Today is a very special day for a wine marketing nerd like me, and it comes but once a year. I eagerly anticipate it for months and it shapes what I do for the year to come. It’s the day the Wine Market Council and Nielsen yearly report comes out. And today’s the day for me. Hooray!
I should say, before I jump into my favorite bits (like I said: nerd), that there are some very interesting data in general and I highly recommend anyone interested check out the presentation once it is publicly available on the WMC site. Because I focus on millennials and wine, that’s what I’m covering here.
IN THE MEANTIME
Let’s get to the fun stuff.
This year, I’m guessing due to the sheer numbers and varying life-stages of the group, they have split the millennial demographic into two parts: Younger Millennials – ages 21 – 25 in the year 2011, and Older Millennials – current ages 26 – 34 in the year 2011 (of which I am a member). This makes it more difficult to compare the demo as a group to other generations in terms of numbers or buying power. However, most of the data is in terms of percentages – I suppose we can be thankful for bringing to light the different consumer behaviors of millennials at different times of their lives. It also makes things a bit less dramatic (and anyone who has seen me speak knows that I love the dramatic). Sigh.
But I did find some drama, so let’s start with that:
Millennials, and particularly the older millennials, are most likely to experiment with a brand they’ve never heard of. Many wineries like to complain about this – these complaints can be summed up by the following quote from John Gillespie of the Wine Market Council in Wine Enthusiast Magazine’s blog: “So much for brand loyalty.” I will say, however, that these numbers are specifically referencing trying MORE wines. Being brand loyal and trying new wines aren’t mutually exclusive, are they?
This information should give hope to every winery out there thinking about putting a new product on the market. It’s exciting information and it’s the reason why I spend most of my time now on brand development and launches. It should also give hope to smaller wineries without the multi-million dollar budgets of the big guns: if you can capture our interest, we’re likely to give you a shot. And whether we like it or we hate it, we’re likely to tell our 900 closest friends on Facebook about it. If you want millennials to drink your wine, put a little effort into it and it may well pay off.
Here’s another fun fact that shouldn’t surprise anyone:
Wine labels matter. Period. Now, attempting to define “fun and contemporary” is nigh on impossible, but I think it would be safe to assume that this could mean “non-traditional.” Let’s face it. Design matters to millennial consumers. Apple, Ace Hotels, Dwell Magazine – these brands are not ONLY for millennials by any means (well, maybe Ace), but design is top priority for these brands, and these brands have top priority for millennials. Feel free to do the math. If we spend money on something, we expect it to be beautiful and often times we expect social purchases like wine to act as a public reflection of our tastes and personality. This latter expectation is no different than any other generation (if arguably more intense due to our intrinsic personal branding tendencies); however, our personalities and what we are reflecting out to our peers IS different.
Well, looky here. Wine reviews are important to millennials. I’d be VERY interested to see what the definition of “wine review” was – whether it meant a traditional review from a published expert, a peer review, or a user generated review. In any case, let’s assume this means published expert reviews. Isn’t it interesting that the wine-specific publications that print these reviews seem to have no interest whatsoever in making their media more appealing to the millennial demographic? I mean, I’m sure they’re interested in taking millennials’ money, but the publications with the “most respected” reviewers are also some of the worst offenders in the stodgy-old-boys-blazer-and-ascot-wine-is-for-fancy-people category I can think of. Seems like based on this info and millennials’ ever-growing disposable income, they could be making bank with a few simple changes.
I wonder who these millennials see as industry experts, anyway. Is it Gary V.? Saveur Mag? Real Simple? Robert Parker? Steve Heimoff? I don’t think people will ever stop looking to experts for recommendations on wine; however, it’s my personal prediction that if magazines like Spectator, Advocate, and Enthusiast don’t attempt to reach this demo, that we’ll see new “experts” pop up to take their place in publications that millennials consider more “relevant” to their lives. You can keep the two cents.
Here’s another juicy tidbit:
Oh, you’re not surprised that people in their 20s and early 30s consume more wine per sitting than other demos? Yeah, me neither. And this is a good thing. They purchase more wine per occasion.
I swear, the next winemaker/owner/marketer, etc. that complains to me about how they don’t like millennials in their winery because we drink too much gets an honorary title of Asshat from me. THEY ARE BUYING MORE OF YOUR WINE PER SITTING. Oh, that’s good, but you would prefer them to buy more of your wine per sitting in a restaurant or in your tasting room and NOT get drunk? Well, I suppose they’ll just buy 3 glasses and NOT drink them. YOU SELL WINE. WINE HAS ALCOHOL. ALCOHOL MAKES PEOPLE DRUNK. It’s true. Google it.
Anyway, now that that’s off my chest (phew), this is obviously good news for purveyors of wine.
