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Marketing Wine in the New Millennium

Presentation to the

18th Annual Midwest Regional Grape and Wine Conference 2003

by Darryl Roberts, Editor/Publisher, Wine X Magazine
February 9, 2003

Background of Wine X:
  • young adult lifestyle mag with wine and other stuff grafted onto it
  • specifically target 21 - 30-year olds (get into that in a moment)
  • we have 154,000 readers here in the U.S., and our Aus/NZ edition has aprox 100,000 readers currently
  • our goal at Wine X is to broaden the wine consumer base by getting more young adults interested in wine, by providing them a comfortable and identifiable environment that they can relate to

    I'm going to use the term "young adults" today, which will mean 21 to 30-year olds. The term Generation X gets thrown around a lot, and its definition varies depending on who's using it and in what country it's being applied to. But officially, Gen X are those born in the U.S. between 1961 and 1981, and represents 80 million people.

    I'm also going to use the term "Baby Boomers" and that applies to those aged 42 - 60, and represents 77 million people.

    Here are some quick stats before we get going:

  • Approximately 72% of wine drinkers in the U.S. are over 40 years old
  • In the U.S., 63% of wine drinkers are women
  • Between 1985 and 1996, the percentage of wine drinkers in the U.S. over age 35 grew from 53% to nearly 70%, while the percentage of those under 35 dropped from 47% to 28%
  • In the last 10 years the U.S. has seen a 50% increase in the number of new wineries, a 50% increase in vineyard acreage planted, and a 50% increase in cost of a bottle of wine

    On the global level, from 1995 to 1999 wine production in:

  • the major European countries (France, Italy, Spain, Germany) grew 14%
  • in the U.S. it grew 15%
  • in Australia, wine production grew 89%
  • and in New Zealand it grew 100%
  • global consumption, however, remained relatively flat

    According to MRI (MediaMark Research), a little over 44 million people in the U.S. have had a glass of wine within the past 6 months, that represents 22.5% of the adult population.

    According to MRI, 10.4% of the U.S. adult population drinks 94.7% of the wine.

    According to the latest OIV data (I'd explain what OIV is but it's a bunch of French words I can't pronounce), the estimated gap between production and consumption suggests a global surplus between 1.2 and 1.7 billion gallons for 1999/2000. To put this in perspective, the global market might have been in balance if the U.S., Argentina, Chile, Uruguay, Australia, New Zealand and South Africa had not crushed a single grape.

    Wine marketing, for the most part, is an oxymoron. Why? Because for the most part, except for a few large wineries/wine companies, wine has never really been marketed to consumers, in this country or any country. It's always been allocated to wholesalers and retailers, or sold through winery tasting rooms and/or outlets. Up until a couple years ago, demand had always outweighed supply. However, as we're currently witnessing, with the global wine glut, supply has now surpassed demand, and will continue to outpace demand in double digits, unless new marketing and promotional strategies are implemented to broaden the wine consumer base.

    Let's take a brief look at wine consumption patterns here in the U.S. and how we got to where we are today.

    According to the Wine Institute, per capita wine consumption grew steadily from 1940 through 1968 at an average of about 1% per year. This can be attributed to an increase in the adult population, taking into account both domestic growth (babies born here in the states) and an increase in, what I term, "Euro-transplants" or those immigrating to the United States from Europe, who consume wine regularly as part of their daily habits.

    Then, from 1968 to 1986, an anomaly in per capita wine consumption occurred, not only here in the United States, but globally. During these 18 years, per capita wine consumption increased to a growth rate of about 7% per year - seven-times the average up until then. Then, from 1986 through 1996, per capita wine consumption fell an average of 4% a year, dropping a total of 25%. And, since 1996, per capita wine consumption has basically returned to its 1% growth per year average.

    So what happened during these 18 years, from '68 to '86, that caused this anomaly - this sudden rise in per capita consumption? And then why did per capita consumption fall 25% after 1986?... and settle back to a 1% per year average growth?

