The top issue keeping winery owners and marketers up at night is how to future-proof their brands. Everyone has read the articles warning wineries that their sales will slip if they don’t find a way to attract and build relationships with younger consumers. They’ve watched the rise of hard seltzers and ‘FABs’ (flavored alcoholic beverages), noting the appeal of their fun flavors, lower alcohol and on-the-go packaging to this demographic.
At this point, those in the wine industry have accepted that young people will drive industry change but are not yet sure how to get ahead of the coming shift.
Winery marketing teams have already embraced social media, replacing longer-form storytelling with quick snapshots and short reels. Now winery owners want to know if they need to change the grapes they grow, how they farm them, make different kinds of wine, package their wine in new formats and in what direction to evolve their marketing.
Finding the answers to the mountain of questions swirling around appealing to a new demographic begins with mining the wealth of data available on everything from consumer behavior to alcohol industry sales and distribution.
“On-premise data shows that the spirits category bounced back [from the 2020-2021 COVID pandemic] much faster than the wine category,” notes Dale Stratton, President of the Wine Market Council, “and wine is still lagging.” He also points out the tremendous pressures on-premise operators: “labor costs are rising, labor availability remains difficult, and cost of goods is increasing dramatically.”
Insights like these matter to wineries because they have long relied on restaurants and other on-premise businesses as their gateway to new consumers. Understanding the degree to which younger consumers follow the Baby Boomer pattern of tasting new wines at these establishments will be essential for future marketing and distribution decisions.
Equally critical is the role of direct-to-consumer (DTC) sales. The pandemic led wineries to rely on DTC to move inventory, and they often significantly upgraded their online portals, built distribution through the web marketplace channel and added virtual events. Most of these dramatic changes are here to stay, as they speak to how younger generations prefer to buy products and interact with others.
Gaining insight into the best way to take advantage of these shifts can often be found in a winery’s own wine club and DTC sales data. Wine club managers already understand the value of segmentation, but greater customization can lead to precision marketing that goes beyond club levels to leverage age, geography and behaviors.
For example, Innova Market Insights surveys found consumers are indulging in “revenge spending” on enjoyable experiences to compensate for lost opportunities during the pandemic. Half of consumers, especially younger ones, were likelier to make a one-time impulse purchase if offered a limited edition. Innova also found that launches of limited editions grew dramatically over the past three years. Are wineries keeping up with this trend? Are they creating limited editions and marketing them effectively?
Surveys also tell us that younger consumers are more conscious drinkers, attuned to the rising importance of sustainable grape-growing and winemaking approaches, and more open to no/low alcohol options and new formats and flavors.
Learning from data always brings more questions. Will the value-based preferences of younger consumers mean wineries should alter wine labels to communicate that their wines are natural, organic or regeneratively farmed or that they’re reducing water, electrical and chemical usage in winemaking? Should wineries consider alternative packaging? How should the way they communicate with the media change?
The upcoming Wine Industry Sales Symposium, an in-person event held in Santa Rosa on May 11, 2023, looks to answer these questions and many more. The conference will host the industry’s top marketing & winery professionals to share the way their brand targets and engages the evolving wine consumer. The event is focused on delivering insights and advice, as well as the tools and techniques needed to maximize sales, increase profits, and grow brand awareness.
For more information on the Wine Industry Sales Symposium, visit the event website.
