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SVB study: Millennials haven’t made “a dent” in fine wine sales



The new Silicon Valley Bank “State of the Wine Industry 2015” report is 56 pages long.

I read through every one of them, and by far the most interesting statement was this: “Millennials have yet to make a dent in the fine wine business. So why the difference between the media reports and reality?”

Wow. Tell it like it is, bankerman! As the report noted, “[One] might expect to find the tee totaling Boomers in rocking chairs with the Millennials at the head of the table. But despite the hype, that hasn’t come even close to happening.”

First, a little context. You’ve heard it, I’ve heard it, everybody’s heard for years: Millennials rule the roost when it comes to wine. From Fox Business News: “The face behind the wine glass is looking a lot younger. The Millennial generation, which includes the youngest legal drinkers, is consuming more wine than previous generations when they turned 21, and the industry is taking note.”

From the online PopDust: “Millennials Are Drinking So Much Wine They’re Changing How It’s Sold.”

And this, from Medical Millennials have been driving the wine consumption increase up drastically,..[this is the] ‘Gen Wine’ phenomenon happening right now in this country.”

Well, I could go on and on, thanks to the Google machine, but you get the idea. So why is Silicon Valley Bank saying that, when it comes to sales, Millennials haven’t done diddly?

I have my own ideas concerning that “difference between media reports and reality.” What?!? You mean there’s a gap between what the media report and the real world? I’m sure we’re all shocked, shocked. My take on this dissonance is that there is a lot of me-tooism, cut-and-paste writing, lazy journalism and wishful thinking. That’s a recipe for “Bad Reporter” every time.


But what does Silicon Valley Bank itself have to say by way of explanation?

Well, first of all, they point out they’re only talking about “fine wine.” It’s not clear from the report just how they define “fine wine,” but I think it’s most of the wine you and I care about. I guess it’s not jugs or Two-Buck Chuck, and it may even be wines above $20 the bottle: “Starting in mid-2014,” the report says, “wines priced above $20 a bottle broke out strongly higher,” following the Recovery that kicked in after the horrible Great Recession. Most Millennials don’t have that kind of money to spend on wine, saddled as they are with debt.

What will it take for Millennials to finally be able to afford to drink better? Here’s a one-word answer: Time. “One day,” the SVB report says, “Millennials will be at the center of fine wine sales. But”—and it’s a big but—“the reality is—no matter what a generation is called, the most active buyers of fine wine…will continue to be in the 35- to 55-year age group.”

I’ve been saying this for years and gotten my share of bashing for seeming to dismiss the importance of Millennials. Nonsense. It just stands to reason that when you’re 26, have $100,000 in student loans and other debts, and aren’t making all that much to begin with, you’re not going to be dropping $20 and up for that nightly bottle of wine. (A bottle a night? Well, yes, for you and your sweetie/roommate/whatever.)

Now, onto social media! We know that Millennials are obsessed with it, and we know that older people aren’t (except for Facebook). How to explain that? Is it because old people never “get” new-fangled ways of communication? Or is it that there’s something fundamentally adolescent about social media that older people find, well, kind of immature? If it’s the latter, then you have to wonder if today’s social media-addicted Millennial will still be tweeting and instagramming and pinteresting etc. 24/7 when they’re 50 years old. Or will they look ruefully back, with a wry smile, and say, “I can’t believe I was that hooked on my iPhone back then”?

Well, we can’t know without a crystal ball, which I don’t happen to have. But I can’t help but feel that when today’s Millennials get older and have more money they’re going to look and feel more like their parents than they look and feel today. Aging has a way of doing that: You become your mother or father and discover that it’s not as horrible as you thought it would be.

And then there’s this, just in: “Where do tech-savvy Millennials buy wine?” asks the Tribune, out of San Luis Obispo? It answers its own question: “Not online, Cal Poly study finds.”

It turns out that, when it comes to actually buying a bottle of wine, our Millennial friends go to “the grocery store”! Same as their parents and grandparents, a finding the university’s V&E head called “surprising.” Well, life’s full of surprises, isn’t it?

What does this have to do with wine sales in America? The SVB report contains all sorts of interesting things: one of the more troubling aspects for American wine is the increased interest people have in foreign wines, which are cheaper because of the strong dollar, which will probably continue to be strong for quite some time. But it also suggests that these modern Millennials, who are so adventurous and experimental and fickle in their loyalties today, will become more loyal to brands in the future, provided that those brands give them something to be loyal about: good stories, good quality wine, fair pricing, because older consumers do tend to be more loyal (or, you could say, more conservative) to particular brands. This is what wineries should be focusing on now: Not obsessing over social media, in all its evanescent particulars, but laying down solid, well-thought-out plans for the next twenty years.

