How does the sector get younger ‘millennial’ consumers more interested in wines, in a world of ‘craft’ spirits, beers and cocktails?
In the recent years there has been a significant increase in the number of new ‘craft’ breweries opened in the UK, which has reached 1,424 in 2015 (Mintel, 2016). According to Ascher (2012) craft beers are selling based on their taste and quality, and millennials are driving these sales, as they are more experimental than the other generations, and are willing to pay the higher price for their experience. However various factors such as continuously rising alcohol prices and an increased interest in living a healthy lifestyle, has caused many UK drinkers to switch to cheaper and healthier alternatives such as wine (Mintel, 2016; Aquilani B., et al., 2015).
Various research has shown that the millennial generation relies heavily on word of mouth when purchasing alcoholic drinks, especially wine products. For example, Mintel (2015) has stated that 55% of millennials will only buy an alcoholic beverage that has been recommended to them, compared to 46% for older generations. Similarly, Hall, J., et al. (2004) suggests that the 18-25 year old group relies more heavily on advice from salespersons and waiters, and samples and in-house displays, when purchasing wine. This essay will explore ways in which millennials can be influenced to purchase wine as an alternative to other alcoholic beverages.
“75% of social media users admitted that wine associated social media interactions can influence their purchases and increase spending on an individual wine purchase” (Fernández, R., et al, (2017).One of the most prominent characteristic of millennials is that they are a tech-savvy generation. 91% of millennials own a smartphone (Mintel, 2015), which means that it makes it effortless for them to look up product information whilst shopping, but also makes it easier to consult their friends to make a purchasing decision (Atkin, T., Thach, L., 2012). This implies that brands who promote their wine on social media are more likely to reach their millennial target market, and increase their sales.
However winery brands should be systematic and thorough when posting content on social media. Research has shown that wineries that are more probable to report an increase in wine sales are the ones that have multiple social media platforms, and post frequently (Fernández, R., et al, 2017). The reason for this is that millennials use a variety of social media platforms, and by promoting their wine brand on numerous sites, the wineries are ensuring that they get maximum coverage, which means reaching a larger audience, and may consequently mean an increase in sales.
One of the things that companies have to be aware of is that social media should not only be used for product promotion, but also for communication with consumers. Active communication with customers can help to build relationships with them, and make them more brand loyal, but it can also help with customer retention. Nevertheless, the research carried out by Fernández, R., et al, (2017), shows that although wineries all have a link to their webpage on social media sites, very few have disclosed an email address on which customers can contact them on. This could be an issue, as not only millennials, but other generations as well, have stated that email is their preferred channel for personalized communication, as shown in Appendices 1 (Bedor, L., 2016:online).
The label design of a bottle of wine can have a huge impact on the consumers’ perception of the product, especially for millennials. Millennials place a higher importance on the attractiveness of the wine label compared to other generations. In fact, the highest rated element when purchasing a bottle of wine is an eye-catching label (Wolf, M., Thomas, S., 2007). Packaging design is quite important in promotion of wine, as it helps to distinguish it from the various similar competitors (Jenster, V.P., et al. 2008). According to Wolf and Thomas (2007) millennials are drawn to wine products based on label design, style of the font, and overall appearance of the product. This should be considered by wine producers when choosing the design of wine products, as distinguishing your product from competitor’s products can increase sales and sustain customer interest.
Additionally, Henley, C. et al. (2011) have conducted an experiment by getting millennial participants to try the same wines before and after seeing the wine label. The results showed that “when the producer provided specific fruit characteristics, the informant perceived they tasted those fruits much more than without the information on the label” (Henley, C. et al. 2011). This shows how wine producers can unconsciously change a consumer’s perception of their product by including vital information on the label.
Wine companies should also distinguish how to promote their products to different target markets via the labels. This is portrayed in appendices 2 (Atkin, T., Thach, L., 2012:online), which shows that although both millennials and the elderly pay the same amount of attention to the brand name when they shop for wine, millennials care more about the alcohol content, label imagery and medals won. This also suggests that wine labelling is important to millennials as it is a means of distinguishing products and choosing the ones that match their values.
When trying to attract millennial customers, wine companies should keep in mind that they are a tech-savvy generation, who are always looking for innovation. The more social media platforms that the companies promote their product on, the bigger audience the product will reach. Additionally, wineries should remember that communication is key when acquiring new customers, but also when retaining existing ones, therefore they should remember to provide an email address or another direct way of contact on their social media sites.
As well as this, wine producers should focus on an effective way of labelling their products. They should ensure that the labels are simple and eye-catching, and that the back label is used as the heart of product information, meaning that taste characteristics must be stated clearly as this can unconsciously change the consumers mind, and encourage them to buy the product.
Appendices 1 – which communication channel feels most personal when contacting a brand?
(Source: Bedor, L., 2016:online)
Appendices 2- Graph of importance of wine label information for Millennials and Elders.