Why the millennial generation is important to the wine industry
Properly understanding whom to address is a key element of a good marketing mix. Defining the "bull's eye" of a target group will define the style and tone of the communication and the conversation a brand will have with the consumers.
When it comes to wine, there is a debate about whether companies or brands should address existing or new consumers. As a consultant to Swiss Wine Promotion I defend the idea that new consumers are an essential target and here is why.
What, exactly, is the millennial generation?
The term millennial is usually considered to apply to individuals who reached adulthood around the turn of the 21st century. The precise delineation varies from one source to another, however. Neil Howe and William Strauss, authors of the 1991 book Generations: The History of America's Future, 1584 to 2069, are often credited with coining the term. Howe and Strauss define the Millennial cohort as consisting of individuals born between 1982 and 2004.
Facts and figures
Switzerland's current rounded key population numbers are as follows: 8 million inhabitants with an average life expectancy of 80 years, that means that each year 100'000 new potential consumers reach the age of drinking and another 100'000 quit the stage. Over a period of 10 years we are talking of the replacement of 1 million consumers.
Every four years, MIS Trend conducts a consumer behaviour research on behalf of Swiss Wine, the results are consistent over time, young consumer enter the world of wine between 20 and 30 years old. An age group targeted by many other drinks industries (beer, cocktails or foreign wines).
The research also taught us that 1 in 5 consumers (20%) is interested in wine, others are mostly followers or price driven. Among this smaller leadership group only 1 in 10 has a deep interest and could play an ambassador role. But this does not happen overnight; sharing knowledge, creating an emotional bond between the wine and the new consumer is a process, which requires real life experiences and time. Once established that bond will last forever.
In Switzerland 70% of the wine production comes from the French speaking part located along the Rhône (from Visp to Geneva), people who live in and around this area are aware of Swiss Wines simply because vineyards are part of their environment. The same somehow for Ticino in the Italian speaking part. But for young people in the German Swiss part, the awareness of the existence of Swiss Wine is not as strong.
We may had to this that these young consumers are mostly urban, due to work or studies, there is a natural concentration in the cities of Zürich, Basel and Bern and the neighbouring towns.
So ultimately our target is 20 to 30 years old, German speaking and urban.
What about the other age groups
Wine consumers may be grouped into 3 major segments in Switzerland:
- The most senior group, age 60 to 80, bought wine all their life and deserve recognition for their loyalty to wine producers. However actively pursuing people who often have their mind set and are gradually reducing their consumption is an overkill.
- The middle age group, age 40 to 60, have a higher purchase power than the younger group and aim for better quality. Wine producers will seek their loyalty through events or special programs, however nowadays they enjoy change too.
- The more junior group, age 20 to 40, includes the new consumers described above. Acquiring those consumers can be a challenge if they feel wine is their parent's drink. Therefore it is critical to communicate with values and through media that belong to this group seeking to have them embrace wine as part of their own culture.
Ultimately since the consumer acquisition process is a journey, and a long one, talking to the younger consumer group will increase your chances of success by the time they reach the middle age group. One permanent risk in all industries is to age with your consumer, this explains why constantly acquiring young consumers is a healthy approach to business.
About the author
Jean-François Genoud has worked in several industries and over three continents as marketing and sales director. After his main carrier and a late training as sommelier, he now runs several start ups around wine. He currently consults at Swiss Wine to develop the digital communication.