Millennial Wave Hits Wine

Those of us in higher education were among the first to notice Millennials were different from other generations. Then it was politicians. Now managers, recruiters and HR professionals are scrambling to adjust. What's next? Most likely food and wine marketers.

Millennials are discovering wine in record numbers. Domestic wine volume increased 11% between 2003 and 2007, and imported wine volume increased 27%. According to the Wine Council, Millennials accounted for 46% of the growth (see chart). Savvy wine marketers are aware of the sea change and, excuse my torture of the metaphor, are preparing for what is shaping up to be a tsunami of wine drinking.

Those reading along with me over the past year, already know that Millennials' love of wine is unique to the U.S. - in fact, French Millennials are forgoing wine. You will also know that it is part of a larger affinity for gourmet, premium and imported food and drink in general.

But what do we know about Millennial wine drinkers, and especially about enthusiasts that can help wine marketers?

First, wine drinking appears to start in earnest as Millennials graduate from college and start careers. Incidence of wine drinking increases from 23% among 21-24 year olds to 32% among 25-34 year olds (Mintel, Oct 08), approximately the same as adults in general (35%). However, the wine preferences, attitudes and behavior of Millennials are quite different. They are more sophisticated in their preferences, and more willing to spend to indulgence their preferences.

* Millennials who drink wine are twice as likely to belong to a wine club (20%) and to drink at wine bars in the past three months (38%) than older groups, (Wine Council).

* Forty-one percent of Millennials who drink wine say they drink imported wine most often vs. only 24% of Boomers and 31% of Gen X'ers. For example 31% of Millennials have drunk a wine from NZ, compared to only 15% of Gen X'ers (Wine Council).

* Millennials are much more likely to purchase their wine at a winery (33%), specialty liquor store (40%) or gourmet food store (20%). (Mintel)

* Millennials say they spend about $10 more per bottle than average across a wide variety of wine buying occasions. For example, Millennials say they would spend $40 on a bottle of wine for a special occasion compared to just $24 for all adults. (Mintel)

* Forty percent of 25-34 year olds agree that more expensive wine tastes better compared to 31% of adults on average. (Mintel)

* Millennials' criteria in wine selection tends to favor more familiar wines and wines with fun, casual names. (Mintel)

These facts don't completely relate the sheer enthusiasm of young drinkers for wine. They see wine as part of their move into adult life. It is a passion that drives them to look for new ideas and authentic experiences. For example, here is a comment left by Therese on this blog:

Really enjoyed this. I'd have to say that especially as a millennial, drinking wine is also about the experience. This helps explain why I LOVE and other "millenniels" LOVE drinking imported wine. What better way to escape from stress than to sit outside with friends drinking a Spanish Rioja, eating tapas and discussing life's little pleasures?

For wine marketers, the biggest adjustment will be learning work with younger drinkers' high degree of connectedness. Millennials are naturally social. They share their interests in everything from music to philanthropy through social networks, and it looks as if wine will soon be getting the same treatment. Twitter tasting networks and Millennial wine blogs are appearing almost daily. I have already mentioned the Millennier and Just yesterday, Yvette launched her new blog, millennialtastelive, with this introduction and an invitation to all Millennials to share their love of food and wine.

While researching popular wine groups, I found they were heavily slanted toward the more mature wine consuming demographic, particularly the group Twitter Taste Live, now Taste Live! Wine is popular among Millennials for three reasons: Wine is a social drink and Millennials are arguably the Social Generation There is so much variety in wine and Millennials tend to be attracted to constant change: "What's new?" "What's hot?" and "What's different?" And simply: Wine tastes good! It is my hope that this blog and Twitter Feed helps 20 and 30 somethings connect with one another to share our common bond of love of wine and propensity for social networking for the pure FUN of it MINUS the snobby elitest crap.

Efforts to engage this group will need to go well beyond the traditional web site. They are looking for wine knowledge and experiences and ways of sharing them with their friends. Marketers will need to explore leveraging existing networks, such as the 45,000 member online group, Womenwine, or creating new ones. Millennials want social currency they can 'spend' - and savvy wine marketers will be there to provide it.

Perfect Pairing: Social Media and Millennial Wine Enthusiasts

Social media creates communities of interest, so what could be more natural than reaching young wine enthusiasts through Twitter? Wine is inherently social - you drink it with other people. It's also inherently discussable and recommendations are a form of social currency.

