Generational differences in consumption of wine and other alcoholic beverages and stated wine purchasing behavior as a result of changes in wine packaging and composition.
By: Kathy Kelley and Jeff Hyde, Professor of Agricultural Economics
To this point, we have shared just a fraction of the data from the surveys we have conducted to learn about wine consumers in the mid-Atlantic region of the U.S. The data provides insight into consumption frequency, purchasing habits, and motivation behind our survey participants’ choices as to why they drink wine. By gathering information from those who reside in Pennsylvania and surrounding states, and who could potentially purchase your product and visit your tasting rooms, we can provide profiles as to what the “super core” (those who drink wine daily to a few times a week), “core” (those who drink about once a week), and “marginal” (drinks wine less frequently) wine drinker “looks like” demographically and how varietal preferences, average amount spent on a 750 mL bottle of wine, etc. differ between the three groups.
We can also segment the data based on the participants’ generation (e.g. Millennial/Gen Y, Gen X) as much of the available national data compares these consumer groups’ attitudes and behaviors. Though demographics (e.g. gender, age range/generation, household income) should not be the only component on which you base your decisions, there are some generalizations that have been made in the wine industry (and others) that seem to hold true based on a consumer’s generation. In today’s post we will take a closer look at some of our data and how responses differ (or not) between four different age groups: survey participants ages 21 to 24, 25 to 34, 35 to 44, and 45 to 64.
Today’s post focuses on data from a 15-minute survey conducted between July 12 and 17, 2011 that targeted consumers who met this criteria:
- between 21 and 64 years of age
- resided in New Jersey, New York, and Pennsylvania
- drank and purchased wine at least a few times a year.
In total, 910 wine consumers participated in the study.
We achieved a good representation of the generations. Even though there were fewer participants in the 21 to 24-age range category (18.4% of the total) compared to the other age categories, this age range only spanned four years compared to the others, which ranged between nine years and 19 years.
Why were we interested in segmenting the age ranges in this manner? In 2012, the Wine Marketing Council segmented consumer survey responses for Millennial participants (born between 1981 and 1997; http://pewrsr.ch/1xgHdxJ) into two groups: 1) Younger Millennials (age 21 to 25) and Older Millennials (age 26 to 34) (winemarketingcouncil.com). We adjusted our age range slightly to mimic the age categories reported in the U.S. Census (http://1.usa.gov/KWEGYk); hence, the age categories we used to segment our data are 21 to 24 and 25 and 34.
Published research has provided some insights into the behaviors of U.S. Millennial wine consumers:
- In 2012, they consumed 25.7% of all wine by volume (though less than those 55 and older, 41.4% volume consumed) and they are “adopting wine at a faster rate than any other generation” http://fxn.ws/1bGL0iv
- 30% of Millennials are “core” wine drinkers, consuming wine at least once a week http://fxn.ws/1bGL0iv
- According to one survey, 94% of Millennials drank wine from a box, and while taste (83%) is what they like best about wine, they also like “learning about terroir, regions, and varietals” (44%), and “the way it makes [them] feel” (44%) http://bit.ly/1pj1zSP
Though data that describes the U.S. wine consumer is readily available on a national level, we are quite interested in learning about wine consumers in our area, specifically those who reside in New Jersey, New York, and Pennsylvania to be of service to the growers, wine makers, and tasting room owners/operators in these states.
Consumption of other alcoholic beverages
Much has been written about what alcoholic beverage is the “most” popular and whether wine drinkers consume other types of alcohol. According to a 2014 Gallup report, beer surpassed wine and liquor as the drink of choice (41% vs. 31 and 23%, respectively (http://bit.ly/1CZAWgc) in 2010, a year before our first survey, results were nearly identical (41% beer, 32% wine, and 21% liquor) (http://bit.ly/16hKpTh). Since this data only provides information about the preferred beverage, and not what other beverages are consumed, we included questions in both the 2011 and 2013 survey to learn what alcoholic beverages(in addition to wine) our survey participants consumed and the frequency of consumption.
With wineries adding breweries and distilleries to their facilities, numerous recipes for wine and liquor cocktails (http://bit.ly/1uaayif) and commercial products (e.g. Arbor Mist Frozen Cocktails; Vice, “a fortified white wine with neutral spirits added” http://bit.ly/1zSCQQY) available, as well as growing interest in ready-to-drink malt-based beverages and ready-to-serve cocktails (http://bit.ly/1AtIZCE), tasting room operators should at least be aware of what other alcoholic beverages their clientele is consuming. Such information can assist in new product development and expansion as well as be the basis for promoting recipes that use wine as an ingredient.
Though not significantly different from the other age groups, 35.2% of our respondents age 45 to 64 were “super core” wine consumers (drank wine daily to a few times a week), with 29.0% of those age 35 to 44 and 28.0% of those 25 to 34 also selecting that frequency category. There were more, however, of those age 21 to 24 who classified themselves as “core” (drinking wine about once a week) than those age 45 to 64 (36.5 and 16.6%, respectively).
