Wine trade must increase focus on millennials to preserve its future
Retailers feel that suppliers are not doing enough to preserve the future health of the wine category by attracting millennial consumers, an Off Licence News survey has found.
Shoppers aged 18-34 represent just 8.3% of the £4.3 billion off-trade wine sector (Nielsen, year to January 2016) and more need to be turned on to wine to arrest the category’s declining sales figures.
OLN polled thousands of retailers from across the UK, including independents and head office staff at multiples along with a few key wine writers, and 23.1% said suppliers have the greatest responsibility to attract younger adults into wine.
A further 22.1% said it was more down to retailers, while 54.7% said they have an equal responsibility, but the vast majority agreed suppliers are not doing enough.
Just 16% felt suppliers are doing enough, but 79% said they were not and the remaining 5% were unsure.
OLN spoke to a raft of the UK’s leading suppliers on what they are doing to attract millennials and found a strong appetite to address the problem, but many different ways of solving it.
Pernod Ricard has launched Jacob’s Creek Sun Craft, a range that targets younger drinkers by eschewing grape varietals and instead focusing on the wine style.
The range is made up of Soft Rosè, Bold Red, Crisp White, Smooth Red and Fruity White.
Toni Ingram, head of marketing for wine at Pernod Ricard UK, said: “Millennial consumers told us they want nice, approachable wines, but they find the category overly complicated and academical. They want simple taste descriptors.”
Concha y Toro has sponsored the Brit Awards with its Frontera brand and believes better consumer marketing targeted at younger adults will win them over.
Commercial director Clare Griffiths said: “We believe that Frontera, through the activity we have got, is a brand that can bring younger people into the category. It’s a huge opportunity. Our audience is Generation Y and we worked very hard to connect with them. We are the official wine of the Brits 2016 and other events like the Mercury Awards, and we can put artists like Ed Sheeran and Sam Smith on the packaging.”
Gallo believes bringing fun to its labelling and marketing is important. Bill Roberts, general manager for Europe, said: “It’s really all about how we communicate to them and approach them. Our first thing is about the taste and making great tasting wines that millennials would find relevant and interesting.
“Also we have put a little fun into a category that’s pretty serious. Whether it be Barefoot or GFV Spritz, the labels are very approachable and easy to identify. At the end of the day it’s all about the taste and something that that demographic likes is varietals like Moscato, which have the right taste profile, and it’s about getting them to find our brands. Year on year we are spending more on our digital platforms, social media and how we talk to our consumers.”
When asked for the best way to attract younger consumers, the retailers we polled said better marketing was the most crucial element, followed by telling a captivating story, then creating appealing labels and then promoting grape varietal over price.
But Michael Moriarty, commercial director at Boutinot, warned against dumbing down the category too much. “There’s a danger of encouraging people to drink wine like Coca-Cola and not understand there’s quality and provenance to it,” he said. “Then you might end up in 20 years’ time with a generation that doesn’t understand the fundamentals of wine.”
A new report from the Wine Market Council has revealed that millennials drank 42% of all the wine consumed in the US in 2015, more than any other generation.
What the UK wine trade would give to see such figures. The UK is a far more mature wine market and Brits drink a lot more wine than Americans, but nevertheless the figures point to a healthy future for the category over the pond.
In the past year in Britain, however, the fact millennials drank less than a tenth of the wine consumed is the main reason why the category is declining, with overall sales down around 2% year-on-year (Nielsen).
James Leacy, category and insights manager at Concha y Toro, said: “Younger people are having a big drop off in drinking. Wine is significantly in decline among under-50s. They under-index. The over-50s are drinking more and propping up the category. As they get older and the category gets smaller we need to recruit more younger people into the category.
“We get a service from Kantar called Alcovision, which breaks down demographics, and they gave us a presentation about millennials, saying that 18 and 19-year-olds in the UK are behaving differently to any previous generation. They are a bit boring – not drinking, smoking, taking any drugs. The whole culture of blokes going to the pub and drinking pints together is disappearing. They are going out as bigger groups and it’s more about experimenting with different food, the coffee culture, and smoothie bars are becoming popular, so it’s becoming more like continental Europe, rather than old generations getting tanked up together.
“When we used to go to the pub it was unlikely people would be taking pictures of you, and certainly not sharing them on things like Facebook the next day. People don’t want to be shamed as being out of control. They are taking their careers more seriously as they come out of university £50,000 in debt. That group has always previously rebelled, but this is the first time that isn’t happening.”
The big challenge for the wine market is winning over this group of consumers.
Ingram at Pernod Ricard led her team on one of the biggest pieces of consumer research it has ever done in a bid to crack this market.
After interviewing a raft of young adults, they came up with the new Sun Craft range, which is exclusive to the UK market and retails at £6.
She said: “What I love about this wine is that the UK consumers have driven the brief to the winemakers in Australia. The millennial group of shoppers were unimpressed with the complexity and often confusing nature of the wine fixture.
“Instead, they told us that they wanted a range of wines from a brand they know and trust that delivers a clear promise of quality without the confusion of traditional signals such as variety and vintage.”
Accolade has driven growth among millennials with Echo Falls Fruit Fusions, and marketing director Amy White said: “The younger, millennial consumer is always looking for something new to experiment with and Echo Falls Fruit Fusions offers this in an easier drinking, sweeter style.”
But Deborah Brook, who runs the independent channel at Boutinot, worries that a proliferation of sweet drinks and a lack of education could harm the category.
She said: “You have to be careful you don’t dumb down too much. Wine has been produced for millennia and it has always been drunk, and it has been drunk by 18 to 34-year-olds.
