What’s Trending? An Update on Today’s Wine Consumer and Product Trends, Part 1

By Dr. Kathy Kelley, Professor of Horticultural Marketing and Business Management

Last week, I spoke at the 2020 License to Steal National Wine Marketing Conference held in conjunction with the Eastern Winery Exposition in Lancaster, PA. During one of my sessions, I presented data and insights that describe current alcohol consumption, product trends, and food trends to be aware of that could influence what wines consumers might drink with trendy meals and flavors.

This post includes the information I presented, updated data and additional sources, and elaborates on specific topics.

How many of us are drinking alcohol?

According to Gallup, 65% of U.S. adults age 18 and older had “occasion to use alcoholic beverages such as liquor, wine or beer” in 2019. Since data were first recorded in 1939, this percentage has ranged between 56 and 71% (Saad, 2019). The average number of alcoholic drinks consumed during a week was 4.0, which is slightly lower than the number Gallup recorded from 2002 to 2010 (4.6 drinks per week), but higher than the number for the period of 1996 to 2001 (3.4 drinks per week) (Saad, 2019).

Data published by the Wine Market Council, collected in June 2019, is only from adults age 21 and older (Wine Market Council, 2019), and reveals that:

  • 75% of participants drank alcohol, even if consumption was “infrequent” and “less than every 2-3 months.”
  • 12 to 16% of participants in each generation responded that they were “high frequency wine drinkers,” and consumed wine more than once a week.
  • 32% of iGen (a.k.a Gen Z) participants drank wine “occasionally” (once every two to three months to, at most, once a week), which was significantly higher than all other generations reported (a range of 24 to 26%).
  • 18% of iGen did not consume alcohol, which is a significantly lower percentage than Baby Boomer participants (31%) and those aged 74 and older (37%).

What alcoholic beverages are consumers drinking?

According to Silicon Valley Bank’s 2020 State of the Wine Industry report (McMillan, 2020), based on data from the Nielsen Homescan Panel (52 weeks ending June 29, 2019), for those who consumed alcohol:

  • 72% of panelists drank beer (including flavored malt beverage and ciders)
  • 68% drank wine
  • 48% drank spirits

When segmented based on which beverages participants consumed:

  • 18% drank beer exclusively
  • 15% drank wine exclusively
  • 6% drank spirits exclusively
  • 19% drank beer and wine
  • 8% drank beer and spirits
  • 7% drank wine and spirits
  • 27% drank beer, wine, and spirits

What about the frequency in which consumers drink wine?

The data below are from two Wine Market Council publications for consumers age 21 and older who drank wine. The first percentage is from a June 2019 survey (Wine Market Council, 2019), and those in parenthesis are from a study conducted in June/July 2017 (Wine Market Council, 2017).

  • For both 2017 and 2019, 35% of wine consumers were “high frequency” drinkers as they consumed wine more than once a week 
    • 9.2% consumed wine every day (9% in 2017)
    • 25.8% drank wine “more than once a week, but not every day” (26%)
  • 65% were “occasional” drinkers and consumed the beverage less often
    • 17.6% drank wine once a week (19%)
    • 25.2% drank wine 2 to 3 times a month (22%)
    • 10.9% drank wine once a month (13%)
    • 11.3% only drank wine every 2 to 3 months (11%)

As can be seen, only a 0.2% shift occurred between the two “high frequency” categories, whereas changes among the four “occasional” groups were a bit higher.

With interest in how consumption differs between generations, a report published by Mintel (2019) revealed that of the survey participants, age 22 and older, who drank wine within three months before the study:

  • 58% of Millennials reported drinking red wine, and 59% drank white.
  • Similar percentages of Gen X participants drank red and white wine, 57% for both types.
  • Slightly more Baby Boomers and WWII/Swing/Silent generations, 62 and 63%, respectively, drank red wine in the past three months, with lower percentages, 54 and 53%, respectively, responding that they drank white wine during that period.

