Wine demographics in focus

At the 2019 edition of Wine2Wine, there was plenty of discussion of where new wine drinkers will come from. Felicity Carter reports.

Stevie Kim, managing director of Vinitaly and Wine2Wine, opens the conference.
Stevie Kim, managing director of Vinitaly and Wine2Wine, opens the conference

Wine2Wine is one of the most practical of wine conferences, where speakers are expected to deliver information that wine producers can use in their business. While the topics on offer are varied, ranging from sustainability to communication strategies, themes seem to naturally emerge each year.

In the latest iteration, held in Verona in December 2019, some of the most thought-provoking talks were about demographic trends. As a number of speakers noted, the first cohort of Millennials turn 40 this year, their first flush of youth well behind them. Yet the wine trade continues to talk about Millennials as if they’re very young consumers, about to enter the wine market for the first time, who need to be captured and pinned down. At the same time, the wine trade continues to rely on the free-spending Baby Boomers, many of whom are now entering old age.

It’s as though the wine trade still thinks it’s 2010, not 2020. With the oldest Baby Boomers downsizing and reducing their consumption, finding new consumers is an urgent priority.

Diversity in focus

Kristina Kelley, senior director of public relations at E&J Gallo, began her keynote speech by saying that it’s time to think about the 20- to 24-year-old GenZ group, who are just coming of drinking age. For this group, social, corporate and environmental responsibility are extremely important. “They’re more likely to purchase products from a socially and environmentally sustainable company,” she said. “They are raising concerns about climate change and supporting companies that have a cause.”

Ms Kelley also raised the question of diversity, saying that the US is at a demographic crossroads. “Right now, Caucasians are 62% of the population, but by 2045, Caucasians will be a minority.” Not only is it important that the company reflect the audiences that they are serving, Ms Kelley said that encouraging diversity makes good business sense. “There was a McKinsey study out a couple of years ago that said that companies that are gender diverse are 21 percent more likely to perform,” she said. “When you look at companies that are ethnically diverse, they are 33 percent more likely to perform. With that culture comes innovation and creativity.” E&J Gallo, she continued, has created network groups such as GAAN, the Gallo African-American Network, and enABLE for disabled employees, to help foster diversity.

Ms Kelley also said that Gallo had taken a look at its advertising and social media posts, and “they showed we had a lot of white, attractive people – and we thought wine needs to be accessible for all.” She showed new social media posts, featuring people who were more ethnically diverse.

At which point Joe Fattorini, the star of the UK’s The Wine Show, stood up to point out that nearly all of the people featured were young. “Where are people like me?” asked the 50-something Fattorini.

The Millennial trap

Later, in his seminar on Millennials and wine, Joe Fattorini demolished the idea of marketing to demographics. “How many marketers does it take to change a light bulb?” he began. “Millennials! It’s the answer to everything!”

He was not, he said, trying to insult Millennials. “I love a Millenial!” he said. “My wife’s a Millennial – I’m not having a go at Millennials. I’m having a go at you lot.”

Fattorini then put up a list of traits that Millennials are supposed to have: tech savvy, family centric, achievement oriented, feedback seeking and job hopping. But, he said, plenty of other people who aren’t Millennials are tech-savvy and family oriented. Then he put up a picture of the Duchess of Cambridge next to a welder from Poland and pointed out they were both Millennials – and that neither of them had anything in common. “Trying to segment a market by age group is like trying to slice a trifle,” he said. “Millennials do not exist as a market segment.” 

Anyone who wants to understand the market should take time to understand the Knopfler Effect, he said, where “the general passage of time means that our tastes and behaviours evolve in relatively predictable ways. As soon as Millennials start having babies, they will suddenly start to behave like generations in the past.”

Many people drink wine, Fattorini went on, because they “are knackered” (meaning exhausted). “Millennials are not knackered. They are not relaxing – because they don’t need to. You don’t know you need a treat until you spend a week with a baby filling his nappy.”

Instead, younger people without family ties are out having fun, which is why Prosecco is so successful with Millennials in the UK market. “You can drink it with your friends!”

Fattorini said it was folly to focus so much marketing attention on Millennials, when they may not reach their “knackered” stage for another ten years. “The over 50s have 69% of all the wealth in the UK. Half of UK expenditure is made by the over 50s,” he said. “We mostly operate in businesses that have single digit profit margins. Asking wine distributors to invest in a market that may come good in 2050 is not going to happen. Go and sell to the people who have money today. There is good money in over-55 foodies.”

Marketing efforts should be laser focused on specific sub-sets of people, who are aligned by behaviour, values and money, not by age. “Segment by groups that are homogenous among themselves, and heterogeneous to others,” he finished. “Then target one. Position your wine in that market.”

Opening the door

When it comes to bringing new consumers into the market, Texas-based wine consultant and writer Julia Coney thinks the wine trade has a lot of work to do. She should know – she’s experienced just how cold the world of wine can be to newcomers.

After Ms Coney switched from beauty writing to wine writing, she was shocked at the way she was treated. “People were elbowing me at tastings. Producers were not pouring for me to taste – they were pouring me a splash of wine and saying, ‘you can taste that’.” Cellar door and retail staff assumed that because she was African American, she was only interested in sweet wines, and that’s all they would offer her.

The racism she experienced she says, has been evident throughout the whole wine chain. “I don’t see myself in any marketing material,” she said. “Nobody is marketing to me – but I have disposable income.”

She’s not the only one. The total spending power of the US African American market is, she says, $1.2 trillion – and the spirits industry has taken notice. “The spirits industry has realised that if they partner with black people, they can get more black people to the table.” But when Ms Coney goes to wine industry events, on the other hand, “I am always shunned, and I am usually the only black person there.”

The simplest thing the wine industry could do, she said, is to ask different people about their wine preferences and what they would like to be served. Next, consider using more varied imagery. Coney says she sees many different ages, races and body types, that are never represented in wine marketing or media. “I was involved in fashion and beauty, and they have made a lot of strides,” she said. The images used in wine, however, particularly in cellar doors, she finds exclusive. “Do the images in your wine marketing reflect the world? Does it have various body types and disabilities?”

Ms Coney also said that people within the wine industry have to make an effort to seek out new voices. “I know writers and somms who write who have never been on a press trip,” she said. “Nobody is seeking them out.”

Advice from the Obama White House

Wine2Wine, at least, is one of the more diverse events on the calendar, with speakers from India to Italy. The message that come through loud and clear is usually the same, however – that the wine trade has to do better. It was quite refreshing, therefore, to hear at least one speaker talk about how other industries get it wrong as well.

Tom Cochran, a partner in 720 Strategies in Washington DC, was the digital strategist for the Obama White House which, according to his telling was a workplace stuck in the dark ages –there was no Internet and people had to rely on floppy discs. Some of that was for security reasons, but Cochran also said the government was a vast institution that was resistant to change.

The career public servants who work in government have not only seen administrations come and go, they’ve also had to hear lots of ideas from newcomers who don’t understand the way government works, and who don’t respect it.

How did those newcomers make themselves heard?

By respecting the people they were dealing with, said Cochran. If you want to effect change – or bring new consumers to wine – you have to listen to your audience and respect their choices. It sounded a lot like Julia Coney’s advice to start by asking consumers what they like to drink. Which is not only practical advice, but it’s easy to implement.

Felicity Carter attended as a guest of Wine2Wine.

This article first appeared in Issue 1, 2020 of Meininger's Wine Business International magazine, available by subscription in print or digital.

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