Wine Intelligence investigates Generation Wine

Wine Intelligence research in four markets has shed some much-needed light on the habits and aspirations of consumers aged under 34.

We all know that people under 34 are skilled at watching TV, listening to music and updating their Facebook status all at the same time. But what about their attitudes towards wine?

The industry often talks about the importance of engaging with younger consumers, but sometimes lacks more than a superficial understanding of what motivates the demographic known as “the millennials”.

Wine Intelligence calculates that there are 6.5 million regular wine drinkers from this age group in the UK, compared to 15.5m in the US, 3.6m in Australia and 5m in Canada. Its research team has studied the habits of millennial wine drinkers in the markets it monitors around the world, and built up a detailed understanding of the way under-34s interact with the category.

At a seminar at the London International Wine Fair, chief executive Lulie Halstead warned delegates it was “very easy for us to arrive with our own set of prejudices” when analysing the behaviour of younger consumers. For example, it might be assumed that younger drinkers spend less than older consumers, but this is not the case.

“There are higher spenders per bottle,” Halstead said. “On average across all of these markets, and in each market, it’s consistent: the average bottle price for a millennial is higher than that of consumers from older age groups.

“Although they’re high spenders, that doesn’t mean they’re frivolous with their cash. They’re still value-conscious and price-conscious. The price must be reasonable, even though the price point will be higher.”

Typically, millennials are somewhat self-conscious about their lack of wine expertise, and often select expensive wines as a means of overriding this absence of knowledge. “It’s interesting: they’re spending more on a bottle, but they’re not yet as engaged as drinkers from other generations, so they’re using price as this proxy for quality,” said Halstead.

Low involvement with wine is perhaps only to be expected from relative newcomers to the category, but younger drinkers in the US are the exception to the rule. “Here we find millennials are more engaged with wine than their counterparts in other countries – and they actually represent the most involved consumers in that marketplace,” Halstead reported.

The US is also the only market where the gender split between millennial wine drinkers is evenly balanced. In most markets, Halstead said, there is a bias towards females.

Red wine is more popular with millennial consumers in the US and Canada, while white and rosé wines have most appeal in the UK and Australia. Interestingly, younger drinkers perceive colours very differently: white is associated with the outdoor lifestyle and is seen as upbeat and flamboyant, while red wine exudes sophistication and authenticity.

“For millennials red and white wines are not interchangeable,” Halstead said. “For these consumers these are different beverages. It’s beer; it’s gin; it’s a cocktail; it’s red wine; it’s vodka; it’s white wine.”

This could have implications for the way wine marketers create their brands. “Do you need the matching pair of red and white? Should they be in the same brand portfolio if you’re targeting these consumers and they’re reacting to these wines in very different ways?”

Unlike previous generations, millennials typically have strong bonds with parents and are often influenced in some way by their wine-drinking behaviour.

“We’re finding out that tradition, heritage, provenance and what their parents drank are some of the key cues for these consumers,” Halstead said.

“French wine is ‘the’ wine as far as they’re concerned, particularly if they’re buying it to give to others or serving it in a formal environment. French wine equals proper wine. They feel that France is giving them the sophistication they want from wine, and particularly red wine. Millennials feel that traditional wine, ie French wine, is what appeals to them most when they’re trading up or looking for more sophisticated wine.”

Yet typically, she added, “millennials quite like to defer the decision making about wine if they can to other people. If there’s someone else around that they trust they’re much happier with them making a decision on their behalf. They’re keen on recommendations, but they’re a bit embarrassed in many cases to ask for recommendations because they might not understand what they’re being told.”

Through online surveys and discussion groups, Wine Intelligence has found that the main buying cues for millennials are, in order, recommendations from friends or family; grape variety; the promotional offer (particularly in the UK); brand awareness, and country of origin.

Social networking plays a limited role in the way younger consumers learn about wine: as far as they’re concerned, Facebook is for socialising, not for education or marketing.

Research shows that wine bloggers also pass this age group by, and iPhone apps with wine themes also leave them a little underwhelmed at present. The group is particularly sensitive to being hoodwinked by marketing, and quick to expose any corporate untruths.

Packaging design is also a key influence, but it’s not necessarily the funky, vibrant labels that impress millennials. More traditional labels offer reassurance and convey a quality message, according to Wine Intelligence’s studies with wine consumers under 34.

Overall, millennials are frustrated by their own lack of wine knowledge – though perhaps not to the extent, in most markets, that they want to actively do something about this. Instead, they would like to see more help provided by on and off-premise retailers to make their selection easier, and maybe more adventurous. Because millennials, for all their thirst for new technology and new experiences, tend to have relatively small wine repertoires.

“There is still limited experimentation,” said Halstead. “They often revert to previous experience. The default setting is to go for something they recognise.

“They’re eager to learn. We need to reassure them and make them feel more comfortable with the wine category.”

Graham Holter, 02.06.2010