There's an elephant in the room. The wine industry is at a standstill. It's no secret that global alcohol consumption is decreasing. Younger generations are drinking less alcohol than previous generations. But what is the wine industry doing?
Understanding the reasons behind this decline (a troubling combination of health concerns, social media and public image, diversity and choice, and economic insecurity) and addressing changes in drinking behavior will help the industry (drinking (an industry not known for its ability to enforce driving enforcement). change quickly) adapt to survive.
According to the European Parliament Research Service, wine consumption in the EU fell by 24% between 2010 and 2020.
health conscious consumers
Health and wellness trends are promoting temperance and abstinence. Powerful messages about the negative health effects of drinking alcohol, regardless of the amount, are fueling the debate. According to the World Health Organization, as of January 2023, “there is no safe amount of alcohol that does not pose a health risk.”
Younger generations are more aware of what influences their health and well-being than previous generations at the same age. Generation Z (born 1997 to 2012) in particular is plagued by information and data overload.
Erica Ducey, founder of the podcast Business of Drinks and consultancy (GenXer), says more than half of U.S. Gen Z and Millennials (born between 1981 and 1996) drink a moderate amount of one to two drinks a day. He says he even engages in heavy drinking. – as unhealthy. According to marketing intelligence agency Mintel, around a third of Gen Zers in the UK do not drink alcohol at all.
According to beverage market analyst IWSR's BevTrac, based on data collected over the six months to April 2023, the key to maintaining both physical and mental health through moderation regarding changes in global alcohol consumption behavior. was the second most common consumer sentiment.
social media tension
Social media can perpetuate these feelings. “The portrayal of what success and the good life looks like has changed a lot these days, fueled by social media,” says Millennial Jarlath Karan, Wine Logistics Manager at Decanter. “Everyone is beautiful, fit and healthy,” he adds, but for many, alcohol doesn't align with these goals.
Ben Franks, Chief Operating Officer, Canned Wine Co. Credit: www.benfranks.wine
Ben Franks, a fellow millennial and chief operating officer of a canned wine company, echoed this sentiment, saying, “Social media is where everyone is expected to be super healthy, super successful, and consistently overachieve. “There's a lot of pressure on us,” he said. Therefore, we become very conscious of our health.
paparazzi problem
Sofia Longhi, wine communicator and founder of Skin + Pulp. Credit: Peel + Pulp.
But it's not just the roster of health influencers on social media that has Millennials and Gen Z in their hands. “It's not wise to discount vanity, but you also don't want to embarrass yourself publicly,” says Sophia, a millennial wine communicator and founder of the blog Skin + Pulp. Longhi says.
It's important to recognize the difference between these two demographics. Millennials are on the brink of drinking for fun, drinking to excess, and worrying about their health and image. Longhi feels that image is more prevalent among Gen Z, who are more sensible about the effects of public embarrassment. Their permanent record of drunkenness rolling down the gutter is a far cry from the image they want to convey to future employers.
Longhi also points out that increased awareness of women's safety is a strong factor holding young drinkers back.
Cultural and social changes in drinking habits
Credit: Ellen Doggett
The way we drink wine is changing. “People are going out less and staying closer to each other's homes,” Longhi said. UK-based wine importer Liberty Wines' 2023/24 Premium on Trade Report reflects this. It found that restaurant and bar sales declined by 19% from 2019 to summer 2023.
Although the first half of this period was clearly during the COVID-19 lockdown period, the fact that this trend has continued is noteworthy. “We are seeing a significant shift in drinking wine at home,” the report said.
“The way we socialize has changed,” Curran agrees. “Now you don't have to leave the house to feel engaged with people.” However, what this means is that Gen Z and Millennials are special because the opportunity to meet in person is special, with good wine and delicious There is a strong desire to share food.
Franks believes that connection is a key aspect. “It’s a physical act of sharing,” he says. “If anything, Millennials and Gen Z are people who overshare. They live their lives online, and when they have real social opportunities, they put more effort into what they bring. .”
Young drinkers view wine as an occasional treat. “It's completely different from what we knew,” says wine marketing and communications expert Anne Burchett. He believes that luxury and excess were once socially acceptable (she is a baby boomer). “We have to accept that what becomes fashionable and socially acceptable in one generation automatically loses a little of its luster in the next.”
Additionally, in the United States, “younger generations are more ethnically diverse,” Ducey said. “There are fewer and fewer Americans who come from Eurocentric backgrounds or from families who grew up drinking wine at the dinner table and at social gatherings.”
Drink less, but drink better = prioritize fun.