    Well, to understand this, we simply have to look at what happened in the mid- to late-60s. The sudden growth in consumption in this country, and globally, was the direct result of one generation - the baby boomers - who "discoved" wine. Baby Boomers, being the rebellious generation that they were, didn't want do what their parents were doing. They didn't want to drink what their parents were drinking. And their parents, for the most part, were drinking beer and spirits. So, they decided to adopt another beverage that they could call their own. And what they adopted was wine. Wine became the new thing. Wine was hip. Wine became cool. It was groovy to order Chablis or Burgundy in a restaurant. And wine was cheap. You could buy a gallon of wine for a couple of bucks and drink it every day.

    So, we have a generation adopting a product and drinking it on a daily basis. That's important. But the more important and significant factor here is that Baby Boomers were discovering and drinking wine on a regular basis when they were in their 20s. The leading edge of the Baby Boomers were in their mid-20s in the late 60s, and, in the mid-80s, when the Wine Boom hit its peak, the trailing edge of the Baby Boomers was in their mid-20s.

    And this is significant because -- and if you remember anything from my presentation today, please remember this -- people form their consumption habits (and some brand loyalties) for life in their mid- to late 20s. Meaning, if a person is drinking scotch or beer on a regular basis when they're 28 years old, they'll be drinking scotch or beer on a regular basis when they're 58 years old. Equally, if they're not drinking scotch or beer (or wine) on a regular basis at age 28, there's very little probability that they will be at 58.

    That's the reason Baby Boomers are the major consumers of wine today. They established their consumption habits drinking wine on a regular basis while they were in their 20s. And, as I stated earlier, that's the reason there was a big shift (almost 20%) of wine consumers moving from under 35 years old to over 35 years old between 1985 and 1996. It was simply the Baby Boomers aging.

    Okay. So we have this Wine Boom. We have a whole generation hooked on wine, and consuming the vast majority of it... why isn't the next generation, Generation X, drinking wine as well?

    Quite simply, the wine industry got lazy. Instead of learning from history - instead of looking at what I just laid out for you and analyzing why we had this rapid and sustained growth in wine consumption worldwide for 18 years - the wine industry, from the mid-80s through today, has simply ridden this Baby Boomer wine wave, and has been selling more wine to the same people over and over and over again. And that strategy will work... for a while. But if all we do is sell wine to those who're already drinking it... those now over 40 years old... what happens to young adults in their 20s... young adults who're forming THEIR consumption habits now for life... just as the Baby Boomers did 25 years ago?

    Well, we're finding that out now. This massive wine glut worldwide isn't the result of Baby Boomers drinking less. Or the result of a bad economy. In fact, history proves that people drink more during hard economic times, they just don't spend as much money on their drink. The massive worldwide wine glut is the direct result of the wine industry producing wine at a double digit annual growth rate, while consumption, worldwide, is basically flat. And the reason why worldwide consumption is flat is the direct result of what happens when a consumable goods industry, like the wine industry, ignores people in their 20s... while they're forming their consumption habits for life.

    Since 1986, roughly 50 million people, young adults, have formed their consumption habits for life without wine. Why? Because, since 1986, the vast majority of wine marketing and promotional dollars has been spent, and still is spent, trying to reach the 40 to 60-year old demographic - the Baby Boomer. The vast majority of wine advertising dollars is spent in wine trade magazines, which cater to the wine industry and the core of the core of the core of the core wine consumers (basically those over 40 years old), and in upscale consumer magazines that boast a readership with high household incomes and that showcase the lifestyles of the rich and famous. And, although these magazines, both trade and high-end consumer, are flashy and serve a niche within the wine community, they do absolutely nothing to broaden the wine consumer base. If they did, then wine consumption should be up 20% since 1986, when publications like Wine Spectator and Wine Enthusiast, and critics like Robert Parker, became popular amongst the trade. But it hasn't. ver since the wine industry has run to its own trade magazines, and "guru"-like critics, per capita wine consumption has gone down.

