There is much talk about Millennials and how they are the future of wine. The obvious answer is that as they are the next generation, they are the future of wine. Simple logic. But, what will that really mean? Will their spending habits be greater than other generations? The jury appears to still be out on that question.
Currently, Millennials spend, on average, the least amount of money on wine each year. In Wine Spirits Daily, there was recently a brief article on the buying habits of the four key generations
"Nielsen analyzed the shopping habits of four key generations - greatest generation (aged 64+), boomers (45-63), gen x (33-44) and millennials (15-32) - and gave a rundown on what marketers should expect when targeting these groups. Interestingly, wine is one of the largest spending categories for seniors at $124 per year. Boomers spend $125 per year on wine, while gen x spends $78 and millennials spend $61 annually."
So Millennials are spending half what Boomers and Seniors spend, and about 20% less than Gen X. So when will this change, when will Millennials be spending more money on wine? Or will it never change to any significant degree? Is the publicity about Millennials being the future of wine merely sound and fury, signifying nothing? What is the reality beyond the hype?
Beyond the Millenbial issue, it is intriguing how little people spend, on average, for wine each year. Wine still needs to make much greater inroads among all segments of the population. I know that I spend way above average on wine each year. I have spent more money on a single visit to a wine store than the average person does all year. Most other wine bloggers are probably in the same situation.
I think wine marketers should consider addressing all generations, as none of them are really spending an inordinate amount of money on wine. There is opportunity with all four generations, and ignoring any segment is ignoring oppurtunities. Wine consumption may be continuing to increase in the U.S., but it can easily grow much more.
12 comments:
Interesting blog, Richard, but it’s missing an important part of the equation: Generation Jones (between the Boomers and Generation X). GenJonesers, who are more than 1 in 4 US adults, are hugley important to the food biz.
Google Generation Jones, and you’ll see it’s gotten lots of media attention, and many top commentators from many top publications and networks (Washington Post, Time magazine, NBC, Newsweek, ABC, etc.) now specifically use this term. In fact, the Associated Press' annual Trend Report chose the Rise of Generation Jones as the #1 trend of 2009.
It is important to distinguish between the post-WWII demographic boom in births vs. the cultural generations born during that era. Generations are a function of the common formative experiences of its members, not the fertility rates of its parents. And most analysts now see generations as getting shorter (usually 10-15 years now), partly because of the acceleration of culture. Many experts now believe it breaks down more or less this way:
DEMOGRAPHIC boom in babies: 1946-1964
Baby Boom GENERATION: 1942-1953
Generation Jones: 1954-1965
Generation X: 1966-1978
Generation Y/Millennials: 1979-1993
Here are some good links about GenJones I found:
http://www.usatoday.com/printedition/news/20090127/column27_st.art.htm
http://www.youtube.com/watch?v=1Ta_Du5K0jk
http://generationjones.com/2009latest.html
Great post, Richard.
I don't think the way wineries market to millennials should be tremendously different to those in genx. As millennials get older, they will spend more, the older gens will die off. It seems like a no-brainer to market to those who are consuming information through the internet these days as opposed to old school media (senior gen). I think the millennials are most impressionable. Also would be interested to see what the spending number is when you take a hybrid of millennials and genx. Lindsay
Very interesting facts here Richard. I was very surprised at the averages. What I would like to see is a stat that shows, of those that drink wine, what is the average they are spending?
Mellenials are getting their palate wet with wine. As they mature so may their tastes. However, wineries that maximize their marketing exposure to this group will have brand loyalty for generations.
Josh
I am incredibly surprised at the low amounts of money spent on wine annually for all categories. I spend over $61 on wine this weekend alone (I am a member of the Millennial Generation.)
As Linda said, it make sense to market to those my age - and no, it's not just because I want all the marketing strategies aimed at me. What's interesting about this study is that many others have shown the Millennials are actually spending more money on wine and are the highest category of growth for such. Also the 15-32 category is a very broad range and includes many who are not legally ABLE to purchase wine - so how accurate can these numbers be at this point?
I completely agree with you - it's important to market to everyone - if everyone focuses on one, core group then the messages won't mean as much anyway.
Recently, our country has become much more accepting of wine and because of this growth along with the introduction of several new regions, ALL generations are benefiting from this exposure.