So I’d like you to take a minute and look at 3 out of the last 4 slides. The ones with the bottom category that says “High End.” Go ahead, take a look.
Notice anything interesting about the overall numbers? Look again.
According to this data, the consumer behaviors of millennials, specifically older millennials, correspond to the consumer behaviors of the “High End” group. (“High End” being people that purchase $20+ wines monthly or more often.) Here’s some more data to illustrate this correlation:
They all correlate. So does this mean that it’s the millennials that are the high end buyers? Not necessarily.
HOWEVER, it DOES tell us that millennials and high end buyers have many of the same consumer traits. High end buyers seem to behave much the way millennials do as consumers.
SO WHAT DOES THAT MEAN TO YOU?
By targeting these traits in millennials through your outreach and marketing, you are also targeting these traits in high end buyers.
Well isn’t that interesting?
New data on millennial buying habits by the folks at BazaarVoice focuses on social influence between generations. They are specifically focusing on User Generated Content (UGC), which essentially means user reviews in this case. I’ll be sure to publish any juicy info from the report, but in the meantime, feast your eyes on their infographic.
So you want to know about millennials, eh? Well, don’t take my word for it – take a look at some of the latest headlines and get some important insights – as well as a bit of myth-busting – on this mysterious generation.
Restaurants Should Cater to the Millennial Generation – QSR Magazine – Despite a few trite and opinionated generalizations early in the piece, a very good article on how one industry is taking spending habits and trends among younger millennials into account.
Millennials Are Less Likely to Cut Spending During Recession press release & Accompanying Report - MarketResearch.com – A press release and accompanying report summary put out by a research organization de-bunking the “buy cheap” myth of two segments of adult millennials.
Me Generation Actually the Us Generation – Miller-McCune – Another myth busted: the research-based Miller-McCune shows that the “tropy-kids” are showing an overwhelming sense of social responsibility.
How Millennials Measure Greed – Dallas Morning News – Though I’m sure this piece in the Dallas Morning News was supposed to be a cute and timely comment on the buzz of the new Wall Street movie, it’s actually a surprisingly insightful peek into the millennial generation’s concept of social currency.
And it’s true. At last. The millennial generation is arguably the hottest topic in the US wine industry this year. IMHO, millennials will be to wine in 2010 what social media was to wine in 2009 – a game changer. And just like social media, companies within the wine industry can either adapt and thrive, or stick their heads in the sand and be left behind.
Quite frankly, NO ONE should be left behind. So for those interested in educating themselves, their co-workers, or (yikes) even their bosses, I’ve compiled a short list of resources that is designed to catch ANYONE up on the current state of the wine/millennial connection. Look at it as a bibliography for future conversations in 2010.
Obviously, if you’re looking for more detailed information on millennials and wine, you’re sitting right in the middle of a blog entirely dedicated to the GenY/wine connection. Check out the Millennier archives, if you feel like learning more.
One of the most frequently asked questions I get is “Will Millennials spend the money on a $50 bottle of wine?” Ok, sometimes the price changes, but I’d have to say I answer this at least 2-3 times a week. The answer is YES, WE WILL. But in order to spend more money than we normally do on wine (or ANYTHING) there must be a reason for doing so.
This spring, I compiled the data from a survey I conducted online – some of the results from that survey I included in my May 5th post, Where Millennials Are Buying Wine. I asked over 100 Millennials (mainly residing in Southern California) questions about their wine buying habits. None of the answers were a big surprise to me, but to many people who are not members of the Millennial Generation, the answers are a real wake-up call.
First we need to know what Millennials normally spend on wine. From the research based on the informal online survey a baseline was established in terms of the average amount on money respondents spend on a bottle of wine.
Almost 60% of respondents spend between $11-$20 on average on a bottle of wine, so we have our baseline. According to survey results, giving wine as a gift is one of the main reasons the survey respondents buy wine in the first place (these results to be posted soon). I know from experience and observation that we tend to spend more money on a bottle of wine when we give it as a gift – and so the question was posed: Just how much are we willing to spend on a bottle of wine – in any circumstance – including as a gift?
Most of us are actually happy to pay $50 and above for a bottle of wine as a gift. Two thirds of us are willing to go above our typical price range for a gift. So what does this mean in terms of increasing sales among Millennials?
GIVE US A REASON
Seriously. If you are in the position of selling wine to a Millennial, and you get the feeling that it may be more than this young person is comfortable spending on themselves – suggest it as a gift. Mother’s Day, Father’s Day, Hostess Gift, Birthday Present, Wedding Gift – help them find a reason to spend more money on your wine. I’ve mentioned this before in the April 3rd post, along with a few suggestions on how to engage young people and build a relationship with them – feel free to take a look and do some brushing up.
