The Maddening Business of Marketing to Millennials
"I do think Bordeaux is potentially losing a generation," argues NYC-based sommelier Cedric Nicaise.
"The wines are expensive, seen as 'old' by many younger people and are not cool."
Is he right? Even if Nicaise is way off track, wine agencies across France are nevertheless busy crafting campaigns intended to attract Gen Y.
"Until recently, it was true that Bordeaux wines appealed to an older audience, but the tide is turning," insists Allan Sichel, vice-chairman of the CIVB. He continues: "By communicating the region's affordable and diverse styles – which include dry whites, rosés, lighter, more modern reds and even sparkling wines – and stellar sustainability credentials, we are encouraging a new generation of younger wine drinkers to discover Bordeaux."
Several other promotional bodies, including Inter Rhône and InterLoire, have also invested unprecedented resources into campaigns targeted at younger drinkers.
Of course, this is hardly revolutionary – for as long as I can reasonably remember, everyone in the wine industry has been chasing Millennials (born between 1981- and 1996). After comfortably selling wine to the Baby Boomer generation for years, Millennials became the next big target of importers, producers, and PR firms.
Except that in the US market at least, it hasn't quite turned out as planned. Wine.com's recent success with selling to Gen Y proves they're far from a redundant consumer group, although there is still much consternation about why Millennials are not buying wine in the numbers that producers and marketers were expecting.
But if we pause for breath for one moment, then the constant self-flagellation over failing to engage with this demographic suddenly appears quite ludicrous. It's not that I hate Millennials (I am one), although many of the points of ridicule – phone addiction, narcissism, self-absorption – seem quite reasonable. It's just that the hand-wringing, the neurosis, the obsession over this consumer group is almost entirely unjustified.
The main argument for investing resources into enticing Generation Y is surely that baby boomers (born: 1946-1964) are aging out of wine buying and drinking. Who is going to take their place? Yet 54-72 year olds increasingly rule the roost; birth rates in the west are incredibly low, while an aging population continues to benefit from increases in both the length and quality of life. As a result, we're seeing an increasing shift in wealth to older people within populations in nations like the US.
"Globally, it is projected that the over-60s will account for 50 percent of all the growth in urban consumption between 2015 and 2030," explains Lulie Halstead, a senior analyst at Wine Intelligence. "These demographic shifts are reflected in a proportionate change in the age of wine drinkers, with a shift to a higher proportion of drinkers being older drinkers." She adds that Baby Boomers tend to drink wine more frequently than younger drinkers under the age of 30.
Trust me, I speak from experience. My parents are fit, healthy (touch wood) and continue to spend generous amounts on travel, restaurants and premium wine. I've waited patiently for my inheritance, but to no avail – the older cohort of the Baby Boomers are hanging on for dear life. The bastards.
Meanwhile, most of my friends in the 30-35 age group can only dream of a mortgage, moan about how little disposable income they have, and occasionally buy wine under £10 ($13). No amount of digital marketing, of Instagram wankery, of social media campaigning, is going to tempt them to trade up. Two reasons: first, because they're not that involved in the category and, second, because they lack the resources. In my experience, they speak for the majority of Millennials.
It's certainly ironic that at a time when the industry – particularly in France – is investing in the younger cohort, some Millennials are rejecting alcohol and pursuing healthier lifestyles. Or at the very least, rejecting wine for beer and spirits.
"The global shift towards personal health and well-being continues to have a strong impact on the consumer relationship with alcohol. The move towards both moderation and abstinence has impacted wine," says Halstead. "In the UK and US, the active moderation trend is being led by younger drinkers."
Millennials are also a fickle bunch, at least when it comes to buying alcohol. That's according to the IWSR, who have conducted extensive research around this topic.
"We know that Millennials are less brand loyal, and in beverage alcohol, they are less category loyal," says IWSR marketing manager Hana-Mai Hawkins.
"What this means is that they are more likely to jump between craft beer, spirits and cocktails, and wine. This makes it challenging for brand marketers to capture attention and share."
Stephen Cronk, owner of Mirabeau, adds: "Millennials seem to be more health conscious and socially responsible than the generations before them but potentially more adventurous and therefore more fickle."
Yet (some) in the fine wine market still believe that Millennials are an untapped source of riches. Perhaps one day, but historically the expensive stuff has never been accessible to the vast majority of 20 to mid 30 somethings. So why do we expect Millennials to be any different?
"Marketing fine wine has always been more about disposable income than age. Are more baby boomers buying expensive cars than Millennials, I would venture yes, same as any luxury item," says Nicaise. "I will say, however, that millennials are much more adventurous wine drinkers than the preceding generations. But again, is this a reaction to high, unattainable prices, or are they very much looking to new regions?"
Wine Buyer Peter Mitchell MW expands upon the theme.
"Much of the trade wrings its hands about attracting younger customers, and has little idea how to go about it. That said, premium wine has never really been big amongst younger consumers, so the current situation is not unusual," argues Mitchell MW.
"I don't remember claret, Burgundy or Sancerre featuring amongst my contemporaries' drinking habits 25 years ago. What is more unusual historically is the number of under-30s who do not drink alcohol. That presents more of an issue for the future, assuming that habit does not change as they grow older."
Stephanie Peachey, vice-president of the fine wine division at Fetzer Vineyards, argues that most of the presumptions about age segmentation and wine consumption can be discarded outright.
"As an 'Oregon trailer' and marketer, I think too much hype is made of the 'younger' age segmentation in general," says Peachey.
"We need to think about consumers in terms of their lifestyle preferences. I have some Millennial friends with far more sophisticated palates and cellars than some of my Gen X friends who conversely might spend more on wine in terms of volume and vice versa."
This last statement begs the question: What about Generation X? No one has been talking (in any detail) about the cohort born between 1965-1980. Yet in my wider social circle, people in their mid-40s to early 50s seem to be having the best time of late. They entered the workforce at a good time economically, and with fewer graduates competing for careers compared with the generations bracketing them. The last generation who could aspire to property ownership, Gen X are arguably at the peak of their lifetime income and spending. And, they typically have fewer children, if any at all, compared to Boomers.
"Generation X is absolutely overlooked. For me they are actually the best consumer group – people who are often established in their careers and lives but have much more adventurous tastes than Boomers," says Zach Jones, Wine Director of Pacific Standard Time in Chicago.
Kate Goodman, owner of Reserve Wines in Manchester, adds: "Generation X is our biggest audience in terms of sales. As a business we are aware of this. It is possible that the wine trade as a whole may still be overly focused on the baby boomers, however we have seen some engaging stories emerging from the Independent wine scene aimed at freshening their outlook and engaging with their younger audiences."
Nevertheless, opinion pieces continue to chastise brands for failing to capture Generation Y's attention, while simultaneously offering advice on how to woo them back, typically involving a sycophantic ode to the value of endless drivel put out via social media.
I understand that Millennials are probably the most connected demographic, as they are 'always-on' with regards to handheld devices. They don't call them zombies for nothing. Therefore in theory it's possible to communicate directly with them or to work with people who can influence them. However, this foolishly presumes an interest in wine to start with. And brands should remember that a competing bottle, or category, or point of interest, is merely a swipe away.
Thankfully, although marketeers and columnists are obsessed with pandering to Millennials, the trade has successfully nurtured a strong relationship with the generation in the middle. There is more being done by buyers and sommeliers in engaging with Generation X, arguably wine's most important consumer group, than they are given credit for.
Millennials may become important wine consumers one day. But, as life expectancy rises and retirement becomes either a dream or an unsolicited eventuality, Generation Y should always take a back seat to their predecessors, at least for the time being.
No comments