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Nov 19, 2017

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What Gives
by John Bonick and Vivien Gay
Magazine Issue: Vol. 2.4
W H A T . G I V E S
gays and lesbians mean business
N E X T P A G E >
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This essay is the third in a series voicing the concerns of wine consumers and industry professionals regarding the marketing of wine to minorities and alternative-lifestyle groups. With the rich cross-section of cultures and lifestyles in this country, common sense dictates that marketers of any product must acknowledge each potential market and react accordingly. However, mainstream wine marketing seems intent on focusing in on a small demographic of affluent white male collectors. Why?

Why is the wine industry concentrating on this already saturated market when statistics reflect that 55 to 60 percent of wine purchases in the United States are made by women? When one of the fastest growing segments of the upper-middle class with disposable income is African American? When experts say sales could double or triple to the gay and lesbian community if only the industry would show some interest by advertising in their publications or participating in their events?

Our goal here at Wine X is to reach out to ALL young adult consumers, regardless of ethnic origin and/or lifestyle choice, with the message that wine is for everyone, not just upper-middle class, aging white male collectors. We understand that 10 percent of our generation is gay; 13 percent African American, 12 percent Hispanic, 4 percent Asian and 1 percent Native American, and we realize that these vastly ignored demographics constitute about thirty million potential wine consumers. Thus, we aim to reflect as much diversity in content as possible, including forums such as this one.

By continually presenting a different and new point of view, maybe we can help the industry find a place for wine in every household throughout America. Now that wouldn't be such a bad thing, would it?

Have you looked at your shoes lately? What are you wearing? Dr. Martens? Kenneth Cole? How about your jeans? Deisel? Levi 501s? When was the last time you ordered an Absolut Martini or an Absolut anything?

For most of us, it's hard to know where trends come from. Out of nowhere, it seems, products and fashions suddenly just feel right. Whatever "it" might be, one day you look around and notice all the right people are doing it, wearing it or drinking it.

Trend watchers and marketing types spend a lot of time analyzing how trends evolve and have concluded that along with the urban African-Americans, the gay and lesbian community is one of most influential trend-setting groups in America. Why? Because as a culture, gays and lesbians are risk takers. Let's face it, being gay in America is no cake walk. Growing up with a sense of difference from the mainstream, finding the courage to face that "difference" and "come out" in a society that is still widely homophobic -- well, it makes fashion risks seem pretty tame.

Many members of the gay and lesbian community are deeply involved in so many facets of arts and entertainment that their tastes and influence are tremendously far reaching. Music, movies, television, fashion -- this is where new ideas and new looks come from. This is where they're so attractively packaged and where the tastes of gay and lesbian creatives, designers, directors, actors, entertainers and chefs are easily translated into, you guessed it -- trends.

The products mentioned above? They've been advertised to the gay community for years and have become the leaders in their categories among gay consumers. That popularity has been fundamental in each of the brand's current success in the mainstream market. But it's not only the gay community's trend-setting record that attracts these and other companies. Even more appealing to marketers is the demographic/psychographic data. Consider the findings of a recent study by Simmons Market Research:

  • 28% of gays and lesbians have household incomes over $50,000
  • 21% have household incomes over $100,000
  • 50% hold management positions
  • 61% have taken a foreign trip in the past year
  • 80% dine out five-plus times a month
  • 84% order drinks by brand name
  • 60% drank premium wine in the past six months
  • 18% drank eight-plus glasses of domestic wine in the past 30 days
  • 55% drank vodka in the past 30 days
  • 51% drank beer in the past six months
  • 88% would go out of their way to buy brands advertised in gay media
  • At a glance, it appears that gays and lesbians just have more fun. It's no wonder that appealing to the gay market is one of the hottest trends in advertising -- so hot, in fact, that Advertising Age, the industry bible, devoted a cover story to the topic a few months ago. Even Market Watch, the major trade publication of the wine and spirits business, covered the topic in detail recently.

    "Visibility of gays and lesbians has reached a critical mass in corporate American and mainstream media over the last several years, slowly easing reluctance by marketers...to court a demographic previously perceived as risky," Ad Age says.

    Companies that recognize this opportunity and that have recently begun directing their marketing dollars toward gay media are major players such as: America Online, Aetna Life & Casualty, Chase Manhattan Corp., IBM, Johnson & Johnson, Merril Lynch, Subaru of America and United Airlines. They join an equally impressive list of organizations that has been courting the market for some time: American Express, Apple, AT&T, Evian, Levi's, Nike, Saab, Virgin Atlantic and a host of fashion, drink and cigarette brands.

