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Statistically Speaking: Why Your Customers Might Drink The Way They Do

Posted on  | April 1, 2011   Bookmark and Share
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Your mother probably drilled it into you that it’s not nice to judge a book by its cover. But maybe Mom was wrong. While she was right when she said you never know who’s behind those ripped jeans, and that you can’t tell if that guy in the nice suit has the wherewithal to navigate your wine list without any assistance, she neglected to point out the reality of life is that certain people behave in certain ways, and have enjoyed wine and spirits accompanied by particular traditions and experiences for generations.

Your prim elderly aunt wasn’t without her sherry each evening, and Grandpa couldn’t end the Passover Seder without a shot of Slivovitz. Think of clubby leather chairs and walnut-paneled private club rooms and immediately the image of well-dressed men sitting beneath a halo of cigar smoke with a rocks glass of whisky or a snifter of Cognac in hand jumps to mind. Crack open that Red Stripe and your mind wanders back to the waterfall in Jamaica where you got a recommendation for Montego Bay’s hottest new restaurant.  Think spring break and its Jell-O shots, with Tequila and lime sucking thrown in for good measure. Rented Dukes of Hazards from Netflix last week and found yourself craving bourbon sipped on the porch? Wanted to feel daring and so you and your girlfriends skipped the Cosmos and moved straight to the bubbly?  No surprise.

This isn’t stereotyping and profiling.  It is market segmenting and demographics, and it is a perfectly acceptable way to identify an audience and get to the core of what makes them tick so you can sell a brand off the shelves or behind the bar. If you want to successfully get a brand in a customer’s hands it means tapping into the statistics reflecting the behaviors of various segments of the market to create a marketing message that makes the right overtures to your coveted demographic.

Start with a few simple questions: Is it influenced by peers and celebrities (more on this later), family and friends or is it simply regional? David Ozgo, senior VP of strategy and economics at DISCUS, offers up another possibility: “Sometimes drinking patterns are weather related. People tend to not drink piña coladas when it’s freezing outside, meaning rum and Tequila-based drinks could be more popular in warmer climates.”

But it can go beyond the temperature outside. Are they drinking for quality (real or perceived)? Exclusivity? Aspiration? Personal experiences?  Are they emulating the spirit choices their fathers and uncles have made for generations, or selecting a beverage solely to turn heads? Rob MacMillan, manager of Du Vin, an exclusive wine and spirits shop in West Hollywood, notes, “In terms of spending patterns there’s no telling; it’s really across the board. I have wealthy clientele that spend so little money. And then I have young up-and-comers starting their careers in banking, movies. They just broke $100,000 and they are price-conscious unless it’s work-related; then they buy to impress.”

Understanding the drivers for each of these groups, and being able to synthesize that with anecdotal experience, comes from observing the behaviors of consumer groups, and seeing how they are consistent with their peers. Brands like Jim Beam know how it works. “One of the great things about the Jim Beam portfolio is that fans range all across the spectrum of adult males. Jim Beam drinkers are bold and decisive; they’re outgoing and social and look to make bold choices that ultimately define them,” says Rob Mason, U.S. bourbons, Beam Global Spirits & Wine. “We’re focusing on platforms where our consumers are already active, and making Jim Beam something that can be associated with ‘bold choices’ in these arenas.”

The boldest choice many bartenders made for years when it came to creating cocktails for their female guests was deciding what garnish to put on top of pink and fruity concoctions. That is until Sex & the City-influenced patrons started discovering wines and their palates became a bit more enlightened thanks to women like Leslie Sbrocco who drove the message home that exploration of varietals was not only a good idea but something everyone could handle. With her regular columns and television appearances on programs like The Today Show, Sbrocco demystified wines and made them fun and appealing.

Then along comes a brand like Little Black Dress—which tapped into that market niche of women exploring wine—and the sales possibilities were endless, especially considering that 80% of all purchase decisions (not just limited to liquor) are in the hands of women. Since its launch in 2006, Little Black Dress has seen sales triple with 80% at the retail level and only 20% taking place on-premise. For the girls’ night-out or girls’ night-in, the brand has positioned itself as a quality escape from the every day.  Says Kim Charney, brand manager, “We didn’t want to be offensive and whimsical. We wanted a wine that spoke to women through an emotional icon that connects with the female market. We hope that Little Black Dress wines are like the little black dress in your closet; your go-to.”

That same confidence acquired by wearing a black dress and sipping a Little Black Dress wine is also what’s driving them into the scotch market. After all these years of sweet and fruity, women are opening up to the strength and nuance that whisky brings to a glass. Heather Greene, whisky specialist and ambassador for Glenfiddich, notes, “We’re at a place where wine was 15 years ago. It’s a natural progression for women. Whisky is one of the last frontiers of food and wine that women have yet to go and infiltrate; maybe this is the last stop.”

