The wine industry as it stands is facing a looming problem: younger generations are not drinking anywhere near enough wine to be able to sustain it. With Millennials having paved the way for more mindful drinking habits and Gen Zers taking this to an even stricter level, how is wine going to maintain appeal amongst this market? This question is particularly relevant when looking at the type of beverages this demographic tends to buy even when they do consume alcohol. Spoiler alert: it’s not wine. Beer and cocktails both have more popularity amongst this age group, with lower price and alcohol often being cited as attractive qualities.
To ascertain how the industry is going to pivot towards them, the reasons why young people are drinking less must be analyzed and understood. Call them the “boring generation” if you must, but there are, of course, a number of factors that contribute to this sober curious lifestyle. Firstly, these generations seem to be far more health conscious than those that came before them. This may stem from a higher level of education around a healthy diet or it could even be the wellness trend making its impact. Secondly, they have less income than previous generations had at the same stage of life. With wine being comparatively more expensive than alternatives, this has caused it to fall slightly out of favour with a more budget-conscious consumer.
Additionally, trends have endorsed these other drink options, with craft beer and spirits soaring in popularity. The effects of social media can also not be underestimated. In the past, someone could drink heavily and make a bit of a fool of themselves (everyone’s done it), knowing that they could wake up the next day and forget that it ever happened. With social media, young people today have grown up knowing that anything can be documented forever and – if it is embarrassing enough – could even be seen by thousands of people online.
Ultimately, this age group are less enamored with drinking to get drunk. If looked at in simple terms, it might be easy to reach an assumption that this will be extremely damaging for the wine industry. If people are drinking less, surely fewer bottles of wine are sold? This is the impact that the trade is noticing within alcohol reports and, whilst that is technically still true, the result is not as worrying as it might sound. The consumer habits of younger generations must be taken into account. In particular, their affinity for high quality and experience-led spending. These two ideas are crucial in pivoting the wine industry so that it can mitigate the current decline in sales and instead spark the interest of this new demographic. This is not an issue that the trade is helpless against; they are simply aiming incorrectly.
This age group is willing to pay more for products that are clearly quality-focussed, especially in terms of sustainability. As a result, there is huge potential for the industry to target them with higher-end wine. The lower quantity purchased can be balanced by an increased spend per bottle. Not only does this create an incredible opportunity for the industry to focus on higher priced (and thus higher margin) wines, but this is also hugely exciting for small producers, whose premium price point will no longer outweigh their sustainability factor and superior standards. Moreover, Millennials and Gen Z show increased aptitude to spend on experiences than on items alone. As a product that is rooted in experience, this should be an almost thankfully easy way in which to lead sales. Wine tastings, dining and interactive, as well as informative experiences are going to be vital methods to attract the next generations into the world of wine. Not only do they place higher value on an event rather than a product alone, but circling back to their lower inclination toward getting drunk, they will likely be more attentive too. The result is an exceedingly engaged audience that is more willing to spend money on quality products. And still, the industry has not tapped into this pool of people, rife with opportunity.
To attract young winos, the wine industry must change the way it is communicating with them. Due to their differing priorities, a younger demographic is more likely to be responsive to marketing that is promoting upscale wines and experiences that revolve around them. Moreover, as can be seen with their concern for sustainability above, these consumers are far more concerned with the ethics behind a bottle than an older age group. Thus, companies will gain appeal through transparency, morality and equity becoming central pillars of their brand. Positive changes towards this would include organic/biodynamic wines, sustainability credentials and paying producers fairly for their craft. Of course, there are many more, but that is the topic for another article. Young winos are out there, waiting to have their passion ignited by the wine trade. For the future of the industry, it must be willing to meet them halfway.