Research - Tuning into younger mindset no easy task for wine
By Ben Cooper | 23 July 2009
Appealing to younger consumers may be vital in ensuring a healthy future for the wine sector but it is easier said than done. New research from Wine Intelligence which segments the wine market into six different consumer groups underlines why the youth market is a tough one for wine marketers to crack. Ben Cooper reports.
Last month, Mintel reported that the UK wine market declined by 2% in volume in 2008, and by 1% in value to GBP9.6bn (US$15.8bn), as recession, higher duties and rising production costs combined to create something of a perfect storm.
Mintel said the figures underlined the need for wine companies to attract more young people. "Once people join the wine 'club' they tend to stay in it for life," Mintel senior drinks analyst Jonny Forsyth said. "The problem for industry is getting people to join earlier. Despite being big drinkers generally, 25-34s are below average drinkers of wine. With wine seeing its first decline in volume and value for some time in 2008, it is increasingly important to target younger consumers effectively."
It is a challenge the industry has been facing for many years, and while some marketers will say wine has latterly increased its appeal to younger age brackets, research from Wine Intelligence on market segmentation in the UK wine sector suggests there is still much work to be done.
The Wine Intelligence 'Portraits' segmentation, derived from a sample of more than 3,000 regular wine consumers, divides UK wine drinkers into six categories: Adventurous connoisseurs; Generation treaters; Mainstream-at-homers; Risk-averse youngsters; Senior sippers; and Kitchen casuals.
Encouragingly, the research reveals that while risk-averse youngsters account for 17% of wine drinkers, they represent 20% of the market in value terms, pointing to a higher per capita spend.
However, there are some other characteristics that will provide wine marketers with food for thought. This younger consumer cohort of wine consumers, which is around 60% female and 86% aged between 18 and 34, ranks fourth out of the six groups in terms of frequency of wine drinking. Some 61% drink wine between one and four times a month. In addition, they have lower-to-medium 'wine involvement', according to Wine Intelligence, ranking fourth of the six groups under that criterion also.
"In general, they enjoy the taste of wine, and rate it highly for both food and non-food occasions, although [they] consider it to be less suitable for outdoor occasions than the majority of other consumers," the research states.
Not surprisingly, the research reveals a prevailing lack of knowledge of, and quite possibly interest in, the subtleties of wine classification, suggesting that some of the conventional means of differentiating wines - by region or by varietal - may not be so effective.
"The majority of consumers in this segment don't really mind what wine they buy so long as the price is right," Wine Intelligence says. "The decision to purchase is typically quick and influenced mainly by price and label/bottle design and packaging."
It is no surprise therefore to find that brand penetration among these consumers is relatively high. While they had a below average appreciation of wine regions, these consumers exhibited strong awareness of the more mainstream brands such as Jacob's Creek, Blossom Hill, Wolf Blass, Echo Falls, First Cape and Gallo, the research found.
The research also revealed that these consumers "generally express lack of confidence about their level of wine knowledge". Some 38% say they know less about wine compared to others. They are the most likely of all the groups to believe that wine is "quite expensive" and are the least likely to have any bottles at home.
The research also pointed to how wine companies might address the challenge of appealing to younger consumers.
The main issues young wine consumers appear to have, Wine Intelligence states, are a difficulty in telling from the label whether a wine is suitable for the occasion for which they are buying it. However, it also revealed that while they don't feel they know enough about wine, they would like to know more. But they also they said they did not need such a big selection to have to choose from.
The strongest call, the research suggests, is for more explanations about the taste of wines. It says that these consumers "can be intimidated into making a cheaper purchase", and would respond well to more free samples in stores.
The interviews revealed that younger consumers would like more wines at their preferred price-points, which range from GBP3 to GBP4.99. They tend to search by price and style and are less interested in country, region and varietal.
Underlining perhaps why marketing a product such as wine to younger consumers is such a challenge, the research highlights a certain dichotomy. While much of the research suggests consumers are either not interested in or are daunted by complicated wine classifications and information, there is something about wine culture that is at the same time aspirational for them.
"Wine is seen, in some respects, as sophisticated and "the thing to do" for these consumers," the study states. "They want to develop a taste for it as it will signal their full immersion into the adult world."
The research tells us that these consumers look for wine in quite a hurry, shop on price, have a moderate appreciation of many of its finer points, such as provenance, and gravitate towards brand names. However, they do want to be educated about wine, almost as some rite of passage.
The sophistication that wine offers has an appeal, so some education might be a good thing. But they have a fairly low tolerance for wine education. Oversimplifying is clearly risky. It does not take market research to tell us that this market segment would not respond well to being patronised.
The Wine Intelligence segmentation sheds some interesting light on how younger adult consumers shop for wine, but also appears to confirm what older generations would probably tell you: that young people are complicated, unfathomable and rather difficult to please. Capturing younger consumers may be vital for the wine sector's future prosperity but wine companies will have to be innovative and inventive to find the marketing solutions to woo them.
There are 33.3 million wine drinkers in the UK. We hear a lot about the £9 billion they spend, their average off-trade price point of £4.25, and their supposed preference for Australian wine. But how meaningful is this data? To really understand the UK wine market, it is necessary to study how consumers operate individually, not en masse. One thing is obvious: they don’t all act the same way. Portraits is a segmentation of UK winedrinkers. It groups regular wine drinkers into distinct segments, based on the relationship that the consumers within the group have with the wine category. It provides wine businesses with a reference segmentation which can be applied to individual brands, categories and companies. Wine Intelligence developed Portraits to fulfil a range of industry needs, including: To help build an understanding of which consumers are driving value across the trade To provide a cross-industry language for describing regular wine consumers To assist with consumer targeting in NPD and existing brand marketing programmes The Portraits segmentation was first developed for the UK market by Wine Intelligence in 2005. Substantial updates have been made for this edition, released in July of 2009. Separate Portraits segmentations are now also available for other key international winemarkets including USA, Canada and Australia. What does Portraits provide? Portraits is based on a sample of more than 3,000 regular wine consumers – that is, those who drink wine at
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