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The Merchant23 Blog

3 Trending topics in the Wine Industry

Feb 23, 2019 4:47:52 PM / by Cyrus Azari


wine trends

The wine industry is an evolving entity. What worked three years ago no longer works today. To stay relevant, you must stay informed. Having looked across a plethora of articles and publications, these 3 trends kept coming up.


1) Natural Wines

2) Millenialls

3) Winery Direct

 
1) Natural Wines

Lets begin the discussion with natural wines.  These are wines that made with minimal intervention and doctoring. Natural wine sports minimal amounts of Sulpher Dioxide (So2), often aged in neutral oak, is un-fined, and un-filtered. Primary and secondary fermentation are done with native yeast.

 

The vineyards are often minimal as well. Often, pesticides and herbicides are not used, making for a very "clean" grape come harvest.


If you want to get a better picture of what this looks like, look at rawwine.com.

 

It is a new take on vinification that is becoming very popular in the industry. Edith Hancock, writer at the Drinks Business says "...while natural wine may still be hard to swallow for some consumers, its increased visibility in the market will encourage established brands to adopt more sustainable practices"


More industry experts weigh in on the trend, like Dave McIntyre from the Washington Post, saying "Natural wines: These unconventional, minimalist wines are becoming increasingly mainstream; they are arguably as much political statement as viticulture...We will see more of them on retail shelves and restaurant wine lists as distribution expands beyond the big cities."


Suffice to say, natural wine is carving out a very solid niche in the marketplace. Just like Napa Cabernet, French Burgundy's and Bordeauxs are seen as legendary in the industry, natural wine may yet soon stand among the titans.


2) Millenials 

 

Rob Wilson points out in his article on L.E.K saying "millennials will hold the largest share of U.S. wine consumption by 2026. In the same article he talks about how millennials seek new experiences, and "drink in."


We have an info graph that showcases how millenials make up over 32% of wine drinkers. (and more!) 


This means higher off premise sales! This is good news for the liquor retailer. Compared to other demographics, millennials are one of the easiest consumer segments to reach. They respond very well to social media campaigns

 

The majority of millennials appreciate progressive companies. Natural wines talked about above, given their cultivation techniques, fit right into the millennial playbook.

 

Millennials are different from the "traditional" wine buyer. Edith Hancock further elucidates the Millennial experiences and their differences to other age groups how millennials saying "Unlike the baby boomers before them, millennials prefer to spend their earnings on experiences over material goods. This translates into choosing unusual and unique bottles over well-established brands."

 

Millennials are fast approaching and present a paradigm shift, one that will overtake the industry in the coming years. Forbes even echos this point: " Styles, regions, grape varieties—all of these are just as subject to the vagaries of changing tastes and trends as fashion or music." Brian Freedman, in his article  predicts that these trends ." ...are going to be set by millennials."

 

Millennials have one predictable behavior, and that is they aren't predictable. They constantly change preferences. How can you keep up? Simple, access to a wide variety of products...through winery direct suppliers, another growing trend.

 

3) Winery Direct

 

Winery direct is the strategy Total Wine and More is pursuing.  Cyrill Penn, a prominent writer at WineBusiness.com states in his article: "(winery direct is) wholesalers clearing the wine at reduced margins, enabling the retailer to sell wines from smaller producers more profitably and at relatively low prices."

 

Total Wine is on track to make 3 billion in revenue by 2019, and this model plays a pivotal roll in accomplishing that goal. To further drive the point home, Dave McIntyre in another article from Washington Post called "When the Wines are Exclusively Theirs:" 

 

"The retail world values exclusivity as a competitive edge. Wine shops and restaurants take advantage of the District’s regulations to 'direct import' wines unavailable through the normal distribution system."

 

Total Wine is looking to increase winery direct sales, millennials are the fastest growing market segment, and natural wines are catching on. If I were a liquor store retailer, I would want to find ways to source natural wines straight from the winery. Direct to trade, in other words. Need a hand to figure that out? Set up a strategy call today!
 
 
 

Topics: Retailer Winery-Direct Consumer Trends Industry Millennials Direct-to-Trade Distributors Natural Wine

Written by Cyrus Azari

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