How often did our participants consume the other alcoholic beverages of interest? Slightly over a third (37.4%) of participants age 45 to 64 claimed that they didn’t drink beer at all. Slightly less than a quarter (22.7%) didn’t consume distilled spirits (either on its own or mixed with another drink) and over half of these participants (58.7%) didn’t drink ready-to-drink cocktails. If we were to combine the Younger Millennial (age 21 to 24) and Older Millennial (age 25 to 34) categories, which is how many sources report data, slightly less than half (48.0%) drank beer “daily to once a week.” Fewer participants belonging to the combined Millennial segment (age 21 to 34) consumed distilled sprits (23.4%) and ready-to-drink cocktails (12.8%) “daily to a few times a week.”
With many reports focusing on whether beer, wine, or other alcohol is more likely to be the beverage of choice for certain generations, we found that 24.6% of participants age 21 to 24 consumed beer “daily to a few times a week” and 19.8% of this group consumed wine at this frequency. Nearly equal percentages of Older Millennial group (age 25 to 34) consumed wine (28.0%) and beer (23.4%) “daily to a few times a week.”
If we were to look at percentages for both Younger Millennials (age 21 to 24) and Older Millennials (age 25 to 34) who consumed each alcoholic beverage “about once a week,” we find that a greater percentage of both groups reported that they consumed wine at this frequency (36.5 and 24.0%, respectively) than they consumed beer (20.6 and 21.8%, respectively), distilled spirits (22.6 and 18.6%, respectively) and ready-to-drink cocktails (9.5 and 11.4%, respectively).
How a change in bottle composition could impact purchases
It is not unusual to see or read about wine that is packaged and sold in a container that looks much different than the traditional 750 mL glass bottle with a cork closure. Sizes, shapes, packaging materials include single serving “fruit cup like” plastic cups, paint can sized vessels, and aluminum cans that look like grenades (any guess as to what generation these are meant to appeal?).
There has also been a surge in the number of articles and blogs written about increased interest in wine with fewer calories or lower alcohol consumption (a.k.a. “Skinny” wines) and the number of wines becoming available in this category.
We, too, were interested in learning if an investment in these alternative packages and alcohol/calorie content were of interest to those who participated in our 2011 survey, hence we asked a variety of questions to see what might appeal – and that participants felt would encourage them to impact their purchasing (increase, stay the same, decrease). In this post we are only presenting data pertaining to the percent that indicated that their purchasing would increase.
With regards to a change in alcohol content and reduction in calories, at least 36.7% of participants were interested in a wine with “fewer than 80 calories per 5 oz. serving” compared to the standard which would have “80 to 112 calories per 5 oz. serving.” Participants age 21 to 24 and 25 to 34 were more likely to indicate that their purchasing would increase (52.2 and 52.4%, respectively) than participants age 45 to 64. Conversely, compared to those 45 to 64 years of age (13.3%), more of the two Millennial segments (38.1 and 30.4%, respectively) indicated that their purchasing would increase if the alcohol content was 15% or greater compared to the standard with an alcohol content of 10 to 14%.
Where did we see the greatest increase in interest in purchasing based how a container would “be changed” from the standard 750 mL glass bottle? Very few of our participants in each age range would increase their purchases if wine was packaged in a plastic bottle (as opposed to glass), an aluminum can, tetra pack, or 500 mL glass bottle. When we proposed the shift from a 750 mL bottle of wine (that held 4 to 6 glasses of wine) to a 1.5 L bottle (that held 8 to 12 glasses of wine), interest was greater with 36.5% of participants age 21 to 24 indicating that they would increase their purchasing. Winery tasting room staff interested in exploring such packaging options should create mock-ups that include varietal, sweetness/dryness, unit price, etc. to better gauge potential demand.
Lastly, compared to wine with a screw cap closure, a bottle of wine with a cork closure was more likely to appeal to participants age 21 to 24 (35.7%) compared to participants age 35 to 44 and 45 to 64 (21.5 and 20.1%, respectively). Results from a 2013 survey published in Wine Business Monthly, does show that natural cork received a more “positive” level of consumer acceptance (a 4.5 rating on a 1 to 5 scale) than technical corks (approximately 3.25), screw caps (3.0), and synthetic closures (2.4) (http://bit.ly/1ABXqVv).
Another of our post you may be interested in focuses on whether boxed wine/wine in 750 mL glass bottles and wines with cork/synthetic or screw cap closures purchases differed based on occasion (everyday consumption vs. special occasions) (http://bit.ly/1LVBuIc).
As with our other blog posts, we encourage you to consider the data and our analysis and think about how you might apply what you have learned to your own situation. We also strongly encourage you to learn directly from your customers and tasting room visitors about their preferences, how frequently and what they purchase, etc.
Until next time. We have much more data to share!
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