This article was originally published in Wine Business Monthly. Reprinted here with permission.
While many wine marketers have been focusing on selling wine to Millennials, more than 20 million Generation Z consumers have reached legal drinking age since 2016, according to US Census figures. Of course wineries should still pay attention to the other lucrative generation segments of Baby Boomers, Gen Xers and Millennials, but the fact that Gen Z is even larger than the Millennial generation and already represents up to $143 billion in buying power accorded to Forbes, is of high importance. Even more critical is that very little is known about Gen Z from a wine consumer behavior perspective. Who is Gen Z? What are their traits and characteristics? What are their wine preferences, and what does Gen Z want from the wine industry?
Who is Gen Z?
According to the American Generations Report, Generation Z was born between the years 1995 and 2009, though other sources vary slightly on these dates. Also referred to as “i-Generation” and “Post Millennials,” Pew Research has recently reported that the most common term used by marketers and as an online search term is “Gen Z”. In addition to being the largest generation in the US, with US Census number showing they number 80 million vs. 72 million Millennials, they are also the largest generation globally, comprising 32% of the world population according to Bloomberg. They are expected to have a huge impact on consumer products around the world, and that includes wine.
Traits and Characteristics of Gen Z
In terms of traits, Gen Z is reported to be more realistic than Millennials, as well as responsible, determined, curious, and open-minded. They are very entrepreneurial, with more than 40% reporting they want to start their own business according to Entreprenuer.com, and other sources stating the number is higher. They are very multi-cultural with 48% from communities of color according to NPR, and many prefer to avoid labels – finding forms or surveys that request race and gender to be outdated and irrelevant. Gen Z is also very interested in health, including how food/beverage products they consume are created.
Regarding technology, they are incredibly linked, having grown up with the Internet always available. They do not watch as much traditional TV as other generations, preferring to watch YouTube. According to Forbes, 80% of Gen Zers will research a product online before purchase. This includes not only looking at the product website, but also reviewing their social media pages; then many will look at product reviews and also seek feedback from friends before making a final purchase.
Another key way they differ from Millennials is that they desire cool products over experiences, and are also more accepting of online ads. According to the Cassandra Report, 28% of Gen Z consumers want marketers to reach them with online ads compared to just 16% of Millennials. They also appreciate “edgy” and creative ads, especially on their preferred platforms of YouTube and Instagram.
Wine Preferences of Gen Z
Based on the growing importance of Gen Z to the wine industry, a series of research projects at the Wine Business Institute at Sonoma State University were conducted over the past 3 years to explore preferences and perceptions of Gen Z in reference to wine. The most recent 2019 survey included responses from 158 Gen Z wine consumers. Though the sample was small, the results still provide some direction for wine marketers to consider.
Gen Z respondents reported that they prefer both white and red wine (see Figure 1), with a slight preference for white wine (70%) over red (68%). More surprisingly was the high percentage that indicated they enjoy both rose (52%) and sparkling wine (49%), which is a larger number than reported by a national sample of American consumers from mixed generations. This could also be due to the fact that both rose and sparkling wine are hot trends in the US market.
Figure 1: Wine Preferences of Gen Z Sample
(What type of wine do you enjoy drinking? Check all that apply)
In terms of wine taste preferences, more than 50% of the Gen Z sample reported that they preferred their wine to taste smooth, fruity, and semi-sweet. Only 39% stated they preferred dry wines, however this is often common with younger wine consumers, who as they age, will often adopt drier styles of wine.
Gen Z Wine Perceptions
When asked their opinion about wine on a 5-point Likert scale, 90% of the respondents agreed that wine is “pleasurable,” 83% “delicious”, and 81% “fun.” Only 19% agreed that wine is “confusing,” and 15% as “snooty.” These perceptions are fairly positive for young wine consumers, and most likely explain the reason that Gen Zers seem to be adopting wine at almost the same rate as Millennials, according to a Wine Opinions report. The same report states that Gen Z seems to rely more on advice from friends and family, and also values wine scores and ratings more than Millennials. This corresponds with the Forbes report on how Gen Z is more apt to research a product and read reviews before they buy.
What Gen Z Wants from the Wine Industry
A major open-ended question on the survey asked Gen Zers: “What should the Wine Industry do to market better to Gen Z?” From this process, 236 written quotes were obtained. These were coded and sorted into themes, with 10 major themes emerging (see Figure 2).
Figure 2: Gen Z Recommendations for the Wine Industry
Online Advertising – the number one piece of advice was more online advertising cited 62 times by the sample. This corresponds with the Cassandra Report stating that Gen Z is more accepting of online ads. Examples of some Gen Z quotes regarding this issue are:
- “Just advertise… I’ve never seen an advertisement for wine.”
- “More commercials on YouTube and ads on the Internet.”
- “(More) Highly visual wine & food pairings photos on Instagram.”
Better Packaging/Design – the second highest scoring suggestion had to do with better packaging and design (40 mentions). This also corresponds with the Cassandra Report, stating that Gen Z prefers cool products and edginess, over experiences. The responses also showed that Gen Z desired clearer labeling of wines so that consumers could tell what was in the bottle and how the wine tastes. Examples of some Gen Z quotes regarding this issue are:
- “Find a way to make the packaging stand out. Almost every wine bottle looks the same to me.”
- “Describe the taste on label more because it isn’t fun to buy a wine and have it taste different than you were expecting.”
Education/Approachability –tied at third place (29 & 28 mentions) was a request for more basic wine education from the industry in an attempt to make wine more approachable. A quote here was: “Make it not so scary and intimidating for people who don’t know as much about wine.” Potential platforms to make this happen could be short and fun YouTube videos or a creative Instagram campaign.
More social media (21 mentions) targeted at Gen Z was another suggestion, followed by more affordable pricing (15) and free samples (13). Given that the average tasting fee in Napa Valley has now reached $44 per person and Sonoma County $22 per person, according to the 2018 WBM/SVB Direct to Consumer Survey, these suggestions are not surprising coming from younger wine consumers just entering the category. “Have options for less expensive wine tastings,” said one respondent, while another recommended, “More sampling in grocery stores and other locations so that people can try it before purchasing.”
Finally, more festivals/events, food pairing, and healthy wine options rounded out the top 10 themes emerging from the data. These are also related to the education and approachability themes. In addition, the healthy wine concept could be linked to a growing trend for “low-no” wines seen in Europe, where more low alcohol or no-alcohol wines are being introduced. The trend to add descriptors to wine labels such as “low carb, gluten-free, paleo friendly, organic, low sulfite, reduced sugar, and natural,” is also related to this health trend that is sweeping the nation, and that is of concern to 25% of the US population, according to Nielsen. This is also supported by a 2019 Wine Market Council report showing that 31% of younger consumers are drinking less alcohol.
A small group of Gen Z wine consumers participated in the creation of a video to describe these ideas in more detail. Please access the video HERE.
Implications for Wineries
In general, this is good news about Gen Z and wine at this early stage. They are adopting wine at nearly the same rate as Millennials, and seem to be mainly positive about it. They are quite different from previous generations, and have a huge amount of buying power and sheer numbers behind them, which suggests the wine industry should consider paying attention to some of their suggestions. More time engaging with Gen Z online on their preferred platforms of YouTube and Instagram makes sense, as well as responding to packaging and design needs to create “cool products.” This linked with approachable educational opportunities, more affordable pricing at winery tasting rooms (perhaps micro-tastings or thimble tastings…..), and possibly the development of more “healthy” wine options with clear ingredient and taste labeling would be a good place to start.
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