Is your company keeping pace with emerging wine industry and consumer trends?
It’s easy to think that the wine industry exists in its own bubble. But emerging consumer trends are fast disrupting the way people choose, buy, and drink their wine.
To survive and grow, wine companies need to dig deep into these consumer behaviours and trends, and scrutinise what they mean for their company. How can you grasp the new opportunities and battle the challenges to drive your wine brand into a strong, healthy future?
Here are 5 facts you need to know and what you should do next:
Fact #1: Cask wine is on the decline
According to recent research by Roy Morgan, 16% of Australian wine drinkers consume cask wine. This is a massive drop from 30% in 2007. Those from South Australia – home of the wine cask inventor – are more likely than any other state to drink wine from a box, with 18% consuming cask wine in an average four weeks. There’s also a significant difference between male and female cask drinkers: 18% are men compared with 14% being women. Interestingly, the ratio of male and female drinkers of bottled wine is fairly even.
Takeaway: Even though consumption of cask wine is on the decline overall, it is still the wine of choice for lower socio-economic markets. Affordability is seen as one of the biggest selling points of cask wine. A point for thought here is how to effectively market cask wine to this segment.
Fact #2: Gen Y will pay $14.99 or more for a bottle of wine
Wine company Australian Vintage has uncovered research that shows Gen Y will pay $14.99 or more for a bottle of wine that “reflects the impressions they would like to make on their friends”.
This is an incredibly important fact to know when pricing wine, especially as Gen Y makes up 45% of total wine shoppers, according to data by Shopper Tracker.
Takeaway: Whatever your market, it pays to work out a price point that will appeal to them, while also giving you a solid profit margin.
Fact #3: Younger drinkers are intimidated by ‘wine speak’
Psychologists say that younger drinkers are put off by the jargon on wine labels. Regional references and terminology around fermentation, aging and grapes are found to be confusing and intimidating.
This insight is already being put to work by a new Australian wine brand, YOU Wines, designed to target 18-34s. YOU Wine is simplifying its labels to reach the younger market, with label descriptions such as “Fun, fresh, flirty, life, laugh, party, friend, anywhere” (Pinot Grigio) and “Bold, generous, embrace, everyone, friends, feel good” (Shiraz).
Takeaway: If you want to engage and appeal to the younger market, make your wine labels clean and simple. Use your packaging to address what matters to younger consumers: honest, authentic products that talk to them in their language.
Fact #4: 31% of China drinkers of imported wine prefer an Aussie drop
Australian wine exports increased 3.6% in volume and 3.9% in value in the 12 months to end of March 2015, with the focus firmly on the Asian market.
China is still the biggest Asian market for Australian exported wines. Of 38 million drinkers of imported wine in China, 31% currently prefer Australian wine. On the one hand, traditional buyers believe drinking imported wine is a sign of prestige and social status. On the other, there are younger Chinese consumers drinking imported wine to get closer to the western lifestyle. Both markets are reliant on the label design to make their choice, because they lack knowledge of wine.
Other export markets experiencing strong growth are Japan, Thailand, Malaysia, Taiwan and the Philippines.
Takeaway: The wine label is more important than ever to drive sales and brand awareness in export markets. Not every market is the same, so consider what’s important to the consumers you are targeting. Check out these 3 labelling trends for beverages (and food).
Fact #5: The value of fake goods is expected to soar to $2.3 trillion worldwide in 2015
Counterfeit products are on the rise, and the wine industry is not immune. Along with Aussie beef farmers, breweries and fruit producers, wine makers need to be aware of the threat that counterfeit products pose to their brand integrity. Penfolds has already been a target, with fake “Benfolds” spotted at a wine show in China.
Takeaway: Don’t let your brand integrity and consumers’ safety be compromised by fake products. Serialisation is one of the most effective ways to improve traceability and provide you with the data you need to respond quickly and effectively to risks in the supply chain. Serialisation makes it more difficult (and less financially viable) for counterfeiters to enter the supply chain – simply because it’s difficult to duplicate valid codes. Find out how to implement serialisation.
The bottom line
No company can afford to stop listening and learning about their consumers and the wider industry. And in these times of massive, rapid change, wine companies need to look closely at how every change and trend will impact their business strategy.
Want to learn more? Here are five beverage trends you need to know. Matthews has a vast library of free case studies, whitepapers, FAQ’s and presentations to help you understand solutions better and gain ID and inspection insights that you may find useful. Feel free to download them! You can also click on the image below to access our free beverage whitepaper.
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