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Are Millennials killing CA wine? NY Post says for sure

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The New York Post long has been famous for its outrageous headlines: “Obama Beats Weiner,” “A-Hole” (about A-Rod’s steroid scandal), “Cloak and Shag Her “ (the Gen. Petraeus love affair). Now they have this tasty little tag, “Millennials are ruining the American wine industry,” and if you don’t feel compelled to read the actual article, you’re not a real wino!

After all, Millennials have been perceived to be the holy grail of the wine industry for years. Every winery wants a piece of the Millennial action; nobody cares about Boomers anymore—we practically have one foot in the grave–it’s all about the generation born between the early 1980s to about 2001, who within ten years will be “the largest fine wine consumer demographic in the U.S.”

So why are they suddenly villains?

Because “We’re training Millennials to drink foreign wine,” explains Rob McMillan, one of the best-known wine economic forecasters in California. The “We,” in this case, seems to be the collective industry, including media and Internet-based retailers, who apparently have convinced 30-somethings that wines from abroad are better buys than domestic wines. “[H]ow do we brand American wines?” McMillan asks. “We have to be able to say something more than price.”

What would that “more” be, besides an ineffective appeal to patriotism? Not clear. McMillan’s full report, the Silicon Valley Bank State of the Wine Industry 2016, details the major factors impacting Millennials’ economic and cultural outlook: “the digital world,” of course; “the Great Recession,” and a generally bleak outlook concerning their future prospects. Millennials do “not have the same financial environment to push [wine] spending compared to the baby boomer and Gen X cohorts.” They are “more value conscious [and] greener than Baby Boomers,” facing “significant headwinds” in their ability to spend money. They also, unfortunately from a winery point of view, “are inclined to substitute craft beer and spirits for wine.” Nonetheless, and despite this dreary prospect, McMillan writes, Millennials “are the future fine wine consumers.”

So what’s a wine marketer to do?

Well, the report doesn’t come right out and make “do this” reccos. But reading between the lines, there are some things wineries can to do take advantage of certain Millennial trends. One is to experiment with “blends” rather than varietals, and this is a trend I think is here to stay. Another is to be very cognizant of label design; Millennials “select a wine based on its label…they look for personality and originality.” The report also cites a study suggesting that Millennials “prefer fruity or semi-sweet wines,” which no doubt explains the success of something like Meiomi; but the report also acknowledges that, as they mature, Millennials, like their baby boomer predecessors, are likely to “migrate to wine that [is] more complex” and, presumably, drier. And, of course, Millennials also are prime targets for direct-to-consumer sales, which have been sharply up over traditional retail outlets this past year.

All that aside, don’t look to the Silicon Valley report for a set list on how to increase sales to Millennials. No such list exists, nor can it. Every winery has to figure it out alone. The report ends on an up note: “we are quite confident the industry will find creative ways to overcome and succeed”; but this rah-rah will be of little relief to wineries struggling to figure out how to sell wine to the elusive, fickle, always unpredictable Millennial. And don’t blame the Millennials. They’re just doing their thing, as do we all.

  1. Bill Haydon says:

    The fault lies not with your Gruner Veltliner but with your selves. There is no hideous ‘speeracy to “train” millenials to drink imports. It is a natural and organic market response. Imports ARE better values than California wine at almost any price point but particularly (and spectacularly) at the under $20 range. Imports ARE better balanced and more food friendly than California wine. Imports ARE more interesting than cookie-cutter California wines. Sure California produces some outliers that are exceptions to all of the above statements, but they are just that–exceptions to the rule.

    Until California removes its head from its rectum and realizes that the Emperor is Naked, this trend will only continue to strengthen in the markets where it already pronounced and broaden to the second and third tier markets where it has begun to take hold.

  2. One needn’t rely only on an appeal to patriotism when one can also cite terroir.

    This is, of course, a matter of taste; but (with respect to the French and Italian wines I love), California has killer climate that can produce a quality of wine that is hard to match anywhere else. (I would add “IMHO,” except I’m hardly an outlier with that opinion.)

    I do wish we grew a few things more widely here, especially more widespread growing of Italian varietals: California has little to match the complexity and subtlety of Italian whites, and there are volcanic soils in several regions that mimic those in Italy pretty well. For that matter, I’d love to see Oregon lend its soils to traditional Italian whites. These would seem to be right down the Millennial alley (hey, they already know about Moscato .

