Navigating the ‘Lifestyle Generations’: Adaptability of the Wine Industry

By | 13 March 2024

There’s a difficult subject that many are avoiding. The wine industry faces a troubling crossroads. Worldwide alcohol use is sharply declining – this is well-known. Younger folks aren’t drinking as much as their elders. What, then, is the wine industry’s response?

Grasping the causes of this downturn – a prickly blend of health worries, the influence of social media and public perception, variety and choice, along with financial instability – and tackling how drinking habits are shifting, may aid this industry (which isn’t famed for rapidly embracing change) to adapt and endure.

An informative report from the European Parliamentary Research Service shows that wine consumption within the EU fell by 24% from 2010 to 2020.

Health and wellness movements are leading the charge towards moderation and non-drinking. Strong messaging concerning the damaging health consequences of drinking any quantity of alcohol is fuelling this contention. As per the World Health Organisation, as of January 2023, ‘there is no quantity of alcohol consumption that is safe for health’.

Today’s youth are progressively becoming more knowledgeable about factors influencing their health and wellness than their predecessors were at their age. Specifically, Gen Z (those who were born between 1997 and 2012) are overwhelmed with an abundance of information and statistics.

The founder of the podcast and consultancy Business of Drinks, Erica Duecy, hails from the GenX generation and observes that over half of Gen Zs and Millennials (individuals born from 1981 to 1996) in the United States perceive even moderate alcohol consumption — one to two drinks daily — as detrimental to health. Mintel, a market intelligence agency, reports that about one-third of Gen Zs in the United Kingdom do not consume alcohol at all.

As per the data collected in the six months leading up to April 2023 by the drink market analysts from IWSR’s BevTrac, the second most popular consumer sentiment worldwide regarding alterations in alcohol consumption behaviors revolved around maintaining physical and mental health via moderation.

Social media often facilitate these opinions. Jarlath Curran, Decanter’s wine logistics manager and also a Millennial, states “The representation of success and an enviable lifestyle has undergone significant transformation recently, largely due to the influence of social media.” He continues, “everyone is depicted as attractive, fit, and healthy,” and adds that for many, alcohol consumption does not complement these aspirations.

Ben Franks, chief operating officer of Canned Wine Co. Credit:

Ben Franks, also a Millennial and chief commercial officer of Canned Wine Co, echos this: ‘There’s a lot of pressure on social media where everyone is expected to be super healthy, super successful, and always achieving constantly. That makes us hyper-aware of our health.

Sophia Longhi, wine communicator and founder of Skin + Pulp. Credit: Skin + Pulp.

But it’s not just the roster of health influencers on social media that has Millennials and Gen Zs in its grip. ‘It would be unwise to discount vanity, but also not wanting to embarrass yourself publicly,’ says Sophia Longhi, a Millennial wine communicator and founder of blog Skin + Pulp.

It’s critical to recognize the distinctions between these two audience groups. Millennials straddle the line between enjoying a good drink and taking it too far, maintaining a balance with their health and image consciousness. Longhi suggests Gen Zs place a greater emphasis on image, being cognizant of the lasting implications of public humiliation. A lasting imprint of them staggering inebriated in a public place is not the ideal portrayal they wish to show potential employers.

Longhi also identifies an increased understanding of women’s safety as a significant factor deterring younger alcohol consumers.

Our wine-drinking habits are evolving. ‘People are socializing less frequently outside, and more within each other’s homes,’ Longhi points out. The 2023/24 premium on-trade report by UK-based wine importer Liberty Wines mirrors this. The report indicates that sales volumes in restaurants and bars dropped by 19% between 2019 and the summer of 2023.

The first half of this period admittedly spanned the Covid-19 lockdowns, but the fact the trend has continued is notable. ‘There has been a significant shift towards drinking wine at home,’ says the report.

‘The way we socialise has changed,’ agrees Curran. ‘Now we don’t need to leave the house to feel engaged with people.’ What this does mean, however, is that the occasions where Gen Zs and Millennials do meet in person are special, so the desire to share good wine and good food is strong.

Franks believes that connection is the important aspect: ‘It’s about the physical act of sharing,’ he says. ‘If anything, Millennials and Gen Zs are oversharing: they live their lives online and if they do have a social occasion in person, they make more effort around what they’re bringing.’

Young drinkers see wine as more of an occasional treat. ‘It’s completely different from what we knew,’ says Anne Burchett, wine marketing and communications specialist, who thinks overindulgence and excess used to be more socially acceptable (she is a Baby Boomer). ‘We need to accept that what becomes fashionable and socially acceptable in one generation, will automatically lose a bit of its lustre in the next generation.’

Duecy points out that the ‘younger generations in the US are increasingly ethnically diverse’. He highlights the fact that ‘an ever-decreasing segment of the American population hails from Eurocentric backgrounds or families where consuming wine at dinner times or social events was the norm.’

