Expanding the population of wine consumers

The wine industry has experienced a decade of growth and prosperity, especially among the premium segments of the market, but with the current economic downturn and reports of excess grape and wine production around the world, there are serious concerns about the future growth of this industry--at least in the foreseeable short-term.

An obvious antidote to excess supply is to increase demand, but when it comes to wine consumption only about 25% of the American public actually drinks it--according to the Wine Market Council. This low percentage becomes even more startling when you break the numbers down further to discover that 10% of the U.S. population consumes 86% of the wine. In marketing terms, this group is defined as core drinkers-- or those people who consume wine at least once a week, and they are usually described as between the ages of 40 and 55, more educated and with average incomes of $78,000. The second 15% of Americans who drink wine are defined as marginal consumers, or those who drink wine once every two to three months. They are younger--between the ages of 30 and 49--with an average income of $63,000. The other 75% of Americans prefer to drink other alcoholic beverages such as beer and spirits, or do not drink at all.

So with an excess of wine coming on the global market, who is going to drink it? An obvious solution is to attempt to convince beer and spirits drinkers to try wine. However, this will call for large advertising budgets and will take some time before results may be achieved. A less expensive, more targeted and impactful solution is to encourage marginal drinkers to enjoy wine more often. As a group, they already consume wine but usually see it as a special occasion beverage only. The question is, why do they differ in their thinking from core consumers, who see wine as a beverage to enhance a meal, to promote a relaxed warm atmosphere between friends and family, as a health benefit and as part of a quality lifestyle?

Wine business researchers at Sonoma State University have set out to explore this question in more depth. Supported in part by a grant from Pacific Coast Farm Credit and using the original research work of the Wine Market Council as a foundation, they have just finished interviewing a targeted sample of core and marginal wine drinkers across the United States in an in-depth qualitative research project that attempts to delve deeply into the differences in attitudes, beliefs, values and behaviors of marginal versus core wine consumers.

What are some of their findings, and how can these be translated into marketing strategies to promote moderate and safe wine consumption? A major difference in the two groups is Positive Introduction--meaning that core consumers often had a very positive introduction to wine at some phase early in their lives. Often they were introduced to wine by a parent at a meal or special occasion in a safe and responsible environment. Following this, they have usually attended some sort of positive wine appreciation event such as a wine tasting, winery tour, wine education class or some other event that made wine seem fun and approachable.

Marginal consumers, on the other hand, often don't have these experiences of positive introduction. Many tasted wine for the first time as teenagers while drinking with friends and may not have enjoyed the experience, and very few have ever attended a fun wine tasting event. They often see wine as complex, slightly intimidating and "something you have to study or work at to understand."

An obvious marketing strategy for wine marketers to combat this obstacle is to promote wine as fun and approachable through sponsoring wine tasting events. It is a strategy that has already been used very successfully by the Australians, who have sponsored many of these types of events across Australia during the last five years specifically to convince a primarily beer-drinking population that wine is an excellent beverage to be enjoyed with food. It is also a strategy that has been used successfully by Wine Brats, which promotes over 30 events per year across the U.S. to introduce young professionals, usually ages 25 to 35, to wine. However, with the exception of Wine Brats, this concept has not been employed very widely across the U.S. The idea is simple--let people taste the wine in a fun and safe environment with food, family and friends. Don't harp on the aromas, how long it was aged or what brix it was picked at-just let people enjoy it as a beverage.

A second major difference between core and marginal wine consumers is the Every Day Food Connection. By this we mean that core consumers see wine as a beverage to compliment good food. Selecting a nice wine for the food they were serving was seen as fun and enhanced their normal daily dining experience. Marginal consumers did not find cooking and meal planning nearly as enjoyable. They often prefer to pick up take-out food on the way home from work rather than cook an evening meal. For them, wine remains a drink that is saved for special occasions, perhaps a celebration that merits the extra attention given to preparing the entire meal, including the choice of beverage.

Since it would be difficult to change marginal consumers' entire orientation to food, an easier strategy would be to show them that wine can be enjoyed with simple, daily meals, carry-out dinners, snacks and even by itself. For example, more advertising could be targeted at serving wine with hamburgers, tacos, chips and pizzas. Some very positive attempts are just beginning in this area, such as marketing wine as an alternative beverage at Super Bowl parties instead of just beer, but more efforts need to be focused on this. If consumers begin to see wine as part of their normal, every day eating lifestyle, then it can slowly become more a part of the American culture.

