Where Millennials Are Buying Wine: Some Tough Love For The Wine Industry

Millennials are wine’s next big consumer.  So why aren’t smaller business in the wine industry (boutique wineries, wine shops, wine bars, etc.) seeing much of the action?    There could be several factors at work, most of which business owners have direct control over.  These controllable factors include outreach, branding, marketing, social media presence, brand awareness, accessibility and plain old customer relations.  However, one factor that many people don’t think of – and one that business owners do not have direct control of –  is the current buying habits of this generation.

Somehow (Millennials) have gotten to the point where we’re getting $15 – $20 everyday drinking wine, but we’ve never been to a tasting, never been to a winery, and feel like we have no idea what we’re actually doing. It doesn’t stop us from buying, but it does keep us in our comfort zone of the same familiar aisle at Trader Joe’s.  And there’s the issue.

Though there are some numbers out there that I have found useful for my own use, the details that small businesses need are not available from the huge (and expensive) research firms at this time.  Having all the tools, I decided to take matters into my own hands and conduct my own online survey for my company, Millennier Wine Sales.   This survey was conducted over the internet using direct email and social media tools.  The sample size consists of over 100 respondents within the age range of 21-32.  The percentages that you see are rounded to the nearest 100th of a percent.  The respondents were all located in states where it is legal to purchase wine grocery stores, and mainly resided in California.

Though this information was originally intended only for MWS, I’ve decided to publish my findings in the hopes that people will take notice of the trends and pass on the information so we as an industry can do something about it.  I’ll continue to post the other findings of this survey, but I find it extremely important to all aspects of the industry to focus on this first question:

Millennial wine buying habits as revealed by a recent Millennier Wine Sales online survey

Millennial buying habits as revealed by a recent Millennier Wine Sales online survey: Bars 1.91%, Grocery Stores 45.71%, Liquor Stores 25.71%, Mini Mart 1.91%, Restaurant 4.76%, Wine Shops 17.14%, Other 3.80%

The most important lesson we learn from this chart is that ALMOST HALF of Millennials are buying their wine in a grocery store.  An additional 25% are purchasing wine at liquor stores that include giants like BevMo and others.  With results like these, it is not hard to understand why small businesses in the wine industry are not feeling the positive effects of this Great New Hope called Millennials.

It makes sense really.  As a Millennial, I’ve walked the path than many of us have taken, and many more will continue to do so in the future:  We get our first apartment and realize that with 2 Buck Chuck, we can actually buy wine!  It’s kind of a big deal to even HAVE wine as a 21-22 year old, so I would (swear to God) not drink it myself, but save it for guests (I know, I know).  After we get used to buying wine for $2, we start in on the Yellowtail.  Now we’re experiencing a new varietal or 2 and guess what – this is why we love Syrah!  After some time with the YT, we now know we enjoy wine and are comfortable spending more than $10 on a bottle of wine.  Now we’re serious wine consumers, but the only place we really feel comfortable buying wine is in the super-market.  Somehow we’ve gotten to the point where we’re getting $15 – $20 everyday drinking wine, but we have never been to a tasting, never been to a winery, and feel like we have no idea what we’re actually doing. It doesn’t stop us from buying, but it does keep us in our comfort zone of the same familiar aisle at Trader Joe’s.  And there’s the issue.

Less than 2% said that they purchase most of their wine from wineries or wine clubs (included in the “other” category).  How will smaller wineries that do not have placement or distribution in huge grocery store chains be able to reach this important group?  How will small businesses in all areas of the wine industry benefit from this generation if almost all the money is going through only 2 channels?

The answer is clear.  OUTREACH.  It’s a great sign to see over 17% of this group purchasing most frequently from wine shops.  This is a trend that everyone in the wine industry should encourage.  It could be the only way that non-supermarket brands can benefit from these consumers in the short- and long-run.  I strongly believe that WE as members of the wine industry need to be the ones to get Millennials out of the grocery store aisles and into wine shops & wineries.   Talk to your favorite wine shop, encourage them to reach out to this age group.  If you are a winery and the shop carries your brands, offer to hold a tasting there geared towards younger drinkers.  If you are a retailer,  look into social media – even if you’re intimidated, all it really takes is a Facebook page.  Throw events, reach out to younger social groups in your area, get creative.  I know of a young BOOK CLUB in LA that has all their meetings at a wine shop with a tasting bar.