“It’s about having money and wanting to spend it,” notes Du Vin’s McMillan. Michael Muser, beverage director at the Peninsula Hotel Chicago (and James Beard Award semifinalist for Outstanding Wine Service) adds that some of the Asian customers at the restaurant “are very big on first growth Bordeaux, the cult Cabs like Screaming Eagle and Scarecrow.” On the spirit side of the business Matt Biancaniello of Library Bar at the Hollywood Roosevelt Hotel finds the Asian market “ordering quite a lot of whiskey.”

Urban purchasing and consumption patterns have been tied to celebrity endorsements for decades, from Billy Dee Williams’ smooth moves back in the 1980s when he didn’t exactly claim you could have a better time with Colt 45 than without it, but cautioned (with a sultry woman by his side), “Why take chances?” to the popularity of hip hop moguls like Busta Rhymes, P.Diddy, Mr. T and Pharrell kindly requesting that you “Pass the Courvoisier.” Cognac and Cognac-inspired brands like Hypnotiq are still popular among this community, with the arrival of new quality products such as Ludacris’ Conjure that keep the masses intrigued. But now it might just be Tequila’s turn with the agave spirit gaining ground thanks to singers like TI plugging Patrón.

Based on the above numbers, you might jump to the conclusion that those not making the big bucks aren’t drinking. Not necessarily. They could be drinking beer, says Chicago-based bartender and beverage consultant, Todd Appel. While “stereotypes could be misleading,” he warns, “people with more money to spend generally have been exposed to vodka and a wealth of other spirits, and they have the resources to make it part of their regular routine.”

The Millennials are fast becoming a marketer’s dream, pushing aside the last big demographic group to impact sales—the Baby Boomers. According to a recent Wine Market Council study America’s core wine drinker population has doubled from 10-20% of the market. Millennials say 25% of wines they consume is +$20 and with better economic times 67% would spend even more. Danny Brager, the Nielsen Company’s VP and group client director, beverage alcohol, knows the buying power Millennials collectively bring to the table. “Over the course of the next 10 years,” he says, “Millennial consumers (those currently aged 21-34) will make up 40% of Americans 21 and older.”

A recent study released by his office reveals:

  • Millennial consumers are more likely to equate product cost with quality.
    (Translation: an audience primed to trade up)
  • They are more likely to explore new and different beverage alcohol products and will be even more likely to buy a locally-made or produced product knowing it may help the local economy. 
    (Good news for everything from vodka crafted from New York apples to boutique Pinot Noir out of Oregon)
  • Millennials are slightly more likely to plan their purchases versus impulse buys in today’s down economy.
    (Despite flashy ad campaigns, brand loyalty is essential)
  • Millennials’ tendency to experiment and try new things will keep them versatile, skipping between a variety of alcoholic beverages.
    (While the majority of Millennials still prefer beer, they purchase relatively more wine and spirits than older generations did at a comparable age.)
  • Nielsen’s research shows that as consumers age, their lifestyle transitions typically result in a relative shift from beer to wine and spirits. Given that current Millennial preferences between beer, wine and spirits diverge from prior generations, future consumption preferences also become less predictable.
    (Does your wine and cocktail list speak out to this experimental demographic?)
  • By 2036, the majority of consumers age 21 and over will be multicultural. Hispanics, in particular, are swelling the ranks of these new legal drinking age consumers, and their tastes are influenced both by cultural factors, such as their degree of acculturation, as well as attitudes that include a willingness to try new things and an openness to be influenced by other consumers’ suggestions.
    (Is it coincidental that Latino culture is hot right now, from churrascarias to cachaça to South American grape varietals?)

Max Kuller, assistant GM at Washington, D.C.’s Estadio, is noticing these trends. “I do think that younger people are more interested in exploring things that they don’t know,” he points out. “Older couples come in probably knowing what they want to drink; they don’t want curveballs.”

The Peninsula’s Muser concurs, “The new generation of wine drinkers are savvy and they are into local wine shops. They are very influenced by Twitter and Facebook and they are not held by the constraints of the old school labels. The younger clients that we have—those in their mid-twenties to mid-thirties—are super blog-savvy. They are into ratings on the Internet; not like the old guard age bracket, the 40-70s, that are Robert Parkerites and adhere to those Top 100 lists.”

With 64% of the population surveyed by Simmons confirming that yes, they are beverage alcohol consumers, it’s clear that understanding the marketplace is key to thriving—and generating sales.

“Drinking is becoming much more a part of our culture,” MacMillan concludes. “People are informed. The door has been opened, and it’s really kind of cool.”


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