Wine’s Face Changing
How does an increasingly diverse U.S. population impact the wine industry?
The face of America is changing—culturally, economically, ethnically. As emerging demographic segments impact the consumer purchasing market, so does the way in which businesses appeal to and target these new consumers. America’s wine culture is, of course, not immune to these tectonic shifts, and as increasing numbers of wine drinkers in previously non wine-focused communities—African-American, Hispanic, Asian and Millennials among many others—seek out the products and lifestyle associated, the industry is necessarily shifting the way it thinks about who its audience is.
“As people prosper and mature they will naturally seek out life’s pleasures such as wine,” observes Vanessa Robledo, president of Black Coyote Chateau in Napa Valley, cofounded by African-American neurosurgeon Dr. Ernest Bates. A fourth-generation winegrower whose parents emigrated from Mexico to California in the 1960s and established Robledo Family Winery in Sonoma in 2003, Robledo is a living example of how the industry is changing, and embracing not only men, but women, who previously were under the radar in wine business and consumerism.
How are these increasingly impactful segments influencing and invigorating the face of the wine industry? Wine Enthusiast talked with leaders in four rising demographic categories about trends, tastes and the future of wine among new consumers.
“Mexican-Americans have always been interested in wine,” says Robledo, who was named Entrepreneur of the Year by Latina Style Magazine in 2008 and opened the first Hispanic-owned tasting room in California. “My father Reynaldo started as a migrant worker from Mexico.” Today, Robledo Family Winery produces 20,000 cases of wine a year and in February 2010, was visited by Mexican President Felipe Calderón in support of the contributions of Mexican immigrants like Vanessa’s father. “People were fascinated by the story and even in 2003 when our winery opened, more than half the crowd at our wine events was Latino,” she says. Traveling to Mexico in 2007, Vanessa noticed the growing middle class was increasingly wine savvy and enjoying not only the local wines from solid regions like Guadalupe Valley in Baja and Parras Valley in Coahuila, but wines from abroad as well (mainly from France and Spain).
Part of the previous barrier to entry for Hispanic wine drinkers was presumptions that were made for them, says Robledo. “Despite the obvious growing interest among [American] Latinos in wine, Mexican restaurants in California would tell me, ‘We serve beer and margaritas; we don’t sell wine.’” Through her own winery involvement and the family’s frequent wine and food pairing events, Robledo hopes to educate both Hispanic and non-Hispanic consumers about wine as an exciting part of the Mexican table. “We always paired wines with my mom’s traditional Mexican food, showing people how high-acid wines like Sauvignon Blanc can cool down Mexican spices instead of overwhelming the palate with a big red,” she says. “[It] really comes down to learning which is the best for each dish.”
Big business is noticing the shift, and shifting its own way of thinking to embrace the rapidly expanding Hispanic consumer segment in America. Mike Lakusta, vice president of international business development & multicultural marketing at Glazer’s distributors, says wine drinking is not only aspirational among bilingual Hispanic consumers, but that statisitcs show they are spending more on higher end wines than consumers on “the high or low ends of the acculturation spectrum.”
This bicultural zone is increasingly popular among young Hispanics as well as young African-Americans who social scientists say are ‘retro-acculturating’— rediscovering their traditions, learning their heritage language and embracing their roots, a process that also influences their choice of wines.
“African-Americans are intrigued to find there are African-American producers and growers out there,” observes Stephen Sterling, whose family founded Esterlina Vineyards & Winery in Mendocino, California in 2001, “especially when we account for only 1% of America’s wine production. Once consumers only knew the megabrands that could afford mass marketing, but since the Supreme Court ruling made it easier to ship nationwide, awareness of small brands like ours is improving.”
While Sterling feels African-American wine consumption increases are part of the overall growth in American wine drinking, he does see a change within the demographic. “As more African-American families enjoy affluence, travel and international culinary experiences, their taste preferences expand.” Scarborough Research shows African-American wine consumers are 2.5 times more likely to buy $20-plus bottles than other American consumers, and 2010 U.S. Census reports reflect a 47% increase of African-American households with incomes over $75,000 since 2005.
Lakusta says that the growing interest in regional food and wine pairings throughout America is also making an impact among the African-American segments as experimentation with new beverages and traditional ethnic cuisine (akin to Robledo’s comments about Latin cuisine and wine) grows.
