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The young that got away?

Published:  23 July, 2008

The youth market remains a crucial target to drinks companies, but with shifting demographic trends and new advertising curbs, Generation X is in danger of slipping through the net. Jo Burzynska reports on worldwide attempts to bank the post-pubescent dollar

Young people today don't have lives, they have lifestyles. But whether wine is or will ever be part of that lifestyle without a concerted effort on the part of the trade is a question that the UK is just starting to address. Spurred on by the impending wine surplus, combined with static wine consumption, the Australian wine industry has woken up to the great potential lurking within Generation X and Y, and in the future, Z. The UK, on the other hand, is just stirring, bleary-eyed after a long night out at the wrong party, to behold a vision of millions of potential consumers who could be their hardest to seduce yet. During the last recession, Baby Boomers (born between 1946 and '60) tightened their belts, but the same could not be said of their Generation X offspring (born between 1961 and '81), who continued to spend regardless. This phenomenon made many industries realise that they should have been targeting this demographic, and with another global downturn already underway it could be time for the wine trade to at last wise up to the power of the post-pubescent pound. In the UK, the healthy growth of per capita consumption of wine has meant that companies have felt no great need to venture into unknown markets. Growth has been driven by existing wine drinkers consuming more, with few new consumers being brought in, creating a situation which some feel needs to be seriously addressed. Wine has traditionally been perceived as something people naturally grow into, but this may no longer be the case. Figures for the last decade show wine consumption in the 18-25 bracket in decline, with recent years seeing some of the largest decreases. There is a danger that these could start to impact on the health of the overall wine market, so this is no time for complacency, as Keith Lay of Ehrmanns warns: "If we don't convert drinkers at an early age to make wine part of their repertoire, then ultimately we face a shrinking market. "There is already evidence that wine consumption among the young is shrinking," he adds. "Part of this is demographic: the UK population is getting older, but we must face the fact that younger consumers are faced with much greater choice, and will have grown up in an environment in which their parents drink wine. Drinks are no different from any other market: successive generations always want to discover their own brands, rather than simply consuming the same as their parents." While wine was a great discovery for the Baby Boomers, it has largely failed to make an impact on young drinkers. BRL Hardy winemaker Steven Pannell is worried. Speaking at this year's Australia Day conference, he said: "I think there's a belief in the wine industry that everyone's going to wake up at the age of 34 and start drinking wine, that they're all going to be like us. But Generation X are not like us at all. What concerns me is that if young people aren't drinking wine now, they won't drink wine later."

No future? One reason the wine industry has not identified young people as a lucrative market has been their supposed lack of money. But this clearly is no longer the case. Young people are not getting married as young as their parents did, and their delay in having children leaves them with more money for leisure pursuits. A report by Bacardi-Martini, which produces one of the leading youth drinks brands, Bacardi Breezer, quotes figures from the Office for National Statistics, which show that expenditure has increased significantly where the head of the household is under 30. In 1997/1998, 14.80 a week was spent on alcohol, which rose 23% to 18.20 the following year. Young people certainly have the money to spend on alcohol, but it's not wine. The recent micro-scooter craze, where people old enough to know better could be seen propelling themselves across crowded pavements at perilously high speeds, is indicative of another Generation X phenomenon - people perceive themselves as being young for longer, so the "youth" market stretches beyond the parameters of age. This is observed by Roger Harrison, marketing controller, low products at Bacardi-Martini: "There are five million 18 to 25-year-olds out there, and 11 million with the same mindset. The 30 to 35-year-olds still see themselves as young, which means the group has great potential."

