A new and distinct segment of wine drinkers, Generation Treaters, have emerged in the US market. Millennial dominant, they are among the most frequent wine drinkers, but are not the highest spenders. Although building their wine knowledge, they currently know relatively little about the category. What else should we know about what motivates these wine consumers?
Consumer behavior is not typically a fast-changing affair. Habits are formed over long periods and last a long time, even after the rationale for those habits has long gone. Witness the ritual of many people over the age of 50 paying for a daily newspaper to be delivered, reporting yesterday’s news, while their children have already read, forwarded and commented on yesterday’s news and have begun retweeting today’s news.
Sometimes, however, things do change faster than we had anticipated. We are now so comfortable with the world of entertainment delivered to us via Netflix et al., that the fact that this happened relatively quickly doesn’t surprise us, because in the context, it seems logical.
Today’s context is also important. The arrival of a global pandemic has heralded changes in US wine drinker behavior that were already present in the nation’s habits previously – they were just accelerated and promulgated by Covid-19.
Nowhere is this change more apparent than in the emergence of a new wine drinking segment in the Wine Intelligence US Portraits segmentation for 2021. This new segment, Generation Treaters, are largely the educated, urban Millennials, working in the new economy and starting to settle down and raise families. They are transitioning their drinking habits from primarily on-premise socializing and hedonic nights out, into a more everyday, at home existence.
Generation Treaters’ precursors from our previous study in 2018 are the younger end of the most knowledgeable and high spending segment of US consumers, whom we dub Engaged Explorers, and the younger end of another group called Contented Treaters, who are higher spending but more occasional drinkers. In the 2021 segmentation, the Contented Treaters have disappeared entirely, swallowed up by Engaged Explorers (who are now older) and by Mainstream Suburbans, an older-leaning segment of drinkers who tend to drink wine regularly but stick to more value and mainstream prices.
Our new Millennial-flavored Generation Treaters are among the most frequent wine drinkers, but they are not the highest spenders. They are building their wine knowledge, but currently know relatively little about the category, relying on technology, friends or the aesthetics of labels to guide their choices. In normal times this group would still be going out to bars and restaurants (though less often than they used to because they would now have to pay for a sitter). However, in today’s world they are most likely working from home and less able to (or inclined to) spend lots of money on vacations and evenings out. Instead, our Generation Treaters are buying wine more regularly, drinking it more often than they used to at non-food occasions and experimenting confidently with new styles, without always knowing exactly what they are drinking.
Some of this direction of travel is down to Covid-19, but by no means all. The US wine market has been evolving as the 21st Century has worn on, with Boomers slowly moving aside from their previous dominance of the category, allowing Gen-X and now Millennials to influence what is sold and how it is sold.
Our new Generation Treaters segment is also helping to shift drinking behavior towards a more low- alcohol, lower calorie, responsible, in control process. This isn’t always manifested in alcoholic beverages labelled ‘low alcohol’ although that can help – witness the growth of the hard seltzer category.
So how will our new segments influence the wine category over the next three years? Most likely they will care about the things that also matter in their broader existence. Unlike their parents, Generation Treaters are more motivated by concepts such as sustainability and aesthetics, and less by low prices. They won’t say no to a bargain (who would?) but for them, a good deal means more than just cash saved. It is about the value embedded in the product itself – the story, the look of the bottle, the values of the people who made it, or some combination thereof.