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Published:  23 July, 2008

The July IWSC Showcase Tasting was the occasion for a debate on the future of the industry. The main question was: how can the wine industry attract the younger generation? Barbara Scalera reports

The International Wine and Spirit Competition (IWSC) has been committed to the promotion of quality wine and spirits for the past 33 years. Traditionally the Competition celebrates the industry's past through its lifetime achievement awards, and its present via its annual medal and trophy awards. On 2 July, at its annual Showcase Tasting in London, the Competition once again recognised the current quality available in the market by announcing the 2002 medal winners and making over 200 gold medal-winning wines and spirits available for tasting. The Competition also turned its attention to the future of the industry in a separate seminar called Reaching the Young Adult Market', which attracted 90 trade decision-makers. The Competition was able to draw from its esteemed list of presidents and vice presidents to create a panel of international expert speakers. Chairing the event was Rmy Cointreau's CEO, 2002 IWSC president Dominique Hriard Dubreuil. Joining her were IWSC vice president Chris Hancock from Australia, head of global marketing for Southcorp; Darryl Roberts, editor and publisher of Wine X magazine in the US; Lulie Halstead, partner of Wine Intelligence; Michael Cox, MD of Negociants UK; Matthew Dickinson, of Thierry's Wine Services; and Richard Paterson, master blender of Kyndal Spirits in Scotland.

A new generation of wine drinkers? While the seminar room was filled with baby-boomers, the number of young adults - or Generation Xs' and Generation Ys' - present could be counted on the fingers of one hand. The seminar began, therefore, with an accurate profile of the subject at hand. Lulie Halstead provided the insight into the minds and drinking habits of young adults using recent reports from Wine Intelligence in conjunction with Young's Pub Group and Datamonitor. According to these reports, Generation Ys (18- to 24-year-olds) are the trendsetters for the entire population. A demographically expanding group in Europe, Gen Ys are a caf culture; they have the highest TV viewing rates and are impacted by the drug culture and a strong global influence. Their soft-drink consumption is high, while their alcohol consumption is low, but growing rapidly. Key drink trends for this group are energy drinks, carbonates and beer. Only 4.7% of the 18-24-year-olds pooled by Datamonitor drank wine, while 21.1% drank spirits. Their older brothers and sisters are Generation Xs (25- to 34-year-olds), who are most influenced by their own changing social situations. Gen Xs (who are demographically shrinking) are a bar culture; they have a high disposable income, high use of the Internet and a developing interest in restaurants. Their alcohol consumption is higher than their younger siblings and growing at an equally rapid rate. Key drink trends for Gen Xs are New Age beverages, wines and spirits, and coffee. Their consumption of wine is over three times that of Gen Ys, but still only 13.7% according to Datamonitor, as compared with 21.5% spirits and 21.5% beer. Generations Y and X make up the Young Adult Market, which -as a whole - values individuality, has low brand loyalty, and is most influenced by word of mouth and below-the-line communication. According to Wine Intelligence, when young adults begin drinking, wine doesn't factor into the equation at all. Novice drinkers begin with beer more than once a week, spirits once a week, and pre-mixed drinks every few weeks. Ninety-one per cent of their initiation takes place in pubs, clubs and bars. They turn to wine on the rare occasions when they are drinking at home or at a work function. This amounted to a mere 30% of Wine Intelligence's study group drinking wine about once a week.

A generation of hypocrites? While health and global issues were cited by Datamonitor as two of the major influences over young adults, Wine Intelligence found neither to be deciding factors in their purchasing practices. Recycled packaging, fair trade policies and organic ingredients are all noble causes, but not what prompts these young adults to pull bottles off shelves or make on-premise selections. Price and familiarity with the product are the two most influential factors, with recognition a close second. Only 24% are choosing wine based on grape variety and only 3%-8% are listening to retailer or menu descriptions. Seventy-eight per cent like to try wine from different countries and over a third find choosing wines difficult and confusing. So what is the industry to make of the next generation of drinkers? Darryl Roberts, of Wine X magazine, flew in from the US just to tell the Competition's audience that they had better start to make a lot of it - and fast! People set their consumption habits for life in their mid- to late 20s,' warned Roberts, and if someone is not drinking wine by age 27 or 28, then there is very little chance that they will be doing so at age 40, 50, or 60!'

