It’s been big news within the (admittedly internecine) world of the U.S. wine business that Napa Valley startup Pix recently had to lay off most of its staff.
This has been an especially bitter pill for me to swallow, because 1) I truly believe that Pix (still in Beta) represents the future of how wine producers, retailers, consumers, etc. will intersect, and 2) Pix CEO Paul Mabray is a friend of mine. I also count some colleagues and acquaintances among those unfortunately being laid off. In short, the situation acutely sucks.
The situation also sucks for the U.S. wine business in the medium term, and it sucks even more that the industry is very, very unlikely to do anything about it.
Before detailing the foreboding warning stuff, I should probably explain why my outlook on this is so glum.
For nearly a decade, I (and many of my online wine writing cohorts) warned the U.S. wine business that it was not effectively communicating with what was then the next generation of U.S. wine consumers: Millennials. I wrote about it. I gave speeches about it. I talked on panels about it.
Then, I basically gave up, because it seemed as though very few in the wine biz had actually listened. I declared the battle for the hearts and minds of Millennial consumers over, and wine (in the USA, anyway) had lost. I even got interviewed on NPR about it. Still… it felt as though the message was falling squarely on deaf wine industry ears.
And so, I was likely one of the least shocked people in the country to read the following words in Silicon Valley Bank’s 2022 State of the Wine Industry Report (emphasis mine):
“• While boomers are still purchasing at higher price points, demand for wine will be slack as the median boomer hits normal retirement age in 2022 and younger consumers continue to prefer alcoholic beverages other than wine.
• While there were many reports of boomers taking early retirement in the pandemic as the stock market crested, retiring baby boomers likely will not change their preference for wine, though undoubtedly they will drink less as they age.
• Online sales will continue to grow as an important part of Direct-to-consumer (DTC) efforts and expand past its current share of 9 percent of an average winery’s sales.”
Yeah, well, no shit, Sherlock.
iF oNlY sOmEoNe hAd wArNeD uS!!!!!!!
Given the literal f*cking decade that the U.S. wine business spent largely ignoring those warnings, I have little hope it will heed what I am about to point out here regarding the issues that recently befell Pix. But, in the immortal words of Lando Calrissian, “Here goes nothing…”
Another friend of mine, Robert Joseph, interviewed Mabray regarding the troubles encountered by Pix in an extensive piece for Wine Business International. In that interview, Mabray had a a sobering insight on why Pix, which by any reasonable measure had been a hugely successful Beta, had hit a funding acquisition roadblock (again, emphasis mine):
“Pix had a proven thesis. It had growing revenue from wine companies looking for a solution to wine online. And 28 women and men in the company who represent – I believe – the best team in the industry to develop and grow this. But across over 80 VC’s and PE firms, it was clear that the industry’s track record made them fearful of investing. We need to work together to tackle that or the wine business will find it impossible to innovate.”
Folks, that is downright f*cked.
Eighty attempts at funding, and the largest issue they faced was that the U.S. wine business has a dogshit reputation among venture capitalists.
What this says to me is that things are quite likely to get worse in the digital wine space before they get better, and we’re looking at a multi-year process of potentially turning that around IF the industry starts to course correct now (which it probably won’t). Which means the industry I love will fall behind pretty much every other similar industry out there by an even longer stretch of years. Which could mean another generation of potential wine drinkers lost to, well, basically every other adult beverage that’s killing wine with younger drinkers right now.
So, yeah, it’s a sad time for the U.S. wine biz. And yeah, I’m kind of pissed off about it. Good luck to us in the biz, because we’re gonna need it…
Cheers!
What! The wine business doesn’t care about anyone younger than 60? I’m shocked! Shocked! How did no one see this happening?
If only someone had warned them…
I wouldn’t give up on the younger generation just yet. I didn’t become interested in wine until I turned 55 and during the last 20 years, wine has been a big part of my life. I guess my glass is still half full.
Hopefully you’re right, but the wine business has effectively already given up on them.
Is it weird that I think that by ignoring millennials they will gravitate towards us out of curiosity? One thing I’ve noticed is a predilection for authenticity, and for discovery. Being “sold to” is kind of a turnoff for our young friends. Or is that naïve? (go on tell me, I can take it)
I think it is naive to assume that. They’ve been ignored in ways that have made the product of wine less attractive to them, unfortunately.
