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Can The Wine Industry Capture Gen-Z And Millennials?
A report published earlier this year provided a bleak assessment of the U.S. wine industry’s prospects.
The “State of the U.S. Wine Industry” report from Silicon Valley Bank found that the only growth in the category came from consumers over 60. Younger consumers increasingly chose spirits, beer, alternative beverages or alcohol abstinence over wine.
The trend of customers being sober-curious, which refers to avoiding alcohol for personal or wellness reasons, was cited among the threats to the wine industry with the movement being popularized by events such as Dry January and Sober September. Rob McMillan, the study’s author, wrote, “Neo-prohibitionism is very much alive and well.”
Berenberg Research, as reported by Business Insider, found both Gen-Zers and Millennials drinking less than older generations due to anti-alcohol messaging and personal reputation fears, including concerns over drunken behavior being publicly broadcast on social media.
The SVB study argued that the bigger problem for the wine industry is that younger consumers have significantly more beverage options than Boomers did when they began drinking alcohol.
Wine coolers like Bartles & Jaymes served as “gateway” beverages introducing Boomers to wine.
Hard seltzers and ready-to-drink cocktails are better at reaching beginner alcohol drinkers than less affordable and trendy wine options.
Wine’s messaging, according to the study, needs to be louder and embrace issues younger consumers care about, such as wellness, sustainability and social responsibility. It called on producers to list their ingredients and offer nutritional data, such as calories per serving, to support transparency, although the industry has resisted such labeling.
Existing advertising is mainly directed at older consumers and “selling white-linen hospitality and gracious living, with a nod to the lifestyles of the rich and famous in many cases — information that’s interesting to wine geeks and consumers over 60 but probably not to the vast majority of potential customers.”
Assessing the study, New York Times’ Eric Asimov wrote, “Wine, like network television in a streaming world, will probably never play the same central role for younger consumers as it has with older people. But it can do better.”
Discussion Questions
DISCUSSION QUESTIONS: Do you agree that the wine industry needs to be more in touch with younger consumers? What are wine companies’ most significant challenges connecting with Millennials and Gen Z?
Poll
Loading …BrainTrust
Melissa Minkow
Director, Retail Strategy, CI&T
Richard J. George, Ph.D.
Professor of Food Marketing, Haub School of Business, Saint Joseph's University
The wine industry needs to spend more on advertising and promotional programs that emphasize the social aspect of wine. There is definitely more competition for alcohol market share with a greater variety of alcoholic beverages for consumers to imbibe. That said, wine companies need to make wine more fun and social with more tasting opportunities that are engaging. Product placement in TV shows and movies that make wine more hip would also be a good strategy.
Wine just doesn’t lend itself to a casual environment, whereas seltzers, beer and spirits do. Wine as a whole category would need new positioning to align with the lifestyle drinking younger generations do.
No mention of the relaxation in cannabis laws? Surely it’s a factor and the wine industry may need to follow beer-based companies like Constellation Brands (not to mention local breweries) that are investing in cannabis-infused concoctions.
The gateway beverage space is super crowded. And often younger drinkers are looking for smaller packages. So either the wine industry needs to promote the social sharing of their products, or they need to innovate on their packaging and distribution, and find new entry points into the market that help young consumers find what they like.
What if you could buy a “six pack flight” so your can discover your preferences or, even better, get together with friends to do it, without having to buy a whole bottle of each wine?
What if you could buy a four-pack or a 12-pack of your favorites – so there is less pressure around consuming the whole bottle, or wasting if you don’t?
We live in the era of personalization. How can the wine experience be more personal?
Great ideas, Nicola. But I would defer to others to figure out how to go from bottle to six-pack.
Gene, I have actually seen these in small corner stores in Europe and thought was a cool idea. They were wine servings sold in a plastic glass with a foil type cover. I am finding a movement toward spritzers and the like, but the advertising needs to be really thought out when targeting GenZ and Millennials.
Reimagining traditional marketing strategies will make the wine industry more welcoming and attractive to younger drinkers.