Given the affinities, it's no great surprise that it's pretty easy to find young wine marketers on Twitter. Yesterday I spoke with Shana Ray (@sharayray), an ex-ad agency strategic planning professional and social media strategist who works with the Sonoma County Tourism Bureau to help wineries with their social media strategies. Shana says there is a lot of interest in Millennials among wine marketers. She is considering doing some of her own ethnographic research to help them get insight into young wine enthusiasts.

Other fascinating Millennial wine marketers I've friended online include Sasha Kadey, (@skadey, King Estate Winery), and Leah Hennessey (@millennier).

Most of the tweeting is around books, wine news, wines tasted. But there has already been at least one real time 'Twitter wine tastings', sponsored by Project Vino. (This technique was first used by bloggers has been going strong for over a year at WinebloggingWednesday.org).

As more Millennials join Twitter, I suspect wine marketers will be among the first to engage them with real social currency -- knowledge of and news of wine, where to find it, and connections to real wine authorities. What makes these conversations so powerful is that they can happen right in the store or restaurant. Mike McGowan, aka @WineGuyMike is creating in-store kiosks and a few months ago I blogged about Drync Wine, a cool mobile app for easy access to wine recommendations. Mintel data suggests that it will be worth the effort: adults 18-24 are more likely than average to say they 'stick with the brands they know' and more decided based on brand than on price.

Millennials' love affair with wine is part of a larger relationship wtih gourmet foods. Millennials think of food and wine as an 'art form', and eating and drinking with discrimination as another means of self-expression. Although it may seem counter intuitive, a love for gourmet actually decreases with age. 22% of young people 18-24 agree with the statement "I try to eat gourmet food whenever I can", a figure that is 20% higher than that of all U.S. adults. Their love of fine food extends to wine. Unlike French Millennials, young adults in North America are increasing their wine consumption. A Gen Y blogger who calls himself 'The VinoBandito' describes the appeal this way:

I’d like to let you in on a little secret about young people. Just around the time we reach legal drinking age we also start to have a desire for sophistication or a desire to be seen as an adult. We’ve done a lot of moving on from our teenage years and, contrary to popular belief, the majority of us are not a bunch of binge drinking, hard partying, pierced, and tattooed hooligans as we are portrayed in the press. The majority of young people today are smart, ambitious, inquisitive, and above all we’re sophisticated and discerning consumers (even if we’re not yet, we like to think so). This is where wine can compete. Make us feel sophisticated, after all this is one of the ways it is marketed to adults. Wine is a complex and beautiful drink with a great history and a great culture. This is something a lot of the Millennial Generation would love to learn about but the marketers don’t think we want to learn the story. Sure we have our idiosyncrasies and like cool stores, but most of all we want to be treated like the adults that we are.

Fussy Drinkers? Wine Brands Matter to Millennials

Wine drinking is exploding in the U.S., driven by lower prices and increased interest on the part of Millenials (see earlier blogpost). Total inflation adjusted sales of wine in the U.S. have increased 20% over the past five years and are expected to growth another 16% in the next five years (Mintel, 2008). Wine outpaced every other non-water beverage category 2005-2007, including beer, although distilled spirits comes close in rate of growth.

So how do Millennials choose a wine? Surprise! Brand names in wine mean more to Millennials than to older wine drinkers. While the 'animal names' may not work with older wine drinkers, popular and memorable names like Yellow Tail can mean a lot to a Millennial. According to Mintel, 29% of 21-24 year olds and 31% of 25-34 year olds say "I prefer wines with casual and fun names such as Red Bicyclette, Three Blind Moose, compared to old-school names such as Bordeaux or Beaujolais." This compares to just 18% for all adults. They are also more brand loyal. Millennials are much more likely than other adults to agree with the statement 'I stick to (wine) brands I know'. The % of 21-24 year olds who say they decide based on brand (55%) is higher than the number who say they decide by price (48%). (See table above).

Millennials' emphasis on brands helps explain the success of a new mobile phone app, Drync-wine. Launched originally in November, last week Drync added an iPhone application with the explicit goal of reaching "70 million tech-savvy Millennials, the fastest growing segment of the wine industry." Here's how they explain how it works:

Drync, LLC today announced the release of Drync-Wine, simplifying the way people research, remember, share, and purchase wine using their mobile device. Built initially for the iPhone, Drync-Wine is the only mobile wine application that scours multiple databases of nearly a million wine listings in real time to identify the exact wine a user is drinking. Perfect for the wine novice and connoisseur alike, Drync-Wine delivers expert reviews, ratings, descriptions, and pricing. Users may snap a photo of the label, save the wine to their own virtual wine cellar, add their own tasting notes, and even purchase the wine all from their mobile phone.

