Crystal Cameron-Schaad runs Crystal Palate Wine & Gourmet in Norfolk, Virginia. Her business is growing in space and offerings, and she says that her clientele includes a strong following of wine consumers 40 and under. “I believe the key to attracting the younger demographic is to create unique experiences and provide valuable information they can use in their everyday life,” says Cameron-Schaad.
According to the Silicon Valley Bank State of the US Wine Industry Report 2023, this population is a sore spot and has been for a while. Ron McMillan, author of the report, executive vice president, and founder of the bank’s wine division, writes, “We are improving engagement with 60- to 80-year-old consumers and losing the interest of the under-50 population.” The good news is that the 60+ crowd demonstrates a strong interest in spending money on wine. The bad news is that plenty of younger people view wine as their “parents’ alcoholic beverage but not their own,” according to the report.
Younger People Are Spending, But Not On Wine
There’s opportunity to attract younger people who do drink alcohol but choose beverages other than wine. But McMillian has noted for years that he’s concerned with the “lack of engagement and participation in the wine category by younger consumers in their prime spending years.” He says that analyst consensus is that the wine industry will have negative volume growth in 2023, which makes it even more important to corral those prime dollars.
So what’s the problem? Why aren’t younger people buying wine as much as older consumers? There are a few reasons, all of which seem to stem from a lack of curiosity from Gen Z, Millennial, and (to a degree) Gen X consumers. To churn up the type of interest needed to get these people to decide to drink alcohol and to choose wine as their beverage of choice, wineries have to compete in a staggeringly noisy sales arena where consumers are bombarded with sales messaging.
While cost is a typical factor in consumer spending, it’s not the only factor standing between younger generations and the wine industry. It’s not that this demographic won’t spend money on a bottle of wine, yet for many people under 60, this is not happening regularly. “Younger consumers have brought back a phenomenon we saw in the 1980s — opening wine only on special occasions or buying it for gifts,” writes McMillan. Additionally, these consumers put value alignment as a top priority, and for many, that means they are shopping for products that are crafted with integrity and deliver on health-related promises. While wine isn’t healthy, much of it is made by families that don’t put chemicals in the ground or the bottle. Many wineries are also philanthropic, care about their employees, and are important members of their community. All in all, wine should be a good fit for younger drinkers. So why aren’t they crowding around the tasting room or wine shop?
Identifying Messages That Matter
Perhaps the most narrative line from McMillian’s writing is this: “When we do market today, we are still largely selling ‘long warm days, cool nights and special soils.’ You know what I mean by that.” These factors are important, most would say integral, to the production of quality wine. And for decades, this style of storytelling warmed up the customer and helped with sales. But for many of today’s younger consumers, this is akin to telling them what machine was used to make their iPhones in the factory. For some people, this is truly fascinating information, but Apple doesn’t headline its marketing with these details. Apple hits the consumer first with how their product will improve the lives of people who use it — the features. And, to some degree, they do mention how their products are made but often to demonstrate an alignment with the values of their consumer — for example, an explanation about responsible sourcing of materials.
Some might say that a smartphone and a bottle of wine are apples to oranges, and they would be correct. But in many instances, the target audience for these products is the same, and if wineries want to sell their wine, they need to compete with many apples (pun intended) that make a lot of attractive noise. Meanwhile they must reassure their loyal customers in older demographics about the vineyards, soils, and more traditional messaging that demonstrates quality and stirs up curiosity within the demographic. Cameron-Schaad says that younger people want reliable information too, but that they seem less impressed with the classics and more intrigued with unique bottles and stories. “They are also more in tune with the quality proposition and the sustainability efforts of the producers,” she says. “They want to feel empowered to discuss the complex world of wine with their family, friends, and neighbors.”
But what about younger people who don’t feel empowered — don’t even care about wine — how can the wine businesses attract them in the first place? Like everything else, here’s where marketing and advertising come in. “What we as an industry are currently spending on advertising is embarrassingly low, at 5 percent of all alcohol beverage advertising spending,” writes McMillan. “And that 5 percent is our spending in a good year! It’s more often less than that.” He points out that the beer and spirits industries are in a different ballpark when it comes to ad spending. This hints that getting the message right is only one part of the problem — the larger challenge is getting the message in front of the right people.
“Younger wine drinkers are thirsting for information on how to entertain effortlessly whether it’s picking out a bottle for their guests at home or trying to impress colleagues at restaurants,” says Cameron-Schaad. While they aren’t necessarily looking to impress people with the price or reputation of the wine, everyone wants to elevate something they care about and took the time to select and share. There’s value in quality wines made by good people, and for decades American consumers have trusted that with little convincing. Now that wineries and wine brands understand there is a new playing field, it’s time to take advantage and potential new customers. McMillan puts it this way: the wine industry has to reveal common value points between changing generations and use those touchstones to get the word out and claim a larger share of the market. “We can produce wines as we always have,” says McMillian. “But we need to reflect the values of younger consumers in our branding and messaging.”