Good post, Richard. I can see a separation between myself and other Millennials from your numbers. $61 is about how much I spend on wine per month, not annually. Though, I'm sure other wine lovers find that their true wine spending is much above the numbers you stated in your post.
I'm beginning to think that people are over stating the impact my generation is having. Sure, maybe more people are drinking wine, but I'm not sure it's such a big deal. It might become more of a big deal in 5 years when all of the Millennials can afford more/higher priced wines while the younger ones become of age to drink. I think it's a wait-and-see thing.
Rich, this was an interesting post. I think we also need to take into account the fact that many of us Millenials are in school for longer periods of time and are also getting into wine when there's been the biggest economic crises of our lives. There's a glut of wine on the market, so I think this is another important point where Millenials have easier access to closeouts.
On the other hand, I think I spend more on wine than 10 of my peers in my generation, but I guess that just goes with the territory! ;)
These are some interesting stats, and a nice post. There is a lot of data available these days for the wine industry to try and analyze and I'm sure it can get confusing and overwhelming. I would like to see these numbers correlated to the amount of disposable income in these age categories as Generation Y is the first of these groups to come of age and begin their careers in an economic environment that is measurably worse than the previous generation. I actually weighed in on my thoughts on how the wine industry should market to Gen Y'ers a couple of weeks ago http://www.bit.ly/au7T9S but I did not have these numbers. Nice post, thanks.
Hi Heytd4580:
Thanks very much for the info on Generation Jones, which I would fall into. I do admit to not having read much about that "Jones" and that most marketers really don't seem to do so either. But the links you provided are informative, and make sense.
Hi Linds:
Thanks! You raise some good points. My post only really touches the surface of these issues, and it is great to see the dialogue that has begun here. The participants, like yourself, are adding much to the discussion.
Hi Josh:
I agree I would like to see more stats pertaining to "wine lovers" are not just the general public. I think it is clear that the annual amounts would be higher, and possibly significantly so. I do believe millenials will spend more money on wine in the future, but how much more remains a question.
Hi Constance:
The figures were generally not much of a surprise to me, as I have seen similar studies in the past. I wrote a previous post about a stat where people on average buy about 1 bottle of wine a month. For wine lovers though, the stats seem so very low.
You are right that the stat for millenials is broad, and includes some that cannot legally buy alcohol. But even adjusting for that, I doubt the annual figure is that much higher. But more study is needed.
Hi Amanda:
Thanks! I would generally agree with you that a potential is there with Millenials, yet that potential might never occur either. The future will tell.
Hi Kristen:
There are numerous reasons that can acccount for the lower spending of Millenials. And as I mentioned above, there is a bit of a wait and see, to determine whether Millenials truly embrace wine, or just fall into step with previous generations.
Hi Scott:
Thanks, yes more studies and stats would be helpful in this regard. I know that the stats I cited are not the full story.
Wow! This is an interesting post. . . and what does it say about my husband and I, who are milennials, that we spend several times that $61 on wine per month. :)
As a marketing professional and customer myself, I look to the relationship building aspect of marketing to customers of any age. At least for me, there is nothing more important than connecting with a brand and what's behind it. Its why I belong to the wine clubs that I do and why I have become more and more willing to spend more on wine from certain wineries.
Like Constance said, I spent more than $61 this weekend alone on wine. I'd be willing to bet that Millenials will be the future of wine... it's just a matter of when we'll grow into it. We're still fresh out of college, still finding our way and our careers. Most of us simply can't afford to invest in wine for more than special occasions right now (the only reason I can is I budget for wine at the expense of other pursuits).
One thing we have going for us is we're the first generation to extensively use the internet and social media. Whether that will stunt our interest in wine or allow it to flourish remains to be seen, but I think enough producers and sellers are savvy enough to reach out to us in our adopted medium and generate enthusiasm and sales.
I'm rather interested to see how the wine industry as a whole adjusts to the newer generations (if at all). Since I wasn't around for previous generations, I don't have the proper perspective. I'll be consulting the non-Millenials for that insight.
Hi Travel Eat:
Thanks for your comments. There definitely is a subcategory in all generations for "wine lovers" who clearly spend much more than the average consumer. It is good to see too that you don't limit your marketing work to any specific age group.
Hi Joshua:
I do agree that it is all still very new, and millenials do have economic reasons currently that may limit their wine spending. Thus, it will be very interesting to see what happens in another five years or so, and whether they truly embrace wine or not.
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