Frequent 1WD readers know that I get a bit, er, cantankerous when I notice long-standing wine industry types make wildly speculative – or even downright inaccurate – claims about how the wine industry functions, without citing any data in support of their crap claims.
This happens (just a guesstimate) roughly every seven minutes or so (many bloggers succumb to this as well, so I’m not picking on any particular kind of medium here).
In a small attempt to help bring the smack-down on such rampant speculative behaviour by those who ought to know better, during my recent stint at Wineries & Breweries Unlimited 2014 in Richmond I decided to sit in on a (not-surprisingly somewhat poorly attended) session where real data were presented.
“Emerging Trends within Beverage Alcohol” was a presentation highlighting what’s actually happening in the wine world right now, from a consumer perspective, and was given by Nielsen’s Elizabeth Crews (Vice President/Analytic Lead for Nielsen’s Beverage Alcohol Practice Area), based on a combination of information collected at retail scans, via consumer panels, and through actual account data. It’s probably not perfect, but it’s also probably as close to perfect as we’re going to get when it comes to consumer trends in wine in the U.S.
Here are my notes on the session, sans commentary, and based on the data presented (I’m paraphrasing, which will piss off some people I’m sure, but it’s because I don’t have access yet to the actual numbers that were shown; if I can get them, and/or the presentation itself, I’ll post them here). Bottom lines: if you think Millennials and GenX aren’t key to the future of fine wine sales, you’re probably wrong; if you think beer and other adult beverages won’t come gunning for wine drinkers in terms of media spend, you’re also probably wrong; if you think expensive fine wine has no real market after the recession, you’re… wait for it… wrong; if you think blends can’t be popular because they’re not taking advantage of the brand recognition of well-known grape varieties, you’re also, maybe… wrong; and if you think Malbec is dead in the wine sales water, you’re very wrong.
My aim here is posting this is largely selfish, in that I strongly suspect that I’ll be linking back to this post incessantly when commenting on other websites, to deliver smack-downs on the under-supported speculation that seems rampant online and in Op-Ed pieces right now. And yes, I realize those efforts are totally Sisyphusian, but I just can’t help myself…
- “Wine is winning in a larger sense” in terms of general growth.
- 2013’s Nov/Dec data shows big jumps in sales of >$20/bottle wines; it’s a similar situation for sparkling wines, but the spike hits just before NYE.
- Beer is losing share to Wine and spirits, and it’s now <50% of alcohol spend.
- 21-36 year old buyers (Millennials) are showing jumps in wine purchases, and are fleeing beer (same with Gen X).
- Behind fresh produce, beverage alcohol is the single fastest growing food segment Nielsen is seeing now. Coolers are up 20% vs. 2013.
- Everyone in beer, spirits, and wine is spending more on media.
- On premise, BTG purchases are up, wine is on the rise, and beer is on the decline. Two of the wine styles going gangbusters right now are Prosecco and Malbec.
- While there’s growth, a large amount of it is coming from new brands/products, which is translating into shelf challenges for everyone.
- One of the primary drivers for wine purchases is the desire to increase knowledge; this is most pronounced with Millennial and Gen X buyers.
- In category dollars, craft beer is up 20% vs. last year. Flavored spirits are also way up… even flavored whiskey. This matters for wine because craft beer buyers have “strong interaction” with fine wine. They’re buying both more craft beer and more wine.
- We should expect adult beverage products of all stripes to try to market to Wine lovers in attempts to steal them away to other similar product purchases.
- Many buyers report the concept of “local” to be important to them, even with respect to Wine purchases.
- In 2009, we saw the $4-$6 category diving wine growth; now, it’s $12-$15 and especially $20 and up.
- However, most new wine products are coming in at the $9-$12 range (which suggests that the wine biz mostly got it wrong in their interpretation of the market drivers recently).
- Domestic wine currently leads on value growth. Rose is way up vs. last year. White Zin and Syrah continue to decline.
- Moscato is still growing but at a much slower pace now.
- For the $10 range, blends are accounting for “new item activity, driven by Millennial, African American, and Hispanic consumers.”
- There are more outlets than ever for consumer wine sales, including dollar stores.