- Wine Access claims “Millennials Plan to Spend More Money on Wine than Any Other Age Group.” I hope they have a plan to get money when robots take their jobs.
- Are you planning a European vacation this summer? Do you want to restock your cellar with Burgundy and Bordeaux? The U.S. dollar is tanking in Europe. The Euro has gained about 18% in the past year. More reason to buy local.
- This will have to end sometime. “ Pinot Noir overtook Red Blends as the second most common varietal shipped. [Direct-to-Consumer sales only] Two of the most important wines to the DtC channel, Cabernet Sauvignon shipments increased 16% in volume and 18% in value, and Pinot Noir shipments increased 15% in volume and 16% in value. Together, these two wines accounted for over 45% of the value of all shipments from wineries to consumers.” The more Pinot we drink the harder it is to keep up with demand, the more marginal vineyard sites are planted with Pinot. The more swill they make. With all the interesting wines out there at smaller wineries why do we always drink the same stuff?
- They’re coming for your favorite bottle. “In the mid-2000s, Constellation Brands purchased brands that sold $7 to $9 a bottle, according to Zepponi. The company’s more recent acquisitions include labels such as The Prisoner Wine Co. and Meiomi that sell $20+ bottles.”
Well this is interesting. Wineries have been fretting for years about the competition from craft beer especially with respect to millennials. But, as reported by CNBC, the investment firm Goldman-Sachs has downgraded Boston Beer Company and Constellation Brands because millenials aren’t buying what they’re selling.
“We view the shift in penetration and consumption trends as driven by a shift in preferences in the younger cohorts,” added Zhuo. “The youngest demographic (<35 year olds) overall penetration rates are not increasing. The 35-44 year old cohort shows a shift away from Beer to Wine & Spirits.”
I wonder why? Might it be because craft beer increasingly tends to taste like grapefruit juice? (Sorry IPA fans but let’s be honest.)
But another reason might be the one I wrote about on Monday. Industry consolidation is putting pressure on the craft beer market. With 5 companies tallying 80% of the beer sales in the U.S., and trying to market their swill as craft beer, the whole craft beer movement is losing its credibility and cachet.
If there is a single thing millennials want it’s authenticity—a real connection with the people who produce their consumables and a real distinction between products that is more than marketing hype. They’re not getting that from “big beer” so they find something else to drink.
Of course, the wine industry is suffering from consolidation and homogenization as well but apparently the roughly 9000 wineries in the U.S. that are not controlled by “big wine” are having some success persuading consumers there is something distinctive about their product.
For those of us partial to small, independent wineries that is good news.