How much Generation Y will pay for a bottle of wine ?
Australian Vintage wants to sell more wine to 18-to-34 year olds, and in doing so has uncovered some fascinating data about what ‘generation Y’ wants from its alcohol, and the amount they’re prepared to pay for it.
The listed wine group employed two generational pyschologists for the 15-month process of developing YOU Wines, which general manager Cameron Ferguson claims is the first attempt by an Australian company to reach 18-34s with a “pure wine” product.
“You’ve had Rosemount try a few wines infused with elderflower and stuff, a few spritzers, but proper wine remains something they are not really getting into until their early 30s – with the exception of bubbles, which they associate with the odd celebration along the way,” Ferguson says.
Recent industry Shopper Tracker data shows the 18–34 year old demographic represents only 17 per cent of total wine shopper. This is in stark contrast to beer, where this demographic represents 22 per cent of the total beer shopper, spirits (29 per cent) and cider, where 45 per cent of total shoppers are from generation Y.
These numbers are a problem for Dan Murphy’s too. It makes a higher margin from wine sales than anything else, Ferguson points out, so the Woolworths-owned big-box retailer came on early as a distribution partner for YOU Wines, to help try and get consumers into the category younger.
The pyschologists confirmed Ferguson’s hunch that younger drinkers are intimidated by the jargon to be found on the back of many wine bottles.
“They get confused by all the regional references, and bamboozled by all the ‘fermentation, aged in barrels, squashed by virgins’ stuff,” he says.
“Turn a cider around and there’s none of that.”
Generation Y is interested in provenance and the story behind a brand, but only if it’s framed in a way that’s relevant to them, says John Foss of The Chia Co, another fast-moving consumer goods company with younger taste-makers emphasised in its marketing strategy.
“If the words on the packaging don’t directly address how this product will benefit them, and if they don’t feel this product is saying something about them that they want to project, they won’t buy it,” Foss says.
“Millennials seek brands that are authentic and talk to them on their terms,” says Andy Gaunt, brand director of Fever Tree, a premium natural mixer brand that’s also done its share of thinking about these elusive consumers.
The importance of such ‘conversation’ with 18-to-34s is reflected in the YOU Wines marketing strategy, which see each of the four initial stock-keeping units (SKUs) assigned its own personality, with appropriate slogans (ie “You’re epic in every way” for shiraz) taking over from jargon on the back of the bottle . An online or app-delivered test allows you to see which SKU represents you best.
“This is not a generation that wants to be talked down to, but they do want to learn. Matching personalities to grape varieties and bringing them out on the label is key to that,” AVL’s marketing manager Scott Burton told The Shout.
Blogger/influencers like @aisha_jade and @hollyholmess have been incentivised to take the quiz and reflect it on social media.
“We found image and identity were two of the top five values of Generation Y and social media is where that plays out,” Ferguson explains.
The recommended retail price of a bottle of YOU Wines is also the product of market research. Over two-thirds of Gen Y respondents said they’d be prepared to pay $14.99 or more for a bottle of wine that “reflected the impression they would like to make on their friends”, Ferguson reports.
So $14.99 will be the RRP when YOU is rolled out to Woolworths’ small-format outlets later this year, however in typical Dan Murphy’s fashion the big-box retailer has undercut that by $2 since it began stocking them in August.
The simplifying of wine to appeal to 18-34 year olds is a tactic that’s already been successful in the US, Ferguson says. Sweeter, blended red wines like “Apothic Red” have proven a hit among younger consumers, and AVL may look to mimic that success given its “McGuigan’s Black Label” red blend is “by far” the best-selling red wine in Australia by volume.
reported by Michael Bailey Deputy editor of BRW
Published 21 August 2015 16:42, Updated 24 August 2015 10:36