New Age Wine - WAWGG
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New Age Wine
Transcript of New Age Wine - WAWGG
New Age Wine
New Age of Wine MarketingWAWGG Annual Meeting 2011
Christian MillerResearch Director, Wine Opinions
Data Sources
Wine Market Council – annual national surveys of all wine drinkers, sample sizes range approximately 600-100. Core wine consumers are those who consume wine 1+ times a week, roughly 46 million adults responsible for 91% of wine purchases.
Wine Opinions Consumer Panel – 5000+ person national panel of wine consumers that represents the 18 million high frequency, high involvement consumers responsible for the majority of wine purchases over $10. Sample sizes range 800-1000.
Wine Opinions Trade Panel – panel of 800+ trade members, not projectable, sample sizes rang from 100-300.
Nielsen Scan Data – scanned sales in stores, covering most grocery and drug stores, some mass market and liquor stores.
Wine Business/Ship Compliant DtC model – direct-to-consumer sales of wine, shipments (not carryout) only
Percentage Growth in Total Table Wine Consumption(Percentage gain/loss)
-2.9
5.6
4.5
7.2
4.1
2.5
3.4
4.7
1.3
5.7 5.4
3.8
2.5
3.7 3.5
0.9 1.1 0.9
93 94 95 96 97 98 99 00 01 02 03 04 05 06 07 08 09 10
Source: Beverage Information Group
42
8
50
35
7
58
2114
65
13 13
73
More Less Same
Millennial +34
Gen X +28
Baby Boomer +7
65+ 0
Change in Wine Consumption Compared to a Few Years Ago(Percentage)
Source: Wine Market Council
Generation Net Shift
*% drinking more minus % drinking less
More severe than previous two recessions, comparable to 1981‐82.
Financial/wealth component: stocks, house value, income. Big difference: this one impacted the baby boomer wine‐drinkers
Recession Psychology
A Brief Review of the Wine Recession
Percentage Buying “More” or “Much More” Wine by Price Segment & Financial Condition
Source: Wine Opinions consumer panel 2009
48
16
2
48
26
14
9
34
25
21
18
34
0 20 40
Buying More $6‐10
Buying Less $6‐10
Buying More $20+
Buying Less $20+
Improved
No Change
Much Worse
The Effects - Consumer
Trade Down was real and substantial
Luxury wine segment plummeted
Decrease in purchase frequency above $20
Increase in purchase frequency below $15
Stabilized with some comeback $15-30
Channel Shift
Big drop in restaurant visitation
Increased purchasing in warehouse, mass market, grocery
Mixed picture in wine stores, direct
Younger wine consumers more optimistic, increasing consumption much faster
9
41
18 23
83
33
1326 23
1
3118
2721
1
31
7
29 29
Lot Better Little Better Unchanged Little Worse Lot Worse
Millnls Genx Bby Boomers 64+
Wine Consumer Perceptions of U.S. Economic Conditions by Generation
(Percentage)
Source: Wine Market CouncilSource: Wine Market Council Oct 2010
The Effects - Trade
Channel Shift – consumers, then inventory and deals. Many retailers increase revenues, traffic. Off-premise retail is optimistic.
Wholesale tier most pessimistic
most concerned with cost-cutting and inventory reductions
margins reduced with shift from on-premise
high end sales drop results in expensive slow inventory
Distribution funnel effect made much worse; wholesale tier backs inventory into wineries, squeezes winery margins.
Wineries struggle with channel shift, inventories, weak bargaining position. Is Direct-to-Consumer a safety net?