    The wine industry, with all due respect, has gotten so wrapped up in itself, so concerned with its image and "lifestyle" ... that it has totally forgotten how it got here in the first place. Baby Boomers didn't wake up one day when they were 40 and decide to drink wine. They're in their 40s and 50s now. The fact is, is that they started in their 20s.

    That's why Wine X targets the demographic that we do. We didn't just randomly pick the 21- to 30-year old niche to target. We did a lot of research. We came to understand why the 40- to 60-year olds are drinking wine on a regular basis now. We understand that they didn't just wake up one day when they were 40 and say, "Hey, instead of the beer I usually have after work today, I think I'll have a glass of wine. And I'll do this for the rest of my life." We understand that the reason Baby Boomers are drinking so much wine now is BECAUSE they were drinking wine in their 20s. On a regular basis. That's when you have to market consumable goods and products to people. That's when you have to, and I hate to use this term, but it's appropriate, that's when you have to "hook" people for the rest of their life. Because, according to J. Walter Thompson, it costs 10-times as much money to change someone's habits as it does to help them set them.

    Which I find ironic, because the wine industry constantly cries poverty when it comes to marketing and promotional dollars, but then turns around and spends 10-times as much as it should preaching to the choir and marketing wine to those who've already set their consumption habits.

    Why do they keep going back to the same old wine trade and yuppie lifestyle magazines? Because it's easy. It's easy to sell wine to those already drinking it. Or those who you understand because they're your peers. Let's face it: the vast majority of wine marketers and winery owners are Baby Boomers (or older), so it's easy to sell to someone you relate to. It's easy to look at the numbers and say, "Well, no one under 40 is drinking wine, so why would we target them?" I can't tell you how many meetings I've been in where I've heard that line. Or, "Don't worry, as people get older they'll grow into wine." It's never happened, on a scale that'll support the wine industry. And, at the current production levels, it never will.

    The truth is, is that it's hard to relate to and sell a product to someone you don't understand. It's hard to sell something to a generation that you have nothing in common with. That's why we have the term "generation gap." Just as Boomer parents didn't understand their kids, Boomers, for the most part, don't understand or relate to, their kids. And so, instead of trying to understand their kids, instead of trying to reach young adults with the message that wine should be a part of THEIR everyday experience too, the wine industry makes excuses on why they shouldn't market to young adults and continues to just sell more wine to their peers.

    I've done this presentation, this dog and pony show as I call it, for almost six years now, yet despite the numbers (which don't lie) and the facts about consumption habits and the history of wine consumption in this country, I still hear the same 3 "excuses" from almost every person over the age of 40... that I talk to with regards to why they won't market to young adults:

    A) Young adults have no money B) Young adult palates aren't sophisticated enough to "appreciate" wine C) My favorite. Like the generations before them, young adults will simply grow into it as they get older

    Well, let's look at "Young adults have no money."

    According to J. Walter Thompson: "Generation X (young adults aged 22 to 42) spend 10% more on everything than Baby Boomers do, whether it's cars, washer machines, soap, travel or alcohol... they spend 10% more on everything except wine." In the U.S., according to the Bureau of Labor Statistics, 21 to 34-year olds spend 51% more on alcohol than those 35 years or older.

    The Millennials, the next generation after Gen X, whose leading edge is now 21-years old, is the fastest growing group in the United States, projected to increase 14.7 percent faster than the overall U.S. population from 2001-2005. They enjoy greater spending power than any generation before it. Forty percent of Millennial teens (soon to be adults) have regular jobs, while 90 percent receive weekly income. Millennial teens spend 90 percent of their entire earnings, a trend that will follow them into their early to mid-20s. In fact, last year, in the U.S., university students -- roughly 18 to 22 year olds... the leading edge of the Millennials -- spent 5 billion dollars on alcohol. 5 billion dollars. And they are currently considered to be a $300 billion market.

