Overall another good day, reinforcing the initial talk given by Vic on Monday. Today was really a hodgepodge of stats and opinions focusing on the US market, and there was quite a bit of overlap in the presentations. There were a few pretty cool data tidbits from each presenter, and I’ve noted them below after a quick synopsis of each’s talk. (I’ve given up on live blogging, without even really trying it. All the cool kids do nightly summaries anyway )
Christian Miller, Owner, Full Glass Research
Synopsis: Wine consumers can be broken out into Occasional, Core, Bag-in-box and Aficionado categories based on price and frequency of consumption. Core buyers are where the action is, they are typically either Boomers or Millennials, and have high education and high income. Culture is also a big factor in what creates a core wine drinker. Influences include the gourmet revolution (higher priced, more intensely flavored and diverse foods) the luxury revolution, and “the key experience” (a memorable visit to the wine country or an extraordinary dinner of which wine was big part).
Take away: The key to growth is to grow the Core consumer segment.
Interesting tidbit (from some survey data on tasting room preferences Christian shared): 99% of people surveyed think it is very or somewhat important to be able to taste older or small production wines unavailable through retailers or restaurants. All those surveyed want to also be able to taste all new releases. 87% think it is important to be able to learn more about the wines and how the wines were produced, and 64% think it is important to be able to purchase large format bottles. However, only 25% think it is important to be able to buy wine related merchandise or winery branded clothing. In tasting rooms it’s all about the wine.
Barbara Insel, Managing Director, MKF Research
Synopsis: There is consolidation in both wineries and in distribution as well as changing consumer behavior preferences. Consumers are moving up market in all consumption and they are demanding both premium quality and value. The strongest growth continues in the high end. Importantly (and this will sound familiar to Cluetrain kool aid drinkers – and I’m one of ‘em) consumers are seeking authenticity and experiences. They distrust advertising and conventional marketing noise. The implications for winery strategy are:
Take away: Know your customer and build a real relationship with them.
Interesting tidbit: The growth of demand for high end wines has far outpaced the growth of the appropriate grape production. See graph, and feel the pinot love.
John Gillespie, Executive Director, The Wine Market Council
Synopsis: John’s talk was the highlight of the day. The US wine market is a large one, encompassing over 3700 wineries with 260 million cases of wine produced per year at a retail value of 25 billion dollars. Table wine consumption has increased every year since 1994, the longest sustained period of growth yet. John goes on to describe the Core/Marginal wine drinker segments already covered above, but John added a bunch of interesting data on their attitudes. Since the industry’s main goal should be to turn Marginals into Cores, the results are important. Here are some of his findings.
Both Core and Marginal wine drinkers think wine makes a good gift (something Paul at Inertia has been way out in front of – check out his comments here on the subject), that moderate use is good for you and that you can buy good wine without spending a lot. Where they differ is:
Take away: See below
Interesting tidbit: John made the point that Marginals and Cores each buy wines at all price points (including the very high end), it is just that Marginals buy wine with much less frequency (less than once a week vs more than once a week). If the wine industry or some cultural event can tip those who are currently Marginals just one category over into twice a week drinkers, the industry would grow enormously.
One of the obvious areas to attack to bring about that change is the “bottle staying fresh” issue since it directly influences whether someone will open a bottle of wine when they are alone. John related that experiments have shown conclusively that consumers prefer wine that has been opened for three days better than two days, and wine open two days better than one day. It would be a good idea to get the message out there that wine can not only keep for more than one night, but that its taste will probably even improve.
Anyone want to do a blog post on that?