A new report into the state of the American wine industry suggests millennials are unlikely to continue buying at the same rate as their boomer parents, but the contours of the industry have changed deeply.
Why it matters
What haven’t millennials killed in favour of avocado toast? The list is long and getting longer, with a report from Silicon Valley Bank’s Wine Division, hinting that wine may be the next to take the hit. It’s not just a story of shifting interests among demographics, however.
What’s going on
The main threat to the industry is actually the baby boomer generation (born 1946-64) consuming less. The trouble is that a similarly large generation, millennials (1980-95) have come of age at a time of vastly increased competition.
Millennials tend not to dislike wine but to like lots of other types of beverage (cider trails, however). The trouble is that reopening didn’t impact the wine industry as it has other alcoholic beverage industries.
It’s not just hard seltzers. The beer scene is extremely varied; speciality spirits and a growing interest in cocktails are another drain on wine’s typical market.
Yet, these emerging categories are taking on wine’s playbook, as an interest or area of deep knowledge to get nerdy about, but at a far far lower price point.
Yet some of the changes are cultural too. “Consumers younger than 40 have different values, are more health-conscious, have lower discretionary income and wealth and are more ethnically diverse than previous generations.”
Where to take inspiration
“While the wine industry is taking a more passive approach to attracting the young consumer, the luxury market has gone all-in, adapting product offerings for younger tastes, spending on digital communication paired with engagement strategies and evolving distribution channels at the same time” – Rob McMillan, EVP and founder of SVB’s Wine Division.