Consumers buying less wine, cheaper wine in down economy

Survey taps into attitudes on wine

In the current economic slowdown, consumers are buying wines that are cheap, brand specific, and indicate they will alter their buying habits by purchasing less wine overall, according to a new survey of wine consumers released last week.

Mark Russo, senior partner of Clarity, a strategic business and integrated marketing communications consulting and outsourcing firm, revealed survey results on a wide range of wine buying patterns and attitudes last week at the Wine Industry Financial Symposium in Napa.

“Our survey was just recently completed, so it does reflect the somber economic mood consumers are feeling following the terrorist attacks,” Russo said.

Survey respondents consisted of 1,000 wine shoppers canvassed in the wine aisles of supermarkets, discount stores, warehouse clubs and wine shops in both Southern and Northern California queried while in the process of making wine purchases.

“The major trends point to a majority of shoppers choosing far less expensive wines to drink at home — those in the $4 to $8 category — and selecting inexpensive foreign wines fitting that profile,” Russo said. Surveyed winemakers said this year they plan to counter the downturn by making wine more approachable and fun, with changes to packaging. “In the U.S.,” says Russo, “10 percent of the population buys 86 percent of the wine; that tells you there’s something wrong with the equation. Half the U.S. population doesn’t even drink wine, so the process of getting Americans to even select wine with meals is going to be an uphill battle.”

Trends from the survey also underscore the purchasing habits and attitudes of the wine buying public. The study found an overwhelming majority uncomfortable with wine culture. Specifically, respondents were asked if they felt knowledgeable about wine and 89 percent said no, with only 13 percent willing to try new wines they had not sipped before. While almost everyone surveyed felt wine has beneficial health effects, these benefits do not figure into their wine-purchasing mentality.

“There’s a resounding undercurrent here –– wine is not a beverage of choice for the average consumer. It’s evident when we asked consumers if they felt ‘adventurous’ when selecting wines and in making spontaneous wine purchases — 83 percent said no, they’re not adventurous. And these are actually wine consumers in California, people who were making wine purchases when surveyed. You can imagine the results if we’d asked that question in the midwest or the South,” said Russo.

Seventeen percent of those surveyed think of wine as an “experience,” while 82 percent said wine is “just a beverage option.”

“It’s obvious up to this point the industry hasn’t done a very good job bringing wine to the American table; now they really have to focus on it as an industry initiative,” Russo commented. “In the survey, we asked how comfortable people are discussing wine with family, friends, business associates and in a restaurant setting with the waiter or sommelier. A little more than half were comfortable talking about wine with family members, but the numbers drop off dramatically to just about 10 percent with friends, 3 percent with co-workers, and 1 percent comfortable talking about wine with the people serving them in restaurants. The consensus appears consumers are reluctant to seek information to make their wine choices. The prevailing sentiment is that buyers don’t want to appear ignorant seeking information about wines.”

Less than half of those who particpated in the study are willing to purchase a wine made from grapes bio-engineered to resist pests, and only 29 percent of consumers would consider buying premium wines with a screw-top or other noncork closure.

“A whopping 92 percent of buyers are saying they think California wines are better than foreign wines,” Russo noted, “but at the same time, many feel the price is climbing out of reach, and they’ll definitely switch to cheaper foreign wines they find on supermarket shelves if their favorite wines aren’t competitively priced.”

But a majority feel foreign wines should be taxed in order to support the sale of domestic wines.

“This can be a great time for the California wine industry,” according to Russo. “And while the pessimist may say the glass is half full –– that we’re in a recession –– there is tremendous good will towards the industry you just don’t find with traditional packaged goods like soap or toothpaste, and we’re going to help them capitalize on that. Consumers realize that wine is made by hardworking people, that it’s an agricultural product, and they don’t want those American brands to go down the tubes in a bad economy.”

The results of the study were discussed at the Wine Industry Financial Sym-posium in Napa, and industry professionals agreed that wine prices are likely to decrease in some categories, especially the low-end wines, but they question whether high-end products such as Napa valley premium cabernet might suffer from lack of sales. Leaders speaking at the event are hopeful this year’s surplus of grapes won’t require them to discount premium wines like cabernet and syrah on supermarket shelves in the $25 range and up. But the current surplus of California wine grapes — which has seen the price of some crops such as chardonnay plummet by as much as 75 percent this year — is causing vineyard owners to postpone or rethink new vineyard development.

“We believe there’s a tremendous market here in the U.S. for California wines,” Russo said. “We just need to educate the marketplace and make wine a more enjoyable and safe purchase.”

Clarity led a session at the wine symposium on integrated marketing communications techniques to help wineries reach out to a broader demographic, create a larger pool of potential wine drinkers, and upgrade the experience of current wine purchasers.

Clarity is a Bay Area business strategy and integrated marketing communications firm founded in 2001 by principal Julie Lehman Kilarr. The firm counts among its clients specialty food and wine companies, health care, insurance and financial services and technology firms. Partners in the company have backgrounds in marketing, marketing communications, organizational dynamics and business administration, with experience in both corporate and agency settings.

Copyright © Ric Einstein 2003