Will Consumers Pay More for Sustainably Certified Wine?

Completing the process of becoming certified for producing wine using sustainable practices can take years for vineyard owners. Achieving organic or biodynamic certification can take even longer.  Plus the cost of becoming certified and going through the inspection process can cost thousands of dollars.  Is this worth it for grape farmers?  Do consumers really care, and are they willing to pay more for an eco-certified wine?

Wine Consumers.   Photo Credit: Fotolia_123622764

A 2017 survey conducted at Sonoma State University Wine Business Institute with 301 wine consumers illustrates a willingness to pay several dollars more per bottle for “green” certified wines. The online survey was completed by a convenience sample of 26% men and 74% women living in the USA. Age by generation included 65% Millennial, 9% Gen X, and 26% Baby Boomers.

Definitions for Eco-Certified Wines

Consumers were asked: “Of the three major methods of environmental certification for wine in the US, which appeals to you most?” The results show that 44% selected sustainable wine, followed by 36% biodynamic and 20% organic grape wine.

Definition Which Appeals to You Most?
Certified Sustainable Wine – made in a way that is environmentally friendly, equitable to employees and economically viable to winegrowers. No agri-chemicals are applied, unless necessary to save the crop.  

44%

Made with Certified Organic Grapes – means the grapes were farmed with NO agri-chemicals. To achieve this certification, the vineyard must prove they have only used organic products for 3 years or more.  

20%

Certified Biodynamic Wine – goes beyond Organic by not only requiring ORGANIC grapes, but also uses farming practices designed to return the soil to a natural state.  

36%

Will You Pay More for Eco-Certified Wine?

Respondents were then asked if they would pay more for a bottle of eco-certified wine. Figure 1 illustrates that 91% of the sample would pay $1 more for a bottle of wine made from sustainably certified grapes, 88% would pay $1 more for a bottle made from certified organic grapes, and 85% would pay $1 more per bottle of wine made from certified biodynamic grapes.  Likewise, a range of 78% – 81% of consumers said they would be willing to pay $2 more per bottle.  However, as the price increased from $3 more to $4 more to $5 more per bottle, there were a decreasing number of consumers willing to pay more. Interestingly, however, as the price increased a slightly larger percentage of consumers were willing to pay more for certified biodynamic wines.

Figure 1: Are You Willing to Pay More Money for a Bottle of Eco-Certified Wine?

Implications for Winegrape Growers

The results of this survey indicate that consumers are interested and willing to pay a slight premium for wines that are certified sustainable, organic, and biodynamic. The concept of sustainability seems to have slightly more appeal than the other two certifications, even when clear definitions are provided. It is possible this may be due to the fact that the definition of sustainability includes equitable work practices for employees, as well as positive environmental actions. Organic and biodynamic definitions primarily focus on environmental practices.

Previous surveys focusing on this topic show that many consumers are confused by the multiple types of certifications, and that clear messaging must be included in order for the consumer to understand the benefits of the certification. Other surveys have also shown that many wine consumers already consider wine to be a natural product and are surprised to learn that there are certifications to insure organic and/or environmental practices. Due to this type of confusion, some wineries do not advertise the fact that they are certified or are using sustainable, organic and/or biodynamic practices. However, the results of this survey indicate that the timing may be more appropriate now to consider clearer communication on these positive farming practices.

It’s the Right Thing to Do

It should be noted, however, that there are many vineyard and winery owners around the world who elect to implement sustainable, organic, or biodynamic practices because they believe it is the right thing to do. They mention the long-term benefits for the planet, their families, and their local communities. For more information on this topic, see study published in Wine Spectator entitled: Is Being Sustainable Worth It for Wineries.

 

Profile of the US Wine Consumer in 2014

(Originally published in Wine Business Monthly as “Snapshot of the American Wine Consumer” in 2014 by Liz Thach, Janeen Olsen & Tom Atkin)

Wine with FlagWho is the American wine consumer today? What types of wine do they prefer and where do they purchase their wine? How much do they spend on a bottle of wine in a restaurant? These and other questions are addressed in a new annual survey that researchers at Sonoma State University Wine Business Institute have recently designed.

About the Sample

The online survey was launched in early 2014 with a total of 1028 wine consumers responding to the questions. The data was gathered by a third party market research firm supplying panel data of household wine consumers in America. All fifty states were represented, with more consumers responding from states with higher wine consumption rates. For example, 12 % of the sample were from California, 9% from Florida, 7% from New York and Illinois, and 6% from Texas.