Though this will be a difficult hurdle to overcome for smaller businesses in the wine industry, it is not insurmountable.  It will take a grassroots approach to create the paradigm shift that is needed, but the first step – identifying the issue – has already been taken.  Please pass this information on to others who are affected by it, even if it’s just something that is brought up in conversation.

If you are a small business in the wine industry and you have already taken steps to get young people out of the grocery store aisles and into wineries or wine shops, leave a comment, share what you’ve learned with others who are looking to start.  If you’re a Millennial, what do you think would regularly get you into a smaller wine retailer?   Share your thoughts and let’s get to work!

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24 Comments

Filed under Basics, Charts & Numbers, Growth, Marketing, Outreach

24 responses to “Where Millennials Are Buying Wine: Some Tough Love For The Wine Industry

  1. How fascinating. When I was first starting to enjoy wines, I also started at the bottom and worked my way up the chain. My passion drove me, and I kept at it. Now I’m in the biz and loving it.

    We have some *GREAT* wines in the $18-$25 range, in fact we have a Diamond Mtn NAPA cabernet for $18 that drinks like $50. I should know – I put it in some blind tastings with other $45-60 cabs and it won, or came in second place w/ almost everyone. What is it? Dark Horse Gunfighter. http://darkhorsewine.com/ourwines.html#4

    Don’t look for wine lists on our website – we dont have one. We have 15 guys on the phones as personal wine consultants. And no, we don’t “jack” the prices, we just sell great wine you can’t find anywhere else.

    We specialize in small production wines – 400 to 500 cases is our sweetspot and we have 15 professionals that screen the stuff before we even think about selling it. You’ll NEVER see those wines in a supermarket, and rarely if ever will you see them in a wine shop. Most of our customers spend $40-60 on a bottle (or even $1000-2000/bottle!!), and we sell them these lower priced (but amazing) wines as their “every day” drinkers.

    I’ve got tons of other recommendations, and I’d even sponsor a “millenium” wine tasting group and provide some wines. I’m willing to invest in this segment – are others?

    Jeff Stevenson
    CEO/Provino Premium Wines
    jeff@provinowines.com

  2. Good research and thanks for sharing. Maybe what the research shows is wine is a journey for all of us where we go through different phases.

    Engaging in online activities is one way to connect with all consumers who are seeking something new.

    Finding new and delicious wines should be part of everyone’s journey and exploring is the effort that brings those memorable bottles home.

  3. Nice job, Leah. This is the kind of thing that will put you on the map, at least online with your core audience. I’d encourage you to expand the survey as much as possible, a.k.a. putting a link in this article so more people can take it.

    I agree, though, Trader Joe’s makes wine accessible to us young ‘uns and that’s a great thing… but it’s the independent wine shop, like the one my family owns and operates for the last 25 years in Atlanta, GA (Ansley Wine Merchants) that needs to convert those bargain shoppers into the $10-20 drinkers. If Millennials knew the value of the recommendation as much as they can spot the value of $4.99, the industry would be much better off.

    And most of all, hell yeah on the old guard getting online and on social media! It’s a no brainer for us but it’s not easy for them. My sister has been branching out with our family business via an email list but hasn’t gone much farther than that…. and sales have been declining there due to increased competition from… you guess it… Trader Joes, Costco and local grocery stores. Grrr.

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  5. It would be very interesting to know how different these are from wine buyers generally, given your sample bias to CA. I am not sure they are so different.
    Smaller suppliers like us, who must make our brands work in the new generation of wine drinkers, will need to work to reach our audience directly. But the big problem is getting the Millenials away from the retailers and costcos and into the wineshops.

  6. Wonderful article Leah.

    Some things don’t change. 50 years ago when I started drinking wine we bought inexpensive imports that were sweeter, like YT, then as our budgets grew we quickly moved up. The sense of discovery and adventure, learning new flavors and nuances, developing one’s tastes and instincts are all part of the wine experience. Wine was not part of the popular culture back then, but the American wine industry began to change in the 60’s and 70’s and collectively, we’ve both revolutionized an industry and forever changed the American > global culture.