    Advertising Age reports that ad revenues in gay media rose nearly 30 percent last year, to $95 million, on top of 20 percent growth the year before. And why not? Judging by the cover stories of the major national gay publications, advertisers are not only reaching the heart of this community, they're also finding themselves associated with hot topics and personalities. Over the past year, the leading national gay magazines -- The Advocate and Out -- have featured cover stories on, among others, Annie di Franco, Gianni Versace, Ellen de Generes, Anne Heche, Jason Alexander, Mark Wahlberg, Mick Jagger, Woodie Harrelson (as Larry Flynt) and Dennis Rodman -- top names in entertainment by any standards.

    Endearing your product and your company to any niche market requires long-term thinking. Just as advertising needs repetition -- and more repetition -- to succeed, niche marketing requires not only reaching out to a community, but also a willingness to become a part of that niche in order to win credibility and loyalty.

    Gay and lesbian consumers have shown that they're looking for little more than inclusion, affirmation and respect from mainstream marketers. Brands that advertise to the community are indeed taking a big step in this direction. The mere fact that they've chosen gay media is an act of recognition and acceptance.

    The companies that have been most successful at winning the loyalty of gay and lesbian consumers, however, have also demonstrated that they're willing to give back to the community, that they recognize the vital issues and will support key community causes. Nothing could be more damaging to a brand than to appear that it wants to cash in on a hot market. Gay and lesbian consumers are too savvy and sensitive to disingenuous messages and can easily recognize companies looking to exploit rather than support.

    Cause-related marketing, in which corporate America directs part of its profits to charitable organizations, has slowly become a viable tool in affecting the way consumers spend their dollars. When these programs work well, the corporations, the charities and the consumers all benefit. Organizations reaching out to the gay and lesbian community have made this a key element in their overall marketing efforts.

    Absolut Success

    It's impossible to talk about marketing to the gay and lesbian community without talking about Absolut Vodka. Absolut wrote the book on this one. Even while the brand was climbing toward the top of the imported vodka category in the early and mid-1980s -- behind the then dominant Stolichnaya -- Absolut was investing in gay media, at both the national and regional levels, buying up all the back covers with early executions of the now-famous Absolut print campaign.

    Absolut began incorporating the work of gay artists in its ads and got heavily involved in fashion promotional events, spreading its presence and popularity throughout the community. It quietly became the number one imported vodka among gay consumers and subsequently number one in the country.

    The Vodka giant's success made it easier for other alcohol beverage brands to consider gay media. Miller Brewing stepped into the scene in the late eighties and has been at it every since. By the mid-1990s, recognition of the market potential had expanded to major distilled spirits brands, with ads by Johnnie Walker, Tanqueray, Stolichnaya, Remy Martin, Hennessy, Sauza Tequila and others appearing regularly in gay and lesbian magazines.

    Wither Wine?

    In spite of the success spirits and beer makers have enjoyed in this market niche, the wine industry has been slow to approach gay and lesbian consumers. A handful of wine brands have dabbled in the market with advertising over the past couple of years, but almost no one has stepped up and become a major player the way distilled spirits, beer and water companies have.

    All that Glitters

    The wine industry has experienced a "golden age" the past few years, but the shine may soon wear off this period of profits when thousands of acres of new plantings come into production. The "wine lake" of the early 1990s may soon be back. Combined with the influx of low-priced wines from South America, Australia and Eastern Europe, it's become imperative for wineries to invest now in new consumer markets.

    Wine industry consultants Motto, Kryla and Fisher note that wine marketing budgets are on the increase but still lag far behind the spending rates of packaged-goods companies, which typically lay out a minimum of 3 percent of their revenues on advertising. "This equates to $300,000 for a $10 million winery, $9 million for Mondavi, and $150 million for California wine overall. Minimum," MKF says.

    "Wineries are learning that advertising builds consumer trust. If consumers know and trust a brand, it helps them make choices faster and easier. Wineries have also seen the impact of advertising on prices. When you see a brand like Nike getting over $100 for shoes based primarily on advertising, the message isn't lost on vintners."

    Whether the wine industry wakes up to the potential of the gay and lesbian market and invests in developing meaningful relationships with these consumers remains to be seen. The industry has historically been slow to spend its dollars on marketing. But the writing is on the wall: 11 percent of consumers still drink 88 percent of all the wine consumed in this country.

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