A million wine listings? With that many brands to choose from, this category seems perfect for social networking. Community features allow users to share wine information among friends. Future upgrades "enhanced community features such as twitter integration, enhanced sort and filtering of cellar data and wine recommendations." Sounds smart to me. Click here to learn more from Drync's blog.

Millennial Spirits: Make Mine Sophisticated

My Millennial friends tell me they are more likely these days to open a bottle of wine with friends than a six pack of beer. The data suggests they are right on trend. Overall, sales gains for wine and spirits are outpacing beer. And within the beer category, growth in imports and microbrews is outpacing regular beer. This trend, like so many, appears to reflect a growing sophistication in the tastes of young drinkers.

In June, Mintel released two new reports, one on drinking at home and another on drinking away from home. Both reports show similar trends by age: young people are increasingly opting for wine and vodka over beer. 32% of 21-25 year olds say they are 'drinking more liquor/spirits than last year'. The average number of microbrewed beers drunk by 21-24 year old microbrew drinkers increased from 3.0 in 2005 to 3.8 in 2007. And a full 38% of 21-24 year old drinkers say vodka is their top spirits choice in a restaurant or bar.

Diageo, a close watcher of Millennial trends, is among the first to really capitalize on the sophisticated appeal of vodka. Today, a new campaign is breaking for their new ultra premium vodka, Ciroq. Here's what Mediapost says about the new campaign, called "The Art of Celebration" featuring Sean "Diddy" Combs:

"Shot in black and white at one of Sinatra's former California homes, the 15- and 30-second commercials depict Combs as a high-spirited host amidst a chic crowd during an impromptu private house party. Combs is serving Cîroc, one of the world's only vodkas made from grapes, while engaging with his modern-day "Rat Pack" entourage. Sinatra, along with Dean Martin, Peter Lawford, Joey Bishop and Sammy Davis Jr., were the original packers. In the spots, Combs mingles, dances and jokes during the intimate party, before finally stealing a private moment to gaze into the night as the crowd enjoys a fun-filled evening inside. The spot represents a continuation of the brand's commitment to defining "sophisticated celebration"--a concept Combs embodies and cultivates both personally and professionally as a lifestyle and entertainment icon. During the holiday season, the campaign will evolve to focus on safety."

The combination of high style, celebrity and music is likely to appeal to Millennials, who are most likely less interested in 'luxury' than in what wine Fat Bastard calls 'Livin' Large'. As we have noted before, Millennials do not think of themselves as well-off, despite their relatively high disposable incomes. They do, however, see themselves as discerning consumers who value authenticity and quality. This campaign seems to hit the mark in both respects.

Millennial Target: Fat Bastard

With their above average earnings and sophisticated tastes, Millennials are an untapped market for 'luxury' goods -- you just can't call them luxuries. French Millennials are forgoing wine; U.S. Millennials are embracing it in large numbers. According to Nielsen, beer drinking among 21-30 year olds dropped 12 percentage points in the last 10 years, twice as much as those over 30. (Beer still accounts for 83% of Gen Y alcoholic beverage purchases, so don’t expect Beer Pong to lose popularity anytime soon.) Why are Millennials embracing wine? Well, it’s not because its hip or cool – wine is considered too elite to be cool. The answer is that Millennials have sophisticated tastes, a function of early exposure to the finer things in life by their boomer parents. (Most Millennials who like wine say they were introduced to it by their parents).

This is a huge opportunity for winemakers, and Fat Bastard is among the first to jump on it. Their irreverent web site does its best to take out the mystery and put in the fun:

The theme, “Are you Livin’ Large?”, strikes just the right note of luxury that doesn't take itself too seriously. The fifties motif gives the site a retro feel.

The 'hippo' logo is enough of an non-sequitur that it works to heighten the sense of whimsy; this is a wine brand that doesn't take itself too seriously. The hippo logo is nice extended into 'Hippo Couture' t-shirts and 'Hippo Culture'.

The site provides many opportunities to engage: a short fun survey, an invitation to 'share your story' and a contest to design a summer t-shirt. The tone is light and witty: "Tell us how you have reveled and regaled friends and family with the Fat bastard. Send photos of you and your fellow partygoers, enjoying Fat bastard in any lively (and legal!) scenario. Share with us your thoughts and impressions of the Fat bastard."