Branding X, Y and Z So what are the characteristics of this species, and how do you reach them? Research has indicated that they've been desensitised to advertising due to regular bombardment: one US study puts people's exposure at 3,000 ads per day, ten million by the time they're 18. They've been identified as media savvy and cynical - if they think they're being marketed at, they'll reject your product. In order to grab their attention new channels must be used; they must be spoken to in their own language, and they're extremely brand conscious. One product which has been a huge success with young people is Bacardi Breezer, the bestselling brand in the youth-dominated and fast-growing premium packaged spirits (PPS) category. Harrison says the secret of Bacardi Breezer's marketing success has been to connect with young people in a different way and keep in touch with their ever-changing interests. "Trends change very quickly, which means you have to keep in touch. Ten years ago trends developed over two to three years; now they can happen in two to three weeks. But we're now more conversant with consumers." Identifying where young people are and what they are doing has become crucial, as Harrison explains: "People are watching less and less TV than ten years ago, when it was a lot easier to use TV to put your message over. We now use experiential marketing through our VIVID events (complete club nights hosted by the brand), SMS messaging, rickshaws, direct mail, e-mail. This year, 50% of the 17 million marketing spend went on TV, with 10% on non-TV." While wine's low profit margins mean that no wine brand could hope for anything near that level of marketing spend to reach new consumers, it would appear that the imaginative use of alternative media could play an important role. So what does Harrison think wine could learn from the success of the PPS? "The only thing I could pick out is the confusion factor, due to huge choice and a lack of brands." With thousands of wines - as opposed to only a handful of PPS brands - in a cut-throat market, brands can make choices simpler. However, brands have also become extremely relevant to today's young person, especially when they are viewed or successfully marketed as saying a lot about oneself and one's lifestyle. Branding and the creation of an identity that transcends the basic product, through consistent marketing spend, has been the key to successful entry into the youth market, from sportswear to spirit mixers. In this area, wine has some catching up to do, with only a recent history of widespread brand development. At present, most of these also have something of a blanket appeal, which will not necessarily attract younger people, who now demand products designed specifically for them.

Wine ravers The understanding and courting of the youth market is more developed in the US and, in particular, Australia than the UK, and could provide some useful lessons. In these countries research, initiatives such as wine raves and specially developed products such as Wicked Wines are helping to reposition wine as a youthful drink. One section of this year's Australian Wine Marketing Conference was devoted to marketing wine to "Generation X, Y and Z". Dromana Estate's assistant marketing manager, Roz Howard, delivered a paper outlining her current research. Howard reassured delegates from the Australian wine industry that while young people don't like to admit to being influenced by advertising, they are. Surveys of Generation X in Australia also highlighted the importance of personal recommendations, which were found to be one of the main influences on wine purchasing. Consequently, "20 to 32-year-olds are an ideal target for wine marketers," observed Howard. "Retail staff do have an influence over this age group (with 20 to 24 being the most influenced group), a lot more than over the 33 to 39 age group," she said. "The 20 to 24 group don't tend to spend much time in restaurants where there are wine waiters to advise. However, 25 to 32-year-olds are influenced by wine waiters." Howard proposed that both retail and waiting staff should be better trained to advise customers and, consequently, promote wine. Another recommendation made from the research was the adoption of younger role models for wine. This is exactly what Yalumba has just done in Australia, signing up our very own Naked Chef, Jamie Oliver, to promote its wines in a new campaign targeting "The New Vintage of Wine Lovers". The adverts are aimed at "a whole new market segment who have been largely ignored by traditional wine advertising," according to Yalumba's general manager of marketing, Ralph Dunning: "They enjoy eating in restaurants and cooking for friends at home. Their attitude to wine is relaxed and they view wine as part of their lifestyle, but they're not experts and they hate wine jargon. Misty vineyard shots, photographs of barrels and other traditional wine images just don't do it for them. Enter Jamie Oliver. His natural passion and relaxed, irreverent attitude captures the spirit of the new vintage of wine lovers. He makes quality food accessible, fun and not in the least bit intimidating - qualities Yalumba is keen to bring to wine." Lovely jubbly. In the US too, the image of wine is being rejuvenated, through largely non-trade initiatives. "How bout a little house with your wine?" asks an advertisement for an event forming part of the Wine Brats Wine Rave tour. It continues: "Wine Rave Atlanta will feature wine, local eateries, fashion mixer [sic], performance art, and a Trinket - all set to the DJ grooves of trip-hop and acid jazz. This is definitely not your parents' wine tasting!" The Wine Raves come hot on the heels of Wine X magazine, launched four years ago in the US by Darryl Roberts. Wine X is described as "a young adult lifestyle magazine with wine grafted on". Roberts explains: "I think Wine X has opened the door for a lot of people on the fringe who are interested in wine but intimidated by all the snobby, elitist, pretentious attitudes, including all the other wine magazines. We got them thinking in a new direction: that wine is only what YOU make it out to be, nothing more. I think our reviews, whether you fully understand them or not, get people to read about the wine instead of just memorising a number associated with the review. This puts people more at ease. And the fact that we incorporate other lifestyle elements - beer, spirits, fashion, music, books - helps place wine among their lifestyle elements, so it feels comfortable and is more identifiable." After considerable success in the US, Wine X launched an edition for Australia and New Zealand in January this year, and there are plans afoot for a Wine X UK.

