How Millennials are Changing the Wine Industry

  • August 5, 2015

Article from Wine Industry Advisor

While the precise dates governing the birth years for the biggest generation in history known as millennials vary, (somewhere between 1976 and 2004), there is no dispute that they love their wine. The first segment of this group hit legal drinking age in the early 2000s, as U.S. wine consumption surged. It has increased at a steady rate ever since. Millennials are responsible for nearly 27 percent of the total U.S. wine consumption, second only to baby boomers (born between 1946 and 1964) who account for nearly 42 percent.

Approximately 70 million millennials are currently age 21 and account for 30 percent of weekly wine drinkers. As the number of aging, wine-drinking boomers decreases, the millennial generation is stepping in to fill the wine buying slack — and marketers and industry experts can’t help but notice. This generation’s whole approach to wine is vastly different from those who have come before them.

Millennials are the first digital generation, and their technological fluency shapes their buying decisions. They
have grown up with instant, on-demand access to information, price comparisons and peer reviews. They don’t wait for a special occasion to drink wine, nor do they stash wine in a cellar for a decade like their boomer parents. Wine is used to relax, to socialize with friends or family, with or without meals, while cooking, while hiking, during wine tasting parties, and on vacations. A 2011 study of 467 millennials by the Wine Business Institute at Sonoma State University showed that this generation drinks wine as part of their informal, everyday life, and therefore in larger quantities than previous generations. The study suggested that “ by linking into these motivations of socialization, relaxation, and fun regarding wine, marketers will be able to relate better to Millennial desires.”

Millennials are not fans of slick advertising or pretentiousness, and want authenticity and transparency from winemakers. They want to know the unique story behind their wine, how it is grown, blended, and by whom. Critics’ scores and gold medals hold little weight for them; instead they’ll value what their friends are saying about the wine on social media.

These wine lovers are experimental and they crave adventure. Traditional wine and food pairing rules don’t concern them. The per bottle maximum they pay for a celebratory quaff hovers around $20, but the daily drinking comfort zone is closer to $10. Millennials are active and they want their wine to be just as mobile and portable. This marketing shift is a challenge that the wine industry appears to be excited to tackle.

Companies are increasingly allocating more of their marketing dollars to social media advertising, and interactive online marketing strategies. Wineries have created digital marketing divisions and director of social media positions. They maintain active and engaged roles on Facebook, throw Twitter parties, curate wine blogs, and produce tasting videos to keep the wine chat flowing 24/7. Wine apps allow users to shoot a photo of a wine label and immediately access descriptions and ratings, adding their own tasting notes to the database. The Wall Street Journal noted that when it comes to wine apps, “Sometimes it seems as if there are almost as many wine apps as there are wines.”

Millennials value the connectivity and networking benefits of in-person social settings — wine bars and festivals are thriving, and tasting groups are forming. Producers such as Gallo, owner of Barefoot Wines, sponsor face-to-face events, like the World Series of Beach Volleyball. Stephanie Gallo, VP of Marketing, draws her inspiration from Starbucks, “which brought a premium product — gourmet coffee — into the mass market.”

The yearning for authenticity and the desire to know where and how the products they eat and drink are sourced has spilled into wine packaging. Millennials value eco-conscious products, and alternative packaging is evolving to comply. The proliferation of premium-boxed wines that use recyclable materials is illustrative of just that.

The wine company Bota uses soy-based inks printed on recycled, unbleached Kraft paper, bound with cornstarch instead of glue. Many box wine producers use organic grapes from sustainable, fair practice farms in California, Washington and Italy. To quench the millennial thirst for information, producers are including more product information on packaging as well.

Several companies now offer single-serving wine pouches. All this experimentation pays off for wineries because approximately 85 percent of millennials are willing to purchase an unfamiliar brand, according to the Wine Market Council. Just as long as that brand offers them sufficient information, authenticity, convenience, and eco-friendly, portable adventure.

Through The Grapevine

Dawn Bardessono
Dawn Bardessono
Dawn Bardessono, co-founded Benchmark Consulting in 1995, aspiring to combine her passion for the wine business with her expertise in attracting high-quality talent. Dawn oversees and takes the lead on all senior-level searches at Benchmark Consulting, utilizing her prior wine experience in the business and keen understanding of clients' needs to create lasting relationships
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