Data for rosé, champagne/sparkling wine, and wine cocktails (e.g., sangria, mimosas) were also presented, with higher percentages of Millennials responding that they drank rosé (36%), champagne/sparkling (37%), and wine cocktails (30%), than Boomers (28, 15, and 14%, respectively).

Since only individuals age 22 and older in 2019 participate, the survey excluded members of Generation Z, born between 1997 and 2010/2012 (the end dates for the generation vary based on source).

What alcoholic beverages are wine consumers drinking instead? Are consumers choosing low-to-no alcoholic beverages than in the past? If so, why?

In January 2020, Wine Intelligence reported the alcoholic beverages that “regular wine drinkers” who were “switching to” at the Wine Data 2020 conference. Their research revealed that:

  • 55% of respondents transitioned to beer,
  • 55% hard seltzers,
  • 46% vodka,
  • 45% whiskey, and
  • 39% to craft beer (Todorov, 2020).

According to Dale Stratton, Wine Market Council president, who presented at Wine Data 2020 in January, “52 percent of people aged 21 to 29 years old say they either rarely or never drink wine because they do not like the taste …that’s an opportunity…Make wines that they do like. Educate them on different types of wine and get them into the category” (Todorov, 2020).

As far as projected growth for these individual categories:
the hard seltzer category may triple by 2023 (IWSR, 2020), while the compound annual growth rate (CAGR) for North American beer market may increase by 4.7% from 2018 to 2023 (Market Insight Reports, 2019), and a 2.7% CAGR for spirits for the period of 2020 to 2023 (Statista, 2020).

In addition to these data, the market for low- and no-alcohol (LNA) products is also expected to grow. Data obtained from the IWSR Drinks Market Analyze (https://www.theiwsr.com/global-low-and-no-alcohol-strategic-study/) indicate that the CARG for LNA is as follows for the 2018 to 2023 period:

  • Low-alcohol beverage: 25.5%
  • No-alcohol options: 2.4% (IWSR, personal communication).

The majority, 80%, of LNA beverages are beers, with the remaining 20% comprised of wine and liquors (Neo and Lim, 2020). Several popular global brands, Heineken, for example, are entering the LNA market with products such as the zero-alcohol Heineken 0.0, which is to have “the same characteristic fruity notes, but with a soft malty body” compared to the original Heineken Beer (https://www.heineken.com/us/heineken00/faq). This product has 69 calories for an 11.2 oz bottle compared to the original Heineken Beer with 142 calories, 11 carbs, and 5% ABV (http://bit.ly/2WkpTzs).

With evidence indicating an interest among consumers and beverage companies in exploring LNA, one may wonder whether LNA is meant to replace the original full alcohol offering. According to Heineken, non-alcoholic beer is “meant to complement rather than replace beer,” giving the consumer the ability to enjoy a beer “during any occasion [at] any time of the day” (Neo and Lim, 2020).

A 2019 article published by Wine Business International included excerpts from a global IWSR report about LNA beverages, citing that “one-third of 21- to 24-year-olds and 35- to 44-year-olds say they consume low- or no-alcoholic drinks two or three times a week” (Siegel, 2019).

What about Gen Z and their attitude and behaviors concerning alcohol? Why might this be?

Based on a 2018 study (Taylor, 2018), members of Generation Z drank “over 20% less per capita than millennials did at the same age,” and that “64% of Gen Z respondents said that they expected to drink alcohol less frequently when they grew older than today’s older generations do.”

And, while it assumed that this generation might drink less alcohol than previous generations, only time will tell whether these sentiments will become realities.

Could this present an opportunity for artisanal grape juices?

Fairview Wine and Cheese Estate outside Paarl, South Africa, “has introduced a refreshing substitute for wine in the form of EGA (spelt age in reverse) …an incomparable, alcohol free product…. Combining the vibrant flavours of grapes, pomegranates and Rooibos, this crisp and zesty drink is an excellent alternative to white wine with a meal” (https://news.wine.co.za/news.aspx?NEWSID=11071).