  1. Bob Henry says:

    Excerpts from
    (May 12, 2010):

    “The Market for Fine Wine in the United States”
    [Fine Wine 2010 Conference in Ribera del Duero (Spain)]


    By Graham Holter
    Associate Director – Publishing
    [Wine Intelligence market research firm (United Kingdom)]

    ” ‘We still sell to a very small segment of the US population,’ he [David Francke, managing director of California’s Folio Fine Wine Partners]said. ‘Forty-three per cent of the population drink no beers, wines or spirits.’

    “According to the data presented by Francke, US wine drinking is compressed into a small segment of the population.

    “SIXTEEN PERCENT OF CORE WINE DRINKERS consume wine once a week or more frequently, which ACCOUNTS FOR AROUND 96 PERCENT OF CONSUMPTION.

    “Thirty-five million adults drink virtually all of the wine sold in America, Francke said.

    . . .

    “Wine Intelligence has studied the US wine market in detail and categorised the wine drinking population –- which it measures at 47 million – into profile groups.

    “Two of these segments –- MILLENNIAL TREATERS and EXPERIENCED EXPLORERS –- were introduced to conference delegates by Erica Donoho, Wine Intelligence’s country manager for the USA.



    ” ‘Experienced Explorers are a bit older, they’re over 40, but they’re the powerhouse,” Donoho said. ‘They have embraced wine as a central part of their lives. They’re explorers, but they’re experienced. They have the ability to rely on some of their own knowledge and incorporate a broad range of influences when making their choice.’

    “She added: ‘Unlike Millennials, they have brand awareness. To many of this group, region can represent a brand, and that’s an interesting way to market this group.

    ” ‘This group will look to the in-store sales person or the wine critic as a source of information.’ “

  2. Bob Henry says:

    I organize private wine lockers and wine cellars in Southern California.

    One venue is The Wine Vault in Glendale — a seven-story former Bekins Moving & Storage facility. It’s wine locker clientele number in the high hundreds.

    From personal experience (but in no way a scientific sampling of the clientele), I can count only a single digit percentage being Millennials.

    The vast majority would fit the archetype of “Experienced Explorers.”

    These collectors are passionate about wine, know their brands, and closely read the wine press for reviews and ratings.

  3. Thanks for the coverage Steve. To answer the one question, we define fine wine as that sold retail for $20+.

    Couldn’t agree more about the cut-and-paste media factor today. Its expensive and time consuming to do reserch. Much easier to follow the crowd and repeat unsubstantiaed sound bites. Hoping your readers spend the time to read through our report ( )

  4. Bill Haydon says:

    As Rob mentions, they define fine wine at a $20+ retail price point. Every study that I’ve seen says wine consumption among millenials is–for that age group–higher than it’s ever been for previous generations. Which begs the question of what are they drinking.

    This is the conundrum that California does not want to face head on. California can’t produce interesting wine at the price points that they are purchasing (and please spare me the list of twenty or twenty five non-junk/non-mass production Cali wines under 20/bottle), so they are drinking value wines from overseas: lots of Argentine malbec among the twenty-something masses but also lots of Bierzo, Dolcetto and Muscadet among the more adventurous. Day-by-day, these consumers are training their palates to like European wines and increasing their knowledge and comfort with them–a trend that is only going to increase as the drops in the Euro begin to hit the US wine market (probably going into next Holiday season).

    Now, Charlie Olkein will rant and rave and say that as soon as these young whippersnappers put down their youthful foolishness, they’ll start drinking California. I don’t think so. Even among older, wealthier collectors once people transition from California to European wines, they rarely come back. These millenials are skipping past the Cali phase altogether, and when they do have the 80-100 dollars to drop on a bottle, what will their choice be? A sudden Olkeinesque craving for Napa Cab or Sonoma Pinot. Or, Barolo and Burgundy?

  5. doug wilder says:

    In tangential reference to what the threshold of ‘fine wine’ is, I recall from my retail days that “premium wine” was defined as above $6 a bottle. This was the late 90s, not the 50s. 🙂

  6. “Now, Charlie Olkein will rant and rave and say that as soon as these young whippersnappers put down their youthful foolishness, they’ll start drinking California. I don’t think so.”

    Not only will they come to more expensive CA wines as they get older, I guarantee they will.

  7. Those who do not learn from the past are bound to repeat it.

    We go through this handwringing about the next generation every time there is a next generation. And maybe the time will come when twenty-somethings do not, in some measure, earn more money, see their tastes improve and their range of interests expand and deepen, but so far, every one of the those problematic generations, the Xers, the Yers, et al have followed that path just as our parents did and we did.

