August 14, 2022

Review and News

Award-winning sommelier and Wine Woman creator Victoria James finds her professional pointers for opting for wine

That trouble reflects long-term trends as seen through the prism of the pandemic. And while...

That trouble reflects long-term trends as seen through the prism of the pandemic. And while the report is aimed at the wine industry and its would-be investors, each year it casts light on what we consumers are voting for with our palates and our wallets.

Last year’s report was published just as coronavirus vaccines were becoming available. There was hope for a grand reopening party, as we all emerged from lockdown and started going to restaurants and throwing shindigs again.

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“A celebration did take place, but … wine … wasn’t invited to the party,” this year’s report said. Turns out, we celebrated with spirits.

Rather than returning to the 2019 status quo, the pandemic has accelerated trends already underway as wine’s core market — the baby boomer generation — ages and younger consumers branch out to spirits, craft beer and hard seltzer. This is especially true for restaurants, as we realized during the pandemic that we could enjoy restaurant-quality wine at retail prices while dining at home on takeout food.

As we ventured back to restaurants in fits and starts while variants surged and restrictions were lifted then reimposed, many of us recoiled from high wine markups. In fact, overall wine sales may have declined as much as 2 percent last year, while sales of spirits increased, the report said.

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Restaurants that sold off their wine collections to get through the pandemic’s early stages aren’t fully replenishing them. Wine costs more than spirits per serving, and it spoils. Diners are pairing foods not just with wine but also cocktails, spirits, beers and even hard seltzers.

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That’s especially true of younger drinkers, the millennial unicorns the wine industry has been hoping will replace the aging baby boomers. The oldest millennials will turn 40 this year, entering their prime spending window but spreading their drinking dollars over a wider market. More ethnically diverse and less focused on luxury than their boomer parents, they display spending habits that are shaped more by the Great Recession.

That means spending less on alcoholic beverages. Dry January, Sober October and mindful drinking trends have emphasized moderation. Public health messaging is moving away from the “French paradox” of the 1990s, which celebrated the health benefits of moderate alcohol consumption, even proposing new warning labels about risks of drinking.

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Rob McMillan, Silicon Valley Bank’s chief wine analyst who has written the report for the past 21 years, has consistently sounded the alarm about the generational shift in consumers. It’s not a prediction so much as recognition of the inevitable. This year, especially, McMillan warns the industry will eventually eat its own by fighting one another for declining market share. He castigates proponents of “natural” and “clean” wine for creating an impression that most wine is “unnatural” or “unclean” as an example of promoting oneself by damaging the overall perception of the product.

The image of wine is still geared toward boomers: Chateaus, villas and trophy cult wines that reek of privilege, entitlement and wealth. Younger consumers, McMillan has argued, value experience over status and want to support companies that reflect their own values of environmental protection and social responsibility.

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As he published this year’s report in January, McMillan announced he had joined with three other wine industry leaders to form WineRAMP (for Wine Research and Marketing Project). The goal is to gather federal support for an industry ad council to promote wine, similar to the “Got Milk?” and “Incredible Edible Egg” campaigns of old. Of the four organizers, including McMillan, three are male, all are White and — well, let’s just say they have many years of experience marketing wine to boomers.

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For such top-down marketing to succeed, I hope these industry leaders will look to small-scale efforts already attracting younger, more diverse audiences. I’ve written about some of these and will feature more in weeks ahead. Change is coming. We can bemoan it, fight it or welcome it. Only one of those is a winning strategy.


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