Tag Archives: Silicon Valley Bank

The Wine Industry’s Millennial Strawman

I have some bad news for wine industry folks like Bob Torkelson, president and CEO of Trinchero Family Estates. You guys are chasing a strawman trying to solve your “Millennial Problem.”
Photo By Silverije - Own work, CC BY-SA 4.0

At a recent wine industry conference at Sonoma State University, Torkelson and other industry executives shared their thoughts on why Millennials weren’t buying premium wine at the rate of previous generations.

Of course, the substantial college debt and poor job prospects of Millennials made its appearance as the scapegoat du jour with Bill Swindell of The Press Democrat quoting Torkelson:

Maybe they don’t have any money. The prospect of them getting a better job is going to be difficult for a while. We face a lot of obstacles in this area. It will be interesting to see how we approach it. — Bob Torkelson, “Wine executives debate the promise and peril of millennial wine consumers” 04/18/2019

The idea of college debt keeping Millennials from embracing wine is an oft-told narrative. After the Silicon Valley Bank report came out in January, sounding the warning call about waning Millennial interest in wine, many stories ran with the idea that the more than a trillion dollars of Millennial student debt was the culprit.

College debt and poor job prospects are serious issues but let me splash some cold truth on this burning strawman.

Even if you forgave all our college debts tomorrow, Millennials are not going to be running towards wine.

Photo By Sideways11 - Own work, Public Domain,

Seriously, it’s not Rex Pickett’s fault that no one is buying Merlot. It’s because the wines usually make us want to fall asleep.

Millennials are already spending money. That’s not the issue. The issue is that most of us are not spending money on wine.

Instead, we’re spending it on things that we want to spend it on–even if they may seem frivolous to other generations. We have no problem spending around $1200 a year (£904.20) socializing with friends or almost $600 (£441) on a daily treat of coffee.

For around $1800 a year, we could buy more than a case of the 2014 Duckhorn Three Palms Merlot that was Wine Spectator’s #1 Wine of the Year back in 2017. Or more than 7 cases of Duckhorn’s Decoy Merlot at around $20 a pop.

But why would we?

I’m in the minority as a Millennial who does spend money on wine but even I wouldn’t bother with chasing the Duckhorn Three Palms Merlot. No Millennial seriously cares about Wine Spectator’s Top Wine of the Year and while the Decoy Merlot is solid at $20, I could only enjoy one bottle before becoming dreadfully bored.

Henry Mckenna Bourbon.

Millennial Math in action. While the #1 wine of the year is usually $100+, you can buy the #1 whiskey in the world for around $30. And you don’t have to finish the bottle in one night.

Even if we had the money, even if you gave us the money (via debt forgiveness), the industry is still not bothering to answer the fundamental question of why Millennials should care about what they’re offering.

The wine industry just assumes that as soon as Millennials somehow get more money in our pockets that we’re going to eagerly start buying whatever it is they’re peddling.

I’m sorry guys, but that’s a pipe dream.

What the industry needs to realize is that for Millennials, it’s not about the money. It’s about the value (i.e. Millennial Math) and whether or not your product is actually interesting to us.

That’s true whether your wine is $10 or a $100+. It has to deliver on intrigue and value.

A bottle of Ménage à Trois or covering the $7.99 Uber Eats fee?

What I found most laughable about Torkelson’s worry about college debt impacting wine sales is that Trinchero’s most well-known brands are Sutter Home and Ménage à Trois. You don’t need to take out a payday loan or put off buying a house to drink these wines.

All you need is the money you spend on delivery fees. Yet, even with all our debts, Millennials have been enthusiastic consumers of services like Uber Eats, Deliveroo, GrubHub and the like.

Why? Because having someone bring us new and exciting food dishes from a variety of restaurants offers us far more value for an extra $8 bucks than a bottle of Ménage à Trois ever could.

Plus, we can always get an interesting craft beer, cider or even hard seltzer water to drink with our takeout that is certainly less boring than another same ole Cab, Chard or Red Blend.

The Avocado Toast Test

Millennials really don’t eat avocado toast all the time. It’s more of a meme than anything. But still, as an occasional treat, spending around $10-20 for some avocado toast is well-established as not being a big deal for us.

That $10-20 range is a sweet spot for a lot of wineries targetting Millennials. So that leads to an essential question that every winery should ask themselves.

Is my wine more interesting than avocado toast?
By Brenda Godinez cravethebenefits - https://unsplash.com/photos/k4116JZ07S0Image at the Wayback Machine (archived on 28 June 2017)Gallery at the Wayback Machine (archived on 28 June 2017), CC0

Does a bottle porn pic on Instagram make me want to drink your wine more than this picture makes me want to eat this dish? Probably not.

Why do people like avocado toast?