When and where we drink wine reflects not only changing social norms, but also economic conditions. Younger generations will spend more on less. “Even though alcohol consumption is down, sales are up,” says Ellen Doggett, a former sommelier, wine industry expert, and millennial. “People want to drink better, and they are being more careful about what they spend their money on.”
This premiumization effect is not new, but was further exacerbated by the recent financial crisis, which left young people with far less disposable income than previous generations at the same time in their lives. Their financial expectations for the future are not in the same realm. Spending on entertainment increases as traditional purchases such as houses and cars become impossible.
Ellen Doggett, former sommelier and industry expert.
Although these two key demographics, Gen Z and Millennials, may become more affluent as they age, they are less likely to “age up” into wine and “drink less than previous generations.” “I don't drink,” he says. “I don't think they're going to spend as much money as baby boomers who have been financially affluent for a long time,” said Miles Beale, CEO of the Wine and Spirits Trade Association and a Gen Xer.
Spending has a lot to do with young consumers' ethics and values, Longhi said, and “they tend to be very loyal to brands that align with them and represent them.” .
purchasing habits
Credit: Canned Wine Co.
It is clear to the younger generation where these values lie. Provenance, sustainability, authenticity and tradition drive their buying habits. Since all these values come with a higher price, this already means a downward shift in quantity.
This ultimately means less consumption of cheap bulk wine. Anyone who works in the wine industry will admire it.
“This is the most replaceable and most forgotten category,” says master sommelier Stefan Neumann, an Austrian independent wine consultant (and millennial) based in London. This should be a concern for wine companies, as younger generations are looking for memorable experiences that they can share with others.
Curran added: “The biggest hope is that in the short term the wine industry will become less overindustrialized and produce more premium, higher quality products.”
But is it really that simple? In some ways, Longhi says, wine has become more elitist and less accessible. As financial burdens continue, your ambitions will change as well.
“I'm not sure that premiumization is sustainable,” Beer said. Recent data from IWSR suggests that premiumization is slowing. “Consumers are cutting back on alcohol spending as economic anxiety increases and the cost of living crisis squeezes disposable income,” the report said.
The astronomical growth in single-serve ready-to-drink (RTD) beverages in the United States can be partially attributed to widespread hesitancy toward the upfront cost of a full bottle of wine. '60% [of consumers surveyed] They say price is very important when deciding which beverage to buy,” says Duecy. “Less than one-third of people who spend more than $30 on a bottle of wine spend $30 or less on a bottle of wine, and 75% say they rarely or never buy wine that costs more than $50.
the chosen sea
When it comes to wine consumption, it's never good to have too many choices. The market is rich and varied with both alcoholic and non-alcoholic drinks, and the younger generation is used to experimenting. Additionally, these other categories communicate incredibly well with consumers.
“No-and-Load Links gives us so many options that it's almost as appealing as trying alcohol,” says Franks. “If anything, alcohol is a bit similar. In the non-alcoholic category, we have kombucha, non-beer/low beer, raw spirits, a variety of mixers and blends… When it comes to trying something new, it’s really There’s an element of choice and it’s exciting.”
But it's not just other beverages that keep wine off the radar of younger generations. Among Generation Z in the U.S., “alcohol use is replacing marijuana use,” Ducey said. “More than half of the U.S. population lives in states where marijuana is legal.”
“The legalization of marijuana has given us another way to generate buzz,” says Den Belmont, founder of Good Wine Good People and a Millennial. This also increased his CBD and THC-infused RTD, posting double-digit increases.
Erica Ducey, Founder of Business of Drinks.
lifestyle generation
Despite continuing concerns about tariff increases in the UK, industry experts' sentiment regarding the future remains largely positive. But the flow is towards those who are stuck.
Involving younger generations in wine requires considering their needs and values, which can foster innovation and positive change. From reducing packaging, to honest sustainability practices, to alternative formats, to being open to new and different flavors, to connecting on your preferred channel.
“We have to exercise this constant creativity, constant renewal and churn… We have to make sure our products are relevant to younger generations,” says Burchett. “We need to be optimistic about the younger generation.
“I refuse to support this attitude that we're doomed and they're spending all their money on Starbucks. I think this is reductive and condescending and not very wise.” Accept that they are different. ”
For Gen Z, wine is much more appealing as part of an aspirational lifestyle, rather than a luxury or binge. “I think this is an opportunity to move away from cheap bulk wine and reintroduce wine as a lifestyle choice,” says Longhi. 'wine can Be part of a healthy and successful lifestyle. ”
“It's up to the wine industry to make sure it's not more complicated than it needs to be,” Belmont says. The wine industry can show younger generations how wine fits into their existing lifestyles, rather than forcing them into traditional pairings and situations that don't resonate with them.
