessarily the terms with which those who grew up in the wine business are familiar or which they value. But the power of the internet, of social media and of the market itself is truly driving a new model for a new generation. JL

Kathryn Vasel reports in FoxBusiness:

Experts say technology and the Internet have made wine more accessible to younger generations  and feeds their interest in the industry.
The face behind the wine glass is looking a lot younger.
The Millennial generation, which includes the youngest legal drinkers, is consuming more wine than previous generations when they turned 21, and the industry is taking note.
“Millennials are storming the wine market and they want adventure and demand more transparency and authenticity from winemakers,” says Rowan Gormley, CEO of Naked Wines, who estimates that one-third of his costumers are of this generation.
Wine makers and distributors across the U.S. say they are seeing more demand from Millennials, and to help attract and maintain this demographic that will continue to become of legal age they are changing the types of wine they produce, how they market their brand and how they connect with their customers.
“Historically, wine has been marketed to older generations and came with a huge pretense,” says Melissa Saunders, owner of wine importer Communal Brands. “But this generation is blowing all of that out of the water. They don’t care about the pretentiousness of a wine, they want something that is authentic and speaks to them. This is a huge marketing opportunity.”
According to Ronan Stafford, Canadean Wine Report analyst, Millennials above the legal drinking age drank 25.7% of wine by volume in the U.S. in 2012, higher than the global average of 20.6% but significantly less than the 41.4% of volume consumed by those age 55 or older in the U.S.
However, boomers aren’t going to live forever, and the industry needs to attract and preserve younger drinkers. “The market for older, stuffier wines that are popular among older drinkers is diminishing (and) there is a new era coming for wine,” Saunders says.
According to Chris Fehrnstrom, chief marketing officer for Constellation Brands, there are 62 million Millennials of legal drinking age, and in two years another eight million will celebrate turning 21. He says that of core drinkers, or people who drink wine at least once a week, Millennials represent 30%.
“They are adopting wine at a faster rate than any other generation -- we know going forward this group is going to be engaged in the discovery of wine, they are experimental, they are rebellious, they crave experiences so we see this as an opportunity to connect with them.”
Vintage vs. Modern Drinkers
Experts say technology and the Internet have made wine more accessible to younger generations  and feeds their interest in the industry.
“You no longer need to be in Napa Valley to learn about specific grapes or blends; now consumers all over the world can have a relationship with wine makers, drinkers and distributors,” says Gormley.
“Presenting a bottle of wine at a party to show off how much you paid for only happens among older drinkers,” he says. Younger drinkers, he says, are picking wines based on the story behind it, how they found it, what unique blend or region it comes from.
Gormley says this generation’s mistrust of institutions makes expert reviews useless in getting them to pick up a bottle off the shelf.
“In the same way they don’t trust the banks, insurance companies or the government, they don’t care what critics say about a wine or how many medals a bottle has won.” In fact, he has gotten rid of expert reviews entirely when marketing his products.
While Millennials are often referred to as “foodies” the conventional wine-pairing rules have been set aside. “They are adding wine into their lives on their own terms, they’re not interested in the traditional aspect of wine pairing, they believe there is more than one way to do it and setting their own path,” says Fehrnstrom.
The Price Point
Ronan points out that the young generation doesn’t have the deep pockets that older drinkers come with.
“Companies targeting Millennials are going to have to face their declining purchasing power, compared to the more financially secure consumers in older age groups.”
When it comes to getting young drinkers to pick their bottle, a $20 price tag seems to be the limit.
“If the bottle is being purchased with the idea of luxury or celebration, they will spring for a $20 bottle, but  between $10-$12 is the sweet spot,” says Fehrnstrom.
How They’re Changing the Industry
Drinking wine outside the traditional setting of a home or restaurant has become normal among the Millennial generation, says Fehrnstrom.
“They want to take wine on the go, it’s those busy mothers going to soccer games that want to be able to take something with them. They are changing the consumption settings of wine and they are having a cultural influence throughout society.”
Wine makers are also adapting to meet Millennials’ affinity for sweeter wines. “Red blends used to be fairly bold and firm, now they are much more sweet,” says Fehrnstrom.
Marketing. For many wine makers, social media is the name of the marketing game.
Fehrnstrom says Constellation Brands relies heavily on social media to attract Millennials, citing specific success on Facebook. “The engagement level people have blows us away, they engage with wine makers and talk about what they’re drinking with their friends. Ninety-four percent of our fans have recommended our brand to their friends.”
The company also uses mobile platforms and partners with companies to provide drink recommendations based on people’s locations. “We need to engage with these drinkers no matter where they are: Facebook, tablet, smartphone or simply online at home.”
Saunders says Twitter plays a bigger role than Facebook because her customers want to know what their friends are saying about a wine over what Robert Parker is saying.
Packaging. The traditional 750ml bottle might become a relic of the old-world drinkers.
Saunders says younger drinkers are more eco-conscious and expect their products to follow the same rules. “We’ve barely scratched  the surface on alternative packaging, we will see more boxed wine, aluminum bottles and other innovative ways to present wine outside the standard wine bottle,” she says.
She also expects packages to become more informative. “This generation wants to know the story of a wine. You are going to see bottles with generous amounts of information that have a cool design that is authentic and appeals to people so they don’t look like everything else on the shelf.”


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