Posted: Jun 24, 2019
The long-term health of the industry is in the hands of those consumers who, today, are either too young to drink, or who are only now forming their drinking habits.
But there are already signs that this group are going to be less interested in alcohol in general, which has enormous implications for the wine industry.
As Rob McMillan, EVP and Founder of Silicon Valley Bank's Wine Division, points out in this blog post about Millennial consumers, simply waiting for the younger generations to get older and have more money isn’t an option if we want to address wine consumption problem. He offers valid solutions to the problem of Millennials spending less, but doesn’t point to the need to understand new potential consumers.
While there is much talk about Millennials and Baby Boomers in our industry, there is less talk about Gen X and Gen Z. For the sake of the future, let’s consider Gen Z, the generation slowly coming of drinking age. Who are they and what do they want?
Gen Z accounts for 32% of the global population slightly surpassing Millennials this year. They currently make up one-fifth of the US’s population and form the most racially and ethnically diverse generation in the country’s history. While only a small percentage of them are of drinking age in the US, a more significant group is already of drinking age elsewhere.
This week, YoungHee Lee, Global Chief Marketing Officer of Samsung, told the audience at the Cannes Lions about how Samsung is approaching Gen Z, based on their research. These are some of the key takeaways:
Gen Zs want to present themselves as they truly are. They value authenticity more than previous generations; 67% of Gen Z think a person is cool when they are true to their values and beliefs. Photoshopping and inauthentic staged photos do not work with them.
They are the DIY generation. They are pragmatic, self-reliant, and want to get things done by themselves. They are resourceful lifehackers.
They are careful about taking risks, which leads them to want to have more control over their lives. They are less likely to drink alcohol and more likely to set aside money for their future.
70% spend more than two hours on YouTube daily
They want a good tech-life balance. While tech powers their connections, they value personal, face-to-face relationships, both online and offline as well as locally and globally.
They are “Dreamers with Purpose.” They want the world to be a better place and are ready to act to make it so.
77% believe doing good should be a central part of running a business.
They have high expectations. They want more than just words; they want actions. Part of their expectations is that brands need to not just talk the talk but walk the walk.
On the same Cannes Lions stage, Susan Buckner Rose, Director of Product Marketing at Instagram, said that Gen Z want to connect with friends but also have more ways to express themselves. They pay attention to authentic and real stories and can spot fake images fast. The prioritize images over words, and the expression of their feelings need to be caught on camera authentically.
Gen Z’s desire to control their lives influences their drinking habits. They know that getting drunk and having evidence of it on social media can have repercussion for their social and professional lives, which is a strong reason to keep them sober.
Ipsos research found that drinking alcohol is not as widespread among teenagers today, and it’s not likely to become a habit, creating a cultural shift that will change the drinks industry. Generally, people in the US and much of Europe are drinking less alcohol, but the decline in adolescent drinking rates are causing a generational shift on a global level. Declines in youth crime, smoking, drinking, and sexual activity reflect a significant behavioral shift, showing that this generation is less rebellious.
What can the wine industry do to future proof itself in the face of this cultural shift in alcohol drinking? What can wine brands do to evolve and appeal to this new customer?
While Rob McMillan is right that not enough is being done to get Millennials on board, we also need to look at Gen Z, because they will have a much more significant impact on our industry in a few years.
Maybe we should adapt to them instead of asking them to adapt to us. We need to embrace their desire to control their lives and not push them to drink more. We should be more transparent about the effects of alcohol, more down-to-earth in our communications, and more authentic in our marketing.
Maybe there are different ways we can help make moderate drinking a positive image and part of how younger drinkers express themselves. Can we embrace this cultural shift?
By Reka Haros
June 24, 2019
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