Baby boomers comprise a large segment of the population in ABC Fine Wine & Spirits’ home market of Florida, but the 123-unit retailer says millennials are a growing part of its customer base. “Millennials are paying more attention, partly because we’ve done a lot more to get their attention,” says ABC’s chief marketing officer Sean Kelly.
ABC’s millennial customers typically buy wines in the $12-$15 a 750-ml. range, and Kelly says they aren’t really so different from older generations, as they too look for wines that over-deliver. “Everyone loves to find a $14 wine that tastes like a $20-or-above wine, so we strive to stock them,” says ABC director of sales Alex Poreda. A key point of distinction is that millennials are more adventurous in terms of styles and regions, Poreda notes, whether with Pinot Noir from Chile or sparkling wine from Spain. “Origin seems to have less bearing on their selections,” he says.
There are no precise parameters to define the millennial demographic, but the Pew Research Center defines the birth years as between 1981-1996 (ages 23-38 in 2019). This year, millennials are expected to overtake baby boomers as a share of the population, with a total of 73 million. Millennials became the largest generation in the U.S. workforce in 2016, with 56 million either working or looking for employment. Many factors are set to continue the demographic’s growth, such as immigration. By 2036, Pew estimates, the millennial population will peak at 76.2 million.
To understand how to effectively reach this slice of the population, players like E. & J. Gallo Winery have commissioned in-depth research. Last year, Gallo instituted a multi-phase survey called KUBE—Knowledge Unearthed for Business Expansion—which examined all beverage alcohol categories to see what motivates consumer behavior on- and off-premise, as well as in e-commerce channels. “Before approaching millennial consumers, we must understand that there are many subsets of this generation, each with its own needs,” says Jennifer Jo Wiseman, vice president of consumer and product insights at Gallo. “Millennials are part of several KUBE consumer groups, sharing attitudes and behavior with other generations.”
By not approaching the millennial demographic as one unit, Gallo uses its understanding of consumer values and beliefs to offer messages that speak to those behaviors where purchase decisions are made. One avenue is reaching out to consumers who are actively engaged online. Gallo’s marketing effectiveness comes from understanding enough about millennials to meet them where they are and educate and persuade them in meaningful ways. “Wine should be more about pleasure than being an expert, for example,” Wiseman explains. “By offering wines that are enjoyable and approachable, the industry will continue its expansion into everyday occasions.”
New Tastes And Habits
While the millennial generation encompasses many consumer groups, wine marketers have noticed some overarching trends. “On the wine side, Meiomi, Ruffino, and The Prisoner Wine Co. are incredibly popular with millennials,” says Jim Sabia, executive vice president and CMO at Constellation Brands. “Each of those brands has a unique story and an approachable drinking style, which resonates with millennials who are looking for authenticity and a wine for many occasions.”
Constellation acquired California Pinot Noir-focused Meiomi in 2015 for $315 million, and the brand has since surged in volume, from 790,000 9-liter cases in 2015 to 1.35 million cases last year, according to Impact Databank. The range also includes a Chardonnay ($21 a 750-ml.) and rosé ($25), as well as the recently launched méthode champenoise Meiomi sparkling wine ($27). “We see that millennials over-index on rosé and sparkling wine and are willing to spend more for quality, purchasing just as much luxury-priced wine as older generations,” Sabia explains. As a result, the company has invested in Meiomi sparkling wine, as well as its Black Box Rosé ($25 a 3-liter box). Through its fine wine division, Tru Estates and Vineyards, Constellation also entered into an exclusive import partnership last summer with Champagne house Champagne Palmer & Co., making the brand available in the U.S. for the first time since 2015.
California-based Riboli Family Wine Estates imports the wildly popular Italian label Stella Rosa, one of the largest brands in the premium-plus wine space, which does around 1.8 million cases in the U.S. “Millennial wine drinkers enjoy a wide range of styles, regions, and taste profiles,” says Riboli winemaker and fourth-generation family member Anthony Riboli. “It’s a group that’s very diverse and shouldn’t be pigeonholed.” Stella Rosa’s original lineup—which includes Rosso, Moscato D’Asti, Peach, Pink, and Berry wines ($11-$12 a 750-ml.)—has been extended numerous times in recent years. In 2018, the brand added sparkling wines Rosso Lux and Black Lux (both $19) to its Imperiale collection, offering trade-up opportunities for consumers. Also added was Rosa 22 ($26), a new aromatic aperitivo brand from Italy’s Piedmont region.
On the retail side, Kelly of ABC agrees that the millennial demographic has taken rosé to new heights. “Rosé still shows no signs of slowing down, and we’ve brought in a lot of new items,” he says. In addition to spending more to upgrade their wine selections, Kelly says millennials are insatiably curious, wanting to learn all about the wines they buy. “When they find a varietal they like, they’ll often learn as much as they can about it and try different expressions of the grape across various regions,” he adds.
Gallo is reaching millennials with a number of its California wines, including Apothic, which is currently the largest wine brand in the above-$10 segment and offers a number of labels, including Red, White, Dark, Crush, and Rosé ($7-$14 a 750-ml.). The Apothic brand depletes around 3.5 million cases in the U.S. with retail sales of more than $400 million, according to Impact Databank. Last spring, seeing opportunity to capitalize on a drinks trend that’s hot outside the beverage alcohol space, Gallo extended the brand with a limited-release, cold brew coffee-infused red wine, Apothic Brew ($14).
