Where do leading wine industry experts think restaurant operators should focus their efforts if they want to sell more wine? Informed predictions for 2013 include a continued effort to reach the Millennial demographic, greater emphasis on women wine drinkers and a general pronouncement that wines‐by-the-glass programs should stretch beyond the “known” varietals and provide more choices. The general consensus for wine selection trends in 2013 focuses on an interest in the unconventional wines from New World producers including Argentina, as well as a resurgence of Old World wines from Spain—both seriously encroaching on the California wine stronghold.
These are the top-line results from "Wine, Women and Boomers," a February 2013 survey of 90 sommeliers, wine directors, restaurateurs, hotel operators, wine producers, wine buyers and other wine industry players. It was sponsored by wine dispensing solutions provider Napa Technology and conducted independently by online firm Angelsmith. Here are the specifics:
1. Demographic groups to watch.
Millennials edged out other groups as the demographic that will continue to drive wines-by-the-glass sales with 44.3 percent of survey respondents confirming that this group will outpace both Baby Boomers and Gen Xers. However, most industry experts (68.9 percent) reported that Boomers make up a “significant” portion of their wines-by-the-glass revenue. More than 70 percent of those polled also shared that Boomers account for 20 to 50 percent of their total wines-by-the-glass revenue.
Our analysis is that although Millennials may be driving the exploration of new varietals, they most likely are spending less per glass than their more economically stable Boomer counterparts. This provides a huge opportunity to provide education and tasting opportunities for all demographic groups with the goal of increasing what consumers will spend per glass.
Aaron Inman, g.m. and founder of Pinot Patch, an emerging wine label, believes that in the future wine will be more highly targeted not by demographics but by regional preferences. “Wine preferences are highly dependent on familiarity with wine in general. In areas like the San Francisco Bay Area, consumers will generally spend more on a glass of wine across all demographics.”
Donna Hood Crecca, Technomic wine industry analyst, reports that wine is firmly positioned as a food-friendly beverage appropriate for everyday occasions. She states that all the stars aligned at the same time—legible and understandable wine labels, familiar varietals, and accessible price points—when Millennials came of drinking age.
“Baby Boomers are slowing down on their wine buying,” says Gena Carlin, Tasting Room Manager at Calistoga, CA’s Up Valley Vintners. “They have the cellar full, so to speak, and they are now making very selective purchases. In Napa Valley, Boomers want small, limited production, hard to find wines. And when they find something they like, they’ll pay a higher price and purchase it by the case.”
2. What’s driving wines-by-the-glass sales?
According to 2013 survey results, value is the most important reason people order wines by the glass (39.5 percent). An opportunity to taste more wine is the second driver (29.6 percent) and individual palate considerations are the third most important reason (27.2 percent).
Millennial preferences for individualism, adventurous palates and economic restraints contribute to the growth of this trend as well.
According to Thea Dwell, wine blogger and sounder of Luscious Lushes, “A strong by-the‐glass program allows the customer to make a selection based on food pairings as they progress through the meal. It also allows a party of two or more to enjoy their personal favorites, without having to agree on a single bottle.”
3. Varietals gaining popularity.
Not surprisingly, given that value and adventure are two key traits driving wines¬‐by-the-¬glass sales, Malbec and Spanish wines were among those gaining the most.
George Wine, founder of exclusivewineclub.com, sums up the popularity of Spanish wines in the United States this way: “Spain has a long wine-making tradition and many years of marketing efforts to export to the U.S. market. A huge Spanish- speaking community—an emerging wine drinking population segment—in the U.S. makes it easier to engage with Spanish products. And as wine always goes with food, popular Spanish cuisine makes an appealing pairing with Spanish wines."
About a third of those surveyed saw Champagne and sparkling wines moving up in popularity; another 38.4 percent said the same about Pinot Noir. While traditionally Champagne and sparkling wines have been reserved for special occasions, this survey indicates that they are making inroads into the core rotation of everyday drinkers. According to Michele Smith, proprietor of Vino Bello, a Burien, WA, wine bar and wine shop, “Bubbles are on the rise. We carry 10 to 12 splits on the menu—from Champagne, Prosecco, and Cava to Brachetto—at all times to keep up with demand. And bubbles are not just for women; men are ordering up as well.”
More wine trends
4. Varietals losing ground.
Chardonnay was the clear loser with 40 percent of survey respondents reporting that its popularity is retreating among more adventurous consumers. Many survey respondents believe that the increasing interest in other white wines, such as Albarino and Torrontes, is contributing to the demise of Chardonnay.
5. Wine, women and Boomers.
Our wine experts report that women wine drinkers represent 30 to 50 percent of their total wines‐by-the-glass business. Most recognize women, across all age groups, as the key to a robust wine business.
According to Marian Jansen op de Haar, wine curator for Women of the Vines and the person responsible for choosing bottles for More magazine’s new wine club, More Uncorked, “Women are much more likely to choose a wine based on a recommendation from a friend and less likely to be as concerned with scores.” She adds, “For women wine is an affordable luxury that can be enjoyed every day.”
Reporter Kara Newman, Wine Enthusiast, recently wrote that this was the first year the Wine Market Council included statistics on bottle versus by-¬the-¬glass consumption due to the latter’s rising influence. And women account for higher consumption rates of wine by the glass than men.
Despite the fact that survey respondents report women and Boomers make up a significant part of their customer base, most do nothing to attract either group. However, of those who did indicate they actively pursue these groups, promotions and an increase in varietals top the list of efforts taken.
Top suggestions to attract Boomers included adding value, more wines by the glass and more varietals.
6. Wines-by-the-glass lists growing.
A whopping 83.4 percent, more than 8 out of 10 operators, report adding more offerings to their wines-by-the-glass programs. The majority (45 percent) have added three to five additional wine selections.
7. Preservation adoption.
Although wines by the glass are becoming increasingly important to profitability, 55 percent of operators rely on manual preservation systems and more than 18 percent of operators do nothing to maintain the quality of an open bottle of wine.
This leaves the door wide open for competitors to capture market share from venues that do nothing to ensure a great glass of wine is poured every time. In a previous Napa Technology wine consumption survey, respondents reported that most consumers were savvy enough to know when they were being served an oxidized or otherwise spoiled glass of wine.
At our company, we believe that wines-by-the-glass programs will continue to grow as consumers demand more variety, operators gain positive experiences with wines by the glass profitability and wine preservation technology becomes more widespread.
Jayne Portnoy is v.p. of brand strategy and marketing for Campbell, CA-based Napa Technology.