Demographics showed 49% male and 51% female respondents; 59% had a college degree; and 61% made over $50,000 per year. In terms of age, 36% were Millennials (21 – 36), 22% Gen Xers (37 – 48), 34% were Baby Boomers (49 – 67) and 8% were Traditionalists (68 +). The ethnic breakdown of the sample was 72% Caucasian, 12% African-American, 8% Hispanic, 5% Asian with the remaining 3% Mixed or other. These demographics are very similar to other research portraying the American wine consumer.

Wine Consumption Frequency and Preferred Varietals

When asked how often they consume wine, 20% of the sample reported drinking wine on a daily basis, 48% several times a week, 18% once a week and the remainder were occasional drinkers at 14%. Respondents were given a list of the 12 most popular varietals in the US, according to Nielsen scan data and asked to select their favorites. Results were slightly different than current scan data with 55% selecting Merlot as a top favorite, followed by Chardonnay at 52%, Cabernet Sauvignon at 45% and Pinot Grigio at 44%.

Average Price Spent on Wine

When buying a bottle of wine to drink at home, the most common price point was $10 – $15 per bottle with 35% of the sample, whereas 22% spend $8 – 10, 16% spend $15 – 20, and the remainder spent either less or more. When dining at a restaurant, the most common price was $20 – 30 per bottle at 27% of the sample, 17% spending $30 – $40, 12% spending over $40, and the remainder spending less or more. Interestingly, 21% of the sample reported only buying wine by the glass at restaurants. The most common price point for this was $5 – 10 per glass at 61% of the sample.

Preferred Location to Purchase Wine

Since this was a national sample, and wine is not sold in grocery stores in every state, it was not surprising to see that the most common location to purchase wine was in a Wine or Liquor Store. Participants were asked to rate how often they purchase wine at these locations with possible responses of Never (0), Rarely (1), Sometimes (2), Often (3), and Almost Always (4). In this study, 25% of the respondents said they purchase wine in a Wine/Liquor store almost always, which caused the overall rating to be 3. 6, whereas only 17% said they almost always purchase wine in a Grocery Store, resulting in an overall rating in that category of 3.21. Online wine sales is still quite small with only 4% of the sample reporting they almost always purchase wine Online.

Decision-Making Cues to Buy Wine

In addition to using Price and Varietal as decision-making cues when buying wine, 74% of the sample reported that wine Brand was very important, followed by Country at 52%, then Region at 44%. The way the Label looked was important to 38% of the respondents. Least important was Appellation at 12%.

Organic, Sustainable and Biodynamic Wines

Though the Organic Trade Association reports that 41% of American consumers are now buying organic food, this number is not as high with organic beverages. That could explain why only 16% of this sample said they look for organic wine as part of their decision-making process. Listing “sustainable” on the label only was important to 10% and “biodynamic” to 6%. Other research indicates that many Americans assume that most wine is organic anyway and therefore don’t look for these cues, and some consumers confuse the term “biodynamic” with “genetically modified,” which can be a deterrent to purchase.

Social Media and Wine Apps

Social media is being adopted in large numbers by American wine consumers with 80% of the sample reporting they use Facebook, 41% Youtube, 39% Twitter, 28% Linked-In, 25% Google+, 24% Pinterest, and 20% Instagram. Only 9% of the sample said they don’t use social media. Of those that do, 13% reported they frequently use social media to get information about wine, look up wine pricing, and ask friends for wine recommendations. An amazing 76% of the sample own a smart phone with around 24% using wine apps.

Table 1: Use of Smart Phone & Wine Apps

Have a smart phone 76%
Use smart phone to check prices on wine 36%
Have wine apps on smart phone 24%
Use apps to get coupons on wine 24%
Use wine apps to decide which wine to buy 23%

Wine Tourism

Wine Tourism Word Cloud

Wine Tourism Word Cloud

Reports about wine tourism growing appear to be true, according to this sample. When asked if they had visited wineries in other regions to taste wine, 67% of the sample responded positively. They were then asked to type in the names of some of the regions they had visited for wine tourism, which resulted in the “word cloud” picture below. This diagram illustrates the 27 most important words listed, with the larger and darker the font reflecting a higher number of responses. The statistical analysis confirms that in the US, Napa was typed into the data box slightly more times than California, followed by Sonoma (misspelled a few times), New York and Oregon. Outside the US, France was documented slightly more than Italy.

Ongoing Research on Wine Consumers – Additional Questions?

This article reports on the highlights of the American Wine Consumer Survey for 2014. Additional research questions were included on other wine business topics and will be analyzed and published in the future. Researchers at the Sonoma State University Wine Business Institute have received grant money to conduct this American Wine Consumer study on an annual basis. If you have suggestions on additional questions or topics to include, please do not hesitate to contact the authors.