    One of my writers produced a video about 6 years ago for the Wine in which she took a video camera into a Gen X hangout and asked a group of 12 young adults a bunch of alcohol-related questions. She asked this group what they were drinking. All responded beer and spirits. No wine drinkers. She asked what beer and spirit ads they remembered. Most could remember television ads verbatim, name a slew of magazine ads. Then she asked what wine ads they remembered. Only one person out of the group of 12 could remember a wine ad, and that was the Orson Wells "We will sell no wine before its time" for Paul Mason. That ad, at that time, was more than 20 years old.

    Then she asked the most important question: how much money did these young adults spend on alcohol per week. Their answers ranged from $30 to $300 a week!

    That's a lot of money. But what you have to remember is that young adults today are:

  • Living at home longer, thus spending little or no money on rent
  • They have good paying jobs
  • They're not getting married as young, thus they have more disposable income
  • They don't go out as often as their parents do, but when they go out they treat themselves better

    The fact is, is that toung adults are not the savers that their parents and grandparents are or were. Up until the 1980s, luxury goods marketing professionals used the same formula to target consumers - they targeted high income households or those with high disposable incomes, because those were the people spending the most money. But in the last 15 to 20 years, the spending habits of young adults has changed everything. Why? Because they've seen what happens when you put your life's savings into a company, only to have that company suddenly "disappear." They seen what happens when you work for a company your whole life, then suddenly get laid off right before retirement, losing your pension and, instead of being able to "live it up" after retirement, having to cut back just to survive. They are not the savers their parents are. They live for today.

    The old marketing formula doesn't work anymore. When it comes to marketing today, it doesn't matter how much money people make, it matters how much they spend. And even though young adults don't make as much money as their parents, young adults spending more because they're living it up TODAY.

    In fact, according a study conducted by Scarborough Research, a joint venture between Arbitron and VNU Marketing Information Inc., in a study that was released a couple weeks ago, they found that young drinkers, ages 21 to 34, are more willing to pay for premium wine than the generation of 35-to-54-year-olds. Young adults are 84% more likely than the average adult to spend $20 or more for a bottle of wine.

    Our reader survey shows that our reader spends an average of $16/bottle retail. And just to add a quick story to this, I'd been chasing a wine producer for years to advertise with us. They produced a nice wine for $10 and it was the right fit for our magazine. So I finally got a meeting with their brand manager, who abruptly told me that she didn't think our reader would spend $10 on a bottle of wine. Even after explaining to her that they're spending $10 for a six pack of micro-brew and $20 on a bottle of vodka, she still wasn't convinced. So we tabulated our survey results and faxed them to her. Then I called her to see what she thought. And she said, and I'll never forget this, she said that they wouldn't advertise with us now because our reader was spending TOO much for a bottle of wine, and would never think of buying a less-expensive wine.

    Again. They industry will make-up any excuse to do what's easiest. And that's spending their money in trade magazines and magazines that they like and they read.

    B) Young adult palates aren't sophisticated enough to "appreciate" wine

    Over the last 20 years or so, we've seen, not only here in the United States but in just about every industrialized nation, we've seen a huge infusion of rich, flavorful foods and beverages from around the world. Basically: globalization. You can walk down just about any street now anywhere and find Thai food, Chinese, Indian curries, Pacific rim cooking. You can walk into grocery stores and choose from a huge assortment of rich, flavorful foods or beverages. These are choices that my parents didn't have. In fact, to put things in perspective, when my parents were in their 20s in the mid 1960s, there was only one flavor of coffee in the United States. One. Now there's a practically a gourmet coffee house on every corner. Selling rich flavorful coffees and beans from around the world.