    And to quote Anthony McAuliffe, for Mr. Haydon’s benefit, in McAuliffe’s response to a patently stupid comment, “Nuts”.

  8. I think Mr. Haydon wildly overstates this idea on a regular basis, but I also think he has a point. As the under-$15 retail wine market among domestic wines continues to be more and more concentrated in boring McWine brands from Gallo, Trichero, Constellation, etc.; twenty-somethings seem to be nearly forced to cut their teeth on Spanish, French, Portugese wines. One can only drink a bottle of Apothic or Menage a Trois or Cupcake so many times before looking to Europe for wines with a soul or abandoning wine altogether.

  9. Everyone has a good point but nobody’s mentioned old & loyal consumers (myself being one of them) go to a grocery store to shop for wines too. What’s surprising about it? Three years ago, I discovered the $6 Argentinian Tempranillo at Trader Joe’s that was refreshing, robustly fruity and marvelous treasure hunt.

    Three years ago, I couldn’t rationalize why I’d spend $55 for a 2011 SC Pino; but now a bottle of similar caliber from the AVA carries a tag of $68-75. Be careful when you mention your liking for SC Pinos to that guy at the wine shop: He’s going to tell you what a value this &29.99 2010 Pino from SC is. I tried it, and it was crap for that price range. Don’t bother for a Cab from the famed Napa house if you don’t like its $75 tag. The threshold has been elevating, and can anyone rate it against the standard CPI for the last three years?

    Luckily we still have someone like Eric Asimov who spent time and energy to find bottles that are under $20 for consumers. I’ve ordered the one from Republic of Georgia accordingly and am ready for the exploration.

  10. I had a bottle of fine wine on Sunday evening…a 1997 Kendall Jackson buckeye vineyard Cabernet. An unbelievable value that was on close out at the wine exchange for, brace yourselves, 11.99. Savvy shoppers can find deals like this all the time…Millennials should keep an eye on the flash sites, discount retailers, and local wine shops for the coveted closeout.

  11. Bob Henry says:

    Fuhgettabout the new producers and the new AVAs and the new vintage releases if they dissatisfy you.

    Be discriminating and embrace older wines sold by the wine auction houses.

    Corie Brown writing for the Los Angeles Times got it right when she revealed the comparative bargains that exist when collectors (or their widows) sell off excess or unwanted wines.

    I call it wine arbitrage.

    Experiment by buying a mixed 12-bottle case. Almost invariably there will be a few gems whose worth equals or exceeds the acquisition price of the entire case. The remaining bottles are effectively free.

  12. Bob Henry says:

    Steve, with your indulgence I would like to throw out a non-rhetorical question to your readers.

    Do wine merchants in your cities of work or residence have winetasting bars, and host winetastings on Fridays and/or Saturdays?

    Do they organized and host winemaker dinners in town?

    Do you participate? Strike up friendships with fellow attendees?

    And do they lead to forming private winetasting groups which meet regularly, and conduct “theme” winetastings (e.g., focusing on a specific grape variety or vintage or AVA)?

    I genuinely wish to know how widespread and vibrant are these “off-line” gatherings.

  13. John Calmeyer says:

    In the argument of whether Millenials will or will not return to Cali wines if and when they can afford them, I think there is a missing element: the movement, although nascent at this point, towards less ripe, more structured, more terroir based (what’s a better term for that??!!) wines from California. If the whippersnappers are getting weaned on more Euro-centric styles, maybe, just maybe we can have something to offer them when their ships come in…

  14. I don’t disagree with the proposition that Millenials are having less an affect on the wine category than the media would lead us to believe. I think at its core, this is true.

    However, I disagree with the supposition that Millenials don’t have the money to spend on more expensive bottles of wine. I would suggest they do, but that the wine industry as a whole has done a very poor job of marketing to this generation.

    Millenials spend a lot of money on Whistle Pig and other very expensive single barrel and cask strength whiskeys. Millenials spend money on Reyka and Belevedere vodkas. Let’s face it, Millenials put the same amount of money other generations spend on wine toward top-shelf craft spirits. The true craft spirits companies have done a great job creating hip, retro-packaging and targeting the Millenial generation. Spend a Friday or Saturday night in a bar and you’ll see it played out hundreds of times in a single night.

    And it doesn’t stop there! Millenials are directly responsible for the rise in sales for both craft and imported beers; particularly Belgian beers. Find a retailer with a great selection of beers in these categories and look at the retails. Believe you me, the Millenials are paying top dollar for top beers. And, oh by the way, craft brewers are coming up with better, more realistic food pairings than many wineries put out there.

