Frequent 1WD readers know that I get a bit, er, cantankerous when I notice long-standing wine industry types make wildly speculative – or even downright inaccurate – claims about how the wine industry functions, without citing any data in support of their crap claims.
This happens (just a guesstimate) roughly every seven minutes or so (many bloggers succumb to this as well, so I’m not picking on any particular kind of medium here).
In a small attempt to help bring the smack-down on such rampant speculative behaviour by those who ought to know better, during my recent stint at Wineries & Breweries Unlimited 2014 in Richmond I decided to sit in on a (not-surprisingly somewhat poorly attended) session where real data were presented.
“Emerging Trends within Beverage Alcohol” was a presentation highlighting what’s actually happening in the wine world right now, from a consumer perspective, and was given by Nielsen’s Elizabeth Crews (Vice President/Analytic Lead for Nielsen’s Beverage Alcohol Practice Area), based on a combination of information collected at retail scans, via consumer panels, and through actual account data. It’s probably not perfect, but it’s also probably as close to perfect as we’re going to get when it comes to consumer trends in wine in the U.S.
Here are my notes on the session, sans commentary, and based on the data presented (I’m paraphrasing, which will piss off some people I’m sure, but it’s because I don’t have access yet to the actual numbers that were shown; if I can get them, and/or the presentation itself, I’ll post them here). Bottom lines: if you think Millennials and GenX aren’t key to the future of fine wine sales, you’re probably wrong; if you think beer and other adult beverages won’t come gunning for wine drinkers in terms of media spend, you’re also probably wrong; if you think expensive fine wine has no real market after the recession, you’re… wait for it… wrong; if you think blends can’t be popular because they’re not taking advantage of the brand recognition of well-known grape varieties, you’re also, maybe… wrong; and if you think Malbec is dead in the wine sales water, you’re very wrong.
My aim here is posting this is largely selfish, in that I strongly suspect that I’ll be linking back to this post incessantly when commenting on other websites, to deliver smack-downs on the under-supported speculation that seems rampant online and in Op-Ed pieces right now. And yes, I realize those efforts are totally Sisyphusian, but I just can’t help myself…
- “Wine is winning in a larger sense” in terms of general growth.
- 2013’s Nov/Dec data shows big jumps in sales of >$20/bottle wines; it’s a similar situation for sparkling wines, but the spike hits just before NYE.
- Beer is losing share to Wine and spirits, and it’s now <50% of alcohol spend.
- 21-36 year old buyers (Millennials) are showing jumps in wine purchases, and are fleeing beer (same with Gen X).
- Behind fresh produce, beverage alcohol is the single fastest growing food segment Nielsen is seeing now. Coolers are up 20% vs. 2013.
- Everyone in beer, spirits, and wine is spending more on media.
- On premise, BTG purchases are up, wine is on the rise, and beer is on the decline. Two of the wine styles going gangbusters right now are Prosecco and Malbec.
- While there’s growth, a large amount of it is coming from new brands/products, which is translating into shelf challenges for everyone.
- One of the primary drivers for wine purchases is the desire to increase knowledge; this is most pronounced with Millennial and Gen X buyers.
- In category dollars, craft beer is up 20% vs. last year. Flavored spirits are also way up… even flavored whiskey. This matters for wine because craft beer buyers have “strong interaction” with fine wine. They’re buying both more craft beer and more wine.
- We should expect adult beverage products of all stripes to try to market to Wine lovers in attempts to steal them away to other similar product purchases.
- Many buyers report the concept of “local” to be important to them, even with respect to Wine purchases.
- In 2009, we saw the $4-$6 category diving wine growth; now, it’s $12-$15 and especially $20 and up.
- However, most new wine products are coming in at the $9-$12 range (which suggests that the wine biz mostly got it wrong in their interpretation of the market drivers recently).
- Domestic wine currently leads on value growth. Rose is way up vs. last year. White Zin and Syrah continue to decline.
- Moscato is still growing but at a much slower pace now.
- For the $10 range, blends are accounting for “new item activity, driven by Millennial, African American, and Hispanic consumers.”
- There are more outlets than ever for consumer wine sales, including dollar stores.
Cheers!
"21-36 year old buyers (Millennials) are showing jumps in wine purchases, and are fleeing beer (same with Gen X)." Interesting. I was just at a wine trade fair in France where they presented a report saying that millenials are giving up wine altogether.
Clearly not happening in the US, but I wonder if that was specific to France or Bordeaux where the trends are less positive.
Sorry I was not clear. It was a study of the French market.
It’s certainly not what’s happening in the U.S., Barney.
Joe, Nielsen covers at best only 50% of the alcohol market because they rely on the sellers to give/sell Nielsen the scanner data. A lot of the important ones won't because they consider the data proprietary. Not only are the data "imperfect" but most of them are simply missing. And those panels tell you very little about what exactly people are buying, they're used for the "why" instead. So I'd take all of this with a huge grain of salt — and be careful about using it as backup to anything you're trying to write. You're mostly getting info on what people buy in supermarkets, period.
