Younger drinkers know fewer wine regions and varietals than they did three years ago
January 18, 2019
Speakers on Thursday gave insights into the latest trends in the wine industry at Sonoma County Winegrowers' Dollars & Sense Conference.
Lulie Halstead, chief executive officer at London-based Wine Intelligence, was one of the presenters at Luther Burbank Center for the Arts in Santa Rosa.
She addressed a number of issues, including demographic trends among regular wine drinkers in the United States, where 21 percent of all wine drinkers are 65 or older. Three years ago, it was 16 percent.
The age profile of people who drink wine at least once a month is similar to the age profile of Americans generally, Halstead said.
Also, the number of wine drinkers 21 to 35 years old is decreasing, Halstead said. There were 7.5 million regular wine drinkers in that age group three years ago. There are now 6.5 million.
Younger drinkers now know fewer wine regions and varietals than drinkers their age did three years ago, Halstead said. Their confidence level about wine has decreased as well.
Millenials also like other alcohols such as craft beer, cocktails and spirits. “They’re more price conscious, and they’re moderating more in terms of their overall alcohol consumption,” Halstead added.
Halstead also addressed gender equilibrium in the wine world. Men, and US men in particular, are significantly more confident in their knowledge about wine even though their knowledge is actually the same as the women’s, she said.
Another trend, according to Halstead, is that consumers who say they enjoy trying new wines on a regular basis is decreasing while those who say they stick to what they know is increasing. “That doesn’t necessarily need to be a negative,” Halstead said. It’s just that US consumers know what they like because that’s what they are more familiar with, she said.
Also, a higher proportion of consumers of all age groups say they are buying California wine.
Generally, consumers “are not very good at remembering stuff anymore,” she said. They live in a world where they can look up information on their smart phone. It is not that consumers do not care about wine regions. “They do,” Halstead said. “They just can’t remember them as much because we’re now in a world where you don’t need to remember stuff.”
Napa and Sonoma, she said, buck the trend. They are gaining ground with wine consumers, Halstead said.
Consumers also think wine is more expensive even when it is not. As a result, the visual impact from the label and the bottle design have gained in importance.
Sustainability and accreditation do lead to “an uplift” on how much consumers are willing to pay for wine. “It has a positive impact,” Halstead said.
Glenn Proctor on Grape Supply
Another speaker, Glenn Proctor, partner at Ciatti, gave an update on the grape and bulk markets.
An estimated 4.3 million tons of wine grapes were harvested in the fall, according to Ciatti. The biggest crop until this year was 4.24 million tons in 2013, Proctor said.
About 252,000 tons were harvested in Sonoma. “I think that’s a conservative number,” Proctor said.
Buyer activity on the grape market has been extremely slow, he said. The bulk market has been slow as well.
“Sales are sluggish and buyers are cautious,” Proctor said. “And supply is more of a bad word today.”
Eric Hemer Gives Perspective from Southern-Glazer's
Eric Hemer, vice president, director of wine education, at Southern Glazer’s Wine and Spirits, gave an overview on the wine market trends.
All wine sales were up, driven by Cabernet Sauvignon, according Nielsen’s sales data. New Zealand’s Sauvignon Blanc, Italy’s Prosecco and France’s Rose sales are also thriving.
Southern Glazer’s sales in 45 markets grew by 6.1 percent in 2018. Of those, 64 percent were domestic wines, he said.
Sales have slowed down a little after steady growth over the past two decades, he said. “But our numbers are still growing,” Hemer said.
Other growing trends include alternative packaging such as can and keg wine.
Customers are requesting vegan wine, a category the company is now tracking. “People are concerned about additives,” Hemer said.
Alternative alcohol drinks such as cider is a concern.
“The one that really keeps us up at night is the legalization of recreational cannabis. There is a lot of talk out there in the market as to whether cannabis sales will take away from alcohol beverage sales,” Hemer said.
Direct-to-Consumer sales in 2016 totaled $2.6 billion, according to Southern Glazer’s. “Still a small portion of the market but that could change rapidly,” Hemer said. “Beverage alcohol is ripe for a disruptive competitor.”
The company sold 3.9 million cases last year of Sonoma appellated wines – about the same as the year before. A bright spot included the red blend category whose sales were up 49 percent.