    This is not a situation where Millenials are unwilling to spend money, but rather, the wine industry isn’t marketing to them. Beer and Spirits are winning a race the wine industry hasn’t even noticed has started.

    Boomers are dying off, and in the coming years, Millenials consumption habits will have been formed. While the industry needs to continue to reap the benefits of their Boomer/Gen X customer, it also needs to recognize that Millenials are the largest ever generation, and they aren’t simply going to start drinking wine because they turned 35. Get ’em now, before they’re gone.

  15. Sociologists have observed that each generation rebels (in some way) against its parents’ generation.

    And come to resemble their grandparents’ generation.

    So go back two human generations, and draw insights from that demographic group of drinkers.

    As Millennials move through various life stages, they will “converge toward the Bell Curve mean”: adopting middle class values and practices such as marrying, having children. and becoming homeowners.

    Just like the generations that preceded them.

  16. Bob Henry says:

    To be more numerate:

    “As Millennials move through various life stages, they will ‘REGRESS toward the Bell Curve mean’: adopting middle class values and practices such as marrying, having children. and becoming homeowners.”

  17. Bob Henry says:

    Craft brewers offer 22 ounce “bomber” bottles that lend themselves to single unit sampling . . . unlike European brewers which force the consumer to purchase six-packs.

    (Aside: 20-plus years ago, grocery store chains here in So Cal allowed the consumer to “break” a six-pack of beer — purchasing just a single 12 ounce bottle at a slight premium to the pro rated six-pack’s per bottle price. That encouraged consumer sampling. No more. Grocers adamantly refuse to sell single 12 ounce units.)

    Those bombers retail between $3 and $10. Less than the comparable retail price of a well-made domestic wine. At the low end of the pricing spectrum, equal to “Two Buck Chuck.”

    Easy on the wallet for a risk-averse new experience seeker.

    But the Millennial aspires to drink something — anything — better than “Chuck.”

    So what’s out there readily available in the grocery store aisle?

    Columbia Crest and Chat. Ste. Michelle from Washington state.

    Castle Rock from California and Washington state and occasionally Oregon.

    Gallo from California.

    Beringer from California.

    Mondavi’s Woodbridge from California.

    Kendall-Jackson from California.

    And “critter wines” such as Yellow Tail.

    Bill Haydon would suggest looking to Europe for alternatives. But those alternatives are found on the shelves of discerning fine wine merchants and on restaurant wine lists. (And restaurants don’t sell bottles to dining patrons to take home.)

    Those European wines are not merchandised at the grocery store. At pharmacy chains like Rite-Aid and Walgreens and CVS. Or at big box retailers like Target and Walmart and Costco.

    Purchasing them requires a trip across town or to an adjacent town’s fine wine merchant. And most of those merchants close around 7 PM.

    Thwarting a Millennial’s “grab-and-go” drive-by purchase ambition.

  18. Bob Henry says:

    Bill Haydon:

    Drawing upon your East Coast experience, how are fine wine merchants succeeding in introducing and converting Millennials to well-made, affordably-priced European wines?

    How do they publicize their store’s existence?

    Do they sample store patrons through a wine bar on premises, with a regular calendar of activities?

    Do they keep extended (versus “banker’s”) hours?

    And can any of these well-made, affordably-priced European wines be found other than on the shelves of fine wine merchants?

    My experience is California-centric. Living in a wine-producing state, the consumer has it really, really good here.

    Our state legislature drafts and enacts laws that support our home-grown industry.

    And the retail marketplace has responded.

    We boast a huge number of single proprietor fine wine merchants. Wine store chains such as BevMo and Total Wine. Our better grocery chains cater to novices and experienced wine enthusiasts alike. Mixed merchandise retailer Cost Plus World Market has a wine department. Big box retailers such as Target and Walmart — and especially Costco — have put greater effort into retailing wine. All contributing to ample supplies and competitive prices.

    What’s it like where you work and reside?

    ~~ Bob

  19. Bill Haydon says:

    @Tom Wark

    You say, “Not only will they come to more expensive CA wines as they get older, I guarantee they will”

    In the words of one of my old professors at Chicago, “now back up three or four steps and tell my WHY this will happen. Don’t just pull conclusions out of your ass and expect me to pay attention.”

    I’ve told you why I think they won’t: i.e. consumption patterns, palate preferences and familiarity being established in their twenties will carry over into their later years and more upscale purchasing.

    I eagerly await your observations.