    And I like to use coffee as an example, because I want you to think about this for a second. If you walk into a coffee establishment at about 3 or 4 o'clock on a school day, you'll usually see a bunch of teens and young adults. And these teens and young adults are paying three bucks for a cafe latte or cappuccino or whatever. They're choosing a certain KIND of coffee, whether it's Kenya AA or Ethiopian or Columbian. And by choosing a specific blend of coffee or a coffee from a specific country, they're discerning the differences, whether consciously or not, between beans and blends from different regions around the world. They're discerning the differences in roast levels of the beans and how that makes the coffees taste different. They're discerning what blends they like or don't like, of certain coffees with different roast levels from different countries from around the world.

    And this should sound familiar. Because it's exactly what we do with wine, isn't it? Don't we talk about how different grapes planted in different regions and countries taste differently? Don't we talk about how different barrels or toast levels of barrels make wines taste differently? Don't we talk about, ad nauseam usually, about how "blending" of different varietals creates more interesting wine?

    After the coffee house, check out a bar or nightclub or young adult hangout or even a restaurant and look at what young adults are drinking. They're drinking top-shelf spirits, rich flavorful beers, single malt scotch. So if they're enjoying exotic coffees, microbrews and single malt scotch, high-end vodkas, gins and tequila, I think it's safe to say that their palates are sophisticated enough to appreciate wine.

    The fact is is that kids palates today, teens as well as young adults, their palates are so far ahead of where my parents palates were, or even my palate was, at that age it's scary. It's not because they're special or super humans or mutants. It's simply because they've had the opportunity their whole life to experience rich flavorful foods and beverages from around the world by simply walking down their street. And as curious teens and young adults they'll go outta their way to try new and exciting things. As every year passes, palates of young adults will only become more sophisticated as globalization continues to offer them more and more choices.

    So, the biggest problem we face, myself included, is to NOT transpose our experiences and our sophistication levels of when we were teens and young adults onto the young adults today. It's not the same world. It's not the same world as it was 20 or 30 years ago. It's not even the same world it was 5 years ago.

    I have a niece that's 7 years old. She has never known a world without the Internet. Think about that. Think about how differently we have to market products and services to her. Think about how incredibly sophisticated her palate will be when she's 21... with her parents exposing her to all the rich and flavorful foods and beverage products now available.

    C) Like the generations before them, young adults will simply grow into wine as they get older.

    I said earlier that this is my favorite, and that's basically because absolutely nowhere in history, in any country, or anywhere in the world, has this happened. There will always be a small percentage of people that'll naturally gravitate to a product as they age, but that percentage is very small, maybe 4 to 5%.

    Yet it's the number one reason or excuse used by the wine industry to only target the 40+ crowd. Well if you want a living, breathing example, other than the U.S., of what happens when an industry sits back thinking that young adults will simply grow into wine at a rate that'll sustain their production, just look at France. Here's a country where kids grow up with wine on the table; where kids are able to drink wine from the time they can walk. Yet in the past 15 years, per capita wine consumption amongst young adults in France has dropped more than 50%. 50%. Why? It's obviously not because young adults aren't exposed to wine. It's not that wine is this big mystery to them. The reason why wine consumption amongst young adults has dropped so drastically, not only in France but around the world, is because young adults today have a million more choices than they did 20 years ago. Again, globalization. Today, young adults have 100 different vodkas and gins and tequilas and beers and sports drinks and coffees and whatever to choose from. And, unlike the wine industry, these beverage companies are in the faces of young adults constantly. They're in the magazines young adults read, in the TV shows that young adults watch; and on the radio stations young adults listen to. Because they understand. They understand the fact that I told you to keep in mind -- that if you get young adults, who're in their 20s, to try your product and you "hook" them while they're in those formative years, you'll have them for the rest of their lives.

    Why are young adults drinking beer and spirits? Because beer and spirit companies target young adults. Why don't young adults drinking wine? Because the wine industry doesn't target them. It's that simple.

