Report from Lodi Grape Day: Wine Market Council Data Highlights Need to Adapt
March 05, 2020
According to Wine Market Council president Dale Stratton, a significant percentage of today’s regular wine consumers are also regular consumers across all major alcohol beverage categories. In addition, the wine industry needs more consumer information about health/wellness factors driving wine perception and consumption to properly market to today’s consumers. Stratton discussed current Wine Market Council data, research and insights in his talk, “Consumer Research in a Changing Winescape,” at the 68th annual Lodi Grape Day Feb. 25 in Lodi, California.
"The WMC receives good support from the Lodi region, and we're grateful for that," he said
Stratton is the newly named president of Wine Market Council, as of early February. He has served on its board of directors for many years and was board chair from 2015 to 2017. Stratton has 35 years of experience in the alcohol beverage industry, most recently as an independent consultant. He worked 22 years at E. & J. Gallo Winery in distributor management, account management and strategic insights. He later served as a vice president at Constellation Brands in commercial insights working across the company’s wine, beer and spirits divisions.
Wine Market Council (WMC) is a non-profit trade association established in 1994 and has been an industry leader in tracking wine consumption and market trends of U.S. adults. WMC members represent a diverse wine market community of growers, producers, importers, distributors, trade associations and affiliates.
Stratton listed several recent, ongoing and planned WMC consumer market research projects: packaging and consumption based on occasion, generational consumption changing trends, winery consumer experiences and direct-to-consumer trends, wine and wellness—what role wine plays in a healthy lifestyle, and packaging and bottle weight—what does the consumer think about it.
Providing context and an overview of current market trends, Stratton observed, “Going back over the last 15 years, the U.S. wine market has done well, but we’re starting to hit a lull. We need to take a step back and see what’s driving that, and then address that as an industry.” He said the spirits market category is growing and there is a divergence in consumer trends as spirits are growing and the wine market is getting softer.
Stratton provided the following breakdown on alcohol and wine drinking frequency among all U.S. consumers based on 2019 WMC consumer survey data:
- Non-alcohol beverage consumers = 25%
- High frequency wine drinkers (more than once per week) = 14%
- Occasional wine drinkers (2-3 times per month) = 25%
- Non-wine drinkers (prefer spirits and/or beer) = 26%
- Infrequent alcohol beverage consumers = 10%
Stratton said, “That 14% of high frequency wine drinkers is extremely important, they drive the market.” He provided data on changes in consumer frequency levels over the past 20 years. In 2000, 10% were high frequency and 15% were occasional. By 2010, high frequency had jumped to 20% and occasional were 14%.
Although the increase in occasional wine drinkers to 25% is positive, and perhaps an opportunity for sales growth, the WMC looked into reasons for the drop in high frequency wine drinkers and overall slowing of wine sales growth. Stratton showed the following breakdown of wine consumer drinking habits in relation to other alcohol beverage categories:
- Wine Only = 19%
- Wine and Beer = 19%
- Wine and Spirits = 18%
- Wine, Beer and Spirits = 44%
Stratton observed, “Today’s high frequency consumer is a total beverage alcohol consumer who drinks across all categories and occasions.” The high frequency wine drinker is also driving growth for categories such as whiskey, tequila and craft beer. Stratton said the spirits category is currently winning in sales growth compared with the wine and beer categories.
Wine consumers who are drinking less wine were asked why they are drinking less, and gave the following main reasons:
- Drinking less alcohol in general = 41%
- Health issues = 40%
- Prefer other alcohol beverages = 29%
Stratton attributed the first two above reasons to the “aging out” of older and baby boomer drinkers who are drinking less alcohol or leaving the market. The last category indicates a change to beverages that are lower in alcohol and perhaps perceived as healthier, lower calorie, or appropriate for more occasions such as hard seltzers and ciders. Stratton said, “We are definitely losing some occasions, and drinkers, to hard seltzers (notably White Claw) and other beverages.” He also noted that seltzers are showing less seasonality for consumption than what many would think. “This category is different than what we’ve dealt with in the past,” Stratton said, and could endure longer than other alcohol beverage products that have seen rapid market growth in the past.
Stratton showed reasons cited by people who don’t drink wine, or rarely drink wine, for two major age groups:
|Don’t like the taste||52%||34%|
|Hard to choose||28%||16%|
|Doesn’t fit personality||22%||20%|
Highlighting the obvious, Stratton said, “People consume a product because they like the taste.” The wine industry has opportunities to produce and sell products to a wider range of consumer taste profiles. In addition, changes in packaging to suit more consumer personalities and drinking occasions can also help grow sales in the wine category.
Stratton said the purpose of an upcoming WMC study is to show what role wine plays in the health and wellness category—such as, does wine have a negative perception or no perception? Stratton concluded, “The WMC will continue to do more research to understand what’s going on with consumers, get this information and results out to the industry, and help get wine back to a level of robust growth.”