Are We Prematurely Panicking about Selling Wine to Millennials?

millennialsThe Internet is abuzz with discussions about the latest report from Rob McMillan of the Silicon Valley Bank on the current financial state of the wine industry. According to the most recent data, baby boomers are aging out of the wine market and millennials, short of cash and more focused on cannabis, cocktails and beer, aren’t picking up the slack. The result is slowing growth rates for wine consumption in the U.S. The worry is that millennials (age 22-37) are turned off by wine and its sometimes stuffy image signaling a long-term trend that will harm the industry.

No doubt wineries face an immediate problem if consumption is slowing. But I’m wondering if it is realistic to expect millennial consumption to be the solution.

I doubt that wine has ever been the drink of choice for most young people. It’s expensive and less efficient as an alcoholic delivery system than beer or spirits. Cheap wine is one dimensional and not very interesting. Yet appreciation of better quality wines is not only expensive but requires some experience, education and appreciation of nuance. Wine’s charms are often best appreciated with fine food consumed at a slower pace, and it’s a symbol of the good life and for some people elevated social status.  In other words, the wine experience is more likely to appeal to people as they mature.

This is not to say that wine can’t appeal to young people. Only that as a statistical generalization it is less likely to appeal to them. The median age of the millennial cohort is about  29 years old. That’s a bit young to be jumping wholeheartedly into wine.

The wine industry for the past few decades has enjoyed rapid growth largely supported by baby boomers. Yet the baby boomer generation got a late start in appreciating wine. I didn’t have a lot of time to dig for data today so I couldn’t find an analysis of how much wine was consumed by baby boomers when their median age was 29. Buy I’m quite sure their consumption was meager.

The baby boom generation today is aged 54-72 so they were born between 1947 and 1965. The median boomer was born in 1956 and so she was 29 years old in 1985. It is highly unlikely that 29 year old was supping much Chardonnay.

Why? Well, we know that in the 1980’s alcohol consumption, including consumption of wine, was plummeting. These were the Reagan years, “Just Say No to Drugs” was  the message, and hedonism wasn’t on the table. All of that changed in 1991 when 60 Minutes aired an episode on the French paradox—the French were notorious wine drinkers with a diet high in fat and cholesterol yet they enjoyed low rates of coronary disease. The hypothesis was that red wine was the source of their good health. (It probably wasn’t the cause but it was a good story)

As you might imagine, the French wine industry promoted the hell out of this story, rates of wine consumption skyrocketed even while alcohol consumption continued to diminish, and the rest as they say is history. Obviously, we cannot draw secure conclusions from one historical case. But it does show that 29 year old behavior is not destiny. The boomers were late to the party but when they arrived it became a celebration.

What seems stuffy at 29 can seem exciting at 35. When I was 29 I believed you couldn’t trust anyone over 30. It’s funny how that changed overnight.

There is little reason to think millennials–who after all pursue experiences rather than things, love to travel, and have already shown an interest in authentic food–will not embrace wine when they become more settled. That is, unless the neo-prohibitionists persuade them otherwise.

 

2 comments

  1. Dwight, thanks for continuing the discussion. Is it too early to panic? Yes. But we should be concerned and as producers, take appropriate action.

    While I’ve thought the young consumer will evolve to wine, their delay in making any significant change into the category when the outer edge of the cohort is 38 doesn’t make line up with prior generations that were definitely engaged by now.

    I personally watched the engagement with GenX and its not happening the same way here. Interestingly Wine Intelligence just released their annual US Report, and came to the same conclusion about the young consumer.

    Now we could just pull the blankets over our heads and wake up in 5 years and see if its better. I did call for millennials to take over as lead consumers in 2026 so that’s my guess/hope too, but with sagging sales growth and defined reasons for them staying away from wine today – we can’t wait for that day and hope.

    As I often say, “Hope is not a strategy.”

    Thanks for writing on this important topic!

    1. Hi Rob,
      Thanks for reading. Your point about the leading edge of the millennial generation is interesting and troubling. As I noted, I didn’t have reliable stats regarding earlier generations and when they amped up their wine engagement. Hopefully, it’s a matter of limited income rather than lack of interest and their engagement will increase along with their incomes. But a strategy for engaging them is surely needed.

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