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Wine-onomics: How Gen Wine, err…Y is Changing the Industry

Woman drinking white wine on patio

The rise of the wine in a can is an example of how the wine industry is figuring us out.

The relationship between millennials and wine

As of January 2016, all those part of the Gen Wine cohort are now able to legally drink alcohol. According to Wine Spectator, a wino magazine, millennials consumed 159.6 million cases of wine in 2015. Since we’re now the majority demographic in the population, we now drink more wine than the Baby Boomers (36 percent vs 34 percent). Also, 30 percent of millennials are “high frequency” wine consumers, which means 30 percent of Gen Y likes to get up from the wine drinking session with a buzz and we do it on more days of the week. Yeah, that means three or more drinks in one sitting.

As we continue to trudge through life, wine is making it a bit more bearable.

How we’re changing the industry

Not only is it helping us see the bright side in our daily struggle, we validate this behavior by wine’s long history of health benefits. Today, drinking wine (moderately) is tied to the prevention of memory loss, lowered risk of heart disease and stroke, and the promoting of a long and healthy life.

That being said, Gen Y is more health conscious than any other generation. We’re making use of the Internet and mobile apps to track how and what we eat and drink. Despite our picky, foodie nature, we still emphasize convenience—and the wine industry is noticing.

We like our drinks cold and portable, especially during the summer. According to a report by Nielson, “Forty-two percent of Americans consider buying their beverages cold highly important…73 percent say that packaging options that are easy to carry is important to them,… while 53 percent say that environmental friendly packaging is of somewhat importance. And these factors are even more highly important to younger Millennial legal-aged drinkers.”

Enter the “wine in a can.”

Canned wines saw explosive sales going from $6.4 million in 2015 to $14.5 million in 2016. Boxed wine, though not a new concept, is also seeing its sales grow annually by more than 16 percent. Though, it’s still a fraction of a percent of total wine sales, the uptrend in canned wines seems to be long term.

Information bringing the price down

For a long time, people would go to the restaurant, order a bottle of wine, and have no idea if it would be a “good” bottle of wine. The only information available to help make their decision would be the recommendation from the waiter, sommelier, or if they had drank the wine before. Unless you had some extensive training in wine, there was no possible way of selecting a bottle of wine you knew would be the best bang for your buck.

Today, this has all changed. With a couple taps on our smartphone, we can find out virtually any wine’s rating, flavor profile, and importantly, what other untrained wine drinkers think about the wine. Not to mention, the various mobile apps that guide you and keep track of the wines you enjoy the most.

This technology and access to information has given us, the consumer, much more leverage when purchasing wines. Now, it’s harder to make us believe that only the popular brands with the hefty price tag are the only good wines. We can find wines that both fit our budget and appeal to our taste preferences.

This doesn’t mean prices for wines have gone down. Due to the increased demand, Americans are paying slightly more for a bottle of wine than they had in the past. But, they are acknowledging good wines at lower prices—and buying more of it. Instead of spending the $40 for a nice Cabernet Sauvignon, they’re dropping $20 on two bottles of an even tastier Cab. Yeah, we’re getting more drank for the buck.

For a nerdy economic description of what’s happening: information asymmetries have decreased which has increased consumer surplus. It has increased competition as winemakers and distributors innovate new ways to attract a more enlightened consumer, hence wine in a can.

Fill me up!

What’s more, Amazon just partnered up with King Estate Winery in Oregon (their wine is delicious) to develop—from conception to release—a new wine geared especially for us, called Next. This new partnership is just another way the market is adapting to our consumer preferences, making it even more convenient to get wine in our glasses, pronto.
As somewhat of a wino myself, I see this as a sweet trend. Cheers!

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