Wine Opinions Trade Panel Survey (preliminary Jan‐Feb 2011)
Wineries report:– Direct to Consumer sales up (even clubs, which were down in 2009)
– Sales to distributors extremely variable, but more up than down
Distributors/Importers report:– Supermarket, mass market and warehouse club sales up
– Liquor/Wine store sales up but more variance
– Chain and mid‐priced restaurant sales flat to up, variable
– Fine dining sales extremely variable, more down than up
– “Fine Wine Shops” majority increased but average pricing down
Nielsen Retail Scan Data: Trend by Origin
Lat 52 $ Share Origin (bottled)
Value % Chg Volume % Chg Lat 26
Avg PriceLat 52 Lat 26 Lat 52 Lat 26
100% Ttl Table Wine +4.5% +4.8% +3.2% +3.5% $6.3671.5 Domestic +5.8 +5.9 +4.2 +4.4 $5.9765.2 --California +5.7 +5.5 +4.1 +3.9 $5.704.0 --Washington +5.1 +6.0 +5.5 +5.5 $8.760.8 --Oregon +15.3 +16.8 +18.7 +17.4 $14.76
28.5 Imported +0.4 +1.0 +0.2 +0.7 $7.34
Source: Nielsen Total U.S. Food/Drug/Conv/Liquor Plus; thru 1‐8‐2011
Consumer Buying Trends 2010, Wine Opinions Panel
2010 Buying more Buying less No changeDon’t buy from
this country/region
Napa Valley 17% 18% 59% 5%
Sonoma County 22% 7% 66% 5%
Mendocino 7% 5% 59% 29%
Santa Barbara 9% 7% 62% 21%
Lodi 9% 6% 48% 36%
Monterey 6% 7% 62% 25%
Paso Robles 20% 7% 51% 22%California (no region on
label)14% 9% 65% 12%
Washington 23% 6% 55% 16%
Oregon 21% 9% 54% 16%
Source: Wine Opinions Consumer Panel December 2010
Share of Direct‐to‐Consumer Sales
3.3%2.1%
0%
10%
20%
30%
40%
50%
60%
70%
80%
90%
100%
Share of Volume Share of $$
Rest of US
Washington
Oregon
Rest of CA
Sonoma
Napa
(Mail/Website/Club shipments, no carryout)
Source: Wine Business Communications & ShipCompliant Model
DtC: Variety’s Share of Total Cases
19%
10%
13%
6%
5%
4%
4%
17%
18%
6%
2%
0%
13%
1%
7%
22%
0 0.05 0.1 0.15 0.2 0.25
Cab Sauv
Chard
PN
Zin
Syrah
SB
Merlot
Red Blends
WA
All States
Washington vs. Total for All States, no carryout
Source: Wine Business Communications & ShipCompliant Model
DtC: WA Share of Varietal Totals
4%
5%
12%
9%
4%
5%
3%
0.00% 2.00% 4.00% 6.00% 8.00% 10.00% 12.00% 14.00%
Cab F
Merlot
Riesling
Syrah
Red Blends
White Blends
All Wines
WA Share of Volume
Washington Wineries’ Share of Varietal Total, no carryout
Source: Wine Business Communications & ShipCompliant Model
11
9
80
14
11
9
76
Bought through a winery website
Bought from an online retailer
Bought through a website of a brick-and-mortar
retailer
Did not buy wine online
2008
2010
NA
Online Wine Purchases, 2010 (Percentage who purchased wine online in the past year)
Source: Wine Market Council
Washington Wines in
The U.S. Market
Market Penetration by Region, Core Wine Drinkers
(% who purchased wine from region in past 3 months)
Source: Wine Market Council
89
2229
4442
2229
CaliforniaOregonWashingtonFranceAustraliaNew ZealandChile
Quality Ratings by Region, Core Wine Drinkers(% giving top “Excellent” rating to wine from this region )
Source: Wine Market Council 2010
43
3228
54
383932
CaliforniaOregonWashingtonFranceAustraliaNew ZealandChile
Value Ratings by Region,
Core Wine Drinkers(% giving “Excellent” rating to wine from this region )
Source: Wine Market Council 2010
343031
33
25
3230
CAOregonWAFranceAusNZChile
Quality Ratings by Region, Wine Opinions panel
Source: Wine Opinions Consumer Panel August 2010
Answer OptionsOne of the
bestVery Good
Good Fair PoorDon't know
Napa Valley 49% 37% 11% 2% 0% 1%
Washington 11% 40% 30% 5% 1% 14%
California 30% 40% 26% 4% 0% 0%
New Zealand 9% 31% 38% 8% 1% 14%
Sonoma 37% 43% 16% 2% 0% 3%
Australia 10% 36% 36% 11% 2% 4%
