The key to growth is to retain current customers while connecting with new ones.
Sales of your wine have gone gangbusters since last year. In fact, wine sales were up 19.3% by volume and 24.7% by value across the board during the first six months of the pandemic. Yes, restaurant sales dropped, but restaurants are reopening now, and retail sales helped pick up the slack, anyway. Despite the sales and increase in business, there’s an uneasy feeling amid this success. The pandemic sales increase is a heck of a wave to ride, but like any wave, it can take the unsuspecting and inexperienced and crash them to shore. Like a surfer, the trick is to figure out what the waves are doing and ride gracefully along while preparing for the next wave, and the next, and the next.
As you’re working to figure out how to find new customers, retain old ones, and expand the reach of your expertly crafted products, you must be in touch with the wants and desires of those you hope will become loyal brand ambassadors. Brand ambassadors are those who will shout your name through a metaphorical megaphone, whether they insist their friends take a sip at a dinner party, share your wine on social media, or insist on placing your wine at the top of a menu. Once you know how to ride the waves of consumer taste, the waves propel you forward rather than slam your business to the ground. Let’s look at some different wine buyer segments and how you can strategize for them.
#1 - Old School Foot Traffic
The predominant age group that purchases wine is 56 to 74 years old. That’s the group you’re most likely to find in a tasting room. Overwhelmingly, the Baby Boom generation drinks wine as a social activity. Now, if you’re a small winery, say, under 1,000 cases per vintage, a tasting room might not be possible. You just might not be able to spare the wine for a large number of sips without seriously cutting into your bottom line, and maintaining a space meant to entertain guests can suck up even more profit before seeing a return. The problem is, this core demographic of wine buyers expect a certain experience they’re accustomed to and are anticipating being able to enter a tasting room as lockdowns and quarantines come to an end. Your solution might just be a multi-winery tasting room.
In a multi-winery tasting room, such as Vintner’s Collective in Napa Valley or Paso Underground in Paso Robles, many small wineries can be featured at once in one storefront. Wines from different vintners rotate through so one winery won’t burn through their samples with nothing else to offer potential customers. It also gives an opportunity to share the stories behind the wines and provide wine buyers a chance to engage with the wine producers themselves. As for the wine, if you’re aiming at Baby Boomers, keep in mind the demographic. In general, the preference will be for established styles with little to no experimentation or whimsical graphic design.
However, you need to be aware that Baby Boomers are starting to retire and rely on the wine collected in their cellars rather than drink newly purchased wine. While you don’t want to alienate your 56+ crowd, you’ll need to start working on reaching a new demographic, too. While they may be your largest demographic currently, that’s rapidly changing.
#2 - The Next Generation Digital
Targeting Millennials successfully has been a struggle for the wine industry. A focus on fitness and health consciousness has steered the under 40 crowd away from wine towards healthier drinks, or at least drinks that are perceived as healthier, like hard seltzer. The perception that wine is an “old person’s drink” hasn’t helped either. For Millennials and Generation Z, image and brand are huge factors, and sharing a picture of a $100 bottle of Bordeaux with flowy cursive writing above a line drawing of a mansion isn’t, in their opinion, “Instagram-worthy.” But, in 2020, that started to change.
During the pandemic, Millennials went from consuming 18% of wine sold to 20%. While much of this new consumption is pandemic related, new wine fans have been won, and it’s up to wineries to keep the fandom stoked. Zoom tastings have increased in popularity, allowing for safe socialization. Creative wine labeling and design have made wine a darling of social media. Since Millennials view wine as more of a casual drink than previous generations, lighter styles with less alcohol have risen in popularity, canned and boxed wines are desirable for easier portability, and smaller bottles that are lower cost allow wine drinkers to try more wines without spending as much as they would otherwise.
Millennials and Generation Z are far more environmentally and socially conscious, too. Wineries that tout eco-friendly farming and donations to worthy charities can get a PR edge over those that do not. And while online and direct-to-consumer sales may be how many younger drinkers have been introduced to their favorite wines, once it’s safe for large crowds to gather in bars and restaurants again, these new wine aficionados will want to be able to have a glass in their favorite meeting spot. It’s up to you to make sure your wine is there waiting for them.
#3 - Retail and Restaurant Gatekeepers
Winning over the people in charge of whether your wine gets in their stores and on their menus is a tough but worthwhile fight. No one will order a hard seltzer with their dry-aged New York Strip steak at a restaurant. That’s a given. But you will be entering the market territory of White Claw when trying to convince younger buyers to walk out of a liquor store with a bottle of your wine instead. You’ll be competing with flashy, bold craft beers at a steakhouse. Cocktails and hard liquor are still highly popular choices at bars. You’ll need to convince the gatekeepers that
your wine is worth the space they’ll give it.
As for restaurants, find establishments with “semi-controlled” instead of “controlled” wine lists, so you have a shot of getting on the menu. Keep in mind, you’ll be knocking someone else’s wine off, so you’ll have to convince them yours is worth it! Casual chains are high volume, low-cost sales opportunities, usually under $60, while your higher-end restaurants are where you’ll send your best stuff that might be triple digits in price. Wherever you go, stress the strong sales of your wine. They’ll want to know it’ll sell. You will also want to see what style has the most prevalence on menus. Perhaps this is an opportunity to make a style that’s less represented to increase your chances of getting on the wine list!
The good news is, stores will want your wine because smaller wineries are where the profit is. The bad news is you need to absolutely make sure the store becomes a cheerleader for your wine. They’ll essentially be the salesmen and saleswomen representing your brand to consumers. The same goes when providing your wines to bars. The bartender needs to know how to answer when a customer points to your bottle and asks, “How’s that one? Any good?”
Connecting with Potential Buyers — Tell Them “Why”
Simon Sinek was right. As you work to maintain your current customers and reach out to new buyer segments, there are many things you can do to win them over. However, the most foundational effort is establishing and disclosing your "why." We mention this because targeting new audiences is great, but you need a firm foundation in place if you're going to win their business.
Make your "why" evident in every interaction with potential buyers — every business choice, every marketing effort, every social media post, and every transaction. It's the first thing you need to think about. Link your story with your brand to connect to your target audiences as well as the venues that will sell and promote your wine. Prove your passion for creating rewarding wine experiences with every bottle. Buyers are looking for authenticity and a compelling purpose. It's essential to be in touch with your "why" so your customers can be, too.
Logistically, there are many ways you can communicate your "why," but don't overlook obvious opportunities like your branding, packaging, labels, and overall product presentation — each of these pieces impacts and influences your target audiences. To make sure your wine labels — design and application — accurately communicate your brand and mission, we've put together the Winemaker's Guide to Wine Labeling Equipment. Learn how labels impact shoppers and how investing in a right-fit labeling machine can benefit you and your customers.
As you strategize the best way to tap into new buyer segments, be sure to study how those audiences shop, where they buy their wine most often, why they make specific wine purchases, and ways that packaging influences their choice. Passionately share and show your "why," and the sales will follow.
Cheers to new markets and continued growth!