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Measuring Wine's Apathy Problem

O'Neill winery presents deep dive into on-premise consumer attitudes
by Jim Gordon
October 04, 2019

Napa, Calif. -- Wine has an apathy problem in restaurants. Only 31 percent of diners order wine first when they sit down for a meal, while the rest choose beer or spirits to get things rolling. This preference is even more pronounced in the mere 17 percent dollar share of market that wine commands in off-premise accounts nationwide, according to Nielsen.

A major California winery dug up several reasons for this apathy and some potential solutions through its own data gathering.

Alex Kessler, consumer insights and business intelligence manager for O'Neill Vintners & Distillers, told the audience at this week's Wine Industry Technology Symposium in Napa that the top reasons for choosing wine last are: Wine is expensive, people prefer the cocktail experience, and wine is intimidating.

On-premise Data is Sparse

O'Neill is the country's 26th largest-volume wine producer, according to Wines Vines Analytics, and Kessler said 99 percent of its business is conducted through the three-tier system.

Typically wineries have much more data on their direct-to-consumer customers than their on- and off-premise customers. And they have more thorough sources, such as IRI and Nielsen, for off-premise data than for on-premise.

"Distributors have great data of their own but they don't share with us," Kessler said. "It's the silo effect that you often hear about, so we need our own data if we want to talk to our consumers effectively."

O'Neill commissioned its own survey of 3,500 legal drinking age adults, and Kessler presented the results along with pertinent numbers from other sources in a session Oct. 1 on "Understanding and Using Consumer Data."

He pointed out how important on-premise sales are to wineries by noting that 82 percent of cases are sold off-premise, but 58 percent of dollars are collected on-premise, according to the Beverage Information Group.

The good news is that 63 percent of regular wine drinkers dine out on a weekly basis, so it's an opportunity to reach consumers in an environment that's much less saturated with brand competition than in stores.

Even 30 percent of supposedly cash-strapped Millennials dine out multiple times a week and are now claiming the largest share of wine value consumption, according to the O'Neill survey.

Who Wants to Look Cheap?

The high price of a glass of wine compared to many beers and cocktails dissuades many consumers, but they don't want to look cheap when they do order wine. Sixty-three percent of survey respondents said the middle-priced wine should be a safe choice. Millennial consumers were the most likely age group to say that on-premise wine prices are approachable.

Kessler highlighted wine-on-tap as a virtually un-tapped opportunity despite its rapid growth. Awareness of kegged wines was 62 percent among the regular wine drinkers surveyed and 60 percent of consumers said they want to see their favorite brands on tap.

Further, when told about the freshness and environmental advantages of wine on tap, 47 percent of set-in-their-ways Boomer respondents said they would try wine on tap.

Three Ways to Boost Wine Orders

Kessler offered three ways to address the low status of wine as the first beverage to be ordered. Wineries should develop strong brand stories and offer kegs if they're not already. For his third recommendation, he, somewhat apologetically, recommended wine-crafted cocktails.

Karen Daenen of Jackson Family Wines and A. J. Resnick of Wine Access, the online store, were also presenters in this session. Daenen suggested that focus groups, in-depth phone interviews and shop-alongs are other good ways to understand wine consumers. Reznick explained that WineAccess collects a wealth of its own information by tracking its customers purchases and analyzes that to a minute degree to refine its email offers.

Wine Business Monthly produced the symposium along with the co-scheduled Wine Industry Financial Symposium at the Culinary Institute of America at Copia.

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