Rooibos has “high levels of antioxidants and lack of caffeine and has for centuries been prized for its healing properties by the indigenous people of South Africa. EGA is scintillating salmon pink in colour with characteristic Rooibos and pomegranate aromas”

Bottles of EGA stocked at Fairview Wine and Cheese Estate, South Africa

In France, Alain Milliat “professes a disruptive approach at his core: instead of regarding juices as a way to consume fruits, he sees them as a completely separate experience of pleasure, developed to be greater than the mere fruits that compose them. Like any greater composer, he designs them to offer aficionados a tasting full of emotion” (https://www.alain-milliat.com/en/content/7-fondateur).

A few of the “exquisite juices” he has developed from grapes include:

  • a sparkling Muscadelle grape juice (0.75L for 9.95 euros/$10.78 US 3/19/2020),
  • Gamay red grape juice, sauvignon grape juice, chardonnay white grape juice, cabernet rosé grape juice, and a merlot red grape juice (all are 0.75L for 3.95 euros/$4.28 US).

What about focusing on wine cocktails?

As reported above, 30% of Millennials consume wine cocktails (e.g., sangria and mimosa). Still, there are many other concoctions and options that wineries, restaurants, etc. could suggest that their customers create with wine as a key ingredient. According to David Jackson, SVP Trade Relations, COO for the National Alcohol Beverage Control Association, “Having a well-made, handcrafted cocktail is definitely where things have been going for the past few years” (Swartz, 2019).

How can wineries take advantage of these trends? A quick search on Pinterest using the term “wine cocktail recipes” yields an immense amount of suggestions. For example, long island wine tea, sangria Moscow mule, sparkling apple cider sangria, and many more.

Perhaps a spin on one or more of the best-selling cocktails in the U.S. could be a point of differentiation. These are, in order of ranking:

  • Margarita
  • Martini
  • Old Fashioned
  • Mimosa
  • Moscow mule

And, while your tasting room and/or restaurant might have a charge per glass of wine, know that “margaritas in the U.S. cost an average of $9.49,” which might help in justifying offering a cocktail menu (The Nielsen Company, 2019), based on the cost of production inputs.

Additional, consider the characteristics that Beverage Daily released in their predictions for tends for “2020 and Beyond,” which highlighted flavors, colors, and textures (Newhart, 2020):

  • Flavors
    • Botanicals (basil, cilantro, lavender, sorrel, and orange peel), 
    • citrus (grapefruit, tangerine, blood orange, Meyer lemon, yuzu), 
    • white ginger, and 
    • exotic (dragon fruit, coconut, prickly pear)
  • Bright colors & textures 
    • Boba, nitrogen-infusions, whipped ingredients, basil seeds

What other wine beverages could you explore?

As discussed in a blog post published in February 2019, sangria and rosé experienced considerable positive growth for 2018 and 2019 (Kelley, 2019).

In addition to drinking the beverage “straight,” Lolea, one of the sangria brands mentioned in the 2019 post, offers several recipes using their product:

  • Lolea Julep,
  • Lolea Ice tea,
  • Loalea passion “a citrus cocktail with the fruitiness of passion fruit and sweet tones of vanilla, Lolea no. 2, passion fruit pulp, vodka and vanilla syrup” (https://sangrialolea.com/cocktail.php).

Any while much of the branding efforts I have seen for rosé still focus on the female Millennial, in early 2019, UFC champ Conor McGregor launched his own Champ Champ Rosé.”

Here is an excerpt from the article: “I am very excited and proud to introduce Champ Champ Rosé to the world,” said McGregor. “People who know me know I am a proper whiskey man through and through, but they also know I enjoy having a glass of rosé wine on a hot summer’s day (Langeler, 2019).