It’s different and definitely not something that our parents ate.

We can customize it and have it in a variety of ways (sliced, smashed, brioche, bagels, flatbread, baguette, tortillas) and with numerous toppings (bacon, cherry tomatoes, sesame seeds, balsamic, fried egg, grilled shrimp, toasted almonds, pomegranate, etc). Even loaded with all those goodies it still feels relatively healthy and a treat.

Does your wine offer any of that?

Does it offer us something interesting or unique? Or is it just the same old boring stuff that our parents drank?

Does it seem relatively healthy? Or is it sourced from conventionally farmed vineyards and highly manipulated in the winery with oak chips, mega-purple additives, and residual sugars?

By Agne27, CC BY-SA 3.0,

Hey, look! Another sub-$20 oaky, buttery Chardonnay. Lovely…..

Regardless of the price, does drinking your wine actually feel like a treat? Does buying your wine feel like a good value worth spending money on?

Yeah, Millennials do have a lot of college debt and shitty job prospects.

But wineries that are using this as a scapegoat to explain why we’re not buying their wines are fools.

Millennials do spend money on things beyond the bare essentials of food & rent. Like every generation that has come before us, we want to live and enjoy life even when so much around us royally sucks.

If your wine offers us that little bit of joy that our daily latte, going out with friends, a new outfit, getting take-out from a favorite restaurant or avocado toast does–then we’re going to buy it.

But if you’re peddling the same ole wines that we see everywhere, then no, you’ve lost us.

You could snap your fingers like Thanos and make all our college debt disappear, but that’s not going to change the fact that your wine is more boring than avocado toast.

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Zinfandel — The “Craft Beer” of American Wine

Photo from the Provincial Archives of Alberta. Uploaded to Wikimedia Commons with no known copyright restrictions

In 1915, on the eve of Prohibition in the United States, there were over 1300 breweries across the country. Collectively, they produced around 60 million barrels. While the growing behemoths of Anheuser-Busch and Pabst Brewing Company had national scale, the vast majority of these breweries were small regional players.

In 1940, seven years after the repeal of the Volstead Act, that number of breweries was nearly halved to 684. Yet the country was still producing almost 55 million barrels. However, production and distribution was rapidly being consolidated around the big breweries.

By 1980, there were only 101 breweries in the United States cranking out nearly 200 million barrels. The ten largest breweries were responsible for nearly 94% of that.

This was the state of the beer industry on the eve of the Craft Beer Movement. And it truly was a movement–one spearheaded by folks who only wanted something different from the mass proliferation of American lagers.

Chanpuru — “Something Mixed”

I’ve been binge watching Anthony Bourdain’s Parts Unknown, trying to get through all eight seasons on Netflix before it leaves their listings on October 1st.

Photo by Opponent. Uploaded to Wikimedia Commons under CC-BY-2.0

Also good to know that the Okinawan diet includes plenty of beer!

The Season 6 episode on Okinawa, introduced chanpuru. Bourdain described this as the Okinawan idea of eating something different every day and enjoying the richness of variety.

Considering that the Okinawa diet and lifestyle is legendary for promoting long life and contentment, this was certainly a concept that resonated with me–especially being part of a generation that is notoriously “…open to new experiences, new regions and new grape varieties.”

Which brings us back to Zinfandel and the lessons of craft beer.

The craft beer category in the United States has evolved to encompass envelop-pushing styles and new ideas. However, at the root of the movement was a desire of beer lovers to get back what was lost before Prohibition.  They wanted to reclaim the traditional styles and varieties of beers that existed before.  All across the country were unique brews that were influenced by local German, Austrian, Irish and Latin immigrant communities.

The majority of beer drinkers had “moved on” and were content with their mass-produced lagers. But a tiny segment of passionate beer lovers knew that this country’s brewing heritage was a worthwhile story to explore. If the big brewers weren’t going to explore it, then these beer lovers were going to take the mantle themselves.

They not only found their chanpuru but made it their own.

Heritage Vines — Heritage Wines

Photo by Simon Davison. Uploaded to Wikimedia Commons under CC-BY-2.0

Zinfandel vineyard first planted in 1910 in Saratoga, California. Even the “young” 1976 vines are over 40 years old.

First introduced to California during the Gold Rush of the 1850s, Zinfandel has always been an American wine with an immigrant’s story–likely coming to the US as a Croatian vine (now known to be Crljenak Kaštelanski/Tribidrag) that was part of an Austrian nursery collection.

Once the grape reached California, it was spread widely across the state–particularly by Italian immigrants who established numerous old vine vineyards in the North Coast that are still treasured today.

The Hungarian immigrant Agoston Haraszthy, the “Father of California Viticulture,” didn’t bring Zinfandel to the US. However, as Thomas Pinney notes in his A History of Wine in America, Volume 1, Haraszthy did much to propagate and promote the variety.

