If you’re a wine producer and calling, say, your refreshing but probably overpriced (c’mon, let’s be honest) $35 Sauvignon Blanc an “entry level” wine, you might be missing the trick with both the older (now in the 30s) and younger (just reaching legal drinking age) Millennial generation.
That conclusion isn’t based on reams of hard data (believe me, I tried to find those reams, and no one has them… yet…), and so I will go ahead and do you the favor of substantially undermining my own argument here before I even start. But… there are some signs in the wine marketplace worth mentioning, signs that might be of concern to those vintners who offer “lower-priced” wines over $25 labeled as “entry level,” secondary products without as much focus as their high-end stuff. And they are signs that suggest that the target markets don’t consider those wines as much “entry level” (a term they most likely associate with “affordable”) as they do “splurge.”
Consider these tidbits:
- The second wave of Millennials (the older of which are now of legal wine-buying age) are more conservative in their spending and saving habits than their older siblings, and certainly more than Boomers and Gen Xers. This is because they’ve either seen people they know in those older generations get screwed by the current U.S. economy, or they themselves are getting screwed by that economy while trying to find jobs fresh out of university. And when Millennials do buy things, they buy for different reasons than previous generations.
- Millennials generally rank poorly on financial literacy, which means when (that’s when, not if) they hit some economic hard times, they’re probably going to tighten the belt. But that belt gets tightened on things they deem to have poor experience value – so while they still might splurge on a wine for a special occasion, generally their everyday wine purchases are probably going to trend to lower price-points when they’re not splurging and money is tight.
Which means that your “entry level” wine is actually splurge material for most Millennials, and yet is probably marketed as an adjunct to your “real” wines (the more expensive ones) that most of them can’t afford even if they’re splurging. Hellooooo, mixed messages!…
That sounds a bit harsh, but it might actually be what you’re effectively telling Millennials when you market that way. Further tidbits:
- [ Warning: potential fallacy of small numbers here] There is a recent University grad in Philadelphia who (for reasons I can only link to some form of mild insanity) wants to be an intern for 1WineDude.com. She writes about wines for a website produced by the university, and her cutoff price for wine recommendations generally is… ten dollars per bottle. “I need a really, really good reason to feature a wine that’s over that price point,” she told me, because her readers are primarily interested in good, everyday wines that they can afford now (Millennials tend towards instant gratification, by the way, and probably not towards aging wines – and in these economic conditions of total uncertainty, who the hell can blame them?).
- You might also find it interesting that the younger Millennials profiled in this video by Vineyard & Winery Management all cite lower price points (under $15) versus their slightly older counterparts, who cite higher prices ($25-$40) when asked how much they’d spend on a bottle of vino (check it out around the seven-minute mark), which speaks a bit to that divide even within the Millennial generation itself.
None of this means that high-end wine producers should shift focus and producer bulk wine, of course. But it might mean that high-end producers might want to be rethinking how they will shift their focus to market their products to Millennials (you are planning on having to make that shift eventually, right? Right?!???)
Because what you really have with that $35 “entry level” wine is vino that a) is not actually entry-level ($10 per bottle, people, $10 per bottle) to over half of the wine-buying market, and b) is potentially perfectly suited as an instant-gratification splurge (you only need age it for as long as it takes to drive it home or to a restaurant) to that same market
It might just be time to re-position that “entry level” juice, no?