Tag Archives: Baby Boomers

Napa Valley — Boomer or Bust?

Amber LeBeau in Millennials, Napa Valley, Wine marketing

Published on May 6, 2019

Note: For follow ups to this post check out Sculpting Soapstone in Napa and Hunting Unicorns in the Stags Leap District

I’ve entered the lion’s den.
Photo By Aaron Logan - from http://www.lightmatter.net/gallery/albums.php, CC BY 1.0,

This week I will be in Napa assisting Kenneth Friedenreich, author of Oregon Wine Country Stories, with research on the Stags Leap District for the sequel in his Decoding the Grape series.

Surprisingly, no one has written a dedicated book about the district yet. With 2019 being the 30th anniversary of the AVA’s establishment, a deep dive into the legacy and future of this influential region seems long overdue.

That puts me on a fact-finding mission with Friedenreich and two of his other compatriots as we embark on a schedule of winery visits and interviews. In many ways, I am the odd duck in this entourage being not only the only woman but also a Millennial seeing Napa Valley beside the eyes of three Boomers.

Past and Present

The dichotomy will be rich as Friedenreich, Doc Wilson (a longtime fixture in the Oregon wine scene) and Mark, a pediatrician from Portland, represent the bread and butter of Napa Valley.

Are legends still exciting?

They are the generation that took with gusto an appreciation for fine American wine. For the last 40 plus year, every Napa vintner that has had an inkling of success achieved that by courting the Boomers.

While the recipe has varied somewhat over the years, the entire business model and marketing of Napa has been oriented towards enticing and exciting this large and lucrative demographic.

And it has remained a lucrative demographic even as the Boomers settle into retirement. They (along with the smaller Generation X) are still the ones buying the high priced and highly prized bottles that have paved Napa’s reputation with gold. That’s a reality that no vintner can ignore.

But what of the Future?

On the surface, I’m probably the ideal Millennial consumer that Napa wineries could hope for. I’m highly engaged with wine and willing to travel. I crave experiences which is something that Napa has spent decades perfecting. And, most keenly, I’m in a position of financial stability where I could afford to join wine clubs and regularly buy $100+ bottles if I wished.

I will say that the view from Pritchard Hill is awe inspiring.
It does add a bit more character than the highly manicured vineyard lawns of the valley floor.

I might be a minority among my cohorts, but there are other Millennials like me, and we are the future bread and butter.

And with auspicious timing. For just as some industry folks are beating the strawman that Millennials will come running as soon as they have more money in their pockets, here I am representing the best-case scenario that Napa vintners could hope for.

How are they planning to reach me?

While Friedenreich is going to write his retrospection of the Stags Leap District from his Boomer perspective, he’s very conscious of the contemporary. One of the things that I’ll be contributing to the team is being the canary in the vineyards.

Will the Stags Leap District (and Napa in general) still be relevant in another 30 years?

Yes, Cab is King but for how long?

Even if I can afford $100+ bottles, what is the distinct value that makes getting these wines worth buying instead of a nice whiskey or the myriad of other options I have?

I’m from a generation that is notoriously in love with great stories so how are today’s SLD and Napa wineries communicating their stories? Do they feel authentic? Is it presented in a way that I can connect with and relate to?

The old recipe is not going to work.

I mean, yeah, that kind of looks interesting… I guess.

To be brutally blunt, Napa can be really boring.

The marketing to my generation has been trying to sell us a luxurious lifestyle that is rather generic.

Oh, beautiful people in a beautiful place. That’s nice.

Open up Instagram and you see a countless stream of beautiful people in beautiful places. There’s nothing special about that messaging. Been there, done that. Scroll.

Adding a glass of high priced Cab or Chardonnay doesn’t make the #NapaStyle filter feel any more unique or authentic. At worst, with literally hundreds of wineries delivering the same message, it feels fake and basic.

So what Napa will I see this week?

Will I see producers following the old recipe of success that has served them so well? Perhaps. With Boomers and Gen Xers still buying, it would be foolish to abandon it altogether.

But what I am hoping to see is a glimpse of planning for the future. I’d like to see a Stags Leap District and a Napa Valley that recognizes that the old #NapaStyle filter is a recipe for Millennials to keep scrolling past.

What I want is Napa unfiltered.

