Part One: Millennials See Wine Differently
According to researchers at a variety of institutions, the youngest wine drinkers in the United States have different attitudes about wine than their parents and even some of their siblings. Those differences are having a profound effect on how wine is sold, how brand and taste preferences are created, what varietals are sold and how it is packaged. There will be 70 million Millennials (adults approximately ages 21 to 37) of legal drinking age in the U.S. by the end of 2015. Tastes evolve for all wine drinkers over time and this will be true for Millennials as well, but their initial attitudes are creating waves of change as the wine industry tries to understand and adapt to their newest customers.
How are Millennials Different?
Millennials tend to distrust institutions and authority, therefore many traditional wine marketing techniques, such as expert reviews, point ratings and gold medals are viewed as stuffy, pretentious and phony. They’re influenced by what their friends and others they follow on social media are drinking, as well as the story behind the wine. While Boomers are generally impressed with an expensive 92-point wine, Millennials generally aren’t.
Millennials grew up with the internet and social media making information on all things wine instantly available. Interactive websites allow customers to have a personal relationship with wine makers and wineries anywhere in the world. They may follow the winery on Instagram, be “friends” on Facebook or view winemaker videos or take a tour of the winery on YouTube. Their personal interaction with the wineries and wine via various online channels and whether their “friends” like it are all factors in whether they may try a wine and ultimately “like” it. Wineries are using Facebook, Instagram and their YouTube channels to reach out to Millennials to build a relationship with their brands. Wine labels are no longer just vintage, varietal and logo, they’re part of the winery’s branding and tell the story behind the wine. Labels are getting larger to feature stand-out graphics, suggest possible food pairings or share the history of the winery and region.
Laws forbidding the interstate shipment of wine have also been rolled back in 42 states (and counting), allowing customers to buy directly from winery websites anywhere in the U.S. and have their orders shipped directly to their homes. As a result, online sales are growing substantially and grew 17% from 2013 to 2014 alone, with DTC (direct to consumer) sales reaching 1.82 billion dollars. Millennials are ideal customers for wineries that have invested in robust interactive websites that feature an online store, inter-state shipping, video winery tours and interviews with their winemaker.
Traditional wine wisdom and food pairing guidelines are viewed as too restrictive. Millennials are more adventuresome and open to trying new things and don’t care if they break the rules. White with fish and red with meat has given way to dry rose’ and sparkling wines on any occasion, paired with whatever you’d like. Millennials have also spurred the growth of sweeter wine, red blends and imported wines. The youngest wine drinkers make up 24% of imported wine drinkers, more than any other demographic group. They are also more inclined to try wines from less-well-known wine producing states and regions at the expense of traditional California wines. They have also taken up wine drinking at an earlier age and at a faster rate than prior generations. All factors that look very positive for the growth of the U.S. wine consumption in the years ahead.
How wine is packaged is also changing, The traditional 750ml bottle with a real cork is giving way to wine being sold like draft beer in kegs at some restaurants and bars and wider acceptance of box wine, tetra-paks and other eco-friendly packaging, without a low-quality stigma. Subsequently, sales of 3-liter boxes and tetra-paks have grown dramatically in the past few years. Generational change is an opportunity for wineries (and others in the wine industry) to build relationships with new customers that can last a lifetime, if they’re attuned to the newest wine drinkers beliefs and attitudes toward wine and how they differ from older wine drinkers.
In parts two and three of this series, we’ll take a look at the different approach a new wine brand takes to marketing, packaging and branding to appeal specifically to millennial wine drinkers and at the same time how established brands are adjusting their marketing and branding to address how millennials discover, buy and develop a preference for different wines.
Data Sources: Communal Brands, Constellation Brands, Nielsen Company, Ship Compliant, Wine Enthusiast, Wine Institute, Wine Market Council, Wine Spectator, Wines & Vines