In part 2, I’ll provide more data and insight into the health and wellness trends, trending food flavors and suggested wine pairings, CBD infused alcoholic beverages and more.

References

IWSR. 2020. US Bartenders See Growing Demand for Low-Sugar/Low-Alcohol Drinks, Hard Seltzers, and Spicy Cocktails. IWSR Drinks Market Analysis. https://www.theiwsr.com/wp-content/uploads/Press-Release-IWSR-US-Bartender-Study-with-infographic.pdf

Langeler, W. 2019. Conor McGregor Launches New “Champ Champ Rose” Brand. Wiskeryriff.com https://www.whiskeyriff.com/2019/04/01/conor-mcgregor-launches-new-champ-champ-rose-brand/

Market Insights Reports. 2019. North America Beer Market Rising Trends and Global Outlook 2019 to 2023. Marketwatch.com https://www.marketwatch.com/press-release/north-america-beer-market-rising-trends-and-global-outlook-2019-to-2023-2019-12-20?mod=mw_quote_news

McMillan, R. 2020. State of the US Wine Industry 2020.  Silicon Valley Bank Wine Division. https://www.svb.com/globalassets/library/uploadedfiles/reports/svb-2020-state-of-the-wine-industry-report-final.pdf

Mintel. 2019. Wine-US-November 2019. 

Neo, P., and G.Y. Lim. 2020. Booze-Free Growth Imminent: Low-to-No Alcoholic Beverages Set to Boom in APAC. Beveragedaily.com https://www.beveragedaily.com/Article/2020/03/12/Booze-free-growth-imminent-Low-to-no-alcoholic-beverages-set-to-boom-in-APAC

Newhart, B. 2020. New Year, New Drinks: What to Watch in US Beverage in 2020 and Beyond. Beveragedaily.com https://www.beveragedaily.com/Article/2020/01/02/2020-trends-to-watch-in-US-beverage

Saad, L. 2019. Liquor Ties Wine as Second-Favorite Adult Beverage in U.S. Gallup, Inc. https://news.gallup.com/poll/264335/liquor-ties-wine-second-favorite-adult-beverage.aspx

Siegel, J. 2019. No- and Low-Alcohol wine in the US. Wine Business International. https://www.wine-business-international.com/wine/analysis/no-and-low-alcohol-wine-us

Statista, 2020. Alcoholic Drinks Report 2019 – Spirits. Statista.com https://www.statista.com/outlook/10020000/109/spirits/united-states#market-revenue

Swartz, K. 2019. 11 Alcohol Trends to Watch in 2019-2020. Beveragedynamics.com https://beveragedynamics.com/2019/07/10/11-alcohol-trends-to-watch-in-2019-20/

Taylor, K. 2018. Millennials are Dragging Down Beer Sales — But Gen Z Marks a ‘Turning Point’ That Will Cause an Even Bigger Problem for the Industry. Business Insider https://www.businessinsider.com/millennials-gen-z-drag-down-beer-sales-2018-2

The Nielsen Company. 2019. All Mixed Up: A Look at Cocktail Preferences Across the On-Premise Landscape. https://www.nielsen.com/us/en/insights/article/2019/all-mixed-up-a-look-at-cocktail-preferences-across-the-on-premise-landscape/

Todorov, K. 2020. Perfect Storm: Consumer Moderate Alcohol Consumption and Embrace New Beverage Options. Winebusiness.com https://www.winebusiness.com/news/?go=getArticle&dataId=225353

Wine Market Council. 2017. 2017 Wine Market Council Wine Consumer Segment Slide Handbook. http://winemarketcouncil.com/wp-content/uploads/2017/10/2017_WMC_Wine_Consumer_Segmentation_Slide_Handbook2.pdf

Wine Market Council. 2019. 2019 Wine Market Council Wine Consumer Segment Slide Handbook. PDF download: http://bit.ly/2QsTMdb

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