“You have to produce labels that appeal to that age group, but still have good wine. That’s how we want to attract consumers. The way we approach that market is with labelling.”
Leacy at CyT believes the Jacob’s Creek approach is a bit more subtle and smarter than pushing fruit fusions. He said: “Part of me thinks they have done it quite nicely with things like Bold Red. It’s one way of going after it. But most people in this country will have heard of Merlot, Chardonnay, Sauvignon Blanc and Malbec.
“With things like Echo Falls Fruit Fusions you are bringing consumers in but there is a danger of taking it so far away from wine. Jacob’s Creek have done it in a much smarter way, and that’s what we are doing with Frontera.”
A £1 million marketing campaign called Made By has driven Jacob’s Creek back into growth in the UK and sales are now up 10%.
Pernod Ricard aims to boost growth further with Sun Craft, and feels shoppers will then trade up to its Classics and Reserve ranges.
Ingram said: “The Classics range is single varietal. The millennial audience is very clear that that’s not something they want to engage with. Sauvignon Blanc or Chardonnay doesn’t mean anything to them. They are just starting to learn about wine and experience it.
“We hope they start their journey with Sun Craft and then move on to the Classics range, which has the varietal on the label, and then trading up to the Reserve range, which specifies the growing areas, like Barossa Shiraz. Speaking to a millennial consumer now about Barossa Shiraz would alienate them.”
While millennials make up just 8.3% of the UK wine market, within the Australia sub-category the situation is even more challenging as 18 to 34-year-olds consume only 6% of wines from Down Under (Nielsen, year to January 2016).
Pernod Ricard knows that if it can close the gap and bring it up to 8.3% the wine market will grow by more than £40 million, but the possibilities to expand it beyond that are even more exciting.
Ingram said: “Sun Craft will allow retailers to address a long-running trend of devaluation in the Australia wine category, introducing an exciting new addition from the category’s best known and best loved Australian wine brand.”
One part of the wine market hit harder than any other in recent years is fortified wine, and categories like port have a tough job on their hands when it comes to winning over a new generation.
Tania Branco-Oliveira, communications director at Sogevinus, whose four brands all scored 90 or more points at The Wine Advocate’s recent Matter of Taste event, feels a duty to preserve the category for future generations.
She said: “It has a reputation for being old-fashioned, with a decanter that needs to be passed to the left and so on, all these ideas of consumption and having your grandfather drink it.
“If we just focus on port’s history and heritage and don’t look to the future, the category will continue shrinking and then there won’t be port any more.
“We respect the legacy of brands but we want them to be around in the future. We want to make it more approachable and accessible in terms of product and image.”
She believes colheitas will help win over a younger generation as you do not have to age them and you can have the wine open for a few months.
“This generation isn’t really into keeping things for 20 years,” she said. “They don’t all have a cellar to age things. Life is too complicated to plan ahead. Colheita producers are aging them for you.
“Younger consumers want something they can grab off the shelf and drink. From a commercial point of view it’s a fantastic time to be bringing port to a new generation.”
The vast majority of the hundreds of retailers OLN surveyed felt suppliers are not doing enough to win over the millennials.
Bill Roberts at Gallo said: “It’s a mixed bag. There are definitely wine styles and wines out there that are available that are appealing to millennial consumers. However, there’s still a lot of work to do on branding and marketing and the approach to bring millennials into the wine category, so I would give it a 50/50 [we’re halfway there].
“It’s [the responsibility of] a combination of both retailers and suppliers. More the suppliers but retailers have to do their part and in some of the multiples they are creating sections for lighter and fruitier style products that really have a taste descriptor that people can identify with. But it’s up to the supplier to create the product that’s relevant and market it to millennials in a compelling way. Then POS and other devices need to drive attractiveness.”
He added: “In my household I have a 25-year-old, a 22-year-old and a 20-year-old, so I live it first-hand with millennials, and they discover and learn differently than I did. For them it’s about discovering wine in a different way. They learn about it on the internet and through recommendations.
“They may buy it online as opposed to a traditional store. Traditional advertising is not going away, but social media certainly takes on more importance in reaching a younger consumer. You have to have a brand that the target consumer can identify with on packaging, label and product, something they can share with their friends.”
Leacy at CyT urged the wine market to learn from the success spirits companies have had in winning over younger drinkers.
“Diageo have done it brilliantly with spirits,” he said. “That’s seeing an upturn at the moment. With their thebar.com site, they don’t talk about Captain Morgan, they talk about the end drink and tap into what consumers are actually demanding and consuming. They have seen a big penetration in that millennial group, where spirits are on the increase. The biggest occasion for them is preloading and spirits lend themselves well to that, but wine is a perfect sharing drink for that occasion.”
Retailers: what is the best way to attract younger adults into wine?
Better marketing – 28.6%
Telling a captivating story behind the wine – 23.3%
Appealing labels – 18.8%
Promoting taste over grape varietal – 17.8%
Cutting prices – 10.5%
We asked retailers what suppliers could do to bring more millennials into wine, and here are some of their suggestions:
“Organise road shows at younger events, universities and concerts.”
“More advertising aimed at young drinkers.”
“Don't patronise them. Stress the available variety and ensure they know the importance of spending a bit more to get big quality improvement.”
“Make it more approachable and make education more fun.”
“QR labels on the bottles and videos.”
“Social media engagement, modern packaging and modern food matching.”
“Younger packaging and POS. There is not enough promotional material available.”
“The wine industry has always been behind the curve with use of technology. Millennials have been weaned on technology so improvements are necessary.”