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Here’s the marketing message that’s saving wine

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My generation, the Baby Boomers, gets blamed for a lot of stuff, but one thing we got right was wine. We “made” the U.S. wine industry back in the 1970s and 1980s, when we were developing our esthetic and culinary tastes, and wine fit the bill quite nicely.

I speak of “esthetic” tastes, although I could have referred to “cultural” or “lifestyle” tastes. As a demographic—the largest in U.S. history–we Boomers understood by the late 1970s that we had changed the way America does things, and that anything we embraced en masse was likely to be a trend. Baby Boomers had been trendsetters since we were born, and embracing wine was simply another wave in the demographic tide we launched upon the country.

Wine suited our slightly outlaw sensibilities. It was alcohol, after all—a mind-altering drug, and Boomers knew a thing or two about mind-altering drugs. Alcohol, during the heyday of the Sixties, had a negative aura around it: Bowery bums, cheap bottles of Ripple, throwing up, that sort of impedimenta. No pot smoker or acid head with any self-respect would have been a drinker! But a new generation of vintner-entrepreneurs in California—not Baby Boomers, but older—was completely shifting wine’s rather tarnished image. Wine was no longer booze, but an upscale foodstuff, something you could talk about, study, appreciate intellectually as well as hedonistically, and it fitted in perfectly with our newfound appreciation of food. There was something authentic about wine—and Boomers prided ourselves especially for our authenticity.

It was always a question of whether we could bequeath that appreciation of wine on to the generations who came after us. The industry-wide conversation of the last twenty years, in fact, can in retrospect be viewed as trying to answer that question.

A new report by Silicon Valley Bank on the wine industry contains a mixed message. There’s good news: Yes, Baby Boomers continue to display “spending resilience,” which is a good thing for the industry, and “retiring baby boomers seem to have a long tail and fortunately aren’t quick to run to pasture,” which is also a good thing, especially if you’re a Boomer: it means we’re not all dying off!

But there’s also some bad news. Boomers’ “buying seems to be moderating, both on price and volume, as they age.” This makes sense to me: once we retire, most of us find ourselves on fixed incomes, meaning that we don’t drop $25 on a bottle as easily as we used to. (There’s also the reality that, for many of us, our doctors are telling us to moderate our alcohol consumption, if not eliminate it entirely.)

That means that the industry has “no choice except to market to them [i.e. a younger generation].” Unfortunately, “Millennials aren’t engaging with wine as hoped.” In fact, “millennials have made no move in taking share from boomers in several years.” This is really disappointing for producers. With crops continuing at record levels (meaning there’s plenty of wine in the supply chain), the industry is “at a position of oversupply…that extends through retail [outlets] and every growing region in California at every price point. For California,” the Bank’s forecasters warn, “this is the worst combination of market conditions for growers since at least 2001, and perhaps of all time.”

Scary words! But one of the benefits of advanced age is, perhaps, a more seasoned perspective on things, including disaster predictions. We’ve been here before! In the late 1980s and early 1990s, everyone was predicting the imminent demise of the California wine industry due to phylloxera. Didn’t happen. Similar dire prognostications were heard when lead wine capsules were implicated in human disease, when the dot-com collapse led to a recession, and certainly, when the Great Recession struck in 2008-2009. Then, too, the corporatization of wine signaled, to many analysts, the demise of the family winery. And even as recently as the 1990s, neo-prohibitionism still haunted the industry, as anti-alcohol forces, mainly in the Republican Party, threatened to bring back a [somewhat milder] form of Prohibition.

Happily, the wine industry survived all those threats. And here we are once again, facing another one: Baby Boomers eventually will die, Millennials will not take their place as wine drinkers in sufficient numbers to save the industry, and—the coup de grace?—these same Millennials are turning to craft beer and spirits, not wine, to satisfy their alcohol dreams.

What’s a vintner to do?

The Silicon Valley Bank forecast answers this question in an interesting way, by pointing out the truism that Baby Boomers consumed food “if it wasn’t bad for you,” while “the current generation wants to consume things that ‘are good for you.’” As a Boomer, I can confirm the accuracy of that statement concerning people born between 1946 and 1964. As for “the current generation,” I don’t know how much “what’s good for you” drives their food-and-beverage consumption. But when I see the droves of people in their 20s and 30s in the many wine bars in my neighborhood (many of which tout themselves as “natural”), I am struck by the fact that they’re leaner and apparently healthier than many of their generational counterparts, who so often are sadly obese. This suggests to me that younger wine drinkers are concerned about their physical health. They perceive wine, perhaps a bit inchoately, as somehow “healthier” than beer or spirits (or teetotalism). I’ve been critical of the hyperbole that attaches to the promotion of “natural” wine (which there’s no actual definition of), but I will give the naturalistas credit for this: they came up with a damned good marketing message that may, in fact, get wine through this current uncomfortable phase!

  1. As a Gen-Xer, wine bar owner for a couple decades your theory is spot on. It’ll be up to the marketing departments to get the health message across. And beer has saturated fats! Viva la vin!

  2. The more one knows about Marketing, the more one is impressed by how the Natural Wine Movement is doing it better than anyone in the winespace.

  3. Austin: True! And the fact that it’s based on nothing makes it even more remarkable.

  4. This weekend’s issue of the financial times covers in great detail some staggering numbers and behavior of the boomers equivalent in europe and their younger counterparts towards alcohol consumption.

    This current generation is the lamest in many generations. Read the article,it’s very fitting with this good blog entry. By the way,Steve you write so well about wine maybe you could consider a career as wine writer and/or wine critic? See ya.

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