Liquid Thinking

Though not at the peak of their spending power just yet, make no mistake, Gen Z are coming. But how can such a traditional industry as wine broaden its appeal among a generation that rejects tradition for progression? As a new report sheds light on the drinking habits of LDA + Gen Z consumers, we ask how will the wine industry need to adapt to accommodate this powerful new cohort?

‘It’s too snobby. I don’t understand a single word on the bottle. How do I know what’s good? Oh look at that…. A funny pig wearing a waistcoat. Fruit flavoured you say? Fine by me.’ Could this be the internal monologue of most LDA+ Gen Z consumers when approaching a wine shelf? That is, if they approach the wine shelf at all. Or does it come down to a simple equation of budget versus accessibility?

Wonder no more. A new study for Vinexpo Paris, carried out by IWSR-owned Wine Intelligence, has now tracked wine consumption through the generations. Though the survey took in other regions around the world, the UK study surveyed over 1,000 UK wine drinkers and concluded a few surprising and let’s say, a few less surprising things.

Gen Z likes to party

First of all, for the sake of the study Gen Z (18-24) and Millennials (25-39) were lumped together. Though they only represent 26% of the regular wine-drinking population, they of course account for the vast majority of people willing and motivated enough to leave their homes to buy a drink. According to the study, this relatively small group make up 50% of total spend on wine in bars, pubs and restaurants. Maybe that isn’t surprising, but it does teach us where brands need to engage most of all.

What may be surprising though is that wine appears to be a Gen Z preference when they’re out and about. A massive 82% of Gen Z drink wine in bars and pubs, compared to 52% of the Baby Boomer generation (aged 55+). And of course, these digital natives claim a decent share of online purchases too, with Gen Z and Millennials representing 48% of sales here, compared to Boomers who account for 31% of sales.

And when it comes to their preferences, their tastes are very different from their predecessors. Though less than 10% of Boomers care about alternative wines, other wine buyers are looking wider, seeking out products such as natural, organic, and Fairtrade wines, as well as eco-friendly and vegan products. Other studies – and a widely held belief by the industry – is that they prefer slightly softer, sweeter taste profiles too.

Purchasing power incoming

But it’s fair to say that to brands, Gen Z and their unique preferences just haven’t mattered. Yet.  And that makes sense, since Baby boomers and Gen X (40-54) still represent a massive 73% of wine drinkers and so rightly they remain wine makers key audience. And for their preferences? Well, nothing too drastic has had to change to accommodate them. Over the past ten or so years, as a creative branding agency we have noted that a desire for simple, bold, modern yet informative packaging that truly gives mainstream consumers a view on what to expect from a wine, has always been balanced with packaging that intentionally asserts provenance, tradition, pedigree, and knowledge. Wine doesn’t have a reputation for being high-brow for nothing.

And yet interestingly, some of these cues are, according to the study, things that Gen Z consumers are actually already responding to. Their strong preference for wine in the on-trade suggests wine already holds a key place and key status in their social rituals. But this is also a generation willing to trial products and experiment with new experiences. In short, brands need to start now to earn a meaningful and authentic place in these valuable consumers repertoires, or risk being replaced with brands that can.

What drives Gen Z?

What’s for certain is that their future purchasing power can’t be ignored. That combined with their ability to move through the increasingly digitally-powered world with ease, means that for brands looking to target them, there’s a whole load of homework to do.

This is a generation that grew up during the recession and during the craft beer boom. As children of the digital age, they’re used to convenience, information at their fingertips and can reliably see through marketing bullshit. They demand inclusivity and look for diversity. Climate change is a massive concern. Yet virtue-signalling and greenwashing won’t work on them. And having only entered the job market recently - and as a generation most severely affected by rising cost pressures - they are both simultaneously looking for value and status. Because if it isn’t on the ‘gram’ did it really happen?

Speaking their language

So, what approaches could brands take? Having impeccable production standards – from promoting biodiversity and using biodynamics, to labour standards, diversity policies and use of packaging and resources – is a key place to start. Then, because substance should come before style, clear, concise, bold and camera-friendly packaging is a must. Gen Z have become pretty savvy at recognising packaging design that deliberately speaks to their paired-back but playful aesthetic. And in a world of cream and burgundy labels, something disruptive offers shelf stand out.

And that’s a key point. There’s a reason that the off-trade, though more affordable, is the least used purchasing channel for this cohort, with consumers aged 18-39 accounting for just 34% of total spend. That giant wall of grape varietals, country of origin, heraldic logos, wax caps and wire bottle cages means absolutely diddly squat to someone who has not yet learned anything about why they should care about them. Those things are not yet significant to them. Yet the prestige of wine and its place in social occasions is.

Lifestyle then and cause-driven marketing – whether that’s simply about Fairtrade practices or organic growing methods – offer a way for brands to approach Gen Z and truly speak their language. Because right now, wine is asking them to learn theirs. With desperately few, if any, brands yet to overtly plug into Gen Z, wine seems to offer a golden opportunity to anyone confident enough to authentically try.

Interested in finding out more about what this might mean for you and your business?

Please contact us at hello@thecabinetagency.com or 0207 101 3939