There is the obligatory advice on food pairings, recipe ideas and restaurant recommendations.

There's even a nice Breast Cancer cause marketing effort with $.25 donated for each bottle sold.

Above all, the site gives us a plausible back story for the product as well as the implausible brand name:

Thierry Boudinaud, a renowned winemaker who had crafted wines from California to France, from Chile to South Africa was sitting in a cold damp wine cellar one winter day when the door burst open. It was Guy Anderson his dear friend from London who had just arrived to sample the recent vintage. “It’s cold enough to freeze the balls of a brass monkey” Guy was a rebel in the wine industry believing that quality was paramount in a wine but that the average consumer hated the traditional intimidation heaped on them by most of the wine industry..... Thierry thought he would have Guy try an experimental wine he had in a few barrels in the back of the cellar. “Dis is a experiment wine we left it on de lees. We try it no?” “Sure Thierry, you know how hard it is to get me to try a new wine.” Both friends had no idea that leaving the wine in barrel on the lees (yeast cells) would result is such a dramatic difference from the wine they tried the day before. It had a wonderful color and rich, round palate. Both men stood and stared at each other for what seemed like five minutes until Thierry exclaimed “now zat iz what you call eh phet bast-ard” Guy laughed with a belly laugh you could clearly hear in the neighboring town. He had used the expression Fat bastard often to describe things that were great but hearing it in a French accent made it so much funnier.

Millennials: Six Surprising Facts

After three months of blogging about Millennials, it seems appropriate to ask what have we learned about them that differs from common wisdom? While we agree with many of the mainstream conclusions about Millennials - they are more collaborative, tech savvy, ambitious and self-confident than previous generations, I would like to take moment to challenge a few 'myths'.

1. Millennials are cash strapped and debt ridden. (5.22.08) In 2006, households headed by 18-24 year olds had earnings before taxes of nearly $29,057, up from just $20,120 in 2003. Their earnings grew 7.5% 2005-2006 alone compared to a 1.1% jump for total households. While that is not a whopping salary, consider that less than 10% of 18-24 year old men are married, 50%live with the parents. This may help to explain why, according to the BLS, they are heavy spenders in virtually every category other than food and housing. Within many of these categories, they are more likely to purchase the luxury brand, like imported or craft beer, rather than the mainstream brand.

2. Millennials and Boomers make good partners. (5.19.08) While it's true Millennials enjoy stronger relationships with their (mostly Boomer) parents than most other generations, they prefer working with Gen X'ers who they believe have more to teach them in the workplace. In fact, our research shows that Millennials have little respect for tech-challenged Boomers. Perhaps Hogwarts provides a good metaphor; in the Harry Potter books, the kids are the crusading and effective wizards, while the professors seem a little behind the times and inept.

3. The way to reach Millennials is through social media like Facebook. (5.19.08) Social media is more social than media. Millennials do not use social media to shape their buying and tend to ignore commercial messages. MySpace and Facebook lowered their sales goals by 11 and 13 percent respectively. EMarketer has also lowered its forecast for social media ad spending by 12%. Much more experimentation will be needed to bring brands directly into the application experience rather than relegate them to a banner or group, such as Slide's branded 'SuperPokes'.

4. Millennials are no more socially liberally than other generations. (5.29.08) According to Pew (2007), each generation tends to be more liberal than its predecssors, but Millennials are even more socially liberal than Boomers were at a similar age. On Super Tuesday, 58% of younger voters self-identified themselves as 'Liberal'. This is happy news for Brand Obama.

5. Millennials are drinking more beer compared to earlier generations of young drinkers. (5.26.08) Not true! According to Nielsen, U.S. 21-30 year olds are forgoing beer in favor of wine, with beer dropping 12 percentage points in this age cohort over the past 10 years compared to a 6 percentage point drop among over 30's. Instead, Millennials are embracing the wine culture in record numbers. This contrasts with France, where Millennials are losing interest in wine. Mon Dieu!

6. Millennials are cynical and mistrusting of institutions. (5.21.08, 6.04.08) According to Pew, Millennials put more faith in government and business institutions. Their faith in business is growing, while that of other cohorts is decreasing. The gap is even more pronounced when it comes to government effectiveness.

7. The Ultimate Millennial personna is an entrepreneur. (5.12.08) This is more true of Gen X'ers than Millennials, who tend to be more idealistic. Their goal is to 'make a difference' as well as be successful. Clues to the Millennial Persona may be found in some of the TV shows they watched growing up. There are a remarkable number of fifties style through backs and 'princesses' where the kids are smart, gifted, special and uniquely successful - Lion Witch and Wardrobe, Nancy Drew, High School Musical. There are also a surprising number of 'princesses' and average kids by day who become rock n roll stars by night.

