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Can the wine industry adapt to the ‘lifestyle generations’?

To attract Gen Zs and Millennials to wine, the industry needs to better understand the needs of these ‘lifestyle generations’.

There’s an elephant in the room. The wine industry is at an impasse. Global alcohol consumption is tanking, it’s no secret. Younger generations are drinking less than those before them. But what is the wine industry doing?

Understanding the reasons behind this decline – a thorny combination of health concerns, social media and public image, variety and choice, and financial insecurity – and addressing the way drinking behaviours are changing, could help the industry (one not known for its ability to enforce change quickly) adapt to survive.

According to the European Parliamentary Research Service, wine consumption in the EU declined by 24% between 2010 and 2020.

Health-conscious consumers

Health and wellness trends are driving moderation and abstinence. Robust messaging around the negative health impact of consuming any amount of alcohol has turbo-charged the debate. According to the World Health Organisation, as of January 2023 ‘there is no safe amount of alcohol that does not affect health’.

Younger generations are much more aware of what affects their health and wellbeing than the generations before them were at the same age. Gen Zs in particular (born between 1997 and 2012) are assailed by a surfeit of information and data.

Erica Duecy, founder of the Business of Drinks podcast and consultancy (and a GenXer), says that more than half of Gen Zs and Millennials (those born between 1981 and 1996) in the US see even moderate drinking – one or two drinks a day – as unhealthy. In the UK, about a third of Gen Zs do not drink at all, according to marketing intelligence agency Mintel.

Looking after both physical and mental health through moderation was the second most prevalent consumer sentiment around changing global alcohol consumption behaviours, according to drinks market analysts IWSR’s BevTrac, based on data gathered in the six months to April 2023.

Social media strains

Social media can perpetuate these sentiments: ‘The depiction of success and what a good life looks like has changed so much recently and has been fired up by social media,’ says Jarlath Curran, Decanter’s wine logistics manager and a Millennial. ‘Everybody is beautiful, fit and healthy,’ he adds – and for many, alcohol doesn’t align with these goals.

Ben Franks, chief operating officer of Canned Wine Co. Credit: www.benfranks.wine

Ben Franks, also a Millennial and chief operating officer of Canned Wine Co, echos this: ‘There’s a lot of pressure on social media where everyone is expected to be super healthy, super successful, and always achieving constantly. That makes us hyper-aware of our health.

Paparazzi problems

Sophia Longhi, wine communicator and founder of Skin + Pulp. Credit: Skin + Pulp.

But it’s not just the roster of health influencers on social media that has Millennials and Gen Zs in its grip. ‘It would be unwise to discount vanity, but also not wanting to embarrass yourself publicly,’ says Sophia Longhi, a Millennial wine communicator and founder of blog Skin + Pulp.

It’s important to acknowledge the differences between these two demographics. Millennials sit on a cusp between drinking for fun and going overboard, and being concerned about health and image. Longhi feels that image is more prevalent among Gen Zs, who are more wise to the repercussions of public embarrassment. A permanent record of them stumbling drunk through the gutter is not quite the image they want to portray to future employers.

Longhi also cites increased awareness of women’s safety as a strong contender for putting off younger drinkers.

Cultural and social changes in drinking habits

Credit: Ellen Doggett

How we drink wine is changing. ‘People are going out less often, and are around each other’s houses more,’ says Longhi. The 2023/24 premium on-trade report from UK-based wine importer Liberty Wines reflects this. It shows that volume sales in restaurants and bars fell by 19% between 2019 and summer 2023.

The first half of this period admittedly spanned the Covid-19 lockdowns, but the fact the trend has continued is notable. ‘There has been a significant shift towards drinking wine at home,’ says the report.

‘The way we socialise has changed,’ agrees Curran. ‘Now we don’t need to leave the house to feel engaged with people.’ What this does mean, however, is that the occasions where Gen Zs and Millennials do meet in person are special, so the desire to share good wine and good food is strong.

Franks believes that connection is the important aspect: ‘It’s about the physical act of sharing,’ he says. ‘If anything, Millennials and Gen Zs are oversharers: they live their lives online and if they do have a social occasion in person, they make more effort around what they’re bringing.’

Young drinkers see wine as more of an occasional treat. ‘It’s completely different from what we knew,’ says Anne Burchett, wine marketing and communications specialist, who thinks overindulgence and excess used to be more socially acceptable (she is a Baby Boomer). ‘We need to accept that what becomes fashionable and socially acceptable in one generation, will automatically lose a bit of its lustre in the next generation.’

What’s more, in the US ‘younger generations are more ethnically diverse’, says Duecy. ‘Less and less of the American population come from Eurocentric backgrounds or families that grew up drinking wine at the dinner table or at social gatherings.’

Drinking less but drinking better = prioritising pleasure

When and where we drink wine reflects changing social norms, but also the economic climate. Younger generations will spend more on less. ‘Even though drinking is declining, the value of sales is going up,’ says Ellen Doggett, ex-sommelier, wine industry expert and a Millennial. ‘People want to drink better, and they’re more cautious about what they spend their money on.’

