WineInk: Study finds that younger Americans are drinking less wine than older generations
Changing of the Guard?
“My husband and I have a pretty good cellar that we keep in our building in Miami,” said the stylishly dressed 60-something Brazilian skier sitting next to me on the chairlift as we rode up Snowmass.
“Do you collect Bordeaux?” I asked.
“No,” she replied. “We are Burgundy people. We went to Beaune on our honeymoon and still go back every year. Of course, we can hardly afford Premier Cru wines, much less Grand Cru, these days,” she said and laughed.
Ah, the perils of prosperity.
Later that day, on another lift, I asked two 20-somethings from New York City who were here on a Snowmass honeymoon what kind of wine they drink.
“Red!” replied the young wife with enthusiasm.
“I’m more of a tequila guy,” said her husband.
So went my anecdotal chair-lift wine research on a recent ski day.
Not coincidently, what I heard in a nutshell dovetails directly with the trends revealed recently in the 22nd annual Silicon Valley Bank State of the Wine Industry report released in January in a virtual event. For over two decades Rob McMillan, executive vice president and founder of the bank’s wine division, has been writing a yearly report that focuses on the direction and the key financial issues affecting wines, especially the wine market in the United States. He has created a niche as a passionate and prescient analyst of the wine industry — one that evolves sometimes slower than he would like.
The key takeaway from the 2023 State of the Wine Industry analysis is that for the second consecutive year, the percentage of total U.S. wine consumption has seen negative growth. True, consumption was down by less than 1%, but it reflects a downward trend from a peak in 2005, when wine consumption grew by 22% over the previous five years. That is not a good thing if you are a producer of wine in America. And it does not portend a positive outcome if the economy, as many think, takes a slide to the dark side.
There are some clear reasons for the diminished overall demand, and they were reflected in my chairlift survey. The only demographic to show growth in the marketplace are those over 60 — yes, my Brazilian friend, who was obviously well-heeled, and her husband who collects wines have a cellar and travel to wine regions throughout the world. They are among those still propelling the premium wine market to new heights.
“The consumers older than 60 are the only growth segments,” the report stated in the first key takeaway of the research. “Consumers younger than 60 have a lower share of wine consumption compared to what they did in 2007. Consumers older than 60 are the population bands where there is still growth.
That’s right, younger consumers — otherwise known as the future of the wine industry — are less interested in wine as a lifestyle and things that attracted previous generations to wine. They tend to drink lower-priced wines when they dip their toes into the marketplace or, more likely with each passing year, other alcoholic beverages like tequila or mixed drinks.
According to the Silicon Valley Bank study, “35% of 21- to 29-year-old consumers drink alcohol, but not wine. That number drops 7 percentage points to 28% for individuals 50 to 59 years old. Of those consumers who left that group, 2 percentage points moved to being at least marginal wine consumers. Meanwhile, 5% are now abstaining from drinking alcohol.”
So, what does that mean?
For premium producers — those who make the great wines of the world that sell for three and more figures a bottle — it means that things are pretty good in the short term. The top restaurant wine lists in Aspen will remain populated with the great bottles made by the best producers from the best regions.
But time may one day take its toll on that cadre of plus-60-year-old collectors and consumers, and long term, that could pose a problem for an industry built on the passion and the prosperity of this core group who have adopted wine as a part of their life.
Of the total U.S. population of 332 million, 251 million are of legal drinking age. The vast majority of those are younger consumers who drink either less expensive wines, other alcohol beverages, or, in a growing number of cases, abstain all together. It is this demographic that the wine industry needs to connect with if they hope to see growth among the next generation — and the one after that.
As a Boomer (There, I said it, perhaps for the first time ever), I would like to believe that the world of wine is so cool in its own right that it should be a slam dunk to engage younger drinkers: the history of wine in civilization; the way wine is a product of Gaia, Mother Earth; the beauty of the places where it comes from; the fact that wine has never been better than it is today. There are just so many things to explore about wine that should make it appealing for anyone who cares about the greater world.
But the report is clear that work needs to be done. “Wine was last cool with young consumers 30 years ago,” it states. Ouch. “The category back then spoke of Boomer values, conspicuous consumption, outward personal success, short breaks for family gatherings, and the imaginary free time that would be taken with the money earned by working.” All pretty outdated concepts.
Rather, McMillin admonishes the industry to, well, think different. “Attracting younger customers, who are more diverse than older generations, requires re-imagining and redefining the audience and our individual brands,” he notes in the study. “Each point of your brand expression — the website, tasting room, winemaking, growing operations, company goals, packaging hiring practices, and even the dress code — has to be evaluated for how well it will resonate with a new audience.”
He also believes that at core, the next generation of wine lovers has its priorities in the right place. “Younger consumers are more interested in what’s in the bottle — where it comes from, how it’s grown, the ingredients and additives, how it can make their lives more fulfilling, and how you (the producers) as an organization try to the world better.” All fundamentals that dovetail with the what the industry is, or should be, about.
There is much more to the report, including: the perceived influence of wine on health, the effect climate change has on the industry, and how direct-to-consumer models are changing sales patterns. This may be TMI (too much information) and a bit too inside baseball for some, but it is an informative look at how one respected watcher sees his industry. If you want to see more, go to svb.com/trends-insights/reports/wine-reportand you can download the report.
Or you can always do a survey on a chairlift.
Hess Collection Cabernet Sauvignon
Part of being a Boomer is that there are too many occasions where a glass is raised in honor of icons who have passed. For the musically-inclined, we have lost Jeff Beck, David Crosby, and Burt Bachrach so far this year. All worthy of a toast.
The same is true with winemakers. I had the great good fortune to walk mountain vineyards with Michael Martini at the Monte Rosso vineyard in Sonoma County and Donald Hess at this eponymous estate on Mt. Veeder. Both passed this January.
Hess was raised in Switzerland, and he first turned beer into water and then water into wine. At the age of 20, he inherited a brewery from his late father but quickly pivoted to producing bottled water from a mineral spring he purchased in Vals, Switzerland. The water company,Valser, became the largest brand in Switzerland and provided him with the resources to go into the wine business.
In 1978, he bought a 700-acre parcel of land in the rugged Mt. Veeder appellation high above Highway 29 in the Napa Valley. He transformed an old building into a world-class winery and art museum where he showed his collection of contemporary art to visitors who came for the Cabernet and fell in love with the artists. The wines of the Hess Collection became some of the most sought after in the Napa Valley and staples on great wine lists throughout the world.
He created a second act in the 1990s when he bought Bodega Colomè, a historic winery high in the Andes. The grapes for the Bodega Colomè wines were sourced from vineyards as high as 7,500 feet in elevation. He spent much of his golden years in Argentina with his wife, Ursula, where he also created an art gallery dedicated to the work of James Turrell, an artist whose work is informed by light and space.
Today, the Hess Collection is operated under the auspices of his daughter and is under the name Hess Persson Estates. Donald Hess leaves a legacy that can resonate with anyone who loves fine wines.
Regardless of generation.
Mountain Mayhem: Spring flings
Casa Tua hosted a dinner last month in partnership with Wyld Blue, the chic boutique in the Elks Building downtown featuring a collection of housewares, childrens’ clothes and women’s fashion.