A third major difference between core and marginal consumers that was highlighted in the research is a theme the researchers labeled The Fringe Element. Here they discovered that marginal wine consumers often perceive themselves to be "on the fringes" of the wine drinking crowd. They don't see themselves as exactly fitting in comfortably with what they perceive as a group of people who are worldly, affluent, educated and seem to entertain a lot. Core drinkers, on the other hand, often describe themselves with these types of descriptors and believe they are part of this group.

Potential marketing strategies that could be used to address this issue are to make wine understandable, comfortable and accessible to the average consumer. Creating labels with more information about the wine, such as sweetness, body, food pairing recommendations, etc., would create a product that anyone can understand. This would ease some of the confusion when selecting a bottle among many brands.

Another technique would be to desnob the image of wine to the general public by showing it as a part of every day life. Media channels could be utilized to accomplish this by showing wine being consumed by average people on average occasions. This would stimulate social acceptance of wine, which would lead to an increase in wine consumption and wine knowledge.

Europeans drink regular table wine for daily consumption and expensive wines on special occasions. The typical U.S. consumer only understands the idea of special occasion wines. The goal would be to teach the typical U.S. consumer about every day drinking wines.

Finally, the best way to increase consumption is in accessibility. The average person will buy an alcoholic beverage that is convenient to obtain. Distribution lines need to be improved so wine can be available to the consumer at local grocery stores, liquor stores, gas stations and restaurants. Most wine producers need to bring the wine to the consumer because the average consumer will not go to the winery (unfortunately, laws get in the way here--Ed.).

Another interesting aspect of this research revolves around advice from both the core and marginal sample regarding what the U.S. wine industry should do to promote the sale of wine in America. Many creative answers were offered, but the most common responses included: (1) Changing the labels on the wine to be more consumer friendly. Suggestions included putting a star rating system on the bottle to communicate how dry or how sweet the wine is and recommending what type of food to serve the wine with. As one respondent stated: "It's hard to decipher the labels when they say it has aromas of raspberry, coffee and tobacco--what's that supposed to mean? What I want to know is whether it's sweet or dry, fruity or not fruity, light or heavy." (2) Changing the packaging to be more portable. "They need to repackage wine so it fits our fast-paced society. The bottle, cork and corkscrew are too complicated for our crazy lives." (3) Organizing the wine section in the liquor and grocery stores so that it is easy to unde rstand. Some stores organize by varietals, others by brand, and still others by origin. It is very confusing and often intimidating to the consumer. (4) Do more complimentary tastings in grocery stores and restaurants. "If I can't taste it first, then how do I know I should buy it? You know, wine is expensive for a hit or miss. Like shampoo, if I don't like it, no big deal, but $10 for wine, or even more at a restaurant, is a big financial risk."

Two improvement areas on which both core and marginal consumers agreed the most were advertising and pricing. Both groups thought the wine industry as a whole should advertise more. Some comments included: "Come up with an ad campaign like Got Milk and advertise on television," "Get younger people in wine ads" and "Do something fun and situational with wine, like a guy who's on a date with a girl, and she gets upset that he orders beer instead of wine." Regarding pricing, both consumer groups stated that the price of American wine is getting too high. Many mentioned they are switching to less expensive Australian and Chilean varieties, which they say they can purchase "for less with similar quality."

In conclusion, this article has highlighted a few of the differences between marginal and core wine consumers in a qualitative research format, but survey research would help confirm the findings. It should also be noted that some admirable efforts are already underway in the wine industry to address some of the issues identified in the study. For example, the work of Wine Vision, a non-profit group of U.S.-based wineries and vineyards, is exploring new ways to make wine a larger part of American culture. More wineries are starting to produce two labels--a lower-priced, high quality wine that is affordable enough to drink every day, as well as higher-priced, premium labels targeted at the more affluent and discriminating consumer. These efforts are laudable, but more aggressive and accelerated steps still need to be taken to ensure that American wine takes its proper and permanent seat at the global wine table.

(Dr. Liz Thach is associate professor, management of the Wine Business Program at Sonoma State University; Dr. Janeen E. Olsem is with the Wine Business Program; Elizabeth Rice is a student at Sonoma State University.

COPYRIGHT 2002 Hiaring Company
COPYRIGHT 2002 Gale Group