    Your research and insights are very important and having access to many through social media is increasing our ability to communicate ideas and accelerate cultural change. Keep it up.

  7. Patrick Sullivan

    I had some of the same thoughts as Ed regarding sample bias. Two questions came to mind for me:

    1) Why is the sample so small? 100 respondents is almost not statistically significant. It would be interesting to see what the segmentation would be if the sample grew to, say, 1,000 respondents.

    2) Are these figures radically different from any other age segments? It strikes me that given the sample was taken primarily from California and from states where grocery stores are prevalent, that this isn’t a surprising finding. After all, how many people live that close to a winery? And most wine drinkers have never visited a winery, so why would we expect their purchase behaviour to be otherwise?

    Great subject for discussion, Leah. Thanks for getting this going.

  8. marktnorman

    Leah…well written piece…I commend your effort and encourage you to continue to write…this is solid information that can really help open the eyes of those small wineries. I also would like to suggest that you get and read a copy of SVB’s “2009-2010 State of the Wine Industry”. In it you will clearly see that the small wineries will be in trouble if they don’t get help…and this piece is that kind of help!

  9. I agree that most small wineries are forced out the system because the big distributors don’t carry their brands and it seems like most are dropping smaller wineries left and right and focus on Diageo, Gallo, etc.
    As a result, we have decided to become a wine wholesaler here in San Antonio, TX and focus on the small wineries and get them into the liquor stores and grocery stores. We are small and we are nothing like the big guys. But, we handsell and pride ourselves in building relationships and honesty combined with hard work. Obviously, we can only serve a region in Texas.
    Do you think smaller wineries in California are interested in working with small family owned distributors rather than the established big ones?

  10. Courtney Romain

    Hi Leah,
    I love your blog. This is exactly the kind of research I have been looking for! I work with a wine trail of nine family-owned wineries in eastern Pennsylvania. As a millennial myself who loves wine, I have been seeking out the kind of information you have here in an effort to help boost the wineries’ visibility and sales among our demo. Do you (or anyone else reading this!) have suggestions on how a group of vineyards can really target this powerful group? Thanks for starting such a great dialogue!

  11. Great work Leah! Thanks for sharing your results.
    Grocery stores are the biggest wine sales channel for most brands at the moment for all ages, given the current economic environment.
    What I am wondering is where are the online sales?

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  13. Very relevant and well written!

  14. While I agree more data is needed, I think the KEY here that Leah highlights is the millennials (I am one) stay away from wine shops because they are afraid, because like Leah said, they don’t know the info, and they are SO USED to being able to get info! I work for a wine magazine based out of Boston called The Second Glass, trying to help provide that info and we have been working with local stores, who have great experts to help draw millennials into smaller business who have experts on hand to help teach them about wine. We hold Crash Course seminars and because we are a third party editorial magazine with a large millennial following we are able to really help smaller wine shops. Our goal is what you say is missing — the education factor and helping millennials build relationships with local stores!

  15. Finally! Someone who’s speaking the truth out there.

    Thanks for the pie chart. I must be hungry because just writing that made my stomach growl.

    I feel your pain and am basically a Trader Joe’s wine shopper, too, since I’ve been burnt too often by grocery store chains. Though I have to admit that I only recently discovered BevMo right down the street and go out of my way to see what they’re hawking lately.

    Big fan of this.

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  17. Love your posts, keep the information coming.

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  19. `’* I am very thankful to this topic because it really gives great information :;:

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  23. Gemma

    I realize I am coming into this conversation a little late but I’m currently doing my senior project on millennial wine purchasing habits, particularly reasons why millennials aren’t purchasing online. So far my findings have been very similar to yours, of the 120 respondents 83% purchase wine from grocery stores. I’ve been collecting through social media as well as in person in San Luis Obispo, but I need more respondents. So anyone between 21-36, please help me out by clicking the link below and filling out the survey. I’m more than happy to share my results with anyone interested. Thanks for your support!

    https://www.surveymonkey.com/s/WPVMNGJ

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