    In today's market, you cannot sit back and wait for young adults, or anyone, to come to you. It's too competitive. You have to go after them. You can't ignore a group of people and expect them to turn around one day and support you. And that's why, even though young adults in France drink wine as kids, they're not drinking it as young adults. The industry simply sits back and expects them to come running to wine. Well, it's not gonna happen.

    Every year that we ignore people in their 20s, every year that we only focus on those who ARE drinking wine... or those over 40 years old with huge household incomes... every year that we ignore 20-somethings in the U.S. alone, we lose 4.2 million potential wine consumers. Because that's how many young adults establish their consumption habits for life every year in this country.

    So how DO we reach young adults? How do we market wine or any product to them?

    Well, first of all, we must change our overall approach to marketing in general. The old school practice of pushing your product onto wholesalers and retailers is just that, it's old school. It doesn't work anymore. Today's multi-billion dollar industries, which wine is a part of, understand that with the amount of global competition, you can't push your products anymore. You must create a pull-through from the consumer. And that means focusing your advertising and promotional efforts on the consumer, not the trade. That means creating consumer-friendly materials and vehicles to deliver your message. By doing this, you create greater awareness of your product and/or your brand, and this awareness will create demand that can be fulfilled by your wholesalers and/or retailers.

    That's the first thing we need to do. The second thing we need to do is focus on young adult consumers. And to reach them, you only need to know one word: Lifestyle. It's all about lifestyle. Young adult lifestyle. Young adults will not change the way they live to incorporate wine or any beverage into their life. So we have to show them, we have to prove to them, demonstrate to them, on a peer-to-peer level, how wine can become a part of their lifestyle, no matter what that lifestyle is. Look at how the beer and spirits companies market to them. Look at their ads, watch their commercials. It's a group of young adults in a comfortable, identifiable environment enjoying their products. It's the message that you can enjoy their product on your terms. It's not a stupid bottle and vineyard shot with "We won a gold medal." With all due respect, no one cares. Everyone's won a gold medal. Everyone's gotten a "85" from Spectator or some other wine magazine. You have to differentiate yourself from the pack, by reaching out to them with something they can relate to.

    So lifestyle is extremely important. Also important is where young adults look for advice and/or information. In our research at Wine X, and research conducted by other consumer groups, it's been concluded that it's not the "me" generation anymore. It's the "we" generation. Young adults think and act as a group. They travel in packs. When someone in a group of friends finds something fun or cool or interesting they bring it to their group to show it off. Whether it's the latest fashion or movie or restaurant. And when they're looking for the latest fashion or a good movie or a great restaurant to go to, they ask their friends. Then their family. Then consult the Internet. Where the Baby Boomers are more likely to follow a critic's advice, young adults place critic's advice way behind their friends... in fact it's sixth on their list, according to our reader survey.

    So, what does this mean? It means we don't need to sell our product to everyone individually anymore. We can sell wine to a young adult and have them sell it to six or eight of their friends for us. So, for example, even though my magazine's circulation is smaller than some of the wine trade magazines, our pass along numbers are double to triple theirs, because the magazine is shared amongst a group of friends.

    Another important point to remember with regards to advertising and/or promoting wine to young adults, is that young adults are visually oriented. Meaning they look at a picture first, then read the text... where as my parents read the text first, then look at the image. So in an ad or a promotional piece you should dominate it with an image, an image that they can related to, then deliver a subtle text message (if any) secondly. If you look at a beer or spirits ad found in a young adult magazine, it's a large lifestyle image, with a group of 20-somethings in it, then a clever short tag line. If you look at the typical wine ad it's 3/4 of a page (or more) of text, then a small shot of grapes or vines or of a bottle. That doesn't work. In magazines, you 2.3 seconds to catch someone's attention before they turn the page. In grocery stores, even less. Use the page or your display space wisely. Put wine into an environment that young adults can relate to. And feel comfortable with. Whether it's in a club or a bar or simply their kitchen.

