Wine battles to reach younger drinkers

A younger, wine savvy generation is driving an upmarket shift in wine consumption, but many producers are struggling to reach them, claims a new report.

Rabobank’s “Premium wine – It’s a long way to the top” identifies “a growing appetite for wines beyond the mainstream,” thanks largely to demand from Millennial and the preceding Generation X consumers.

Despite this thirst, the report notes that smaller wine producers are having to explore alternative routes to this quality-focused customer base.

Rabobank senior analyst and report co-author Marc Soccio commented: “As the high-volume grocery retail channel in particular is becoming the realm of bigger brands and suppliers, smaller brands have little choice but to seek new ways to connect with the pockets of consumers looking to head upmarket.”

As a result of this route to market obstacle, he remarked: “Somewhat paradoxically, the markets are still seeing many premium wine producers struggling for growth and profitability as their capacity to reach out to modern-day consumers has become more limited.”

Pointing to the US and Canada as countries where this premium shift is particularly apparent, Soccio also highlighted the rise of “some premium-focused emerging markets, such as China,” which has ”played a key role in stimulating global demand for more premium – mostly red – wines, as rising incomes and exposure to western cultural norms have taken effect.”

While noting that “ the fervour and disposition for more premium foreign wines has begun to wane in recent times,” Soccio nevertheless compared the current situation favourably to recent history, observing: “the market for these wines still accounts for a significant component of global demand that hardly existed only a decade ago.”