Customers are Looking for a Good Story with their Wine

Consumers no longer just want their wine to taste good, they want it to tell a story.

Sales of generic wine, priced at less than $9 a bottle, have declined. These affordable options use to appeal mostly to baby boomers, who are now aging out of buying alcohol for health reasons.

“Over the past 50 years, we’ve watched generic wines, which have no story or attachment to a place, fall out of favor with consumers,” the 2020 Silicon Valley Bank report on the state of the wine industry stated.

The report went on to say, “the dated strategy of “make it cheaper and sell it for less,” which appealed to the mature generation, had an expiration date, and in recent history, we saw the result as lower-priced segments consistently declined in their growth rate alongside the aging of the mature generation, while higher-priced premium wine advanced.”

The new consumer is willing to pay a higher price, for a higher-quality experience. Millennial drinkers are looking for a good story attached to their drink that matches their overall values. For example, if they only eat organic food, they want their wine to be organic, too.

Despite this decline, the sales data through November 2019 showed that almost 70 percent of all wine sold by volume, and 45 percent by dollars still traded below $9 retail. In other words, cheaper wines are still a critically important segment of the industry. But some re-branding and a better story can help increase this segment’s sales.

Read more on Dimensional Insight’s blog.