    But, future growth aside, what we do produce, on a world scale, is strikingly great wine. (Everybody does know that by now, right?)

  3. Bob Henry says:

    Many Millennials graduated from college into a contracting job market due to the Great Recession.

    Graduated with burdensome student loan debt levels not shouldered by Gen X and Baby Boomers.

    Their gross annual income and disposable annual income and discretionary annual income (on average adjusted for inflation) is comparatively lower than that of Gen Xers and Baby Boomers when they started their post-college careers.

    So is it any wonder that Millennials aren’t the comparatively free-spending generation that (relatively) characterized Gen Xers and (generally) characterized Baby Boomers?

    If all you have in your wallet or purse is a Hamilton 10-spot (and not even a Jackson) for a bottle of wine to nurse throughout the course of a weekend or workweek, what are your options?

    Bill Haydon says: buy European.

    David Scheidt commented recently that “for a Sonoma County Sangiovese from a producer under 10,000 cases to produce an $8 retail wine and be profitable does not exist in reality.” (Observation: no doubt “true” for other grape varieties as well. ~~ Bob]

    [Link: http://www.steveheimoff.com/index.php/2015/12/15/on-tom-and-julie-anns-2016-wine-trends/%5D

    Domestic (“craft” or otherwise) and European beers (sold by the individual bottle or can) and cocktail-based spirits are deemed by Millennials as acceptable substitutes for wine. (Invoking what economists call “The Indifference Curve,” giving consumers equal satisfaction and utility).

    I continue to champion Millennial winemakers like Morgan Twain-Petersen, who crafts a tasty Shebang! branded Zinfandel-blended wine that’s a pleasure in the glass, and easy on the wallet/purse. (While concurrently turning out the much more expensive Bedrock Zinfandels.)

    Wine magazines with their “buyer’s guide” sections touting “best buy” wines serve a useful purpose in disseminating information about good value touts. (Assuming Millennials know they exist and read them.)

    Wine bloggers likewise play a role.

    Wine merchants acting as “opinion leaders” and “taste makers” can contribute the most to educating Millennials. (Assuming Millennials patronize such establishments.)

  4. Bob Henry says:

    Need I add this qualifier?

    “Wine bloggers likewise play a role. (Assuming Millennials know they exist and read them.)”

  5. Blends are a trend? Long before Millennials there was Bordeaux. Which are mostly blends. Wine itself has become more trendy. It’s even overtaking craft beer in some instances. There is more subtlety and complexity in inexpensive European wines than California ones, which perhaps is why they are selling well. But as Millennials earn more money, many of them will find the better wines, and California can hold its own here.

  6. Millennials feel domestic winery’s produce these varietals… Chardonnay, Sauv. Blanc, Cabernet, Merlot and Pinot Noir. Imported wines are somewhat mysterious and also have very deep and rich stories. They feel domestic wines do not offer this…All of this comes from the consumers mouth not mine.

    Cheers !

  7. Carlos De Toledo says:

    K. Miller, you may be on the right track. Good, decent european wines from very traditional regions can be bought for as low as $ 15.00. Italia, Portugal, España…. Do not ask me how they bring wines from Piemonte or Montalcino or Rioja or Douro into the country and retail them for bargain prices, but they do.

    Langhe rosso x average usa? Game, set, match langhe!

  8. I think millennials just want a good wine at a good price. If we aren’t producing that domestically, it seems short-sighted to blame the consumer.

  9. John Morgan says:

    Here’s what you do. Tell the consumer the truth. Your inexpensive wine is not bottled in Argentina. It’s pumped into a giant plastic bladder (flexitank) in Argentina or Chile. It sits in this plastic bladder, baking on a dock, in a hot metal cargo container. Then it’s supposed to be put under the water line on the ship (when there’s room) then it’s brought to a facility in the US for bottling. This is why you should buy local. We’ve all heard of the “buy local” trend right???? Maybe the wine industry should perhaps hop on board that train. It should have done that years ago. Emphasize the SUPERIOR quality of wine that is undamaged by long voyages.

    Every time I describe to people just how foreign wine is transported, they buy American.

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