Posted on | October 22, 2015
Written by | Jack Robertiello
Adventurous, Wired and Aware, the rising LDA population is a tricky bunch to figure.
They may be the most examined and courted generation since the Baby Boomers, but for most wine sellers, the Millennial is still an elusive beast.
Millennials—variously estimated at around 75 million, roughly equal to the Boomers—are almost all now of legal drinking age. Their eclectic tastes have been credited with super-charging the red blend, rosé and Prosecco booms, but that hasn’t been easy to translate into brand loyalty, and most marketers are still trying to get a handle on how to engage them.
Consultant Steve Raye, CEO of consultancy Bevology Inc., says basic facts about how they are changing the wine market are fairly clear. “They are driving a trade-up to higher priced wines, with the most growth in the $12-$15 and $15-$20 segments. They behave very differently from previous generations and seek out what’s new and different. They’re very open to imported brands, and particularly New World wines.”
Those who are successful selling to them report they have a different outlook on wine. “At this point, Millennial drinkers are a large swath of people,” says Gary Fisch, owner of Gary’s Wine & Marketplace with four locations in New Jersey. “They’re not economically-heeled enough to be buying at the high end—they’re still not full consumers. They’re much more into experimentation than previous groups, going across all beverage alcohol. They love coming in to experiment and taste wines. They are probably our best buyers at the tasting bar.”
Stephanie Gallo, Vice President of Marketing, E. & J. Gallo, says their behavior will affect most wine producers one way or another, or should have already. “Millennials are fueling the growth of the wine category and their behaviors are dramatically different than their predecessors’. They don’t adhere to traditional wine rules. They are adventurous when it comes to what they will try and purchase for themselves, their friends and their family. They appreciate innovation—particularly if it simplifies or eliminates routine challenges.”
Growlers & Boxes & Kegs, Oh My!
It goes almost without saying that Millennials are effectively the first generation of American wine drinkers to hold no resistance to screwtops. But that is just one of the packaging formats embraced by these LDA drinkers. Stephanie Gallo points out that much of the growing popularity of the premium box category is due to the way Millennials enjoy wine at gatherings and outdoor occasions. Box wines such as Gallo’s Naked Grape and Vin Vault also touch on another important selling point for Millennials: reducing the carbon footprint of glass wine bottles.
Dr. Liz Thach, a professor of both wine and management at Sonoma State University says a number of wineries are working hard at finding ways to attract Millennials: “Some wineries with younger owners here in Sonoma are doing things like filling growlers with wine for customers— something which Millennials are really attracted to because it is sustainable and casual.”
But she warns against regarding them as a homogeneous buying group. “The oldest Millennial is now 38 and is able to spend more money on wine,” she notes. In fact, in her research, Thach breaks Millennials into two groups: The first, those in their twenties, still in college or struggling with the post-recession economy, are more likely to be attracted to innovative packaging like wine in cans, pouches or boxes, or interested in social media and sharing discoveries. The older Millennials are getting deeper into wine, can afford to spend more, and it’s this group that more traditional wineries are reaching out to, through social media but also wine clubs and events. What she calls Old Guard wineries—e.g., Silver Oak and Jordan—are also connecting with their older buyers on mobile, via videos on YouTube and social media contests.
Many wineries are responding to the democratization of wine. “Millennials entering the wine category and the casualization of wine go hand-in-hand,” says Gallo. “Although they take a more casual approach to drinking wine, they also appreciate a great value without sacrificing quality. According to our 2014 Gallo Consumer Wine Trends Survey, nearly half of frequent wine drinkers ages 25-40 purchase 187ml wine bottles with some regularity and 72% purchase screwtops regularly.
Gallo says more than a third of total users for brands including Alamos, Apothic, Ecco Domani and Mirassou are between the ages of 21 and 34, while for super premium wines, they account for more than 40% of drinkers for brands like Columbia Winery, Edna Valley Vineyard and William Hill Estate.
Connecting Digitally & Personally
Thach points out wineries in some cases hiring marketers who focus exclusively on social media, and lauds Constellation for the job they do with brands via an entire department devoted to digital marketing campaigns and wine apps. But smaller companies without that spending ability need to find less expensive ways to appeal.
One Millennial, JJ Williams, a third generation family owner of Kiona Vineyards and Winery in the Red Mountain region of Washington State, says using social as an educational tool works better for small wineries like his.
“Millennials want to know where things come from. Being able to connect with the winemaker in the tasting room, things like that, make a big difference in the type of relationship a winery can build with Millennial consumers, and it is something they are more likely to take advantage of than that older consumer.” Social media efforts for small wineries work best as public relations and customer support tools rather than sales, he thinks.
New kind of caring
According to most observers, Millennials don’t care about wine scores, no matter who awards them. At Kiona, they post any high scores they’ve garnered but keep an eye on who checks them out. “We find it’s almost never someone who looks like they are under 30,” he says.
“They place more value on what their peers say, rather than old-school critics and pundits,” says Raye, who points out that making those peer-to-peer recommendations available is a good way for wineries to connect consumers. “Case in point, wine apps that allow you to take a picture of a label and get information from peers, trusted reviewers, et al. The beauty of this is that they’re literally holding the bottle in their hands; that means they’re more than likely in a position to buy the product, right now.”
It’s helpful to note, however, that digital sharing of wine recommendations can be as personal as communication itself. While some may search wine apps like Delectable and Vivino for specific picks, others may use Twitter or Instagram. Still others may skip the online-sharing completely and just shoot off a quick text to a trusted peer or wine mentor.
According to Warren Solocheck, Vice President of the foodservice consultancy NPD Group, too little attention is devoted to creative wine marketing on-premise. Enabling servers with better wine knowledge would help, he says: “Servers are the ones who need to know what they are talking about, because it will be their recommendations that will help Millennials select a wine they aren’t familiar with. They are much more willing to take a recommendation from a stranger than any other demographic group.”
In the wine moment—that is to say, when actually drinking wine—Millennials have proven that their interest goes beyond the actual organoleptics. Drinking and eating are more than the liquid being consumed. It’s an experience, with social factors, including an awareness of the wine’s impact on the environment.
Thach says keg wine works especially well at attracting Millennials on-premise, especially if an operator includes multiple portion sizes for tasting. Wine cocktails, too, are welcomed by many Millennials, and more wineries are exploring the field, including packaging in cans.
Fisch says he sees many retailers chasing what the Millennials are doing, as opposed to providing information and solutions, which he advocates. “They love having someone they can come in to talk to. They take a picture of the label and ask a friend, ‘Is this the wine we had the other night? They will Google the label, compare with others, and ask questions.”
But as Gallo says, digital isn’t everything: “Although we are leveraging digital programs to reach consumers in a contemporary fashion, we still value our ability to have one-on-one time with consumers and that means sampling our wines in the shopping aisles and engaging consumers we meet at food and music festivals.”