Joe, many of us banged that drum about marketing to millennials. And the wine industry was slow to respond.
But now … we’re seeing a lot of things that we recommended in action. Wineries are talking more about their commitment to sustainability (some of them are even doing more than talk). Varieties beyond Cab and Chard are getting attention. Tasting rooms are changing their setups. Lots of wine is available in single-serving cans.
Now it’s time to move on to worrying about marketing to Gen Z. And for that, I present natural wine.
Feels like bandaids on a compound fracture at this point.
I became wine obsessed back in the mid 80s. It was a time when US producers were making some interesting choices, and you could buy some pretty fabulous bottles for an hour or two’s pay. We drank some absolute bangers, and could afford to keep exploring week after week.
Now? That’s not happening for anyone. Boomer demand and prestige chasing, along with the ridiculous values placed on growing land and inflation in general won’t allow anyone to make a shining example from solidly grown grapes at a price Millennials can afford.
Is it any wonder when they can choose between an awful bottle of supermarket wine they can afford, a decent bottle of wine they can’t afford, or a pint of Hazy IPA they choose the IPA? Or the RTD seltzer? Or bottled water and cannabis?
I’m not blaming anyone, but the industry is now past a state of maturity and into senescence. It has nothing to that appeals to Millennials, and don’t believe that any amount of outreach will create a connection to them or change the situation.
Well put. It’s basically too late at this point, in all likelihood.
Yeah, change is tough, and always needed when you least want it. Covid forced some innovation but I’m seeing wineries fall back to old patterns, I.e. Open to the public without resies etc. And virtual tastings and events mostly gonzo… what’s a PR to do?
Honestly, I’ve no idea. I mean, we’re basically screwed with half of an entire generational market now.
The ‘But that’s the way we’ve always done it..” is strong with this one..
They’re going to try to milk that Boomer market cow well after it’s a rotting corpse, aren’t they?
“You’ll have to pry my yellow notepad from my cold, dead fingers..”
HA!!!!
There are standouts in the industry that make wine approachable to Millenials and Gen Z. Take Tank Winery in Calistoga for instance. They have some of the best labels in the industry and pumping out always interesting and affordable wines. Not to mention pinball games onsite and killer parties! It’s about leadership and foresight. For many of the landowners in Napa Valley they are stuck with having to charge astronomical prices for Napa cab or lose money. Canning napa Cab will never be a thing or would anyone want it to be a thing? For those with money (and that includes many Millenials) they will buy wine. Perhaps offer a beer option as well as wine. Millenials like options and travel in packs. So give them what they want. A better experience they they are asking for!
That’s all great, but it’s stuff that wine brands should’ve been doing 8-10 years ago
As an elder Millennial and one that works in the wine industry, my focus has been to cater to like-minded folks by trying to steer away from what the Napa establishment has been doing for far too long. Granted, I am not doing anything revolutionary or groundbreaking, but with my small wine brand I am trying to bring things back to the basics: making wine fun again.
It seems that Napa, and by extension Sonoma, and all other “prestigious” wine regions will continuously cut off their nose to spite their face. They completely disregard and ignore the younger consumer while relying on aging Boomers to pay the bills. By doing this, Millennials that do drink wine will go smaller, emerging wine regions where the prices are at least palpable. I find it completely ironic that I live in Napa and would never be able to afford visiting here if it wasn’t already my home. This has to change but as long as some demographic continues to pay $200 tasting fees and buys $300 bottles of Cab, it won’t. The point being made here is that demographic is getting smaller every day.
I am trying to buck that trend by featuring wines and growing grapes that are meant for a new generation. Millennials want to identify with wines that aren’t what their parents consume and they want to latch on to something they can call their own. I also don’t want to appeal to wine collectors with massive 5,000 bottle cellars. To me, wine shouldn’t be taken too seriously. Wine should orbit around life and be a complementary piece, not the other way around. Buy a bottle, pull the cork, and let it rip. It’s simple. Somewhere along the line, the wine industry has lost sight of that.
Too bad we don’t have more like you out there