Tom, I guess the counter argument is that supermarket data are still quite important and indicative of trends.
I can't agree that supermarket data is indicative of any trends except the trend of people who buy wine in Safeway. Nielsen doesn't include Whole Foods, Trader Joe's or Costco — and Costco sells more wine than any other non-state entity in the U.S. Nielsen doesn't capture any place that sells the wines you review on this blog. The data are fine, though limited — the problem is using them to say anything except what they are, exactly.
Tom, I don’t think we can dismiss the data, either, however. And those who make wines mentioned here need to be thinking about the trends that data support. I’d add that it does cover some of the wines mentioned here, considering the data on high end (though probably not low production, etc.).
Who exactly would argue with this data… seems pretty non-controversial. Not sure I understand all the smack-down speak.
Michael, you’d be surprised…
Just curious if Ms Crew from Nielsen had anything to say about the position of box wines and what's expected in terms of 2014 sales. The Wine Market Council reported that 297 million cases of table wines were consumed in the US in 2013 and 23% of that total was box wine. They didn't differentiate between 3 and 5 liter boxes.
Good article. Thanks.
Hi Jerry, I don’t recall anything specific on box from the presentation.
Good information and nicely summarized. Thanks.
Thanks, Tony.
I still don't get the attitude that the "wine biz" keeps getting things wrong. If wine sales are so healthy, is that because the bloggers are driving growth and not the people who are developing the brands, pounding the pavement, making the wines?? Puzzling.
And yet again you slam others for not including data, while you give the Cliff Notes version without letting us see the data, with the excuse of "it's out there, can I have it please?" For example, some items could be way up off of a small base, the data is skewed because it doesn't include ANY fine wine shops across the country, etc…
And finally, who is the wine business thinks that Gen X and Millenials are not the future?? Since everyone older than them will eventually cease to consume, I can assure you, that there is not a major wine company that thinks the opposite. That's not speculation, that's from sitting in dozens and dozens of meetings and still not hearing anyone say, "let's just keep going after the baby boomers, they'll live forever!"
This I'm smarter than everyone else in the room from someone who has never sold a case of wine to a customer is getting very old. Yes, I may be cranky tonight, but read your first couple of paragraphs putting down people and then you again do exactly what you criticize others for… and it's the second post in a row where you killed people for lack of data and then presented virtually no data.
PA – 1) No one is saying bloggers are selling all the wine. 2) In providing my notes here, I'm providing a proxy to Nielsen's data, which as already stated isn't perfect or definitive, but shouldn't be dismissed either given the sources. 3) I guess someone needs to show me and a lot of other people what is being done in wine to court Gen X, because from my perspective it isn't really being done. 4) Look, if I'm giving you angina, stop reading, already. I get just as cranky reading speculations by wine writers and others that don't cite any sources at all; at least I'm sharing the sources that I've got and am making an effort.
Wine writers are NOT Wine Industry people. If you mean wine writers, say wine writers.
You and I had this same debate last time you killed people for not including data while at the same time not providing your own data. Making an effort is not the same as providing actual data. How about a link to a wine industry exec saying that millenials are not important, or one saying that moscato is not a trend, nor red blends…
And I really don't get how you want people to cater to millenials. If they are already drinking a ton of wine, younger than other generations, doesn't the industry get some credit for that?
PA – forest through the trees. Wine writers, from the perspective of anyone not involved in making, selling, or distributing wine, are part of the ecosystem of the wine biz. You’re right in that I should provide more direct examples of the stuff that pisses me off, though in some cases that is an indelicate approach. And you’re right that we’re not going to agree, since you don’t consider a summary of data to be appropriate data (though I’d caution you that doesn’t make the underlying data incorrect). And please stop saying I’m killing people; I get your point, but none of this is equivalent to life or death matters.
You're right, a smack down is not killing, my language was insensitive. My point is that while in every industry there are challenges and people who don't get it, many of the people that are writing things that are ticking you off are no more wine industry people than a local bartender might be…
So when you paint with what appears to be a broad brush, there are readers, who may not take the time to comment like I do, that are puzzled and pissed off because they can't understand what you've got against all of us that are directly responsible for the day to day growth of our industry.
You're a smart guy, and make many good points, but it would be better if wine industry types, when discussing you latest column, are talking positively about something you wrote, as opposed to "can you believe that guy??? How many cases of wine has he ever sold?"
PA , believe me, I understand. In some ways, I want people to get irked about this, and I often run the risk of style trumping substance as a result. And hopefully I’m conveying the sense that I do value your contrasting opinions (& those of others) and that they do inform how I approach these topics in subsequent posts. Be careful about the writers, in this case I’m talking about some quite prominent and influential people. And finally, you and I are probably overdue for a beer at this point!
Correct on the beer as we are not very far apart and have been having these conversations for years now!
This information is great but why is it posted again almost a year later.
I need to know the latest information not from last year.
Thanks for wasting my time.
August – it wasn’t.