    Remember that young adults are also extremely brand loyal, more so than any other generation out there. Why? Because they have to be. There's too many choices out there. Once they find a company or a product that they're happy and comfortable with, they stick to it. So just think what would happen if we not only got them drinking wine in their 20s, but you get them drinking YOUR wine in their 20s. They'll ore than likely be drinking your wine for the rest of their lives. And wouldn't that be a shame.

    Also keep in mind that with young adults you can create any kind of image that you want for your product. They're a blank slate with regards to accepting and appreciating new products and/or services. They have little or no history with wine, so take advantage of that. If you want to keep your high-brow image with your established wine drinkers through sources that service them, that's fine. Because at the same time you can create a hip, cool image with the 20-somethings in the sources that service them. There's very little (if any) cross-over between these groups, whether it's television, radio or print sources. Just as the vast majority of 50-year olds aren't watching MTV, the vast majority of 25-year olds aren't watching the Home & Garden Network.

    An example of how willing young adults are to accept what the wine industry presents to them are screwcaps. If you talk about replacing corks with screwcaps to wine drinkers over 40 years old they take offense. Why? Because most of them started drinking cheap jug wine with screwcaps. And that's the image they attach to screwcaps. Young adults? They don't associate screwcaps with jug wine. In fact, they associate screwcaps with everything else they drink. Screwcaps are on the high-end vodka they drink, the single malt scotch. Young adults will accept almost anything you want them to, as long as it's honest, high quality and not shoved down their throats by marketing.

    What this basically means is that we don't have to change our product. We don't have to come up with some flashy "Gen X" label, or put Kool-Aid with alcohol in a weird bottle to sell to them. If fact, that has the opposite effect. Wine companies have tried it and it's failed. Why? Because young adults don't want something that's "marketed" to them. They've been so bombarded their whole lives by advertising and marketing and promotion that they resent anyone trying to si ngle them out. So as soon as they feel someone is "targeting" them they turn off.

    One example of a failed attempt to reach "Gen X" with a gimmicky wine was launched here in the states about 5 years ago by Racke USA. Racke decided that they were going to target Gen X. So they designed this very cool, hip wine label, and then put crappy wine inside the bottle... because, of course, Gen X palates aren't sophisticated, so they'll think it's good and just drink it because the label's cool. Well, young adults tried it once. Then they never bought it again. Why? 'Cause the wine tasted like crap. The brand failed within a year and is now gone. And that's happened to companies all over the world. And not to just wine companies. The most recent failure was an RTD from Captain Morgan. In a category that's nearly doubling every year, the Captain Morgan RTD brand had to be pulled from the shelves because it wasn't selling. Why? "Cause it tasted like crap.

    You have to market quality product. It's not about gimmicks or products that we think they'll buy. It's simply just paying attention to them, and offering young adults good wine on their terms.

    And it's not that hard. If you don't know what kind of ad or promotion will appeal to young adults, just go to the newsstand. Open a young adult magazine, and look at the beer and spirits ads. They know what they're doing. They spent millions of dollars on research and focus groups. Just do what they're doing. It's obviously working.

    And, just as a side note, when you have that young adult magazine open, see how many wine ads you find in there. My guess you won't find any.

    The bottom line is that whether you understand them or not, relate to them or not, or even like them or not, young adults, in their 20s, are the future of the wine industry. Or they're not. And every year that we wait or that we procrastinate in marketing wine to young adults, is another year that millions of people form their consumption habits for life without wine. You can all ride this Baby Boomer wine wave for the next couple of years, keep up your "image" with the established drinkers, but if you do you're gonna image yourself right out of business. Because after the Boomers are gone, you're gonna have a whole generation who's not drinking wine. Then what?

    The first wine brand or the first wine company or the first wine region or even the first country that starts targeting young adults, in their terms and in their language, is gonna clean up. 'Cause currently no one's doing it. And that brand or that company or that country won't have to worry about stealing a small sliver of the shrinking wine consumer pie. It'll have their own pie to themselves. And wouldn't that be a shame.

    Thank you very much.

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