Why Wine, Not Beer?

Posted by Tom Wark on Jul 27, 2005

LA Times reporter Robin Abcarian asks the right question: "What Does it Mean"?

The question refers to a surprising finding in a new Gallup poll that shows that more Americans choose to drink wine than beer. This is the first time wine has outpaced beer in the poll Gallup has been taking since 1992. The poll found 39% choosing wine vs. 36% choosing beer. This is a near 50% increase in the number of respondents who cited wine as their drink of choice over the 27% who named wine in Gallup’s first poll on the subject. Indeed, what does this mean?

The responses found in the LA Times story are not quite off the cuff and infused with a bit of silliness, as well as playing off "masculine beer people" off the "know-it-all" wine people. However, two bits of insight are revealed in the story.

First, they properly point out that there is a lot of affordable wine out there to be had. It really doesn’t matter what the product is, once price comes down enough and once the perception of the price of a product is understood as a value, more people will consider purchasing it. This certainly has occurred with wine. We can thank a number of factors for bringing this into play:

-The lake of wine combined with economic downturn in the early 00s resulted in terrific and very visible bargains.

-The imports into the American market have mainly been value priced wines

-A lot more marketing of wine has been undertaken, particularly by the large drink conglomerates that have been increasing the size of their portfolio, upping production and looking for new customers.

One suggestion to explain the new found status of wine is the impact of the movie "Sideways." There’s no doubt the film has spurred an increase in Pinot Noir sales, and it would be foolish to suggest that an across the board increase did not coincide. This brings me back to a theme I’ve written about before: the impact of pop culture on commerce. Those of us who tend to work in the more rarefied end of wine sales sometimes ignore the impact of pop culture trends and themes and how they related to marketing. We tend to focus on that core group of drinkers that stay in the $20 and above area, visit wine regions, eat well, and buy upscale goods. Yet the ability of pop culture to inspired sales trends is undeniable and probably even more impacting than mass marketers even appreciate.

Clearly a number of factors have come together to see this shift in drinking habits. It’s not one thing.

The health benefits of wine drinker is another factor for sure. Since the 60 Minutes documentary on the "French Paradox" in the early 1990s showing that while the French drink more, they have less heart disease, a number of other studies have been rolled out showing any number of other benefits of wine drinking. This consistent barrage of good wine and health news surely has had a cumulative effect.

Yet it seems the real increase in wine consumption is coming from women and young people. The poll showed that 52% of men still choose beer over wine, suggesting that a whole lot of women are buying the wine. In addition, the millennial generation, those essentially in their 20s, are adopting wine at a much faster rate than Gen X or the baby boomers.

What does all this mean for the wine industry? Clearly it is good news. They are attracting a larger piece of piece. The mass market brands will do most of the heavy lifting when it comes to continuing to attract wine drinkers and who are likely to be attracted to the low end of the price scale. However, a good number of these value drinkers will move up too. They’ll graduate from the $10 a bottle to the $20 dollar a bottle and some will make their way to the $30 and up bracket.

For those of you looking for quality at every price point, the increase in wine’s popularity and in wine drinkers is a good thing. The more drinkers, the more opportunity for sharp winemakers who have a quality vision to find enough consumer support for their efforts.