Expert: ‘Luxury drought’ challenge to winemakers

SANTA ROSA -- Producers of high-end wine face a "luxury drought" decade through 2020, in which attracting younger "affluent" consumers who actively acquire luxury goods will be increasingly challenging as the ranks of such buyers decline until the buying power of the Millennial increases as they age, according to a luxury products marketing expert at a major wine direct-sales conference Wednesday.

This demographic trend suggests that recent indications of increased sales of wines over $20 a bottle do not portend a return to boom times for luxury-tier wines, according to Pam Danziger, president of Unity Marketing and Wednesday's keynote speaker of the 2011 Direct to Consumer Symposium in Santa Rosa.

"Don't buy it," she told the audience. "The consumer has changed. It's not going to go back to the boom again until 2020."

Her firm's quarterly survey of 1,250 households in the top 20 percent of U.S. earners showed a 25 percent increase in spending on wine in the past two years, from $400 a quarter in 2009 to $500 in 2010. Similar growth was seen in a two-year survey of American Express credit card wine purchases prepared for the symposium.

U.S. consumers reach their highest personal income, called the "window of affluence," from age 35 to 54, and those in the first 10 years of that bracket spend two to four times more on luxury goods than older consumers in that window, according to Ms. Danziger, the keynote speaker of the 2011 Direct to Consumer Symposium in Santa Rosa.

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