Oregon 13% 42% 24% 4% 0% 18%
Value Ratings by Region, Wine Opinions Panel
Source: Wine Opinions Consumer Panel August 2010
Answer OptionsOne of
the bestVery Good
Good Fair PoorDon't know
Napa Valley 10% 20% 30% 27% 11% 1%
Washington 8% 30% 36% 9% 1% 15%
California 11% 30% 40% 15% 2% 1%
New Zealand 8% 35% 33% 8% 1% 15%
Sonoma 9% 30% 39% 16% 2% 4%
Australia 13% 40% 32% 9% 2% 5%
Oregon 7% 26% 34% 13% 1% 19%
Cabernet Substitute Question, Wine Opinions Trade Panel Preliminary 2011
Source: Wine Opinions Trade Panel Preliminary January 2011
$50‐100 Napa Cabernet SubstituteResponsePercent
Cabernet Sauvignon from Sonoma County AVAs priced below $50 23%
Napa Valley Cabernet Sauvignon wines priced below $50 22%Cabernet Sauvignon from Washington State pricedbelow $50 27%
Cabernet Sauvignon from Chile priced below $50 11%
Cabernet Sauvignon from Australia priced below $50 3%
There is no suitable substitute for Napa Valley Cabernet Sauvignon wines priced between $50 and $100 5%
Social Media
Activity Core Marginal
Read customer ratings or reviews of products and services 51% 38%
Maintain a page on a social networking site such as Facebook or MySpace 43% 43%
Read blogs or online forums 29% 23%
Post reviews of products or services 28% 14%
Comment on blogs or participate in online forums 19% 15%
Follow people on Twitter 11% 10%
Top Wine Drinker Online Activities
Source: Wine Market Council
(Percentage by activity in which respondents participate*)
*25% cite “none of the above”
Category Core Marginal
Information about various types of wine 64% 65%
Information about specific wines 55% 43%
Looking up wine prices 49% 49%
Information about wineries 47% 33%
Information about a wine region 34% 22%
Looking up critics’ wine ratings 31% 23%
Looking for a retail store that carries a wine 31% 22%
Top Categories of Wine Information Online
Source: Wine Market Council
(Percentage by type of information and segment)
65
27 3021
116
66
23 2619
84
Facebook MySpace YouTube Twitter LinkedIn Flicker
Core
Marginal
Social Media Service Membership, 2010(Percentage)
Source: Wine Market Council
43
12
65
20
28
Facebook Twitter YouTube
2009 2010
23
(Percentage)
Social Media Service Membership, 2009 -2010
Source: Wine Market Council
Usage of Social Media
38% of Core wine drinkers report using social media to discuss wine.
45% of core wine drinkers who use Twitter “follow wine people” on Twitter. 46% tweet family or friends about wine.
41% of core wine drinkers are “smartphone” users. Among them, 39% use wine/food/restaurant apps.
For all the above, the numbers for marginal wine consumers are much smaller.
Source: Wine Market Council 2010
Wine Opinions Trade Panel: Change in Influence of Media Channels since 2008
Greatly increased
Somewhat increased
No change
Somewhat decreased
Greatly decreased
Wine magazines (print) 3% 22% 54% 18% 1%
Wine magazines (online) 7% 40% 51% 2% 1%
Wine bloggers 17% 46% 32% 5% 1%
Wine discussion boards 10% 38% 45% 7% 1%
Winery websites 12% 46% 38% 3% 0%
Wineries or wine marketers using Facebook 31% 44% 22% 2% 1%
Wineries or wine marketers using Twitter 15 % 44% 36% 4% 1%
Winery, wine company, or trade associations’ email newsletters 7% 36% 45% 12% 0%
Newspaper wine columnists 3% 33% 46% 16% 2%
Wine retailer online communications (newsletters, sites, etc.)
19% 52% 27% 3% 0%
Source: Wine Opinions Trade Panel Jan 2011 Preliminary
Generation Shift (but we knew that)
New Normal? Value* rules for now
Economics vs. Demographics vs. Psyche
Communications Shift
“Age” – or just half a decade?
New? Age?
