by Dr. Liz Thach, MW
Recently I was asked why a wine market segmentation I published last year showing the percentage of wine consumed by Millennials, Gen X, Gen Z and Boomers was not consistent with a more recent study. This is an excellent question and one which causes much confusion to both market researchers and consumers alike. However, the answer is really quite simple: There is not consistent agreement on when one generation ends and another begins. For example, see the table below illustrating generation cohorts by source and the differences in their date ranges.
Table 1: Variation in American Generational Cohort Dates by Source
|Source||Gen Z||Millennials||Gen X||Boomers|
|Pew Research||1997 – xxxx||1981-1996||1965-1980||1946-1964|
|American Generation Report (WMC)||1995 – xxxx||1977-1994||1965-1976||1946-1964|
|Howe & Straus – Generations||2001 – xxxx||1980-2000||1965-1979||1943-1964|
|US Census||2001 – xxxx||1982-2000||1965-1981||1946-1964|
What is a Generational Cohort?
Researchers Alwin and McCammon define a generational cohort as a group of people that share distinctive formative experiences that are shaped by events, such as war and terrorist attacks, and technological innovation, such as smartphones and social media. The date range of a generational cohort is generally 15 to 20 years between different generations, but not always (Pew, 2015).
What makes this challenging is that there is not agreement on the date ranges that separate generations, and they can differ by country. According to Pew Research (2019), “Generational cutoff points aren’t an exact science. They should be viewed primarily as tools, allowing for …analyses. Generations are often considered by their span, but again there is no agreed upon formula for how long that span should be.”
Another complication is “cuspers,” or those people that fall on the cusp of a generational cut-off. For example, someone born in 1996 would be considered a “younger Millennial” on the Pew Research scale, but Gen Z on the American Generations Report. Also, depending on where they grew up and went to high school, they could identify more closely with a different generation, instead of the one in which they are classified.
Why are Generational Cohorts Important to Marketers?
Despite the challenge of fluctuating dates, generational segmentation is helpful to marketers because they can analyze the general values, beliefs, and attitudes of a generation and develop products and marketing promotions that will appeal to them. Equally useful, they can track lifecycle changes in generations as they age, and make adjustments to match generational needs.
For example, in the wine industry there is evidence that palates change overtime (Shiffman et al, Mennella et al). Often younger consumers prefer smoother, fruity and slightly sweet wines and then shift to drier more tannic styles with age. Other life cycle research shows that younger consumers often start with beer, sparkling wine and wine cocktails in their 20’s, before shifting to drier wines in their 30’s (Wilson & Riebe, Fountain & Lamb). Coincidentally, they often have more income to purchase fine wines in their 30’s, because many are more settled by that time with steadier higher-paying jobs. For these reasons, it is prudent for wineries to have some type of approachable/affordable “starter wine” that will appeal to younger consumers when they are first introduced to wine.
Other Types of Marketing Segmentation
It is important to recognize that generational segmentation is just one types of marketing segmentation, and generally falls under the category of demographic segmentation. Often marketers will combine several different segmentations when designing new products and marketing campaigns.
- Demographic Segmentation – refers to gender, ethnicity, age/generational, location, etc.
- Psychographic Segmentation – refer to people’s life styles, including how people live, what interests them, and what activities they like to do
- Behavioral – refers to purchasing (where and how they shop, including online behavior) and usage behavior, including consumption and occasions
Implications to Wine Marketers
So, given that there is some fluctuation in generational cohort dates, marketers should remember that they should be focusing on general trends, not exact dates and percentages when it comes to generational segmentation. They should then analyze these trends to determine how their wine portfolio matches consumer needs, and what changes they need to make to attract new consumers.
In the end, strategic marketing is all about satisfying and maintaining your current consumer base, while developing products and campaigns to attract new and younger consumers. In general, the majority of the US wine industry has primarily focused on Baby Boomers, despite continual prodding from wine researchers to pay attention to younger and more ethnically diverse consumer segments.
The good news is that there does seem to be some movement in the industry to attempt to attract other consumer segments, with more approachable “starter wines,” wine in cans/convenient packaging, wine cocktails/seltzers, “better for you wines” (lower alcohol/calories) and other trends that are currently sweeping the US wine market.
- Alwin, D. F. and McCammon, R. J. (2003) Generations, cohorts, and social change, in J.T. Mortimer and M.J. Shanahan (Eds.) Handbook of the Life Course. Handbooks of Sociology and Social Research, Springer, Boston, MA, 23-49.
- American Generations, 8th edition. (2014). New Strategist Press. Available at: https://www.newstrategist.com/series/american-generations-series/
- Fountain, J., & Lamb, C. (2011). Generation Y as young wine consumers in New Zealand: how do they differ from Generation X? International Journal of Wine Business Research, 23(2), 107-124.
- Hawkins, D., Neal, C., Quester, P., and Best, R., 1994, Consumer Behavior- Implications for Marketing Strategy, Irwin Publishers, Sydney, Australia, pg 329
- Howe, N., & Strauss, W. (2000). Millennials rising: The next great generation. Vintage.
- Klatsky, A. L., Armstrong, M. A., and Kipp, H., 1990, Correlates of Alcoholic beverage preference: traits of persons who choose wine, liquor or beer, British Journal of Addiction, vol.85 pp.1279- 1289
- Mennella, J.A. and Bobowski, N.K., 2015. The sweetness and bitterness of childhood: Insights from basic research on taste preferences. Physiology & Behavior, 152, pp.502-507.
- Olsen, J., Wagner, P., & Thach, L. (2016). Wine marketing & sales: Success strategies for a saturated market. Board and Bench Publishing.
- Pew. (2019). Where Millennials End and Generation Z Begins. Available at: https://www.pewresearch.org/fact-tank/2019/01/17/where-millennials-end-and-generation-z-begins/
- Schiffman, S., Orlandi, M., & Erickson, R. P. (1979). Changes in taste and smell with age: Biological aspects. Sensory Systems and Communication in the Elderly, 10, 247–268.
- Thach, E.C. and Olsen, J.E., 2004. The search for new wine consumers: Marketing focus on consumer lifestyle or lifecycle. International Journal of Wine Marketing, 16(3), pp.44-57.
- Thach, L. & Bus305W Researchers. (2018). Do Wine Consumer Preferences Change Over Time? New Research Study Provides Some Answers. Winebusiness.com. April 20, 2018. Available at: https://www.winebusiness.com/news/?go=getArticle&dataid=198045
- Thach, L., Riewe, S., & Camillo, A. (2020). Generational cohort theory and wine: analyzing how gen Z differs from other American wine consuming generations. International Journal of Wine Business Research. Available at: https://www.emerald.com/insight/content/doi/10.1108/IJWBR-12-2019-0061/full/html
- US Census (2014). The Baby Boom Cohort in the United States: 2012 to 2060. Available at: https://www.census.gov/prod/2014pubs/p25-1141.pdf
- US Census. (2015). Millennials Outnumber Baby Boomers and Are Far More Diverse, Census Bureau Reports. Available at: https://www.census.gov/newsroom/press-releases/2015/cb15-113.html
- Wilson, D.M. and Riebe, E.L., 2002. Do wine consumption habits change with age or follow a cohort group? White Paper.
- Wilson, M. and Gerber, L. E. (2008) How generational theory can improve teaching: strategies for working with the millennials, Currents in teaching and learning, 1, 1, 29-44.
Author’s Note: As SSU is a member of Wine Market Council (WMC), we use the American Generations Report (8th edition) scale in our research, which the WMC has been using for a number of years for their US wine consumer studies.