This premiumisation effect is not new, but it has been additionally fueled by recent financial crises which see younger generations with much less disposable income than previous generations at the same point in their lives. Their financial expectations for the future aren’t in the same realm. Conventional purchases like houses and cars are unattainable, so spending on pleasure goes up.

Ellen Doggett, ex-sommelier and industry expert.

Even though these two key demographics of Gen Zs and Millennials may become more affluent as they get older, they are unlikely to ‘age in’ to wine, and ‘they’re never going to drink anywhere near as much as previous generations’, says Miles Beale, chief executive of the Wine & Spirit Trade Association and a Gen X. ‘I don’t think they’re going to spend as much as the Baby Boomers, who have had a long period of economic wealth.’

Longhi says that spending is much more related to younger consumers’ ethics and values, ‘and they tend to be quite loyal to brands who they align with and who represent them’.

Buying habits

Credit: Canned Wine Co

For the younger generations, it’s clear where these values lie. Provenance, sustainability, authenticity and heritage drive their buying habits. This already means that quantity will shift downwards, as all of these values come with a higher price tag.

This ultimately means a decline in the consumption of cheap, bulk wine. Something that those who work in the wine industry would applaud.

‘It’s the category that is most interchangeable and is most forgettable,’ says Master Sommelier Stefan Neumann, an Austrian independent wine consultant living in London (and a Millennial). This should be a concern for wine companies, as younger generations are after memorable experiences that they can share with others.

Curran adds: ‘The biggest hope is that in the short term we see a decline in over-industrialisation in the wine industry, leading to more premium and better quality products.’

But is it that simple? Longhi points out that, in some ways, it makes wine more elitist and unapproachable. Continued financial strain also changes how aspirational you are.

‘I’m not sure premiumisation can be guaranteed to stay,’ says Beale. Recent data from the IWSR suggests that premiumisation is slowing. ‘Consumers are cutting back on alcohol spending as financial concerns grow and the cost-of-living crisis eats into their disposable incomes,’ says the report.

In the US, the astronomic rise of single-serve, RTD (ready-to-drink) beverages can be partly attributed to a widespread hesitancy towards the upfront cost of a full bottle of wine. ‘60% [of consumers surveyed] say that price is extremely or very important in deciding which beverages they’ll buy,’ says Duecy. ‘Less than a third will spend more than $30 for a bottle of wine. And 75% say they rarely or never buy wine over $50.’

An ocean of choice

Too much choice is a bad thing when it comes to wine consumption. There is a wealth and variety of both alcoholic and non-alcoholic beverages on the market, and younger generations are no strangers to experimentation. What’s more, these other categories are communicating with consumers incredibly well.

‘With no-and-low beverages there’s now so much choice it’s just as compelling as if you’re venturing into alcohol,’ says Franks. ‘If anything, alcohol has got a bit samey. In the non-alc category and you’ve got kombuchas, no/low beers, low spirits, all the different mixers and blends… There’s a real element of choice and excitement in trying something new.’

But it’s not just other beverages pushing wine off the younger generations’ radar. Among Gen Zs in the US, ‘alcohol is being replaced by cannabis use,’ says Duecy. ‘More than half of the population in the US lives in a state where cannabis is legal.’

As Den Belmont, founder of Good Wine Good People and a Millennial, says: ‘With the legalisation of marijuana, you have alternative ways to get your buzz.’ This has also spawned a rise in CBD- and THC-infused RTDs, which have seen double-digit increases.

Erica Duecy, founder of Business of Drinks.

Lifestyle generations

Sentiment towards the future among industry professionals remains largely positive, albeit with continued worries over duty increases in the UK. But the tide is turning on those stuck in their ways.

If the younger generation is to be onboarded into wine, their needs and values must be taken into account, and could fuel innovation and positive change. From reducing packaging, to honest sustainability practices, openness towards alternative formats, new and different flavours, and connecting on their preferred channels.

‘We need to exert this constant creativity, constant renewal and churn… We need to make sure that the product is relevant for that younger generation,’ says Burchett. ‘We need to be optimistic about the young generation.

‘I refuse to espouse this attitude that we’re doomed and they spend all their money on Starbucks, I think this is reductive and disparaging and not very intelligent. Accept they’re different.’

Wine as part of an aspirational lifestyle, instead of overindulgence and binge drinking, is much more appealing to Gen Zs. ‘I think it’s an opportunity to move away from cheap bulk wine and reintroduce wine as a lifestyle choice,’ says Longhi. ‘Wine can be part of a healthy, successful lifestyle’.

‘A lot of it is on the wine industry to not make it more complicated than it needs to be,’ says Belmont. Younger generations can be shown how wine can fit into their existing lifestyles, instead of an industry forcing traditional pairings and situations on them that they can’t relate to.

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