‘Not good enough’: Wine marketing strategies fail to attract millennials

By Rachel Arthur

- Last updated on GMT


Related tags Wine Us

The US wine industry fails to appeal to millennials and interest them in the category, according to a new report. "The issue of greatest concern for the wine business today continues to be the lagging participation in the wine category by the large millennial generation."

Attracting younger, health-conscious, multi-cultural consumers to the wine industry continues to be a challenge, with such consumers increasingly attracted to trending categories such as spirits, beer and spiked seltzers or forgoing alcohol altogether. As older consumers age, this leaves a worrying gap in the wine industry for the future.

But while it may be a tricky market, the industry is not doing enough to help itself either. “The US wine industry isn’t doing a good enough job of marketing and selling its product, often remaining wedded to successful strategies from the past while the culture, country, business environment and consumer have radically evolved,” ​notes the report’s author, Rob McMillan, EVP and founder Silicon Valley bank Wine Division.

“It’s flat-out not good enough, and the overall industry results show it.”

Wine industry ‘fails to market to young consumers’

A Harris Poll asked the question, ‘If you were invited to a party and asked to bring an alcoholic beverage, what would it be?'

Wine was heavily preferred by those over 65 (49% of this cohort said they would choose wine). The other cohorts scored 20% lower, with the 21-24 year old cohort the least likely to favor wine.

“That’s clearly indicative that wine sales are overly dependent on older age groups,”​ said McMillan.

“The poll’s warning is that wine isn’t at the forefront of many consumers’ minds when they think of an alcoholic beverage. Unless the industry does more to attract consumers younger than 65, wine consumption might drop by 20% when boomers sunset.”

This one survey alone, of course, does not indicate the end of the industry. But it’s representative of how younger consumers think: and the picture is increasingly bleak when wider factors are considered. There’s hot competition from other alcohol beverage categories such as RTD cocktails, hard seltzers and spirits. And millennials have different interests, situations and habits than their parents and grandparents.

“Consumers younger than 40 have different values, are more health-conscious, have lower discretionary income and wealth and are more ethnically diverse than previous generations.

“While the wine industry is taking a more passive approach to attracting the young consumer, the luxury market has gone all-in, adapting product offerings for younger tastes, spending on digital communication paired with engagement strategies and evolving distribution channels at the same time. The comparison with the wine business is stark: About 20% of millennials consume wine, yet two-thirds more — 33% — consume luxury goods.

“The millennials’ potential to replace retiring boomers as wine consumers has been a delayed promise because of several factors, including their early preference for craft beer and spirits, questions surrounding the health of alcohol consumption and the fact that it takes longer to establish careers, families and wealth than it did in prior generations.”

But it's not so hard... 

So how can wine brands reach these younger consumers? The good news is that the industry is already well-positioned to appeal to these consumers – it just doing a bad job of communicating its assets.

“The strange reality is that it would be easy to start talking about wine in an evolved way and to reference the many things that are already a part of what we do to produce wine and that would resonate with younger consumers, yet as an industry we are not doing it,” ​said McMillan.

For example, many in the wine business use sustainable farming practices and take great care in their winemaking by recycling water, avoiding the use of glyphosate, building and retrofitting with LEED Certification in mind and being good stewards of their land. Yet this is not always clearly communicated to consumers.

Wines can also highlight their provenance to appeal to shoppers who like to think local.

Health touchpoints on wider food and beverage products can also be used with wine: such as being transparent on calorie counts.

Cause-based marketing is what will resonate with millennials, concludes McMillan.

“We need to hire more people in tasting rooms with tattoos and with different ethnicities. We need to promote our efforts at being carbon-neutral and our support for social justice. We don’t need to be cheap. We can be a luxury product or a mass-produced wine, but we have to direct companies and brands toward the younger consumer’s values.”

Related topics Markets Beer, Wine, Spirits, Cider

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