Meet William Occam—The Millennial Wine Marketing Expert
Before we start imploring wineries and retailers to change the way they do business in order to accommodate a different kind of consumer (Millennials) it might be a good idea to deploy Occam’s razor.
William of Occam, a philosopher and friar from the 14th century, implored (and I’m paraphrasing here) that in attempting to explain a phenomenon we should not make more assumptions than the minimum necessary.
Which brings us to the question, why do Millennials spend less on wine? A most common response to this question has been that the wine industry just doesn’t know how or doesn’t want to market properly to a generation of consumers who are more adventurous drinkers than, say, Boomers and are spending on lesser-known wines that are priced less.
Another common response is that the wine industry isn’t properly catering to a generation that values “authenticity”, “stories”, “connection” and isn’t interested in the proclamations of snooty wine critics.
But isn’t the minimum necessary answer to the question of why Millennials aren’t spending as much on wine as predecessor generations that they simply can’t afford wine?
“A new study reveals that millennials aren’t actually different from Gen X or Baby Boomers in how they spend their money — they just have less money to spend….Deloitte’s survey of more than 4,000 consumers, 450 billion points of location data, more than 200 billion credit card transactions, and government data revealed that millennials spend their money on roughly the same things that their parents did 30 years ago. However, millennials are “dramatically financially worse off” than older generations. Since 1996, the net worth of American consumers under the age of 35 has fallen by 34%.”
This obvious conclusion, backed up by very deep data, should be intuitive. Are the members of the Millennial generation really so different from the Boomers and Xers that they would turn away from a product as generic as wine for complex cultural reasons? Is there something inherently different about the Millennial’s palates? Is their desire for a buzz so different from past generations that they would eschew a product as obvious, as delicious and as effective as wine?
What about this notion that the wine industry isn’t connecting with Millennials because that generation wants the stories and passion and connection to a product that the wine industry fails to deliver while it is relying on stuffy, score obsessed critics? I’ve been marketing to wine drinkers since the oldest Millennial was no more than 5 years old. I can tell you there was never a time when I didn’t think deeply about catering to the Boomer’s and Xer’s passions for wine, to their desire for connections to the product, and to their affinity for stories of the authentic dedication to wine and farming by the people behind the wines and grapes.
The similarity between the generations when it comes to how generations make purchases is born out in the conclusion of the new study:
“Millennials are less well off than members of earlier generations when they were young, with lower earnings, fewer assets, and less wealth. Conditional on their age and other factors, millennials do not appear to have preferences for consumption that differ significantly from those of earlier generations.”
Outside of understanding how to better tell stories using social media, I’m not sure wineries need to undertake a significant change in how they market their wines or how they embark on their messaging. Nor is there a really good reason to believe that winery tasting rooms need to significantly alter their hospitality model. Millennials that can afford the wines will enjoy the experience of visiting wine country and visiting tasting rooms and sitting for private tastings and looking out over the vineyards as they sip the next Pinot Noir in the tasting line up.
However, there may need to be an adjustment to the cost of entry. Millennials will come to wine country if they can fit the visit in their budget. This is something the likes of Napa Valley really needs to think about.
There is one other caveat here. Besides their truly unfortunate financial state of affairs, Millennials are different from the Boomer generation by virtue of having been exposed to a much greater variety of drink options. It’s not just wine, beer, and spirits anymore. Today and for Millennials, it’s wine, beer, spirits, cider, hard Kombucha, hard lemonade, hard soda, pre-mixed drinks, and cannabis, just to name a few.
The wine industry doesn’t have good reason to think that its hospitality model won’t or doesn’t appeal to Millennials nor that Millennials are somehow so different than past generations in the way they connect with wine that critical changes are necessary. Watch. The Millennials that do have money will come to the winery and sit at the tasting bar and join the wine club for the same reasons their fathers and mothers did. And who knows, perhaps there will be a surge in Millennial income later in their careers to a much greater degree than occurred with the Boomers or Xers. Or maybe, as William of Occam would suggest we conclude, there will not be any surge and wineries will have to think about their pricing structure.