A Sure Proof Way To Sell More Wine To More Millennials

Want to attract millennials to your wine brand? The way to do so is simpler than you think:

Make lower priced wines.

I thought I’d bring up this important point in light of the most recent article on the relationship between millennials and wine that provided the following nuggets:

“They’re [millennials] looking for something that’s got a nice label. Something that’s fun because then they can go to social media, send it out there, then it will be branded. They can get all of their friends to look for it as well….They don’t want to have what their parents have with wine or spirits. They like blends of different varietals….They’re effecting marketing and how you market to them. They don’t trust. They want to know what’s behind the product beyond the substance. Rather than, ‘I should have it because everyone has had it….It changes the types of wines we are making. We are expanding the varieties we are making.”

Every single idea in the above paragraph (with the exception of posting on social media) tracks with what Baby Boomers interacted with wine. Every single one. Including “something fun” (remember critter labels?). Including not drinking what their parents drank (Boomers created the single varietal wine and expanded the American wine palate by embracing Pinot Noir, Merlot, Petite Sirah and every other wine without domestic labels reading “riesling, white chablis, barbaresco and red burgundy). Boomers also demanded far more wine info than their parents had and they got it from the Wine Spectator and Wine Enthusiast and from numerous wine newsletters including Robert Parker’s Wine Advocate…oh, and the Internet too.

But the single most important difference between Boomers and Millennials where wine is concerned is money. Today, Millennials make 20% less than their parents did at the same age and there is no reason to believe this unfortunate trend won’t continue.

And it’s this trend that I think will most challenge those wineries that are depending upon selling ultra-premium wines direct from the winery as well as retailers that stock high-end California, French, and Italian wines. When Millennials reach their peak earning years in about a decade or so, they won’t have the same amount of disposable income as Boomers and even Gen Xers did at the same age.

For the likes of Napa Valley and Bordeaux and Burgundian producers what this dip in income will likely mean is that they will either have to reduce their output while keeping pricing and price inflation consistent with what it has been, or they will not be able to take the kind of price increases they have over the past 20 years. No matter how you look at it, this means lower revenues for the high-end producers.

I don’t see Millennials changing the practical interactions between consumers and wine. They will still buy most of their wine at the grocery store and at bars and restaurants the same way Boomers and GenXers have. Those in the upper middle and upper-income range will still sate their desires for lifestyle by venturing off to wine country for a visit and tasting adventure.

Millennials, when they are in their peak earning years, will certainly buy more wine on digital platforms, but that trend isn’t something driven by Millennials per se as it is driven by technological development.

Finally, I’m convinced that Millennials will be drinking the same wines that Boomers and GenXers drank. Those who are serious or semi-serious about wine will gravitate toward classic Bordeaux varietals, Pinot Noir, Chardonnay, while at the same time gravitating away from the Red Blends they are so fond of today. Those Red Blends that have jumped in popularity lately are nothing more than a stand-in for the sweet wines that young, inexperienced drinkers always used to make wine palatable in the beginning before moving on to the drier stuff. Think Bartles & James, Yellow Tail and even Annie Green Springs.

The unknown in these predictions about Millennials and wine are technology and the economy. Anyone who wants to make predictions about the way technology will change logistics in 20 years is nothing more than an entertainer. Who knows how technology will develop and impact who wine is moved and sold?

Economically, we find ourselves right now in the midst of a credit bubble. It’s looking more and more difficult to see how we can move away from the consequences of cheap money. The severity of those consequences could be significant and could impact the economy in ways that are not friendly. If that happens, well, how and what Millennials buy won’t be too important.

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8 Responses

  1. Bob Henry - November 1, 2017

    Here’s an idea: how about using the back label of California generic “Red Blend” wines to break-out of the grape varieties used?

    Introducing Millennials to those grapes can serve as the segue for them to try Zinfandel or Grenache or Syrah on its own.

    • Bob Henry - November 2, 2017

      My “go to” red wine in college (the Bay Area) were red “field blends” made by old-line Italian-American family wineries using Zinfandel and Alicante Bouschet and Carignan(e) and Mataro and anything else growing in the vineyard.

