You may have already noticed the change in your local off-license. Eye-catching labels on cans of wine surround the checkout line and there’s more sparkling wine to buy.
The change sparked because there’s a new consumer in the off-license—and it is a buyer who was not 21 years old 10 years ago. This consumer wants the wine they purchase to match their values and lifestyle, and it’s forcing some brands to rethink their strategy.
By using data to analyze this new customer, you’ll be able to help your brand adapt to the changing market.
The changing target customer
Wineries must adapt to serve the profile of a new wine drinker and consumer as the current market is rapidly changing. Total volume of wine sales decreased last year, but total dollars spent increased. The younger generations are buying less on impulse, but drinking more when they do.
Why is this all happening? Because Generation Z finally turned 21 years old and can purchase alcohol.
Millennials — people who were born between the 1980s and the turn of the century— are a large target for brands. They prefer experimentation and care how the label looks, but they also want quality. They don’t focus on brand loyalty as much as the “feeling” they get while purchasing wine.
For higher-priced labels, Generation X consumers—people born between 1965 and 1980 — are the perfect target, as they starting to spend more on the wine they consume and control the majority of the market share in dollars spent.
Traditionally, Generation X and their predecessors, the baby boomers, were predictable in their buying patterns and had regulated consumption. However, baby boomers are starting to purchase less because they’re aging out of the wine industry for mostly health and budget reasons.
The younger generations are also exploring alcoholic beverages beyond wine, and finding ciders, beer, and mixed drinks, as well, leaving the wine market needing to adapt.
Loyalty and the new consumer
The new consumer has less brand loyalty than previous generations of customers. 71% of the baby boomer generation used their previous experiences with a wine label when making a new purchase. This statistic is drastically down with millennials, who only use past experiences to influence their next purchase 43% of the time, according to a Nielsen report.
That same study showed 52% of baby boomers knew which brand of wine they intended to purchase in advance, whereas only 24% of millennials knew before walking into the store.
The new consumer continues to purchase a brand because of quality taste and that the brand matches their values. Consumers are also looking for easy access to their wine. Local higher-end convenience store sales increased at twice the rate of other outlets. Consumers are looking for convenience and something fun.
“The way you win is by focusing on alternative packaging and sparkling and flavored wines,” Constellation Brands executive vice president and president of Wine + Spirits Division Chris Stenzel told Wine Business Monthly. “You go where the consumer is,” and apparently that is at the high-end convenience stores.
A brand with values
Millennials are looking for brands that match their values, such as supporting local breweries or organic farming of the wines. Millennials also tend to be more health conscious, so if they find a brand they perceive to have less calories or carbohydrates, they may switch labels.
The new consumer does stay loyal when the product is quality, seen as reflecting their values and convenient for them to purchase. So brands can gain the loyalty of millennials, it just takes a bit more work to market what your brand stands for.
Sparkling ciders, spiked seltzer water, and local craft beers are rising in popularity among younger drinkers.
Spiked seltzer, which was not even on the market two years ago, sold more than $400 million in 52 weeks. The spiked seltzer market is aimed toward younger female drinkers. It’s easy to see why — one popular brand, Truly Hard Seltzer only has 100 calories, 2 carbs, 1 gram of sugar and 5% alcohol.
The legalization of marijuana in some states across the USA is too new to have numbers showing an impact in decreased wine sales; however, some in the industry worry cannabis could hurt sales.
Now that consumers have more options, wine labels need to do more to stand out and win that coveted brand loyalty.
What do consumers want?
The dominating force behind younger consumers’ alcohol purchases is finding a product that fits their lifestyle. Millennials and Generation Z are suddenly gravitating toward wine in cans and in boxes.
Wine in a can “seems like this came out of nowhere,” O’Neill Vintners chief executive Jeff O’Neill told Wine Business Monthly.
Companies like Union Wine Company lead the charge to selling wine in cans, marketing their Underwood Wine for single-can purchases in stores. Union Wine Company cited cans as the main driver of growth for its brand in 2018.
Some of the wine-in-a-can consumers are not the typical bottle consumers, but former craft beer drinkers that are making the switch. The accessibility of wine in a can mirrored their lifestyle better, and previously wine had not given that consumer an option in a can.
Boxed wine sales also spiked last year 8%, according to Nielsen. Boxed wine brands priced between $5 and $12 appeal to millennial shoppers.
Trends and social media
While some of these trends did seem to come out of nowhere to industry experts, it’s important to see where the consumers are picking up the trends. Social media plays a huge role in millennial and Generation Z’s purchasing.
Telling the story of your brand in captions will help the younger consumers get to know your label and what your company stands for.
Wolffer Estate winery in Long Island, NY had been in the Hamptons for more than 20 years, but just in 2013 did the brand explode with its “Summer in a Bottle” rose. The specific brand and bottle helped create and mirror a lifestyle choice among millennial drinkers. The winery rode the wave and went from making 4,000 total cases of wine in 2008 to 48,000 cases last year.
Brands can learn from Wolffer’s hit by helping craft a story for their own products that give customers a feeling that they keep wanting to feel.
To apply this to your own brand, collect data on who your customer is and on how much an average customer is spending, where they are buying your products, and how often the customer is making a purchase.
Since buying behaviors are morphing as the wine buyer does, as well, using the data will help your brand identify trends early. By analyzing these data points, you’ll be able to start seeing patterns emerge across the generations of your customers, and then make marketing decisions to help expand your reach.
Using social media data can help you also understand how your customers are interacting with your brand, and then your team can make better decisions about the feelings your customers want when drinking your wines.
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