Rabo AgriFinance Announced $10,000 Wine Business Scholarship Fund
Sonoma County, CA – Wine business leaders at the sold-out Wine Business Institute Research Summit held Wednesday, July 10, 2019, at Sonoma State University had overwhelming interest in better understanding wine consumers – gathering data on their behaviors and preferences in a strategic and purposeful way – and the critical role of technology in that. In addition, Jill Jelacich, director of food and agribusiness at Rabobank, announced a $10,000 Wine Business scholarship fund was established to support undergraduate SSU students working towards a degree in wine business.
“The Wine Business Institute in the School of Business and Economics at Sonoma State University does an excellent job preparing the future leaders of the global wine sector,” said Charles Day, managing director and business development manager at Rabo AgriFinance’s newly opened Santa Rosa office. “At Rabo AgriFinance, we hold optimism for California’s wine industry in the long term. This scholarship fund expands our contribution to wine’s great future.”
The Summit consisted of six presentations in Ted Talk-style format, including sessions on Wine Preferences of the “Z” Generation, Marketing Insights from Rabo AgriFinance, and Reading the Tea Leaves of Consumer Data.
Generation Z – The Emerging Wine Consumers
The wine marketplace is shifting, and consumer profiles are changing. While the wine community’s attention has focused on Boomers and Millennials; the emerging “Z” Generation in 2019, ages 10-24, is larger than the Millennial Generation. “We have been looking at Boomers and Millennials who are now 25 and older. We also need to look at those who are 21 to 24,” said Dr. Liz Thach, MW, Distinguished Professor of Wine.
Gen Z is quite different from Millennials and prior generations in terms of identity, preferences, and behavior. “48 percent of the Z generation are from communities of color and are multicultural. Gen Z is technology-driven, security conscious, gender fluid, entrepreneurial, social justice minded, and health conscious,” said Dr. Thach. According to a 2019 report from Wine Market Council, 31% of younger consumers are drinking less alcohol. “They prefer more health-conscious options. We are already gluten-free and paleo-friendly, so let’s include that in our messaging,” said Dr. Thach.
Professor Thach’s recent study on the wine preferences of Gen Z indicated that this consumer group prefers white wine over red wine; like their wines smooth, semisweet, and fruity; and describe wine as pleasurable, delicious, and fun.
Brands are under-utilizing social media, such as Instagram, Pinterest, and YouTube, as platforms for reaching and engaging Gen Z. “They want to be marketed to, but in a subtle, edgy way; not the traditional direct marketing that has always been done in the wine industry,” said Dr. Thach. “For a generation that uses ad-blocking software, an idea would be to provide unique recipes for wine pairing that appeal to their foodie-senses.”
So, how do wine brands balance the need to make things short, cool, and appealing to Gen Z and provide the education that they also value? “Have a conversation with the consumer. See where they are coming from – are they more knowledgeable or new to wine?” said Dr. Thach.
Building Brands in Today’s Market
“Established brands are under pressure from newer rivals,” said Stephen Rannekleiv, global strategist beverages at Rabo AgriFinance. “If we look at traditional wine country marketing, it focuses on terroir, family, and the beautiful wine country landscape. Compare that to, for example, the Fat Jewish’s Babe Wine marketing campaign. It is outrageous. It has personality. It stands out.”
Rannekleiv shared the top seven tactics for building relevant brands in today’s market:
- Have a clear point of differentiation.
- Have a well-defined personality.
- Engage consumers creatively and consistently
- Find new channels to engage the consumer. Maybe focus on depth versus breadth.
- Focus on increasing velocity, not just growing revenue. Go deep rather than wide. Go fast, but be patient.
- Avoid quick tactical decisions, which has led brands to fail quickly.
- Be patient with long-term strategy.
“There are opportunities to look at how and what consumers are looking for both on the marketing and winemaking fronts. You can find a balance between consumer preferences and staying authentic,” said Rannekleiv.
Analytical Tools in Gaining Competitive Edge
The wine community has done better with tracking and segmenting customer data, but “there is opportunity to gather this data more strategically and extract key information using statistical modeling,” said Samual Riewe, adjunct professor of Economics at SSU. Methods such as Survival Analysis and Hazard Analysis tackles the churn in the funnel and helps predict when people are most likely to leave (discontinue their club membership). “In differentiating wine club behavior, not many wineries look at the median which houses short-timers. Using analytics and predictive modeling to segment this group’s behavior, marketers can determine the right campaigns to convert short-timers to loyalists,” said Riewe.
The Summit opened and closed with presentations and discussions about the environmental, economic, and political climate and their impact on the wine industry. Key takeaways from these sessions included:
- The wine community was rated at 2.6 on a 5-point scale for emergency preparedness. Recommendation is for wine businesses to create a communications plan for resilience and create a culture of safety and response.
- Insurance costs are mounting because of multi-disasters (fire and flood). The new Verisk AIR Modeling will help wineries assess their risks and insurance costs. Recommendation is to run models early to determine risk of individual locations.
- Economic forecast shows slow growth in the economy and steady unemployment, with no recession predicted through 2022.
- In 2020, the Rising American Electorate (RAE) – unmarried women, people of color, and young people – will constitute 53% of the voting age population. This will impact every issue up and down the ballot.
For more information about the Wine Business Institute Research Summit and for full presentations, please visit https://wbiresearchsummit.sonoma.edu. For more information about the Wine Business Institute and our certificate and advanced degree programs, please visit http://sbe.sonoma.edu/winebiz, or contact us at (707) 664-3347 or [email protected].
About the Wine Business Institute
The Wine Business Institute, the global leader in wine business research and education, is the first institute of higher learning in the United States to offer an undergraduate degree (since 1998), an MBA (since 2008), and an Executive MBA (since 2012) focused on the business of wine. In 1996, the WBI was established as a unique public-private partnership between the wine industry and Sonoma State University to enable the wine community to keep pace with the changing business landscape and global wine commerce. The WBI is dedicated to training the next generation of leaders through its research and education programs. More at http://sbe.sonoma.edu/winebiz.
About Sonoma State University
With a student population of 9,300, Sonoma State is a regionally serving public university committed to educational access and excellence. Guided by our core values and driven by a commitment to the liberal arts and sciences, Sonoma State delivers high-quality education through innovative programs that leverage the economic, cultural and natural resources of the North Bay. See more news from SSU at http://news.sonoma.edu/
About Rabo AgriFinance
As a leading financial services provider for agricultural producers and agribusinesses in the United States, Rabo AgriFinance adds value using industry expertise, client-focused solutions, and by creating long-term business relationships. Rabo AgriFinance offers a comprehensive portfolio of services that gives producers the right products to prepare for, and take advantage of, market opportunities. This comprehensive suite of services includes loans, insurance, input finance and effective risk management products. Rabo AgriFinance is a subsidiary of Rabobank, a premier bank to the global agriculture industry and one of the world’s largest and strongest banks. Rabobank is an equal opportunity provider.