Presentation to the
MKF Luxury Wine Conference 2004
by Darryl Roberts, Editor/Publisher, Wine X Magazine
February 24, 2004
Can Young Adults Be Luxury Wine Consumers?
First I think it's important to understand that in the eyes of young adults, wine, at any price, is perceived as a luxury product, whether it's $5 or $50 a bottle. And, in my opinion, that's true for the majority of adults in this country. But this luxury is a "New Luxury," one that democratizes high-quality products, making them available in many forms, at many price levels, and through a variety of retail channels. Old luxury is expensive. Only the really rich - a small segment, typically over 50 and conservative - can afford it. But new luxury products are no longer confined to the upscale shops of Madison Avenue and Rodeo Drive. It's so accessible that virtually anyone can get a taste of it with a $3 Starbucks latte and a few moments in an inviting chair. New luxury is less about conspicuous consumption and more about self-respect and emotional need.
So taking into consideration new luxury, and my experience and research in founding Wine X Magazine, not only do I think young adults can be luxury wine consumers, I know they can. And, with recent data released regarding wine consumption and young adults, so do you. But I also know that it's the experience that sells young adults on both luxury and wine. Not just the bottle itself.
My own experience supports this. I started drinking wine and ultimately ended up in the wine business because of the experience of visiting wine country during graduate school. It wasn't a particular bottle of wine I had tasted; it wasn't the rolling hills of vineyards; it wasn't a specific winery that I visited, or some number or Gold Medal that a wine was awarded. It was the whole experience: it was being with my friends; it was feeling comfortable no matter where we went; and, most importantly, I had fun. Wine just happened to be the common denominator. Up until that point in my life, I always viewed wine as a beverage for older, wealthier people. It wasn't accessible to me. It wasn't marketed to me. It was a "luxury" beverage that, maybe, someday, when I was older and wealthier, I'd drink.
So drawing on my experience, and my research into marketing and promoting to young adults, I designed Wine X Magazine to offer our readers an experience; an experience that they'll feel comfortable with; an experience that they'll identify with; an experience that they'll have fun with; an experience that will make wine feel more accessible to them; and, most importantly, an experience that validates that wine can enhance their lifestyle. Our magazine simply reflects, on a peer-to-peer level, a young adult lifestyle and grafts wine onto it... to create a new, enhanced experience incorporating all of these elements.
For example, our winemaker interviews are conducted while the winemaker participates in an active hobby that they enjoy, whether it's mountain biking, skiing, bowling... these are experiences that our readers can identify with a lot more than a bunch of stainless steel tanks and barrels and crush pads. Our regular columns on books or movies or fashion or music recommend hot, new trends in each category... then suggest a wine to enjoy with them to complete the total experience. Our wine reviews are "experiences" rather that grocery lists and a bunch of wine jargon and numbers aimed at the trade.
Okay, you say that's all well and good, but why should we target young adults?
People form their consumption habits (and some brand loyalties) for life in their mid- to late-20s. Let me repeat that. People form their consumption habits (and some brand loyalties) for life in their mid- to late-20s. Once those habits are set, according to J. Walter Thompson, it costs 10-times as much money to get people to change their habits as it does to help set them. So why wait for people to set their habits, when our marketing dollars can go 10-times farther by helping people set them.
To help young adults set they're consumption habits, to utilize our advertising and promotion dollars most efficiently and effectively, we first need to understand young adult behavior and what young adults experienced in their lifetime:
Young adults have been bombarded with intense marketing campaigns - from every angle - since they've opened their eyes. They've been so heavily marketed to that their bull-shit meter is more sensitive than a seismograph. So bottle shot ads touting medals and numbers and quotes from wine critics doesn't work. Never has. From 1985 through 1996, the wine industry spent more than $1,000,000,000 (one billion!) advertising in trade magazines with these kinds of ads. During that period, according to the Wine Institute, per capita wine consumption in the U.S. dropped 25 percent. You cannot "sell" young adults your product. You must present an experience that suggests your product will enhance their lifestyle.
"Globalization." In the last 20 years, young adults have had access to just about every rich, flavorful product from around the world. It doesn't take 40 to 50 years anymore to experience the world. People do it now by their early- to mid- 20s. Which means their palates are incredibly sophisticated by the time they're 25-years old.
Young adults no longer feel economically secure. There have been so many economic disasters, events/scandals/failure of systems to provide economic security for their future, that young adults don't see any point in saving their money. So they spend it. Young adults treat themselves right, and they treat themselves right now. According to J. Walter Thompson, young adults spend 10 percent more on everything than Baby Boomers do, whether it's cars, washer machines, soap, travel or alcohol. And, according to the U.S. Bureau of Labor Statistics, 21 to 34-year olds spend 51 percent more on alcohol than those 35 years or older. Which is why they're more likely to spend $20 or more for a bottle of wine than their parents are. They don't make more money than their parents do. But they spend more. Today, basing marketing strategies purely on household income doesn't work. It doesn't matter how much money people make. It matters how much they spend.
It's not the "me" generation anymore. It's the "we" generation. Young adults travel in packs, groups of 6 to 8 to 10 friends. And they're constantly searching for quality products to enlighten their friends with. This means that if we sell one young adult the "experience" of wine, a positive experience, they'll become instant wine ambassadors and sell all of their friends on it, too. In fact, as I was working on this presentation, one of our readers wrote in and told us that "because of her first experience in a wine shop when she was 23 years old, because the person in that wine shop took interest in her and spent time with her -- made her feel comfortable -- she now has a wine cellar worth $10,000. She spends $5,000 a year on retail wine purchases, plus $100s on bottles in restaurants. That first wine shop experience not only had a profound effect on her perception and consumption of wine, but also on the 100s of people that she's influenced since. As she stated at the end of her letter, "What would the wine industry's prospects look like with 1 million people like her?"
There are 30 million young adults in this country that have yet to set their consumption habits. Sixty percent of these young adults drink alcohol. We have a chance to capture this demographic, this huge group that is thirsty for rich, flavorful beverages regardless of price. We know they're ready. We've seen the data. So let's act on it!
Since implementing the experience of wine to young adults, through our magazine and our events and our website; since breaking down the stereotypical image of wine, that it's a privileged beverage for rich, old people, wine consumption amongst young adults in this country has skyrocketed. With the launch of Wine X Magazine and Wine Brats seven years ago, per capita wine consumption in the U.S. stopped going down, reversed directions, and is now at its highest level since 1982. In the last seven years, 21- to 27-year olds have increased per capita wine consumption in the U.S. by 40%, and have added 25% to the core wine consumer group in this country.
So, we're back to the question: Are young adults ready for "luxury" wine? Question is: Is the "luxury" wine industry ready for young adults?