Wicked Wines "The number one rule of Wicked Wines is there are no rules. So no uptight, pretentious, dinosaur wine snob's gonna tell you what, where or when to drink." This is the message proclaimed on the website of Wicked wines, BRL Hardy's Australian youth wine brand. Made up of a heady mixture of Lust, Greed, Envy and Flirt, the range was launched a year ago in Australia, as an attempt to get young people - especially young women - to drink wine. The range has been created to suit the tastes and image of young people, from funky colourful packaging and a risqu website to the styles themselves, which tend towards the sweet and fruity. Lust, described as "Fruity White Tingle", is a 5.5% ABV semi-sweet Frontignac with a slight spritz; Greed is a Shiraz; Envy a Chardonnay; and Flirt a sparkling wine. They come in 75cl bottles and in smaller sizes, like their PPS rivals, so they are more suited to the bars where many young people are drinking. The Wicked Wines initially met with a hostile reception, which BRL Hardy's international brand manager, Amelia Nolan, put down to the product being so different. "However, when we won a silver medal at the Sydney Wine Show with the Chardonnay, and because we offered quality, most of the trade, writers and consumers came round," says Nolan, who considers offering quality wines the key to winning over the wine consumers of the future. However, it is the less sophisticated semi-sweet, Lust, which has proved the most popular, and a "Fruity Red Tingle" is being added to the range. Since making their debut Down Under, Nolan claims that Wicked Wines have generated considerable interest among multiple grocers in the UK, and there are now plans to launch something similar over here. As Lust has proved too racy for the Portman Group, these will be marketed under a different name. Nolan explains: "We think there's huge potential in the youth market. Although we don't have any stats for the UK yet, we do have information based on the Australian market, and all things point to the UK being very similar. We know that in Australia only 7% of wine is consumed by females between 20 to 29 years old, while 44% is consumed by women over 30 years. But they are drinking new age alcohol', which in order of popularity is premixed spirits, then spirits, then beer, with wine last." She adds: "We think the concept is right, there's a market for it and that the Fruity Red and White Tingles are the right styles." However, BRL Hardy is moving cautiously into this new territory, with test markets and trialling in the coming year, before a major launch. "We just don't know if it will be successful," admits Nolan. "All we know is that there's a big group out there who are not drinking wine, and that we must do something to capture their interest and bring them into the wine world. And this could be through the Fruity White Tingle, which could help wine's tastes evolve." The BRL Hardy initiative is the first real attempt to capture the youth market in the UK, and hesitant trade rivals wait in anticipation to gauge its success before putting any of their own plans into action. If anyone has the ability to create the new youth category it will be a big player like BRL Hardy, which can provide the investment to drive it forward.

The future is a Fruity White Tingle? While a Fruity White Tingle might send a shiver down the spine of many a wine purist, sweeter, fruitier and lower-alcohol wine products could provide that important first step onto the wine ladder. For IWS group category manager Paul Waddingham, lowering the alcohol of wine is an option worth considering: "If wine is to compete with PPSs, it has to lower its alcohol to become a more sessionable' drink," he says. "This adds the complexity of delivering the right flavour, as lower-alcohol wines tend to struggle to give the flavour profile expected. "Historically, wine companies have been against meddling with wine to create another product," says Waddingham, "although wine coolers have been on the market for a long time. In the past, a lot of the wine-based drinks were made from very low-quality wines boosted by fruit. If this is to be an option, wine coolers must get it right, which means retaining the wine profile. The wine character must not be replaced by fruit. The challenge is repositioning them in a way that will create a link to real wine which will get young people to enter the market, and then move [them] up to other styles of wine."

Size matters Alternatively, says Waddingham, "you can look at it from another perspective, by selling wine in a smaller size". IWS has already started to develop wines with youth appeal, such as the minimalist Marc Xero, available in smaller sizes, and the spangly Deep Purple. As young people are introduced to drinking in pubs, clubs and bars - where they do most of their drinking - presenting wine in this bar-friendly way is seen as one good strategy. A whole 75cl bottle of wine is often seen as too much by young and, indeed, older drinkers, while young people are put off drinking wine by the glass as it can be easily spilt, or even worse, have something dangerous dropped into it - a real concern among young people. But as a natural product, a thing worth promoting in itself to environmentally-aware youth, wines come at a generally higher price than their synthetic rivals. This can lead to unfavourable price comparisons, as BRL Hardy found in Australia. "We're not in the business of Bacardi Breezer, we can't compete on price," says Nolan. "In the UK the 300ml Wicked Wine would have an RRP of approximately 2.99, well above that of Bacardi Breezer. We don't have the cost advantage, so the consumer would have to be prepared to pay 1 more for a wine product. Consequently, in Australia the small size was not as successful as we hoped." In the UK, the attitude towards single-serve bottles is generally more optimistic. It has been pointed out that young people are very aware of alcohol content and could soon work out that you get more in wine, albeit at a slightly higher price. A greater problem highlighted by recent research concerns the lack of visibility of wine in bars and clubs, which is hindering trial. Many wines also suffer from staid packaging and are supported by advertising geared to 40-year-olds.

