The first look at the July wave of wine consumer attitude tracking in the UK is showing less, not more, confidence in going out and spending money compared with April. Why?
Are things getting better? Or are they getting worse? On this fundamental question of our COVID-19 era rests many things: the validity of many business plans, the chances of survival of the travel, entertainment and hospitality industries – and the direction of government policy.
As anyone who follows the media closely, coming to a sensible conclusion on the direction of economic travel and consumer sentiment from day to commercial survival day is a fool’s errand. A few bits of good news can be quickly followed by a large helping of bad news, frustrating the would-be forecaster.
Another way of measuring sentiment is to look at attitudes over a longer time horizon. Various major tracking studies are attempting to do just that, and Wine Intelligence’s Vinitrac® Global is no exception. Back in April we surveyed wine consumer attitudes in 14 major wine consumption markets about more general activities in life, such as their willingness – when it was permitted again – to go out to eat, go on holiday or attend a social event; and, in the short term, how willing they were to shop for groceries in a store versus online, as well as their thoughts about drinking more or less wine.
The results suggested that, in mid April, ie at the height of the wave 1 lockdown, consumers around the world divided into four identifiable groups based on their attitudes to life post-lockdown:
- Halters: Those who are thinking of stopping all social activities in the future
- Reducers: Those who will significantly curtail their lifestyles and social lives post lockdown
- Moderators: Those who anticipate a few social life changes post lockdown but largely plan on returning to the status quo ante
- Hedonists: Those who are determined to increase their socialising post pandemic (and in some cases may be flouting the rules to do so already)
While there were differences in the size of each group by market, there was a remarkable overall symmetry in the proportions we found. Around half of consumers were Moderators, while Halters and Reducers together typically accounted for 1 in 3. The remaining 15-20% were the Hedonists. On that basis we estimated that the on-premise in particular would go back to around 60% of its pre-lockdown size once restrictions had been lifted (all the Hedonists would go out, along with most of the Moderators). The early data for the UK suggests this was a reasonable estimate for that market when it came out of lockdown in July.
What might happen next? Curious as to how our segments had evolved, we asked the same questions again in certain markets in July, and ran the same segmentation analysis, looking first at the UK as our bellwether. Despite a torrid few months, and one of the highest death tolls in the world, we were expecting British wine drinkers to be at least the same, if not more outgoing, when we asked them again about their intentions, two weeks after shops, pubs and restaurants could open again.
The results that we got back were therefore a bit of a shock (see table below).
Our four segments are still present, but in some cases their share has changed markedly. Many of the Moderators from April have now become Reducers, and Hedonists have shrunk from 16% to 11% of consumers. Perhaps most telling, the combination of Reducers and Halters – those who have put the brakes on social life and eating out – now account for over half of all UK wine consumers. And this in the weeks after people in the UK were allowed out again.
Why might this be? Many theories are currently floating around about how the world will respond to the ‘new normal’. One idea we were struck by back in March was put forward by David Kessler in Harvard Business Review that consumers would experience a version of the famous Stages of Grief model developed by himself and Elizabeth Kubler-Ross. As a reminder, the original Kubler-Ross/Kessler model identified five stages of grief: denial, anger, bargaining, sadness, and acceptance.
It’s possible that the swing we have observed in our data between those Moderators in April thinking ‘everything will be alright’ (denial) and the growing number of Halters / Reducers believing it won’t be alright (sadness + acceptance) is evidence of the Kubler-Ross / Kessler model playing out. Equally, we don’t want to get ahead of ourselves. We have replicated the April questions in a further six markets, and we will see soon enough if the UK pattern replicates in diverse markets such as China, Canada, and the US, all of whom have had different experiences with the coronavirus since April.
Which begs a final, intriguing question: if we do see a repeating pattern, and we can observe a growth in Reducer / Halter behaviour, how long will it last? While it would be inappropriate and trite to equate genuine grief over a death of a loved one with the inability to enjoy dinner out with friends, both deal with a loss of what was once seen as certain. In the same March 2020 Harvard Business Review article referenced above, David Kessler sees the pandemic as an unprecedented “collective loss of safety”, and that the only way to rebalance the scales is to get to the acceptance stage, and possibly beyond, towards a positive meaning in what has happened. Perhaps we shall start to see this when we next test consumer attitudes in October. Perhaps the evidence for acceptance can already be found in the growing cohort of Reducers, who are – fortunately for the wine category – still treating themselves to expensive wines, but more likely to do so for home consumption.