A generation of spendthrifts? Having delivered his wake-up call, Roberts then set out to dispel what he called the three largest myths about wine and the young adult market: 1) that young adults have no money; 2) that young adults have no palate; and 3) that young adults will naturally grow into drinking wine. According to Roberts, Generation Xs spend 10% more than baby-boomers on every type of alcohol, except wine. In addition to spending more, 21-34-year-olds also drink 51% more alcohol than baby-boomers do. And as for Generation Y, 18-22-year-olds spent $5 billion on alcohol last year. Roberts described a segment of society that consists of people who are not moving out of their parents' homes, not paying rent, not getting married, and not having children. Consequently, they have a huge disposable income that every other sector of the drinks market is taking advantage of.

A generation of coffee connoisseurs A lack of palate sophistication and the resulting inability to appreciate wine is another myth perpetrated by the industry, according to Roberts. He pointed to the globalisation of cuisine and the adventuresome spirit of the younger generation to try all types of richly flavoured foods. Go into the coffee houses,' urged Roberts, they are filled with young people who are discerning between different roasts and blends from different countries. The coffee houses are educating young palates right in our (the wine trade's) direction.' He went on to assert that, compared with the baby-boomers' taste experience when they were in their 20s, this generation's palates are so incredibly sophisticated it's scary'.

The neglected French youth Roberts reached the height of his flag-waving in convincing the audience that this generation of young adults will not simply grow into wine drinking. Wine consumption by young adults in France, for example, has dropped by over 50%. The reason for this, said Roberts, is that they are faced with a million more drink choices than their predecessors, and the French wine industry is completely ignoring them. We, as an industry, need to be in young adults' faces from the age of 18 to 34.' Roberts also appealed to the weakness of the wine industry - their purse strings - warning that marketers and advertisers will have to spend 10 to 12 times more to convert the habits of Generations X and Y later on than to set their habits now.

The we' generation And how does one effectively get in the faces of young adults'? Naturally with publications dedicated to young adults in the US, Australia and possibly the UK. Young adults must be promoted to on their own terms, explained Roberts. It's all about lifestyle. Effective ads show young adults having fun in a comfortable environment with a small label shot in the background. Echoing Wine Intelligence and Datamonitor findings, Roberts also emphasised the importance of word of mouth and identifying with products on a peer-to-peer level. The we' generation shares everything so, if you reach one, you can reach twelve. Potentially good news for an industry that, according to Roberts, is way behind in reaching anyone within this essential sector of the drinks market.

The forever young' market Chris Hancock, responsible for global marketing at Southcorp, followed Roberts's call to arms by unveiling some of Southcorp's new weapons for winning over the young adult market. Hancock did not define this market by age as much as by attitude, or what he called psychographics, not demographics'. Young adults and the people who think like they do are the new target audience for brands such as Rosemount and Lindemans. They are people who work hard and play hard, seize the day, have a good bank balance and get a good kick out of life'. By understanding what makes this group tick and applying that knowledge to new ad campaigns, Southcorp hopes to crack the forever young' market. Hancock acknowledged that the answer goes beyond clever ad campaigns. He called for honesty and accuracy as opposed to obscurity in wine descriptions and flexibility in the industry to make changes such as bottle sizes more relevant to the young adult lifestyle.

