Number of Millennial Wine Drinkers Catches Boomers
Baby boomers remain largest group of high frequency wine drinkers, says Wine Market Council
Yountville, Calif.—The Wine Market Council’s annual presentation to members last week focused on two trends in the wine market: the number of millennial wine drinkers has caught up with baby boomers as the boomers’ wine consumption has begun to drop.
The conference combined hard data from Nielsen and BW166, a new company digging data from government and industry sources, with surveys of consumers including one on women consumers’ drinking preferences and a limited study of millennial tastes.
The numbers from BW166 showed that total wine shipments of still and sparking wines grew steadily from 216 million cases in 2000 to 380 million cases in 2015.
The compound average growth rate was 4% but the percentage growth by year varied from almost 10% in 2001 to only 0.2% in the recession year of 2008. Last year, it grew 3%. Meanwhile wine consumption was 3 gallons per adult in 1985, dropping to 2.4 in 1995 but rising constantly since then to 3.8 gallons in 2015.
Millennials take over
Millennials aged 21-38 are now the largest demographic segment of the population at 79 million, just passing baby boomers aged 51-69, at 75 million. Meanwhile the Generation X of 39-50 years old born after the birth control pill became available total 49 million, and the oldest consumers total 31 million.
Upcoming is the iGeneration with 61 million, none of whom were legal drinkers until this year.
Baby boomers remain the largest group of high frequency wine drinkers (those who consume wine more than once a week), but Gillespie points out that this older generation is losing market share of high frequency wine drinkers, as is Generation X, while millennials continue to gain share of high frequency wine drinkers.
Gillespie also noted that when you look at occasional wine drinkers you see millennials rapidly gaining share and overtaking baby boomers in occasional wine consumption.
Drinking more and less
The Wine Market Council finds that 37% of U.S. consumers don’t consume alcohol. Of the drinkers, 26% don’t drink wine, 24% drink wine occasionally but 13% drink wine several times a week or more often.
The study found that a net 18% of high frequency drinkers are drinking more than they did two years ago, while a net 8% of occasional drinkers are drinking less. High-end wine consumers are drinking more by a net 54%.
More than half the wine consumers are women, 56%, but that rises to 66% among younger millennials, those aged 21-29.
Drinking patterns change with age, and millennial drinkers are drinking more with than two years ago, while baby boomers are drinking less.
Gillespie also stated some beliefs that he candidly titled, “What We Think We Know:”
• Boomers and millennials today account for nearly the same amount of wine consumption and millennials will soon account for decidedly more consumption.
• Millennials already drive market segments such as red wine blends, sparkling wines, sweeter wines, some imports and anything new.
• As consumers age, they turn more toward wine but ultimately decline in overall personal consumption. Acculturation of boomers to wine may or may not override aging into their 70s and 80s.
• Cultural diversity among millennials and especially the iGeneration is of growing importance.
• Craft beer and spirits are still a wild card. Wine-drinking millennials had a net gain of 36% in beer consumption, for example, and a portion of that was craft beer.
• Social media has become an important channel to reach consumers, particularly younger ones, and 34% use Facebook to talk about wine compared to 19% for YouTube and Twitter. Only 4% use the dedicated service Vivo and 3% Delectable. Instagram and Pinterest are gaining among younger drinkers, however.
Younger drinkers are also much more open to wines from states other than California than older drinkers.
A view from Nielsen
Danny Brager, the senior vice president of beverage alcohol practice of Nielsen, reported that beer continues to lose overall share in the market for adult beverages — but mostly to spirits.
The beer value share of the $216 billion alcohol beverage spending dropped 4.8% from 2005 to 2015. In that time, spirits gained 4.7%, wine only 0.1%.
Nielsen has tracked scanning data from grocery stories and others, but not Costco, which reportedly sells 10% of the nation’s wine — or on premise. The research service expects to add on-premise numbers this year; for now it is using those from another source to provide its data.
Alcohol categories easily beat overall consumer sales off premise in growth, with wine up 2% in volume and 5.5% in value compared to consumer spending up only 0.2% in volume and 2.5% in value. Spirits, however, grew 3.6% in volume and 7.1% in value, Brager reported.
U.S. consumers continue to trade up, as higher-priced wine grew 14% while lower end wine fell 1%.
The dividing point is $8, Brager said, but wines selling for $11 and up were especially strong. However, he warned, “It continues to be very dangerous to raise prices in the ultracompetitive market.”
Among package types, 3-liter boxes, Tetrapaks and cans are growing fastest, if on small bases.
These are the highlights of two of the program’s five presentations. For more information, visit WineMarketCouncil.com.
(Editor's note: The headline and several portions of this article were updated on March 24, 2016, to make them more clear and accurate.)