As millennials advance into their drinking years and artisan beer, cider and spirits continue to impact alcohol beverage sales, the wine industry would do well to rethink a business-as-usual operating strategy.
This comes from those who have a sharp eye on a swiftly changing market, including Dr. Damien Wilson, the inaugural Hamel Family Chair of Wine Education at Sonoma State University’s Wine Business Institute.
Wilson, who has more than 20 years experience in the wine industry from Australia, France and now the U.S., says that even though wine consumption is brisk throughout California and beyond, it’s good for the industry to be “a little bit worried” about the future.
“The wine sector works in cycles,” Wilson notes. “The value of (U.S.) wine exports is currently on par with that of France ($5.42/Litre v $5.46/Litre, respectively). The increase in perceived value of American wine continues and there are more wine consumers than ever before … but there’s good reason to have skepticism.”
Wilson believes that the current success of wine consumption and sales is due largely to a baby-boomer market that consumes a lot of wine and is willing to pay top dollar for the privilege.
“As baby boomers die off and move into retirement, we’ll have to refresh the market,” Wilson states bluntly. “If new consumers find something else of interest, they’ll follow that.”
Wilson is referring to the advance of the millennials, who often have neither the discretionary income nor the brand loyalty marked by many of their predecessors.
“Millennials are an incredibly curious group … utterly fascinated by the diversity of everything around them,” Wilson observes. “We’re constantly needing to find ways to keep them engaged … it’s a natural part of their upbringing to explore new cultures, new parts of the world, and new beverages.”
Wilson warns there’s a danger that the millennial market may perceive some premium wines as too “elitist,” and therefore find them off-putting. He’s a supporter of serving wine alongside other beverages, a concept he calls “beverage cross pollination.”
“People come in for a beer, and wine is there, and then there’s a recommendation, as friends say to one another, ‘you should try this.’ That’s cross pollination,” he explains. “Wine can become less alienating, more friendly. We need to manage that image very carefully.”
Along the lines of becoming friendlier, Wilson also ponders the lack of winery facilities for increasing numbers of visitors with families.
“My kids would rail at the idea of visiting a winery; there’s nothing at all there for them to do,” he points out. “Wineries need to reconsider their role as tourist appeals and entertainers for families, instead of focusing on parading their state-of-the-art pneumatic press. The wine sector needs to think a little bit outside the square.”
At the upcoming North Coast Wine Industry Expo on December 3rd in Santa Rosa, CA, Wilson will be moderating the kickoff conference session called “State of the North Coast Wine Industry: Presented by SSU Wine Business Institute.”
The session will focus on a review of the current year and what to expect in 2016, including the future impacts of craft beer, cider, spirits and the possible legalization of marijuana.
Wilson will be joined by panelists Ron Lindenbusch, the Chief Marketing Officer for Lagunitas Brewing Company; Ryan O’Connell, French-American Winemaking Prodigy for Naked Wines; and Eric Thompson, VP of Global Marketing for US Brands with Pernod-Ricard, Kenwood.