      Those wines introduced me to more “serious ” Zinfandels from Ridge — culminating in the Geyserville field blend bottling.

      http://articles.latimes.com/print/2010/mar/11/food/la-fo-oldvine-20100311

  2. Bob Henry - November 2, 2017

    “Millennials, when they are in their peak earning years, will certainly buy more wine on digital platforms . . .”

    Not so fast.

    The news reported in the New York Times [link below] that . . .

    “In the last year or so, carriers like United Parcel Service and FedEx have told retailers that they will no longer accept out-of-state shipments of alcoholic beverages unless they are bound for one of 14 states (along with Washington, D.C.) that explicitly permit such interstate commerce.”

    . . . means Millennials and Gen Xers and Baby Boomers will no longer have access to many highly coveted wines offered on digital platforms such as Wine Searcher.

    Out here in California, wine merchants such as Wine Exchange and Wine Club and K&L Wines and Woodland Hills Wine Company and Wally’s whose business model is predicated on out-of-state shipments will be severely impacted.

    Without those free-spending out-of-state customers, the above retailers will no longer be able to sell through their large annual allocations of high-priced “collectible” and “cult” wines . . . forcing importers and distributors and domestic wineries to reallocate the above retailers’ wines to other wine merchants and restaurants across the country.

    “Wines Are No Longer Free to Travel Across State Lines”

    https://www.nytimes.com/2017/10/23/dining/drinks/interstate-wine-sales-shipping-laws.html

  3. Brian - November 2, 2017

    I agree, Tom. I think companies put so much focus on trying to woo Millennials like they’re some completely different breed of human. The classic wines have been classic wines for hundreds of years in some cases. Millennials aren’t going to be the reason they change.

  4. Julie St. John - November 2, 2017

    In the 90 years we have been in the grape and winegrowing business we have almost always offered up two (and at times even three) levels of wine choices. Our Sonoma Red, White and Rosé line of the 60’s/70’s was our largest production wine and the least expensive. Today we make friends.red and friends.white and it is extremely popular with many people for its’ fun labels, easy on the pocketbook and the fact that they are blends.
    When I was first working for the family business I started in the tasting room. I realized after talking to our visitors that wine has levels of acceptance-most people start with lighter wines and work their way up to Cabernet Sauvignon and the like. If I insisted a guest MUST drink Cabernet Sauvignon at the very beginning of their wine experience and pay more for a wine they have never tried it would fly in the face of good hospitality and winesense.
    And many of our guests were comfortable drinking the less expensive wines-they knew what they like and didn’t need me to tell them differently.

  5. Douglas Levin - November 3, 2017

    I am not sure I agree entirely. If this were the case, why is DtC wine sales over $50/btl the fastest growing wine category by percentage (SVB Wine Report) in the USA? The other figure that is telling, would be that less than 10% of all wine consumers buy roughly 90% of all wine by revenue dollars (Wine Market Council). The biggest challenge in the wine industry always seems to be the producer’s inability to define their primary clientele.This discussion is significantly more complicated…

    • Bob Henry - November 3, 2017

      Excerpt from WineBusiness.com
      (May 12, 2010):

      “The Market for Fine Wine in the United States”

      [Fine Wine 2010 Conference in Ribera del Duero (Spain)]

      Link: http://www.winebusiness.com/news/?go=getArticle&dataid=73903

      By Graham Holter
      Associate Director – Publishing
      Wine Intelligence [market research firm (United Kingdom)]

      “According to the data presented by [David] Francke [now former managing director of California’s Folio Fine Wine Partners], US wine drinking is compressed into a small segment of the population.

      “SIXTEEN PERCENT OF CORE WINE DRINKERS consume wine once a week or more frequently, which ACCOUNTS FOR AROUND 96 PERCENT OF CONSUMPTION. Thirty-five million adults drink virtually all of the wine sold in America, Francke said.”

    • Joe Jensen - November 20, 2017

      DTC is self-reported and while I appreciate strong DTC sales I also see a lot of DTC type wines out there on flash sights, etc!

      Trust me the sweet spot outside of Napa and California is $10 to $30, the rest collects dust!


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