Asian flavor profiles are the wave of the culinary future, note some trendwatching chefs, even beyond iconic restaurants like Vietnam-born Charles Phan’s Slanted Door in San Francisco and Jean-Georges Vongerichten’s Asian-inflected Jean-Georges in New York. Asian-Americans, whose median income is 20% higher than the U.S. average and whose population is growing at three times the U.S. average rate according to Census reports, are fast putting a cultural stamp on America. “With 1.3 billion people in China and 127 million in Japan, versus 310 million in the U.S., Asian influence on the U.S. will increase exponentially,” Lakusta predicts. In the same way Chinese consumers drive purchasing in designer fashions and high-end cars, sales of the best French and Italian wines are booming in China, he observes, and “when we see three bottles of Château Lafite-Rothschild 1869 selling at Sotheby’s Hong Kong auction for a record-breaking $232,692 each, we feel that when these consumerscome to the U.S. they will demand and pay for the best.”
Perhaps the most influential emerging demographic in wine culture is the Millennial segment. With half the world’s population under 30 and the youngest of America’s 80 million Millennials reaching wine drinking age over the next 10 years, the young wine-drinking population is becoming a serious focus in the wine market. Their way of sharing information via social networks is driving the wine industry to evolve digitally, and fast.
Beyond general statistics that claim 96% of Millennials belong to a social network; that Facebook would have the world’s third largest population after China and India if it were a country; and that while only 14% of consumers trust advertisements, 78% trust peer recommendations. Market researchers at Constellation Brands and the Wine Market Council have also confirmed the tech/Millennial boom. Their results: 67% of Millennials get wine information online, compared to 48% of Boomers; 43% of Millennials use wine, food, bar and restaurant apps; and 30% of Millennials and 61% of Gen X are tweeting about wine.
“Both my parents’ Boomer generation and my fellow Millennials rely heavily on word of mouth when deciding what wineries to visit,” observes Chuck Mansfield, the 26-year-old winemaker at Healdsburg, California’s Hop Kiln winery. “The difference is their universe of information. While my parents may reach out to a couple of trusted friends for recommendations, people my age are more likely to get this ‘word’ from Internet review sources like yelp.com.”
Mansfield finds his generation is highly experimental, seeking out emerging varieties, “perhaps looking for the ‘next big thing.’” And while everyone loves good value, Mansfield sees his peers paying more for brands that convey a sense of place, a personal relationship and ecological awareness. “When growers and winemakers are truly dedicated to sustainable, organic and biodynamic principals, embracing them as a philosophy as opposed to a marketing campaign, it creates a powerful bond with like-minded Millennials,” he says.
Some More Food for Thought
The American alcoholic beverage market is large: $36.3 billion dollars according to the U.S. Census (2007 figures, just released). The charts on these pages indicate how much Americans spend on wine or alcoholic beverages and where we spend it. Here’s a snapshot of what we found.
Women, particularly in the white, Asian and African-American categories, continue to buy more than half the wine that ends up on the table. This trend began several years ago and is not waning. Television programs and certainly daytime TV coverage are reflecting this focus.
Baby Boomers: It’s not all about you anymore. More and more marketing attention will be lavished elsewhere: wineries with Spanish language Web sites and advertising on Telemundo, advertising on BET, increased presence on Millennially focused Web sites and social media outlets.
Childless singles and single parents together form the second largest category of consumer, while single parents tend to make less and spend less. How does this impact wine? You are likely to see more information about how to preserve a bottle to drink on more than one night, health aspects (such as the breakfast cereal TV commercial comparing the grain antioxidants to a glass of red wine), and encouragement to buy a red and a white and have the right wine with the right food. Restaurants, which The Nielsen Company predicts will go through another four years before hitting the pre-recession mark, have already focused on wines by the glass. We predict this will increase and the range of wines available will increase.
African-American Women…the Next Wine Consumer To Watch? A new BET study released in January 2010 divides its tracking categories based on women as the center of the African-American family and as the primary buyer instead of using the typical Millennial/GenX divisions. Nearly half the African-American population is in the prime target group of 18 to 49-year-olds (six years younger than U.S. consumers overall).–K.B.