It's been a rough few years for wine producers. First, the pandemic destroyed the cellar door trade, and then the Chinese wine bans killed lucrative export markets. But now, comes more bad news - the next generation isn't drinking wine.
New consumer research from Wine Intelligence recently suggests that young drinkers simply aren't drinking as much wine, with participation rates (defined as the % of a given age group who say they drink wine at least once a month) sliding dramatically among the 18 to 34yo (21-34 in the US) age cohort.
In the UK & USA, the participation rate has dropped by up to half over the last decade.
While that's a global metric, and places like Canada & South Korea are bucking the trend, it's likely to be reflected in Australia too. Of course, it hasn't helped that Australia endured some of the world's longest (and harshest) lockdowns too, but it's just capping off a long downward trend, as Wine Intelligence's Richard Halstead explains:
'Many industry stakeholders believe that wine isn't connecting with the mainstream of younger LDA adult consumers as well as it could, and the pandemic has both accelerated and exposed this,' said Halstead.
'On-premise was a key channel for consumption of wine at social settings amongst younger LDA consumers prior to Covid. Shutting down during lockdowns closed off a key channel for these consumers to encounter wine.'
What's interesting, however, is that at the same time, consumption across the Boomer generation (58-78yo) has increased globally, with the older age groups also spending more on wine too.
Recent figures from the IRI (highlighted in this article from The Shout) point out that last year the over-50s created an equal amount of value as the under-40s cohort across the whole liquor market. Moreover, by 2030, an additional 1.31m Australians will be aged 65 or over, so the older cohort will only grow.
In other words, if you're a winemaker, it's time to cater for the 40+ (you can start by making the label font bigger).
The problem for winemakers is that younger drinkers aren't just sticking to wine, as Humphrey Serjeantson from IWSR explains:
'Competition from other categories is strong, young LDA consumers are more likely to abstain from alcohol entirely or to drink across a wider range of categories than their parents, and the reopening of the on-premise will give more of a boost to other categories as well.'
But don't despair, wine purveyors. There is a silver lining. Among that same cohort of younger drinkers, some are more interested in wine (and willing to spend) than ever.
The same Wine Intelligence insights suggest that the under 34yo cohort connecting with wine tend to be more engaged, enthusiastic, and above all, high-spending, especially compared with older Boomers. Anecdotally, this backs up the trend for big turnouts of young, highly engaged drinkers at some of the Revel wine events (like Pinot Palooza) and the popularity of wine-focused on-premise locations.
For any producer, venue or retailer looking to appeal to this new, smaller cohort of young wine drinkers, you need to know what they're interested in. And as this other IWSR report on Australasian trends suggests, drinkers are looking for products that are 'better for me, better for the world'. So socially aware, environmentally aware and wines seen as 'healthier' are gaining traction, with lo-fi and organic wines singled out as a booming category.
Indeed, Kaddy Marketplace data suggests that producers with a sustainable edge enjoy more transactions, with 3 of the top 5 most popular wines comfortably classable as minimal intervention (the organic Das Juice wines pictured above are very popular, for example). That's not even touching on the NOLO (No and Low alcohol) wines, with younger Australians, between the ages of 18 and 44, twice as likely to purchase zero and low-alcohol products compared to those over 45 (according to IRI studies).
That's important because, as the same study points out, NOLO is growing at 24 times higher than total liquor retail, adding 66 per cent in the year to January 2022.
The 'better for me' (and indeed NOLO) trend isn't confined to younger audiences. For an older cohort, the push is towards more premiumisation, mirroring a global trend that has seen wines in the US$10+ category grow by +12% in value last year, with a forecast to increase in value by +16% from 2021–26 (according to the IWSR). Conversely, younger drinkers are looking for wines that 'embody converging trends around wellbeing, provenance and environmental awareness'.
(Photos - Unsplash, Das Juice Instagram)