In addition to innovating new styles and taste profiles, Gallo has made inroads into such alternative packaging as cans, popular for their portability and sustainability. Last fall, the company’s Dark Horse brand ventured into canned wine for the first time with rosé and Pinot Grigio offerings ($7 a 375-ml. can). The Gallo portfolio also includes the lightly carbonated Barefoot Refresh range ($9 a 4-pack of 8.5-ounce cans), which debuted in canned format in 2016. Canned wines appear poised for further growth, with sales totaling about $34 million in the U.S. in 2018, marking a steep rise from less than $2 million in 2012, according to Nielsen data.
Alternative packaging propelled Delicato Family Wines’ (DFW) Bota Box brand to 6.9 million cases in the U.S. in 2017, according to Impact Databank. Available in 500-ml., 1.5-liter, and 3-liter packages, the extensive lineup ($6-$23) includes popular styles such as Nighthawk Black red blend, Dry Rosé, and Pinot Noir, among others. “The 3-liter box is the perfect amount of wine to share with friends, and millennials relate the brand to the social experiences where they drink Bota Box,” says Kate McManus, vice president of marketing at DFW, who notes that the sustainability of the eco-friendly package also appeals to the environmentally conscious generation. “Three-liter packages, cans, and Tetra Packs have become more preferable in certain away-from-home occasions than the typical 750-ml. glass bottle. This generation has broken down boundaries of how things are supposed to be, and the acceptance of alternative packaging has continued to grow.”
Treasury Wine Estates has had particular success with millennials through Australian brand 19 Crimes, which depleted 1.55 million cases in 2018. The wine’s labels include images and stories of real-life criminals who were sent to Australia, and can be brought to life through Treasury’s “Living Wine Labels” augmented reality app, which allows consumers to watch brand-related content by scanning a label with a smartphone. Similarly, last fall Treasury rolled out the millennial-focused emBrazen brand, which features a California red blend, Cabernet Sauvignon, and Chardonnay ($13-$16 a 750-ml.). Like 19 Crimes, the wines’ labels can be enhanced through the app, telling the stories of historic female pioneers. EmBrazen’s packaging, the wines themselves, the marketing concept, and the digital component are all centered on millennials, and the brand creation process was carried out rapidly. Treasury considers emBrazen a template for how to target millennials moving forward.
Marketing With Meaning
Understanding millennial tastes and wine preferences is just one piece of the puzzle. Wine marketers are also studying effective points of contact and meaningful ways to get their messages across to the diverse demographic. A sense of discovery is crucial for millennials, and can drive fine wine sales. “Consumers, including millennials, are nearly twice as likely to try a new wine or cocktail in a restaurant or bar than in retail stores,” says Gallo’s Wiseman. “In these spaces where millennials play, they’re likely to be influenced by friends or suggestions from servers or bartenders.”
Millennials, of course, rely heavily on web and mobile platforms to explore the world of wine. Gallo is highly active with direct-to-consumer brands and has partnered with several e-commerce retailers in order to be where consumers want to buy products. “Being efficient and informational is ideal for the online space,” Wiseman explains. Still, retail remains an opportune environment for introducing consumers to products they may not yet know. In-store experiences are often where consumers are first made aware of a brand, and therefore it’s important to provide shoppers with the right experience based on who they are and what needs they have.
Texas-based Twin Liquors knows the value of in-store events and tastings. The retailer engages with consumers across its more than 90 locations throughout Central Texas by regularly hosting a variety of educational events. “We have fun, but we want to make it meaningful to both the consumer and supplier at the same time,” says Sandra Spalding, Twin Liquors’ director of marketing and events. Education is at the heart of the company’s customer outreach, from free themed wine tastings and wine pairing dinners to holiday gift-guide mailers and active online engagement. Twin Liquors’ YouTube channel, for instance, features a number of mixology demonstrations and at-home entertainment tutorials.
Florida’s ABC has noticed an increasing number of millennial shoppers attending in-store wine tastings, not only to try new wines but to ask winemakers and staff members informed questions. To help feed the demographic’s appetite for learning about products and wine styles and to pique their interest, the retailer posts as much educational content to its social media accounts as possible. “Our millennial customers are asking many of the same questions as every other generation, but the biggest difference is in how we make them aware of what we offer, and how we’re here to help them explore,” Kelly explains. “We have an opportunity to be better storytellers about our wine selection and share our expertise on the platforms where millennials are paying the most attention.”
While Constellation’s wine portfolio features selections that target a number of trends among millennials, such as fast-rising Ruffino Prosecco and red blend-focused The Prisoner, the company says it’s critical to share the stories of the brands that engage millennials’ time. This means digital advertising, social media influencer partnerships, and live experiential moments. “Millennials are more likely to drink across alcohol categories in one occasion and to purchase alternative formats,” says Constellation’s Sabia. “We’re looking to meet them where they are by investing in cross-category innovation, like Cooper & Thief, which has three expressions aged in whiskey and Tequila barrels. We’re also investing in packaging innovation, like single serves.” The Black Box brand offers its wines in 500-ml. Go-Pack formats ($5), while Woodbridge by Robert Mondavi is offered in 187-ml. Go-Glass containers ($3).”
DFW divides the millennial demographic into two subgroups—older and younger millennials—and uses different marketing techniques for each. But the company’s overall messages to millennials is don’t mimic their language. “If they see a brand is trying too hard to communicate with them, it will likely turn them off,” McManus explains. “We need to market to them very differently than previous generations to get their attention. But they’re our current and future customers, so reaching them in the right way is going to be very important.”