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The Kids Will Probably Be Alright — Looking at Generation Z Trends

Amber LeBeau in General, Millennials, Wine marketing

Published on October 19, 2018

Yesterday, Wine Industry Insight posted an interesting chart taken from the Wall Street Journal about risk behavior among Generation Z high schoolers.

charts showing generation z risk behaviors

Screenshot from Wine Industry Insight 10/18/2018 sourced from the Wall Street Journal article “Gen Z Is Coming to Your Office. Get Ready to Adapt.” 9/6/2018

On the surface, this looks great. Members of Generation Z, born between 1995 and 2010, report that many have not tried alcohol, sex or gotten a driver’s license while in high school. Of course, this is all “self-reported”–by teenagers, no less. So how much stock do we want to put in this? I know back in high school I wasn’t keen to divulge to strange adults everything I was up to.

The Wall Street Journal is extrapolating that Generation Z is showing itself to be highly risk-averse. Wine Industry Insight takes that a step further. They speculates that because of this, Gen Z might be “poor prospects” for the beverage industry.

What?

Since the majority of Generation Z are not yet legal drinking age, there isn’t much data on their alcohol consumption. There certainly are the breathless headlines touting that these 8 to 23 years olds are embracing teetotalism and expect to be more sober than Millennials who are now in their late 20s and 30s complete with college debt, jobs, mortgages and families.

Many cities are seeing less drivers overall and more people choosing alternative transportation like bicycling. Why would we not assume that Generation Z is a part of this change?

I’m glad the kids aren’t spiking their kool-aid with Stoli and Ketel One while having risky sex.

But I do think it is way too early to be sounding the alarm about the prospects of Generation Z. I’m mean, who knows if the driver’s license thing is even related to “risk aversion”. Could this be more about environmental conscience and using public transportation?

These kids are still figuring out who they are as people and a generation. The picture of their prospects is far from clear.

Didn’t we learn this with my generation?

In one of my older wine business books, Wine Marketing: A Practical Guide by C. Michael Hall and Richard Mitchell (2007), the thinking back then was that Millennials would follow a similar path as Baby Boomers with their wine consumption and buying habits.

While Millennials have followed Boomers in liking to drink a lot of wine, we definitely “reinvented” the game with our love of unique varieties and styles as well as shunning of many of the old standbys of status and critic scores. We also tend to be more diverse than Boomers in our alcoholic tastes beyond just wine as I noted in my recent post about the wine industry’s upcoming reckoning with Millennials.

Does Risk Aversion Predict Future Alcohol Trends?

It seems like this is the heart of Wine Industry Insight‘s view about the poor prospects of Generation Z. Now I fully acknowledge that Lewis Perdue has way more experience and insight in this segment than I will ever hope to achieve. But this seems like such an odd correlation—especially since Millennials, ourselves, are notoriously “risk averse” especially with our finances.

Diving back into my wine business books, I tried to find more details about the connection between risk aversion and alcohol consumption. The only written commentary seemed to focus on how willing consumers are to stray from tried and true brands and varieties versus branching out to try new things.

Searching online there are studies comparing alcohol demand and risk preference with a lot of these noting that economic factors and income play a role as well. Whatever connection there is between risk & alcohol–it’s clear that it’s extremely multi-faceted.

Maybe Generation Z Wants More Than Getting Drunk and Laid?

Business Insider’s noted in a February 2018 article that 16 to 22 year olds surveyed “don’t think drinking is that cool anymore.” I think that is very telling and actually really good for the wine industry–at least the quality over quantity minded segment.

Would it really be a bad thing if Generation Z skipped the whole “White Zin/Pink Moscato” phase?

There’s nothing cool or interesting about drinking just to get drunk. Alcohol, like food, is meant to compliment life. Not only is it a social lubricant but it is a bridge to history and culture. That’s hard to appreciate hammered. It may have taken Millennials, Generation X and Boomers longer to realize it but globally we are seeing trends where consumers across the board are “drinking less, but better.”

It’s clear that Generation Z, like Millennials, are more value and economic conscience. We don’t have a lot of money, so we want to get more out of it. Why waste hard earn cash just to get wasted?

Yet, that doesn’t mean that alcohol has to be avoided. Being risk-averse to wasting money on silly expenditures doesn’t mean the door is shut on wine, beer and liquor being part of a normal, vibrant lifestyle.

It just means that you have to get something more from the experience. More than perhaps what big brand, mass-produced corporations have been used to delivering.

Meaningful Consumption

Perhaps we are seeing the beginning of a generation where meaningful consumption takes over from mindless consumption. You can make the same connection when it comes to sex and relationships. Many of us have to learn it the hard way that no amount of physical contact can replace the depth of a meaningful touch from someone you care about.

Top sheets really are pretty useless.