Marketing cool Ehrmanns has just launched a new campaign for Jindalee, targeting "early adopters" by using "Aussie-style humour to debunk traditional wine values in an intelligent way," according to Keith Lay. Marketing to the new generation is about creating a balance: while responsive to ephemera, it must not set itself up to become part of the ephemera. Lay says: "The best way, in our view, to attract a younger audience is to provide something that appears to be of their generation. This doesn't mean talking down or trying to be fashionable, or creating a ghetto Youth Product' which they will quickly grow out of and that no other wine drinkers will touch. As the brand develops we expect it to become mainstream, then we have to find something new for the next generation of wine drinkers." Lay continues: "If you are too obvious or try too hard to be trendy you can end up looking like your Dad dancing at a disco. Brands work best when early adopters believe they have discovered them and introduce them to friends and peers - word of mouth is very important." While youth hero Puff Daddy celebrates his success conspicuously with a bottle of Champagne, young people are desperately trying to impress their peers by the choices they make and the brands they're seen with. It would appear that the kudos generated by wine's top end could make more of a statement than PPS, which could be viewed as more packaged than premium. Hazel Murphy, of the Australian Wine Bureau, personally feels that this aspirational approach is a better proposition than "patronising" young people by trying to sell them cheap or gimmicky products: "Everybody markets down to youth, although they're buying designer T-shirts," she says, questioning what is being offered. "We introduce special' products targeted at the young, but are they targeted at what the older generation think they want? Do they know what they want and it is not wine? Or have we just not offered the wines that are very good quality, or with a designer brand? After all, no self-respecting young person would be seen dead in M&S clothes. Young people are dressing to conform to the peer group, and designer is conformist these days." Perhaps a Nike Cabernet Sauvignon could prove to be a winning combination, or a DKNY Chardonnay. Young people know that cool does not come cheap. In "No Logo", Naomi Klein notes that in the last recession, the "beer, soft drinks, fast food, and sneakers" brands favoured by youngsters flourished where others failed. "Their parents might have gone bargain basement, but kids, it turned out, were still willing to pay up to fit in."

Girl power Within the youth demographic itself, young women are increasingly being singled out and marketed to. With better-paid jobs than ever before, and more open-minded than their male counterparts, according to the Bacardi-Martini report, women have never looked so attractive. Cranswick is one company which has launched a female-friendly wine, its Image range. Graham Cranswick-Smith comments: "Women buy over 60% of all wine in the UK [which is] facilitated by the dominance of the wine category by supermarket distribution. According to a research report conducted by Datamonitor, UK female purchasing has grown by 6.5% compound for the last five years, and this is forecast to continue. Even in France, where the wine category is in steep decline, female purchasing has increased by 1% per annum over five years. So females are a key target market." However, Cranswick-Smith stresses that Image is not targeting under 25s: "We have chosen to do this because the 18 to 24 segment represents only 5% of total wine consumption, while 25 to 45 represents 45%. We don't see 750ml bottles as being relevant to the needs of the 18 to 24-year-olds, and feel that would be a very hard sell. Clearly the wine industry has to be seen to be responsible in its approach to wine promotion. Wine is a lifestyle, social and responsible alcoholic beverage, and targeting 18-year-olds may not be consistent with that positioning."

Making it legal While no one is advocating advertising to under 18s, current guidelines make it difficult to target 18-25s. The Advertising Standards Authority code states that you must not show people drinking alcohol who are, or appear to be, under 25, making it impossible to show your target market enjoying your product. And under Sweden's current Presidency of the EU, there has been a suggestion that the voluntary codes in place could be made into legislation. At Bacardi-Martini, Harrison says: "If there's more European legislation, it will obviously affect us greatly." After the WHO Ministerial Conference on Young People and Alcohol, held in Stockholm this year, a declaration was released with targets set for 2006 aiming to minimise the pressure on young people to drink, "especially in relation to alcohol promotions, free distribution, advertising, sponsorship and availability, with particular emphasis on special events". While this is of only minor consequence to the wine industry at present, it could have repercussions for future promotions to new consumers. Whatever the future holds, today's youth might not automatically be tomorrow's wine drinkers. Ignore them at your peril.