Now that the numbers are in, let’s see what we can make happen.
Have you tried this approach with success? Without success? Are you planning to now? If you have a related experience you’d like to share with other readers, please feel free to tell us about it in the comments section. We can all learn from what you are doing.
Millennials are wine’s next big consumer. So why aren’t smaller business in the wine industry (boutique wineries, wine shops, wine bars, etc.) seeing much of the action? There could be several factors at work, most of which business owners have direct control over. These controllable factors include outreach, branding, marketing, social media presence, brand awareness, accessibility and plain old customer relations. However, one factor that many people don’t think of – and one that business owners do not have direct control of - is the current buying habits of this generation.
Somehow (Millennials) have gotten to the point where we’re getting $15 – $20 everyday drinking wine, but we’ve never been to a tasting, never been to a winery, and feel like we have no idea what we’re actually doing. It doesn’t stop us from buying, but it does keep us in our comfort zone of the same familiar aisle at Trader Joe’s. And there’s the issue.
Though there are some numbers out there that I have found useful for my own use, the details that small businesses need are not available from the huge (and expensive) research firms at this time. Having all the tools, I decided to take matters into my own hands and conduct my own online survey for my company, Millennier Wine Sales. This survey was conducted over the internet using direct email and social media tools. The sample size consists of over 100 respondents within the age range of 21-32. The percentages that you see are rounded to the nearest 100th of a percent. The respondents were all located in states where it is legal to purchase wine grocery stores, and mainly resided in California.
Though this information was originally intended only for MWS, I’ve decided to publish my findings in the hopes that people will take notice of the trends and pass on the information so we as an industry can do something about it. I’ll continue to post the other findings of this survey, but I find it extremely important to all aspects of the industry to focus on this first question:
The most important lesson we learn from this chart is that ALMOST HALF of Millennials are buying their wine in a grocery store. An additional 25% are purchasing wine at liquor stores that include giants like BevMo and others. With results like these, it is not hard to understand why small businesses in the wine industry are not feeling the positive effects of this Great New Hope called Millennials.
It makes sense really. As a Millennial, I’ve walked the path than many of us have taken, and many more will continue to do so in the future: We get our first apartment and realize that with 2 Buck Chuck, we can actually buy wine! It’s kind of a big deal to even HAVE wine as a 21-22 year old, so I would (swear to God) not drink it myself, but save it for guests (I know, I know). After we get used to buying wine for $2, we start in on the Yellowtail. Now we’re experiencing a new varietal or 2 and guess what – this is why we love Syrah! After some time with the YT, we now know we enjoy wine and are comfortable spending more than $10 on a bottle of wine. Now we’re serious wine consumers, but the only place we really feel comfortable buying wine is in the super-market. Somehow we’ve gotten to the point where we’re getting $15 – $20 everyday drinking wine, but we have never been to a tasting, never been to a winery, and feel like we have no idea what we’re actually doing. It doesn’t stop us from buying, but it does keep us in our comfort zone of the same familiar aisle at Trader Joe’s. And there’s the issue.
Less than 2% said that they purchase most of their wine from wineries or wine clubs (included in the “other” category). How will smaller wineries that do not have placement or distribution in huge grocery store chains be able to reach this important group? How will small businesses in all areas of the wine industry benefit from this generation if almost all the money is going through only 2 channels?
The answer is clear. OUTREACH. It’s a great sign to see over 17% of this group purchasing most frequently from wine shops. This is a trend that everyone in the wine industry should encourage. It could be the only way that non-supermarket brands can benefit from these consumers in the short- and long-run. I strongly believe that WE as members of the wine industry need to be the ones to get Millennials out of the grocery store aisles and into wine shops & wineries. Talk to your favorite wine shop, encourage them to reach out to this age group. If you are a winery and the shop carries your brands, offer to hold a tasting there geared towards younger drinkers. If you are a retailer, look into social media – even if you’re intimidated, all it really takes is a Facebook page. Throw events, reach out to younger social groups in your area, get creative. I know of a young BOOK CLUB in LA that has all their meetings at a wine shop with a tasting bar.
Though this will be a difficult hurdle to overcome for smaller businesses in the wine industry, it is not insurmountable. It will take a grassroots approach to create the paradigm shift that is needed, but the first step – identifying the issue – has already been taken. Please pass this information on to others who are affected by it, even if it’s just something that is brought up in conversation.
If you are a small business in the wine industry and you have already taken steps to get young people out of the grocery store aisles and into wineries or wine shops, leave a comment, share what you’ve learned with others who are looking to start. If you’re a Millennial, what do you think would regularly get you into a smaller wine retailer? Share your thoughts and let’s get to work!