Will millennials sink the wine industry?
Millennials have been accused of disrupting the status quo in many industries, from offices to fashion and consumer tech. Their latest offense?
They aren’t drinking enough wine.
(For a quick reference, millennials are those born from 1980 to 1995, boomers were born between 1946 and 1964, and Gen X are those who were born in between.)
Baby boomers make up the prime wine market. However, they are rapidly approaching retirement, the age at which wine consumption begins to decline. Now, recent industry reports show that millennials are not primed to make up for the decline.
For those asking where Generation X is in this equation — they aren’t without blame. However, as they are smaller than both boomers and millennials, they have less buying power. So, even if they did become wine fanatics overnight, they wouldn’t be able to make up the deficit from aging populations.
To be clear, millennials are still drinking wine. Red wine, in particular, is a top choice for both men and women in that age range. However, beer sales are consistently high, hard seltzers are taking over the shelves, and it seems that everyone has a signature cocktail these days.
What is interesting is that while sales of inexpensive wines, those under $9 a bottle, are shrinking, the sales of wine priced above $15 are rising. The assumption behind this “premiumization” is that as consumers are choosing to drink less wine, when they do, they prefer those of a higher quality.
But maybe this isn’t about the millenials. Perhaps the fault lies with those brands that aren’t doing enough to entice this demographic.
Veuve Cliquot is one house that has done a good job of adapting. With a price point starting around $60, the orange-labeled bottles are an attainable luxury. The brand has become synonymous with a slew of hosted events, like the Veuve Cliquot Polo Classic, that have become instagrammable sensations–and help to build up brand loyalty.
But, proper marketing is not the only factor that wine growers need to consider when approaching new consumers. Climate and crop challenges are impacting grape harvests across the world–which will impact supply and price in the short and long term.
While individual brands can move the needle for their own sales, unfortunately, there is not currently a definitive answer as to what the industry at-large can–or should–do to continue to grow as demographics shift. In the meantime, I will continue to do my part to support the industry.
Danilo Diazgranados is an independent investor in the global food and wine, financial services, real estate, and the hospitality sectors.