I’m not going to say that I can predict how Generation Z is going to turn out and what impact they will have on the beverage industry. But I honestly don’t see anything in these very early data points suggest that the industry, as a whole, needs to worry. Maybe the big mega-corps but they already need to shake things up or the Millennial world-killers will do them in like we’ve apparently done to mayonnaise, napkins and top sheets on beds.

If anything, I feel optimistic hoping that the kids today are starting out a little wiser and world weary than my generation and others before. Life is too short to waste time on silly things. Everything we bring in to our lives, and everything we consume, should add richness and value to it.

If the kids are catching on to that a little sooner than most, good for them.

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The Wine Industry’s Reckoning With Millennials

Amber LeBeau in Millennials, Wine marketing

Published on October 8, 2018

Wine Industry Insight has a great chart showing the growth of spirits among Millennial drinkers. Beer is still doing pretty well.

From Wine Industry Insights, October 5th 2018

But look at that little straggler there towards the end. The one holding the tiny 18% preference of Millennial drinkers–after declining 4% from 2017.

We see you wine. We see you.

Though apparently we aren’t drinking you–as the “share of throat” (basically share of the beverage market) for wine is barely a fifth of what Millennials consume.

This is something that the wine industry is going to have to deal with.

Right now Baby Boomers and Generation X still spend a lot on wine but eventually the wine industry’s success is going to depend on Millennials choosing wine over other drinks.

Wineries are going to have figure out how not to bore Millennials to tears with their offerings and marketing.

This is why I harp on the foolishness of producers and wine regions focusing on “the old guard” varieties like Cabernet Sauvignon, Chardonnay and Sauvignon blanc.

These things have been done before, ad infinitum and ad nauseam.

I get it. Those grapes certainly rule the market right now. But it’s incredibly easy to get bored of them and have your wine get lost in the crowd. Once you’ve had one Cab, it often feels like you’ve had them all.

Millennials seek variety and excitement.

And we haven’t even gotten to the Mezcal boom yet.

The diversity of the craft beer movement with all its different styles struck a great cord with millennials that likely won’t wane. Spirits are offering a world of new cocktails to explore. Even categories like whiskey up the excitement factor with different mash bills, aging regiments and cask finishing.

To catch up, the wine world is resorting to gimmicks like blue wine, bourbon & tequila barrel aging, coffee wine, silly augmented reality labels, etc.

It’s basically putting lipstick on a pig. Yeah, that will work a time or two but even the best liquid matte fades.

Yet we already have the answer to the “boredom factor” right in front of us and scattered across the globe. How about highlighting the beautiful wealth of interesting grape varieties, terroir and unique people with stories to tell?

Vermentino! Picpoul! Cabernet Franc! Chenin blanc! Valdiguié! Roussanne! Mourvèdre! Sangiovese! Pinot Gouges! Siegerrebe! Malbec! Cinsault! Counoise! Grenache!

I could go on. The point is that we don’t have to fall back on the same ole, same ole. Instead of looking back at the old guards and standbys of yesterday, we should be moving forward and exploring the promising potential of tomorrow’s wines.

Otherwise, the wine industry is going to keep losing shares of a lot throats.

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Cab is King but for how long?

Amber LeBeau in General, Millennials, Wine grapes, Wine marketing

Published on January 31, 2018

At a 2018 Unified Wine & Grape Symposium panel on Cabernet Sauvignon, one of the directors of winemaking for E. & J. Gallo Winery, Chris Munsell, shared a bit of advice that he learned from a marketing executive.

…for any wine to be successful, it need[s] to be of good quality, known by consumers and profitable for everyone involved. — Wines & Vines, Jan 29th, 2018.

Following that line of thought, it’s easy to see how Cabernet Sauvignon ticks off each box.

Cab’s ability to make high quality and age-worthy wines is legendary. It is relatively easy to grow in the vineyard and is very adaptable to a wide range of winemaking techniques. This adaptability increases the profitability of the grape. Winemakers can make virtually any style of Cab to fit consumers’ tastes at prices that still meet desired profit margins.

At the Unified panel mentioned above, Evan Schiff, the winemaker for Francis Ford Coppola Presents’ Diamond line, describes how Coppola can make consistent under $13 Cabernet Sauvignon sourced from vineyards throughout California. They achieve this with enzymes that facilitate quick fermentation, oak barrel alternatives like chips and staves (as opposed to $400-1000 new barrels) and micro-oxygenation.

Meanwhile, in Napa County where a ton of Cabernet Sauvignon grapes can cost anywhere from $6,829 to $59,375, producers seemingly have no problem selling high-end Napa Valley Cabernets for several hundreds of dollars.