The ways and locations in which we indulge in wine are a testament both to the changing societal standards and economic conditions. Younger generations choose to spend more on less. ‘Despite a decline in drinking rates, there is a rise in sales value,’ states Ellen Doggett, a former sommelier, a specialist of the wine industry, and herself a part of the Millennial generation. ‘Consumers are keen to choose better quality drinks, and they are increasingly mindful of where their money goes.’

This trend of premiumisation isn’t a novel concept, but it has been further intensified by the recent financial downturns. The younger generations now find themselves with far less spare income than their predecessors had at the same stage of their lives. Their financial aspirations for the future don’t align with the past. Traditional major purchases, such as homes and vehicles, are no longer realistic, thus, expenditure on leisure activities has escalated.

Ellen Doggett, former sommelier and industry expert.

Even though these two key demographics of Gen Zs and Millennials may become more affluent as they get older, they are unlikely to ‘age in’ to wine, and ‘they’re never going to drink anywhere near as much as previous generations’, says Miles Beale, chief executive of the Wine & Spirit Trade Association and a Gen X. ‘I don’t think they’re going to spend as much as the Baby Boomers, who have had a long period of economic wealth.’

Longhi says that spending is much more related to younger consumers’ ethics and values, ‘and they tend to be quite loyal to brands who they align with and who represent them’.

For the younger generations, it’s clear where these values lie. Provenance, sustainability, authenticity and heritage drive their buying habits. This already means that quantity will shift downwards, as all of these values come with a higher price tag.

This indicates a downward trend in the consumption of inexpensive, mass-produced wines – an outcome that wine industry professionals would likely cheer.

Stefan Neumann, a master sommelier, independent wine consultant based in London, and a Millennial, suggests that this category is the most interchangeable and the most forgettable. This is a problematic situation for wine businesses considering the younger generation’s pursuit for unforgettable experiences they could share with friends and family.

Moreover, Curran is hopeful that the short term will witness a decrease in the wine industry’s over-industrialization, consequently leading to the production of superior, high-quality products.

However, is the situation that straightforward? Longhi suggests that this could, in a way, make wine seem more elitist and intimidating. The ongoing financial hardships also influence one’s aspirations.

‘I’m not sure premiumisation can be guaranteed to stay,’ says Beale. Recent data from the IWSR suggests that premiumisation is slowing. ‘Consumers are cutting back on alcohol spending as financial concerns grow and the cost-of-living crisis eats into their disposable incomes,’ says the report.

In the US, the astronomic rise of single-serve, RTD (ready-to-drink) beverages can be partly attributed to a widespread hesitancy towards the upfront cost of a full bottle of wine. ‘60% [of consumers surveyed] say that price is extremely or very important in deciding which beverages they’ll buy,’ says Duecy. ‘Less than a third will spend more than $30 for a bottle of wine. And 75% say they rarely or never buy wine over $50.’

Too much choice is a bad thing when it comes to wine consumption. There is a wealth and variety of both alcoholic and non-alcoholic beverages on the market, and younger generations are no strangers to experimentation. What’s more, these other categories are communicating with consumers incredibly well.

‘With no-and-low beverages there’s now so much choice it’s just as compelling as if you’re venturing into alcohol,’ says Franks. ‘If anything, alcohol has got a bit samey. In the non-alc category and you’ve got kombuchas, no/low beers, low spirits, all the different mixers and blends… There’s a real element of choice and excitement in trying something new.’

But it’s not just other beverages pushing wine off the younger generations’ radar. Among Gen Zs in the US, ‘alcohol is being replaced by cannabis use,’ says Duecy. ‘More than half of the population in the US lives in a state where cannabis is legal.’

As Den Belmont, founder of Good Wine Good People and a Millennial, says: ‘With the legalisation of marijuana, you have alternative ways to get your buzz.’ This has also spawned a rise in CBD- and THC-infused RTDs, which have seen double-digit increases.

Erica Duecy, founder of Business of Drinks.

Sentiment towards the future among industry professionals remains largely positive, albeit with continued worries over duty increases in the UK. But the tide is turning on those stuck in their ways.

The needs and values of the younger generation must be acknowledged to induct them into the world of wine. This could stimulate innovation and encourage positive evolution in practices such as reducing packaging, true commitment to sustainability, embracing alternative formats and unique flavours, and connecting via popular channels.

Constant innovation and reinvention is needed to maintain relevance with the younger generation, according to Burchett. He asserts the importance of optimism when it comes to the younger generation’s involvement in the wine industry.

Burchett firmly opposes the negative assumption that the younger generation squanders all their money on coffee chains like Starbucks. He emphasizes understanding the differences in this generation’s preferences instead of criticizing them.

Longhi believes that wine, portrayed as a part of an elevated lifestyle rather than a means for excessive drinking, is much more enticing for Gen Z. He suggests looking at wine as a lifestyle choice instead of focusing on its mass availability. As per Longhi, wine has the potential to fit seamlessly into a balanced, fulfilling lifestyle.

‘A lot of it is on the wine industry to not make it more complicated than it needs to be,’ says Belmont. Younger generations can be shown how wine can fit into their existing lifestyles, instead of an industry forcing traditional pairings and situations on them that they can’t relate to.

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