Changing Spirits of the Times

In an earlier posting, I noted French Millennials are forgoing wine, Mon Dieu! Now Nielsen is reporting U.S. Millennials are forgoing beer in favor of wine. Shocking but true, beer drinking among 21-30 year olds dropped 12 percentage points in the last 10 years. For comparison, over thirty's beer consumption dropped just 6 percentage points. According to Nielsen, most of the 'slack' is being picked up, you guessed it, wine! (Before we get too carried away with this insight, Nielsen also points out that beer still accounts for 83% of Gen Y alcoholic beverage purchases.) Research by Gallup and another study by the industry group, Wine Market Council, confirm the trend. The Boston Globe speculates that "Millennials have the potential to become the next generation to embrace wine in numbers not seen since the baby boomers."
What does this trend tell us about the tastes of U.S. Millennials? A lot, according to qualitative research by Liz Thach, Sonoma State University. First the research revealed that only 18% of Millennial wine drinkers see wine as "hip or cool". Most in fact think it is too 'elite' to be hip or cool and wish that marketers would portray wine drinking as more 'fun'. Instead, the Millennials who drink wine regularly drink it because they like the taste and think it goes well with food. Furthermore, (big hint here), half said that they were introduced to wine through a family member. This suggests Millennials tastes are influenced by their Boomer parents. The Boston Globe put it this way:

Thach's (focus group) respondents seemed to have sophisticated culinary interests. She says they watch cooking and decorating shows, throw dinner parties, and eat interesting, diverse foods. ''They like wine with food," she says. ''This is where I see a trend happening in this country, which also happened in Australia several years ago -- what they call the cafe society. We are starting to be more interested in the good things in life: good wine, good food, friends, taking time out to relax and enjoy things. This is actually one of the values we identified of this generation...The generation who grew up with free-range chickens, organic vegetables, and working moms who stopped for take-out on the way home were exposed to all kinds of food from an early age. Add to that the array of imported foods and beverages available to them -- this demographic moves from Swiss chocolates to Hershey's bars with ease -- and you have one possible explanation as to why the diversity of flavors in wine are appealing to this group.

This insight confirms my earlier assertion that Millennials, with their above average earnings and sophisticated tastes, are an untapped market for what many consider 'luxury' goods. You just can't call them luxuries.

Generation Difference or Simply Age-Related?

One of the biggest challenges of Millennial watching is discerning what differences between younger and older age cohorts are likely to be truly generational differences and which are simply due to age? Only time will tell of course. But it doesn't stop us from speculating which of the categories and decisions they are making now will carry over later in life. Case in point: Wine drinking. WineSpiritDaily.com reported earlier this week that young adults (21-31) in France are drinking less wine than ever before, but drinking more beer and spirits.

Is this truly a generational difference or a choice that younger drinkers will reconsider as they grow older? It's hard to say. In the US, younger drinkers (21-25) have traditionally favored beer and spirits over wine. According to Mintel, penetration of beer and spirits is more than twice that of wine (55% vs. 25%).

The only way to really know is to look at the underlying values and motivations of this group. Is there truly a shift in the way that they perceive alchohol? What they consider the 'good life'? The importance of wine to the national character?

A qualitative research project jointly organized by Sonoma State University and Montpellier attempted to find out why French millennials aren’t drinking wine. Among the top reasons why young French adults are choosing not to drink wine, most appear to be age-related, not generational:

• Many French millennials consider wine to be a drink for older people.
• Some French millennials simply do not like the taste of wine. In fact, when they did drink it, most said they preferred sweet white wines such as muscat, moelleux, or Sauternes.
• Also, good wine tends to be too expensive while beer is cheaper.
• (Surprisingly), many of the young French adults said wine is confusing.

Only one of the top five reasons appears to be potentially generational: a strong anti-alcohol movement in effect in France since 1991 has impacted wine consumption disproportionately and led some young consumers to steer clear of wine altogether. The study's recommendations to help boost France’s domestic wine industry (enhancing wine education and culture in schools and universities offering smaller bottles on-premise and making labels more colorful) are unlikely to impact this trend. As you look at consumption or usage differences among younger people, it is a good idea to ask whether any observable changes are truly generational, or something they may 'grow out of'.