They have been heralded as both saviours and destroyers of the US wine industry. Thanks to Covid, the Millennials are now calling the shots in the world’s largest and most valuable wine market.
Like it or not, the large and influential Millennial cohort is now in the driving seat in the US market. This change has been long-heralded, and perhaps glacial in its development. However, in this year’s Wine Intelligence consumer tracking data one can see its effects.
Some of this direction of travel is down to Covid-19, but by no means all. Introducing the previous edition of the Wine Intelligence US Landscapes report 12 months ago, in the BC (Before Covid) era, we remarked that “if Millennials account for the future wine drinking population, the US wine market will definitely experience some evolutionary pain. The newer wine drinkers are highly involved, open-minded, seeking quality and willing to pay for it, while drinking less overall”.
As we finalise the insights for the new US Wine Landscapes 2021 report, now available, the future conditional clause in the previous sentence has become a present continuous. Despite Covid, or perhaps because of it, the effect of the change in customer type is starting to be felt throughout the sector, as Boomers start to draw back from the category and Millennials seek out interesting products, right here and right now via their Drizly or Instacart apps.
The broader picture remains one of positivity coming out of the wine category, despite a tumultuous year. Initial estimates show that wine volumes have reversed their decline of 2019. This is all the more remarkable given the cratering of the on-premise during the year.
There are several good reasons for this, but most of them are temporary, and we expect wine volumes to resume a slow decline once post-Covid normalcy is restored. The effect of the pandemic has produced different occasions and different needs. If you’re working from home, and need cheering up, why not break open a bottle at 5pm? If you’re able to navigate the increasing variety of Ecommerce channel options, you can have wine on your doorstep quite quickly.
Once we see a world restored, we may celebrate to excess, but this may herald a new, more thoughtful and austere era, where brands and producers must demonstrate more than just pleasant taste and a memorable label. With the on-premise struggling to reconstitute itself, there may not be obvious opportunities for the esoteric in the short run. However, the winners of the 2020s will be the ones to cater to the dominance of the Millennial consumer. At its best, wine can offer intellectual depth, a sense of place, education and fun. These needs align very closely with a Millennial generation scarred both by the financial crisis of 12 years ago, and the chaos of the pandemic. It will translate into a wine market that offers more interest, and probably higher prices, but ultimately less liquid.
Leave a ReplyWant to join the discussion?
Feel free to contribute!