Role Reversal: Wine Replaces Beer as Favorite Drink
By George Anderson
Perhaps it’s the Two-Buck Chuck phenomenon or the big screen spotlight provided by Sideways or the health benefits or simply the taste: Whatever the reason, more Americans now say they prefer to drink wine than beer.
According to Gallup, 39 percent of adults said the alcoholic beverage they drink most often is wine, followed by beer at 36 percent.
This is a reversal of past year results (Gallup has conducted the same survey since 1992) where beer was the clear favorite. In the first year of the study, 47 percent of consumers chose beer as their favorite compared to 27 percent for wine.
According to a report in the Chicago Tribune, beer is still far ahead of wine when it comes to sales volume. “About 2.8 billion cases of beer were sold last year, compared with nearly 270 million of wine.”
Moderator’s Comment: What do you take from the Gallup research if you are a retailer selling beer and wine? How do you present the categories in advertising
and through in-store presentation to accentuate the strengths (elements of consumer appeal) of wine and beer? –
George Anderson – Moderator
The aging of baby boomers is a critical factor in this switch as well — people consume alcoholic beverages with meals more often than as a standalone activity as they age. Ironically, with the growth of spicier and more exotic foods, beer with dinner is becoming a more common occurrence at even the best restaurants.
Secondly, I would point to the health benefits — on a personal note, I am surprised at how many lifetime white wine drinkers have switched to red because of the reported benefits.
From a merchandising standpoint, the critical factor is retailers addressing consumers’ ongoing discomfort with selecting wines. Shelftalkers describing the wine flavors e.g., citrus, oak, berry, helps a lot. Many consumers rely on the ratings from the wine mags. Cross-merchandising signage is even better. A small sign at the seafood case, for example, outlining which wines pair best with mild fish vs. stronger fish help people with selection.
Opportunities and information seem to me the most important approaches to marketing wine and beer. Looking at the times and places when each type of drink is selected, and providing enough detail to facilitate choices and purchases could encourage customers to stick with both beverages according to what they are doing, when, where, why and with whom. As wine drinking is a relatively new phenomenon in the US, far more detail is needed about what’s in the bottle. Brands here are less important than varieties and venues. From what I recall, there isn’t a lot of knowledge about beer either beyond knowing what the drinker likes. I am not trying to encourage snobbery with either drink but would suggest that retailers who give customers good reasons to buy a range of different drinks will be the ones to see the most benefit.
Len Lewis’ suggestion is the home run: hold tastings.
And if there is a private label program, it might be worthwhile to see if the brand can be distributed to local bars and restaurants, so that it gains “legitimacy” and “tasting” occurs in a natural environment, not just the supermarket. Even if the bar/restaurant samples are distributed at no cost to those outlets, the word of mouth might make it well worthwhile to building brand equity for a private label.
Tasting parties can also be co-sponsored with local charities and they can be held at hotels, bars, and restaurants.
When new alcohol products are introduced, the distributors want to give free bottles to bars and restaurants to encourage sampling. Under NY State rules, “free” bottles are not allowed at the wholesale level, so salesmen “sell” the new products and give away cases of free napkins equal in value to the new products.
I see two things happening: smart wine marketing has created some popular-priced brands that people can grab knowing they will get a tasty glass every time, either at a restaurant or at home. The Australians show a lot of creativity here. That $10 bottle of Penfold or Rosemount or Smoking Loon is a no-brainer purchase, just as a six-pack of Fat Tire is. Second, red wine is good for you. It’s full of flavenoids and anti-oxidants, scrubs the LDL cholesterol out of your arteries, takes the edge off the day and tastes good.
The media and our image-conscious society projects that wine (red or white; grand cru or mass produced; good or indifferent) makes a person better pleased with his/herself … while those who drink beer will think beer.
So, being a child of the times, I draw upon the wisdom of Charles Dickens: “Bring in the bottled lightning, a clean tumbler, and a corkscrew.” And when you do, I hope you kindly choose a 1990 Latour, which shall make me be very attentive to all suggestions you might have — beyond those written above — on how to merchandise a whole spectrum of wines along with Budweiser and Red Bull in stores.
Wine sales growth seems likely to be the result of two factors: The general aging of the population and the cumulative effect of messaging from and about the wine industry.
Mature adults may opt for wine due to lifestyle evolution, purported health benefits and greater knowledge. Wine takes some learning to appreciate. We accumulate bits of knowledge over time and gain confidence in our taste.
The increasing number of wineries across the country, as well as in emerging exporter countries like New Zealand, Chile and South Africa has led to beneficial price competition, higher quality, and a greater flow of information about grapes, vintners, wine styles, and food pairings. All contribute to a greater familiarity among consumers regarding a fairly complex purchase.
If I were a retailer offering wine and beer for sale, I’d offer a carefully honed selection that includes familiar brands, a house brand, and a mix of less-known, well-crafted wines and beers. Then back it all up with sipper-friendly information about the product at the point of sale.
Progress is clearly being made, but the U.S. is still a nation of beer drinkers. I’ll change my mind when I see wine companies sponsoring NASCAR events.
Having said that, there are supermarket retailers out there doing a fabulous job merchandising wines–chains and independents–by utilizing people who really know the category and can advise consumers on purchases. But you can’t do it in every store. As with other categories, the key is to do your homework. Look at the demographics and know who your customer is.
But if you want to spark wine sales–especially the $10 or under varieties–the best thing to do is hold tastings in the store. Get people to try and they’re likely to buy.
I’d put together a really good two-tier private label wine program, and promote it aggressively. There is very little brand loyalty when it comes to wine, and people don’t have much sophistication, truth be known, about the product. I’d use my store brand wines to help educate people about it, how it is made, good pairings, temperature, etc. It’s a rare opportunity, and no knowing how long this window will be wide open. I’d also educate people via the brands, using whatever help they might offer that would be practical in my stores.
How sad, but based on some current Retail Surveys we are doing it appears true. I think the answer is all the reasons given in the survey. But importantly consumers are finding the right value for their needs. Value = Benefits/Price vs. Competition. Trading up is clearly an important consumer trend. Convenience and varying packaging formats, including single serve in various package formats. Improved graphics are making a big difference. And the move of “more premium” private label wine into the category is making a positive difference. Cost is important but the real driver is more integrated and goes back to the benefits wine is providing.
In our National Retail survey we ask the store managers: What are the biggest growth areas in your store? Wine is one of the first mentions at every location so far! I like Shiraz myself.
Another thing to think about is how the leaders of the beer industry have pretty much forgotten about talking to consumers and have focused on beating their chests in an effort to one up each other. They pretty much forgot that consumers were the focus, not each other. Winemakers have made strides by giving consumers something that drives them daily: new knowledge. They thirst (no pun intended) for news in all aspects of their lives, and winemakers have succeeded by showing them why wine is beneficial, how to pair up selections with food, types of wine, and so forth. When winemakers stop talking to consumers and turn to talking to themselves/each other, that is another opportunity for someone new to step in to mind the consumer.