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SACRAMENTO — Vintners looking to stem sagging sales need to redouble efforts to appeal to a younger and more diverse audience, a wine marketing expert said at a conference here this week.
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Sonoma State Professor Liz Thach spoke Wednesday as part of a panel at the Unified Wine & Grape Symposium, which served as a type of counterpoint to the Silicon Valley Bank State of the U.S. Wine Industry report, released a week earlier.
In the report, analyst Rob McMillan called the retail silence of millennials “deafening,” stating, “…nothing will change these trends unless the wine industry decides to take on the challenge.” The generation is generally defined as being born between 1981 to 1996.
As consumers move away from wine and drink more across categories or join the sober-curious movements like Dry January or abstain from alcohol all together, McMillan wrote that the industry is not willing to band together to fix the issue.
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In an interview with a frustrated McMillan, he said the root of the problem is that “we have a bifurcated industry with high volume producers suffering volume losses and lower production, premium producers still seeing growth. We’ve known the issue was about attracting younger consumers for some time.”
His report referenced data from wine retailers that suggest younger wine consumers are buying wine — and are even willing to spend more per-bottle than their parents’ generations — but see wine as a drink for special-occasions rather than for everyday enjoyment.
Thach, for her part, said wineries need to focus on connecting with multicultural consumers by creating what she called “gateway wines,” to lure in younger, more diverse generations.
“They want to have something that tastes good to them…” she said during the conference. “The research shows that people’s positive first experiences were with sweet reds, Moscato, and sparkling wines.”
She also suggested more inclusive ads, QR codes on labels, ingredient lists — Ridge Vineyards, based in Cupertino, has led the pack here, printing ingredients on their label since 2011 — and marketing across social media platforms.
And no discussion about the future of advertising and customer experience would be complete without mention of the metaverse. It is time to catch up to the spirits and beer industry who already have brands like Jose Cuervo and Heineken using the virtual, augmented reality 3D technology, Thach said.
While grape growers pull and planting new vines as they try to predict the varietals that will become popular, Thach said it’s important to remember that millennials are variety-seeking consumers who enjoy ignoble, non-traditional varietals and are willing to explore wines from new regions.
“Consumers are actually open to new grape varieties and regions that help deal with global warming. So this is the time to actually start researching or considering planting some of your heat-loving varieties, as consumers understand the need of this.”
She said winemakers can communicate this adapting to global warming and conscious decision into the marketing, which will resonate with increasingly environmentally conscious consumers who are often willing to pay more for products that are responsibly made.
“If you are using less water, or using drought resistant rootstock, make sure that info is being marketed on your website or on your label,” she said.
As consumers move to become more health and wellness conscious, especially young consumers, they are cutting down on all alcohol. With new non-alcoholic beers, and “mocktails” hitting the market, she said it might be time for wine labels to consider adding low or no alcohol wines to their repertoires.
In his report, McMillan questioned the special interests behind recent studies that have found that alcohol, even in moderation, may be harmful. He believes many published studies about alcohol’s effect on health contain “unbalanced” health messaging that’s driving young consumers away from drinking.
“Today, much of the ‘science’ that you read starts with a conclusion that is meant to make a public statement,” said McMillan an interview, and admitted his claims may sound conspiratorial. “I do acknowledge I’m biased, I believe government’s role shouldn’t be to define people’s lives with alcohol, but give is the information to decide for themselves.”
During the Unified Symposium session, Thach also addressed consumer health concerns, saying that while the wine industry cannot make health claims about their products, it can become more market-savvy by using buzzy phrases — like no sugar added, keto friendly and plant-based — in their marketing and labeling.
Another recurrent reminder from Unified Symposium panelists: There have always been ebbs and flows in the wine industry, and a slump should come as no surprise.
Still, McMillan noted, “The industry has to accept the issue before addressing it. We’ve been slow to take action. Where we are as an industry is something I’ve been warning for many years now.”
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You can reach Danielle Wilde at 707-256-2212 or dwilde@napanews.com.
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