The reason why Cabernet Sauvignon is a relatively easy sell is because of the second point in Munsell’s advice. For consumers, it is a known quantity.

One of the oldest plantings of Cabernet Sauvignon in Washington State at Red Willow Vineyard in the Yakima Valley.

In 2017, while off-premise sales of wine only grew by 3%, Cabernet Sauvignon out-paced that trend with 5% growth. This growth was across a variety of price points ranging from a 21% increase in sales of $4.50 (per 750ml) boxed wine to a 15% increase in sales of Cabernet Sauvignon over $25.

Cab is clearly King, but even the reigns of Sobhuza II and Louis XIV eventually came to an end. Looking to the horizon, it is not hard to find trends that, like Macbeth’s witches, whisper of toil and trouble in store for the monarch.

Fair is Foul and Foul is Fair: Who seeks something unique and rare?

If you want to bet on the dethronement of Cab, you only need to look towards the first, second and third murderers of all things–Millennials. With over 75 million members (surpassing now the Baby Boomers), industries ignore this influential demographic at their peril.

While it’s a mistake to overly generalize with such a large cohort, one consistent theme that has emerged is that Millennials tend to value experiences over material goods. In the wine industry, we see this play out in Millennial wine drinkers’ “curiosity” about unique grape varieties and unheralded regions. Instead of seeking out the high scoring Cult Cabs and status symbols that beckoned previous generations, Millennials often thirst for something different, something exciting.

A report by Master of Wine Matt Deller notes that 65% of Millennial drinkers in his Wine Access study actively sought out “unusual wines and vintages.” And while the buying power for Millennials currently lags behind Generation X and Baby Boomers, Millennials have a desire to spend more.

With this context in mind, some interesting trends stand out when you look at the acreage reports of vineyard plantings in California.

Of course, Cabernet Sauvignon still commands a significant chunk of acreage with 90,782 acres of vines in 2016. That is around a 26% increase from 2008 and is a testament to the healthy market that exists for Cabernet. But looking a little deeper we see savvy vineyard owners and wineries anticipating the adventurous appetites of Millennial drinkers.

How does Teroldego pair with newt eyes and frog toes?
From the California Department of Food and Agriculture and USDA 2016 acreage report

During that same 2008-2016 period, there is impressive growth in Italian grape varieties in California like Aglianico (≈ 63% growth), Montepulciano (≈ 77%) and Primitivo (≈ 233%). Even the obscure northeastern Italian grape of Teroldego from Trentino-Alto Adige/Südtirol is getting in on the action with an astounding growth of nearly 731%.

The vast majority of these new Teroldego plantings occurred in 2014 & 2016 with huge producers like Bogle Vineyards, Constellation Brands, E & J Gallo Winery and Trinchero Family Estates behind most of the plantings in the Central Valley of California. It looks like the grape is being groomed to be the “new Petite Sirah”. It likely will be a key component in mass-produced red blends or a Pinot noir-enhancer. However, varietal examples from producers in Clarksburg, Lodi, San Luis Obispo and Santa Barbara could offer consumers attractive and characterful wines.

Beyond the second wave of Cal-Ital varieties, Cabernet is seeing growing competition from its Bordeaux stable-mates. We see increase plantings in Malbec (≈ 130% growth) and Petit Verdot (≈ 62%) as well as the Uruguayan favorite Tannat (≈ 132%).

Among white wines, we see a similar pattern.

Though Chardonnay still accounts for over 94,000 acres in California–an increase of around 13% from 2008.

If she was around today, it’s likely that Lady Macbeth would be drinking Moscato… or Rombauer Chard
From the California Department of Food and Agriculture and USDA 2016 acreage report

Chardonnay still rules by Cabernet Sauvignon’s side. However, we have upstarts like the Spanish variety Albariño (≈ 107% growth) and Portuguese grape Verdelho (≈ 75%) seeing a significant increase in plantings.

As with the reds, the interest in Italian white varieties is growing. Vermentino is seeing around a 287% growth in plantings. Plus, the combined stable of Muscat grapes (led by Moscato bianco) more than doubled their acreage in 8 years.

There is no question that Cabernet Sauvignon bears a charmed life. It makes delicious wines that delight both wine drinkers’ palates and wineries’ bottom lines. But the fickle and ever-changing tastes of the wine world means that even the greatest of kings have reigns that are just brief candles.

While Cab’s light is not likely to go out anytime soon, perhaps the king should watch out for his shadows.