Saving Wine from the Sober Generation

The post-Millennial generation cares more about connectivity than Cabernet. 

If you thought the Millennials were hard to please, wait until you see what’s coming after them.

Source: https://www.wine-searcher.com/

By James Lawrence 

29-Mar-2019

On the subject of Generation Z, market analysts and the wine trade are rarely in agreement – a rash of research pieces suggests that young consumers are increasingly shunning alcohol, while business owners insist that this is a red herring.

Still, after playing second fiddle to Millennials for so long, Generation Z must be delighted to finally have their share of the limelight. The cohort born between the mid-1990s to the early 2000s, Gen Z constitutes approximately 25 percent of the US population, making them potentially a key consumer group for wine.

There’s just a tiny stumbling block: Gen Z has apparently found salvation in abstinence. Social anthropologists talk up an emerging “soberocracy”, or the rise of “the new puritans”. Call it what you will, the number of research voices coalescing over this issue is undoubtedly persuasive.

“Based on a recent consumer survey we did as part of the IWSR Opportunities in Low- and No-Alcohol Report, 61 percent of those aged 21-24 in the US said they are trying to reduce their alcohol intake. Younger legal drinking age consumers are more in-tune to health and wellness and gravitate toward ‘better for you’ products,” says Brandy Rand, president of the IWSR US.

Industry think-tank Wine Intelligence has reached a similar conclusion. “The global shift towards personal health and well-being continues to have a strong impact on the consumer relationship with alcohol. The move towards abstinence has impacted wine, in a world of a growing sector of lower- and no-alcohol beverage options, and in some markets, the option of cannabis-infused beverages as a potential key competitor,” says Lulie Halstead, a senior analyst.

“A significantly larger proportion of consumers now consider the alcohol content when choosing wine, reflecting a rise in consideration of alcohol level consumption overall. In the UK and US, the active moderation trend is being led by younger drinkers,” she adds.

The catalyst for this reported shift in attitudes, however, is not simply a newfound love of body and soul. It seems that social media and phone addiction, as well as ruining restaurants, bars and pretty much any public space, is now having a pop at the wine trade as well. An exquisite irony, as social media is frequently touted as the marketing savior of the business.

“As this generation has grown up with social media as a backdrop to their everyday life, they are aware of how they are perceived digitally and intoxication is an image they do not want to live online,” argues Rand.

“I suspect social media has much to do with the reported rejection of excessive alcohol consumption,” agrees wine buyer Peter Mitchell MW.

“Firstly, because of a rise in vanity and insecurity driven by sites, notably Instagram. Secondly because when I was 20, if you were embarrassingly drunk, the worst that happened was some gentle ribbing by your peers. Now you can end up going viral, which is a strong disincentive to excessive drinking. The relative excesses of their parents’ generation may also be having an effect, as each generation, at least when younger, tends to rebel against what their parents did/do.”

It’s that word again – “excess” is popping up all over the place. This underlines the point of contention between the industry and the doom-mongers predicting the slow death of alcohol consumption. While individuals like Mitchell will accept that a growing percentage of young people may well regard binge drinking as passe, they’re more skeptical about the idea of a mass walkout.

Indeed, a brief Google search yields many stories about Gen Z abandoning alcohol, but the majority are seemingly based on self-reporting, or relatively small sample sizes. Moreover, if buyers, owners and sommeliers are to be believed, these claims from analysts directly contradict their day-to-day experiences.

“In the Sonoma County retail market, I have not experienced this trend. If anything, Gen Z wine consumers are more informed and particular about their tastes when it comes to wine, resulting in an increase in purchases,” says Josh Kirchhoff, wine manager at Oliver’s Market in Montecito.

“This debate over Gen Z and a mass rejection of alcohol is a red herring. Chasing a healthier lifestyle isn’t necessarily in conflict with drinking in moderation and appreciating great wine; the data we’ve seen in Facebook and Quantcast actually reveals that our existing customer base is still very much focused on living a healthy lifestyle,” adds AJ Resnick, VP of marketing at Wine Access.

Younger revellers in Chicago earlier this month gave lie to the idea that Generation Z consists entirely of puritanical killjoys.© Travel Chicago | Younger revellers in Chicago earlier this month gave lie to the idea that Generation Z consists entirely of puritanical killjoys.

Resnick’s colleagues in the major cities are singing from the same hymn sheet.

“This is definitely a red herring – people aged under 25 might actually be more sophisticated drinkers than previous generations,” argues Zach Jones, wine director of Pacific Standard Time in Chicago. “I personally haven’t seen any evidence to support the idea that young people are giving up on wine, beer or spirits. Perhaps those who zealously have rejected alcohol make loud noise on social media but I think we give way too much credit to things that are trending in the moment.

“If you were in Chicago during Saint Patrick’s Day you would have real-life evidence that humans aged between 18 and 25 have most definitely NOT given up drinking alcohol. A few of them unsuccessfully tried to enter Pacific Standard Time, and one may have fallen asleep in our vestibule.”

So where does this leave us? The idea of a large swath of Gen Z in the US rejecting alcohol wholesale makes for a cracking story, but to date there is little concrete evidence that this is on the cards.

However, the case for a consumer shift towards moderation can clearly be made – the rash of low and alcohol-free product launches in recent times is a testament to that fact. Diageo now has a whole department dedicated to the no-alcohol category. In addition, AB-Inbev says at least 20 percent of its global beer volume will be alcohol-free by 2025. There’s also been a smattering of alcohol-free bars opening over the past few years, including the Virgin Mary in Dublin, London’s Redemption chain and Listen Bar in New York.

Yet it’s too early to tell if these apparent changes in lifestyles preferences, with a growing emphasis on moderation and low-alcohol, will impact the wine industry in any significant way. The drinking “less but better” trend is frequently cited as a direct result of growing moderation, but one would imagine that the fine wine trade will remain isolated – no consumer in the market for La Tache or Latour wants the alcohol wrenched out.

“Many of our habits are formed earlier rather than later in life, so we may see an overall increase in abstainers but, at the moment, who knows?” says Mitchell.

“The trend for alcohol consumption has been falling steadily for 20 years now, but not in high income groups who maintain the highest percentage of consumers. I would expect to see total wine consumption fall over the coming years, but not necessarily total spend on wine. I suspect the mass market is more likely to be affected than fine wine.”

Of course, no one is suggesting that significant changes aren’t ahead – the rise of new formats, particularly cans, is a movement that is likely to grow in strength, and presents new opportunities for engaging with young bucks.

But the idea that we’ll eventually transition towards a Star Trek scenario, with alcohol being replaced en masse by synthetic substitutes that offer none of the unfortunate side affects, seems unlikely at best.

Let’s be honest: for the majority of drinkers, even gym bunnies and health freaks, getting ever-so-slightly inebriated is a massive and integral part of the fun.