Don't believe the bulls**t Michael Cox, MD of Negociants, picked up Roberts' gauntlet and threw it back at him. Cox's battle is not with the beer- and spirit-swilling young adults, but with anyone who would stir up the wine industry into thinking that they should alter their products or marketing campaigns specifically to target this group. The idea that the industry is in danger of losing the next generation of wine drinkers is bulls**t', said Cox. Though brought up in a wine-drinking family, Cox did not drink wine as a young adult, preferring lager & lime and Watney's Red Barrel. But for the same reason that he would no longer go to Glastonbury without a ticket, he argued, he would no longer choose lager & lime over a glass of quality wine. He grew up, his tastes grew up, and so will both Gen Xs' and Ys', moving away from alcopops and into the waiting arms of the wine industry. His fear is that, in an attempt to entice young adults into wine, companies will dumb down their products and essentially turn away the audience they were looking to recruit. Patronise at your peril',' warned Cox. Ironically, Yalumba, one of Negociants' main imports, recently launched a campaign in Australia featuring the Naked Chef Jamie Oliver. The aim of this campaign was to target a younger audience for Yalumba. According to Cox, however, the campaign appealed to all age groups, linking fine wine with good food, and not specifically targeting 18-34-year-olds. He acknowledged the industry's need to keep the category interesting to entice this group when they come of age. We want young people to be intrigued into wine when they are ready, not tricked into it when they are not.'

The ends justify the means Enter Matthew Dickinson, account manager of Thierry's - Cox's worst nightmare and the young adult's best friend? One of the largest importers in the UK (responsible for 19% of all French imports into the country), Thierry's is in the process of creating products and campaigns aimed directly at the young adult market. Reasonably priced wines from both the Old and New World, such as French Kiss', Grab Me' or the Party Range, with names like Cindy' and depicting an animated drawing similar to a Barbie doll on the label, are designed to entice the younger/first-time wine drinker. As willing as it is to experiment with the outside of the bottle, Thierry's claims to take a more traditional approach with the inside. The wine quality must be there on the inside,' emphasised Dickinson. Repeat purchase requires good quality.' As for dumbing down the outside of the package, Dickinson told Cox and the rest of the industry purists, So what? So what if wines are given silly names and gimmicky or vulgar packaging? If it appeals to the younger consumer and gets them to buy wine, then we are some way to ensuring that we have tomorrow's consumer.'

Education, education, education As the wine industry continues to debate the issue, one wonders if the answer is held by their other half - the spirits companies. Richard Paterson of Kyndal Spirits has no fear of a generational hiccup on his side of the drinks industry. According to Paterson, the rise of the supermarket chains and their affordable own-label brands helped to introduce young people to spirits such as Scotch whisky. The emergence of sweeter, rounder, more mellow styles of whisky also entices younger drinker as does a more dynamic and exciting range of products. Young marketing gurus developing promotions (such as Allied Domecq's Go Play' campaign) to bring young adults out to the distilleries also make a big difference. But the real key to recruiting the young adult market, according to Paterson, is education, education, education. Tutored tastings, bar staff training, whisky festivals, university tasting seminars - these are all ways that the spirits industry is constantly reaching out to Gen Xs and Ys, creating what Paterson called the new generation of responsible whisky lovers.'

In conclusion If a conclusion can be drawn from the seminar, at least for those who believe in the potential of the 18-34-year-old market, it is that below-the-line education is the key and it must begin with the on-trade. Hriard Dubreuil reminded the UK market not to overlook the potential resource of their young waiting staff, who can promote wine on a peer-to-peer level. Roberts agreed with her but emphasised the need to train those wait staff to communicate about wine in their own language. When Simon Legge, director of marketing for Brown-Forman, asked the panel about the value of above- vs below-the-line advertising, Lulie Halstead confirmed that word of mouth, personal recommendation, event sponsorship and sales promotions with trial and tasting were most important to this group. Roberts, who depends on above-the-line advertising to young adults in his magazines, concurred that Wine X reinforces its print ads with numerous tutored tastings, event sponsorships, and staff trainings. Paid ads are at the lower level of the communication ranking process in reaching this market, but still an important adjunct,' advised Chris Hancock. Delivering the final battle cry of the seminar, Hancock implored the audience, Where we are seriously underdone as an industry, however, is in practical, feet-on-the-ground wine education and we need to step it up!'