  20. @Bill – All of your reasons for Europe are just anecdotal, unsubstantiated opinion.

    When it comes to wine, Europe is a cute girl with an accent from a family with some history. Very alluring on the surface…….but her family is probably now selling Flash Detente.

    IMHO, the main difference is that European wine production is mandated by law. On the bad side, innovation can be stifled. Some regions are tied to second rate varietals. On the good side, some interesting obscure varietals are somewhat protected from market forces. Eg: Chenin blanc has a place in the Loire, but has little place in CA.

    On the flip side, CA responds to market forces. It’s easier in CA to follow your passion to make great wine. On the bad side, there’s a lot of market force to make certain wines. Eg: Cab from Napa. Pinot from Russian River, ..

    CA weather offers everything that Europe offers, but with better rain patterns. The vintages are simply better year to year.

    CA terrior is more complex. The Winemaker’s Dance compares Napa to Bordeaux and there’s no comparison.

    A Californian, Robert Mondavi, has had the largest influence on wine in the past century. His influence extended worldwide.

    Never mind that Michel Rolland is from Bordeaux and has clients worldwide, you only slam CA for high alcohol. What a sham. Warmer climates lead to higher alcohol – Southern Rhone, Languedoc, Spain, Italy, …. Viognier is normally over 14%. Do you think the reds are lower alcohol? Do you think Grenache/Garnacha is magically lower alcohol when made in warmer regions in Europe? Not possible and even less likely in France as they can’t add back water.

    By what measure are CA wines not world class? In prestige, Napa is right behind Bordeaux and Burgundy.

    My impression is that Steve has a passion for Pinot noir from Santa Maria. Though, I doubt he would argue that Anderson Valley, Santa Lucia Highlands, Carneros, Sonoma (Coast, Russian River) all make world class Pinot noir. If you expand the argument to OR, then you get another region of world class Pinot noir in the U.S. Producers vary in style and quality.

    These regions demonstrate more of the potential of Pinot noir. All of these regions offer better qpr than Burgundy at prices that millenials can afford. You just have to look.

    In summary, CA is a world class wine growing region and its only logical to expect there to be some percentage of world class QPR wines from CA.

  21. Scott Mahon says:

    The reason the news gets carried away with the Millennial reporting isn’t just laziness; it’s self-serving. Any national marketing guru will tell you the 18-34 demographic, no matter what era, is the one the advertisers want to reach. So Millennials “must be into everything” so everyone should buy air-time/ad-space. If you’re a national wine advertiser, then most of your portfolio, isn’t “fine wine;” it’s grocery shelf bargains. Get them brand loyal now!

    I think it’s hard for any of us in the “fine wine” business to remember that most of the market share isn’t us. With inflation a $10 bottle in 1995 should be over $21 now. If it’s still on the shelf at $13, it’s no longer in the same market class, sorry. Wineries have used the “fine wine” label for their own marketing, causing a bit of this confusion. I like to walk the halls at Symposium (tomorrow) to be reminded of how small the fine wine market really is.
    Fine wine is a niche market, a luxury market, aimed at the affluent. That anyone is surprised that millennials aren’t affluent yet, is the shock.

  22. Bill Haydon says:


    I’m laughing at your destitute, cute girl analogy. I think she’s more like the UFC woman who’s kicking your ass. On a recent trip to Chicago, I visited three Michelin 1* restaurants (all of whom had California wines in their program) and counted their glass pours. There were a total of 54 that broke down as follows: 39 European, 9 Southern Hemisphere and 6 domestic. I visited the trendiest wine bar in town (rootstock) that literally had more Greek wines on its list than California. In the immortal words of Francis Albert Sinatra, “that’s life, pallie.”

    As for my observations on soil, it’s conventional wisdom because it’s been proven over and over again for ages. Fine wine vines need a certain amount of struggle and that can come largely from three directions: cool climate, austere (slate, limestone etc.) soils or old vines. That’s why Lodi can grow a ton of wine but not great world, class wine. It’s too hot and too fertile. To a lesser degree, Napa is no different. You can make a lot of hot-climate, overblown Cab and Chard, but you really can’t do much in the finesse department. Did you know that up until the early 70s when the valley was turned over exclusively to viticulture that one of NV’s largest cash crops was prunes. Very telling, my friend.

    Oh well, Napa does have its greatest crowning achievement about to open. Of course, I speak of the glorious dwarf themed winery about to open in Yountville founded by a cheap grifter who made millions selling get-rich-quick schemes to rubes in late night informercials. Could there be a truer metaphor for Napa Valley than this exercise in gauche, grotesque taste.

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