Wine companies’ top challenges in connecting with Millennials and Gen Z include:
Wine has suffered from the incredible array of new and innovative beverages that have hit the market, both alcoholic and non-alcoholic, in the last five years. Vintners would be wise to up their promotional messaging with content that resonates with the younger generations. For example, I enjoy good wine and pay acute attention to a wine’s description, its lineage, and its owners. When contrasted to new spirits, seltzers, and beer brands, the content is completely different. The spirits/seltzers/beer category does an incredible job of hitting younger generations’ sweet spots and selling how products can be a frequent part of their multi-day-part consumption occasions.
New categories like canned spritzers, craft brews, celebrity spirits, non-alcoholic cocktails and cannabis are being marketed at much more appealing price points and with much more appealing messages than wines. The wine industry needs to make some pricing, packaging and promotional changes to compete for younger customers.
Absolutely. Cocktails, brews and canned drinks only have to promote a liberating lifestyle, a groove. Whereas wine has to work harder to convince would be younger customers. Making it more approachable and showing how it’s part of the meal will go a long way in converting them.
Let’s start with how wine is marketed. Quiet voices. Elegance. Luxurious and romantic settings. Moms unwinding from a long day. Snore.
If the wine industry wants to capture younger generations then they have to think like younger generations. Beverage marketing to them is fast, loud, and always about the experience. You are cool if you drink Product X. The lesson here is what works for one generation is kryptonite to another.
This is the most relevant comment in today’s discussion: “The lesson here is what works for one generation is kryptonite to another.”
Thanks, Gene!
I think the choice is – and long has been – a deliberate one…trying to avoid the “Neo-Prohibition” the studies mentioned.
When a Westerner orders white wine in China, you get something called Moutai. It comes in shot-sized glasses and can best be described as “fire water.” You can imagine the surprise for the unsuspecting. Notably, drinking in China is about human connection and celebration rather than just drinking for the sake of alcohol.
I believe it is notable that the research is U.S. based. Could the problem be cultural? Do the younger generations embrace alcohol as something called fun, with a capital “F”? Whereas the Boomers were brought up on wine being associated with meals and a certain seriousness?
If the wine industry makes a 90-degree turn and focuses on the conviviality of wine, do they risk losing the upscale users and buyers?
Some terrific comments from BrainTrust experts. I’m most impressed by the closing comment in the article, “…wine can do better.” Certainly the value proposition and positioning can be improved. Next, wine makers need to market where these consumers are, meaning a heavy dose of social media. Finally, the packaging needs to replicate the hard seltzer market. Offer good tasting wines, not currently available, in convenient twist off bottles, cans and aseptic-like packaging as a start.
The wine industry needs to look at how it projects itself and also how convenient it is for younger people. They do not sit down for a formal meal with a bottle of wine, nor do they sit at home and open a bottle of wine. The gin industry reinvented itself a few years ago and became a huge growth sector by having new exciting flavors, canned ready-to-drink options and great marketing campaigns. What was the last innovation in the wine industry? Probably wine boxes in the ’70s and they died quite quickly too. They need smaller more accessible packs rather than a full bottle and new varieties that young people can try and experiment with. As an old guy I am happy with the wine I buy but I know young people find it boring and rather “stuffy.”
SVB…we want that to be our “expert” source ?? Well my (un)expert take is that the claims aren’t so much false as simplistic: just as alcoholic beverages are divided into segments, so is wine itself (premium wines, mass market, etc) Each appeals to different types of customers – different by age, income, health concerns, etc. – and will see differing trajectories over the coming years. The alcohol market is also quite fickle – it was only a few years ago that the roles were reversed and spirits were said to be dead – and it’s pointless to make broad claims about the future.
The biggest opportunities for upside will be in toning down stuffy terminology so wine is approachable, while helping show how all wines pair easily with foods Gen-Z and Millenials love. Wine pairs with foods in ways that cocktails can’t, and where beer increasingly becomes too repetitive.
Grocers will have one of the biggest opportunities to narrate this story, and by simplifying wine display signage so they are easy to try and buy.
Many factors are leading to alcohol products needing to think about their sales moving forward – a major one being the apparent reduction in drinking among younger consumers.
There is logic in increasing the quality – or perceived quality – but I am not sure I agree with the network TV analogy. Wine is often seen as a sophisticated and elegant accompaniment – these things potentially can be linked with aspiration and focused to appeal to younger consumers.