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New research suggests wine vs. beer thinking outdated

Jeff Quackenbush, Business Journal Staff Reporter
Monday, December 9, 2013, 6:06 am
Categories: Food and Beverage, Industry News, North Bay News, Retail, Top News Stories, Wine Industry Business Journal, Wine Industry Report 2nd-level stories | 1 Comment

ST. HELENA — Marketers of wine should be prepared for the full arrival of “Millennial” generation consumers at drinking age in the next two years, surging adoption of Internet retail sales and increasing understanding of “core” consumers as imbibers of fine beer and spirits as well as wine, according to a major tracker of wine consumer trends.

Among high-frequency wine consumers, who drink at least weekly, 43 percent also drink beer, and 41 percent of those drink craft beer. (image credit: Wine Opinions)

Rather than trying to dissuade consumers from brews and stiff drinks, the wine industry may want to tap into an emerging trend in research that suggests “polymorphous” preference among the core audience for higher-end alcoholic beverages, according to John Gillespie, principal of St. Helena-based consumer-research firm Wine Opinions and president of Wine Market Council.

Is marketing to craft beer consumers a good strategy for producers of fine wine?

  • Yes (40%, 18 votes)
  • No (51%, 23 votes)
  • Don't know (9%, 4 votes)

Total voters: 45
Polling period: December 18, 2013 @ 12:00 pm – December 24, 2013 @ 12:00 pm

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“There may be a what I’m starting to call a ‘convergence consumer’ who looks for increasing degrees of complexity, rarity and quality, and understands the importance of methods of production and provenance,” he said.

Early this month, Wine Market Council launched more focused version of its annual Wine Consumer Tracking Study, zeroing in on “high-frequency” wine drinkers, who tip the glass at least weekly. Estimates say they represent about 35 percent of wine consumers but buy more than 85 percent of fine wine.

Results from the new Wine Market Council study are set to be presented at The Vintners Inn north of Santa Rosa on Jan. 31 (winemarketcouncil.com/conference). The effort is following up on surprising results from a recent Wine Opinions survey of 1,151 high-frequency consumers.

Ninety-three percent of respondents who enjoy wine at least weekly also pour themselves spirits, and 33 percent consume one as often as the other, the survey found. For beer, 89 percent of core wine consumer drink also like a “cold one,” and 43 percent could also be considered core beer consumers.

Among high-frequency wine and beer consumers, 41 percent pick “craft” beers, according to the survey. Those are officially defined as coming from brewers who make less than 6 million barrels a year of largely malt beers and are mostly independently owned, according to the Boulder, Colo.-based Brewers Association.

Other brews frequently consumed by the core wine lover are imported lagers, pilsners and light beers at 15 percent, imported ales, stouts and specialty brews at 12 percent and domestics of various price points at a combined 20 percent.

“They find in craft beer the same qualities the like in wine,” Mr. Gillespie said.

The market for craft and “flavorful” beer at $12 billion in annual U.S. retail sales, compared with $100 billion for the total beer market nationwide, doubled in the past five years and is projected to double again in coming years, according to a recent study by Frank, Rimmerman & Co. The report notes that premium wine has about a 15-year head start on the craft beer business in “premiumization,” or convincing consumers to pay more to get better wine.

Driving the growth of craft beer are Millennial consumers, who are now ages 19–33, according to Frank, Rimmerman. Millennials have been seen as a key demographic for wine sales because the size of the generation — up to 80 million — and preferences for fine wine are comparable to those of baby boomers, the current core wine market.

“In 2014, the youngest Millennial will be 20, and we will have about 72 million of 77 million Millennials of drinking age,” Mr. Gillespie said. “And in 2015, all the Millennials will be of drinking age.”

And younger retail consumers have been seen as more apt to buy online. The recent figures for the online-shopping peak day, “Cyber Monday” on Dec. 2, suggest sales increased 18 percent to 21 percent over last year, based on comScore and IBM figures, respectively, while brick-and-mortar sales growth retreated for the first time in seven years.

Mr. Gillespie first presented results of high-frequency-consumer survey at the Wine Industry Financial Symposium in Napa.


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