By 1888, Zinfandel was the most widely planted wine grape in California with around 34,000 acres. Even after Prohibition, Zinfandel still maintained significant plantings with Master of Wine Benjamin Lewin noting in Claret and Cabs that in the mid 20th century, Zinfandel far outpaced Cabernet Sauvignon in Napa Valley with many Napa “clarets” actually being Zin-based.

It wasn’t until the 1980s that Chardonnay (and in the 1990s Cab) eventually surpassed Zinfandel as the most widely planted variety in California. However, with over 44,000 acres, Zinfandel remains the third most widely planted grape in California.

A Sleeping Giant

Master of Wine Morgan Twain-Peterson of Bedrock Wine Co. and Tegan Passalacqua of Turley Wine Cellars both serve on the board of the Historic Vineyard Society. Here they are giving a presentation on old vine vineyards at the 2018 Hospice du Rhone.

Interwoven within those 44,000+ acres are plots of old vine Zinfandel that are increasingly being highlighted by wine producers and organizations like the Historic Vineyard Society.

Scattered across the state of California–from Sonoma to Amador County, Lodi to Paso Robles, Santa Clara Valley to Cucamonga Valley–each of these old vine vineyards are planted with stories that span several decades. In the case of the Zinfandel vines in the Grandpere Vineyard in the Sierra Foothills, those stories have been shared for nearly 150 years.

For a generation of consumers that crave experience and authenticity, connection and chanpuru–few wines can craft a better calling card for Millennial wine drinkers than Old Vine Zin (the real stuff, not the marketing fluff–which is fodder for another post).

But are Millennial drinkers interested?

Perhaps.

Two articles that came across my Twitter dash today provoked this post. In one, Mike Veseth (@MikeVeseth) examined trends in the US Wine Market highlighted by Nielsen data was reported in Wine Business Monthly. In the other, Winesearcher.com’s Liza B. Zimmerman wrote about the big takeaways from the recent Silicon Valley Bank’s State of the Wine Industry report.

I found it curious that this grocery store display of “Beginner’s Wines” under $20 didn’t feature any red wines–only Chardonnay, Sauvignon blanc and Riesling.

After noting Cabernet Sauvignon and Chardonnay’s sustained dominance in both case volume and sales value, Veseth was surprised to find that the number one variety regarding average bottle price in the United States was Zinfandel at $11.19 a bottle–beating out Pinot noir’s $10.43 average. Along with his surprise, Veseth expressed a desire to see more research into this development.

Of course, correlation does not imply causation and all that. But maybe there is a link between this and the  Millennial “frugal hedonist” described in Zimmerman’s WineSearcher.com piece.

While the under $9 category of wines is slumping, adventurous Millennial drinkers are branching out more into the $8-14 range. Like craft beer drinkers before, Millennial drinkers are willing to spend a little bit more. But it has to be something that appeals to their wanderlust hedonism and cravings for what new and interesting.

Few varieties offer a better (or more frugal) bang for the buck in quality than Zinfandel.

Yeah….I’ve been low on Merlot. But given these options, you really can’t blame me for heading over to the Zin aisle.

There is not a huge quality gap between an $8 Cabernet Sauvignon, Merlot or Pinot noir and a $14 example. However, when you get to Zinfandel, there is a much more noticeable jump in quality. Try tasting a $8-9 Bogle and Seven Deadly Zins against $12-14 examples from the Sobon and Maggio-Reynolds families. Even relatively large wineries like Ravenswood, Klinker Brick and St. Francis make tremendous Zins in that range.

The jump to $15-25 Zinfandels also offers exponentially higher quality than you find in Cabs, Merlot and Pinots. Offerings from wineries like Rosenblum, St. Amant, Seghesio, Truett Hurst, Carol Shelton, Ridge and Renwood are drenched in value.

Then when you start exploring the character-driven wines of single vineyard, old vine Zinfandels from producers like Turley, Bedrock, Carlisle, Bella, Robert Biale and the higher-end Ridge wines, you find heaps of wines in the $40-60 range that would blow most $100+ Napa Cabs out of the water.

Even Turley’s entry-level Juvenile Zin at $30-38 offers more character and complexity than a lot of Cabernets twice its price.

Zin-ful Thoughts Part II

Now I’m not saying that cheap, crappy Zin doesn’t exist.

If there is a dollar to be made and a brand to be mass produced, you know that one of the big mega-corps are going to capitalize on it.

Just look at what has happened to the craft beer segment which has become a feeding frenzy of acquisitions by the big beer firms trying to conquer the craft market by gobbling up brands like old European powers colonizing Africa and the New World. Just as beer drinkers have to be open-minded, but weary, so too should wine drinkers. They will always be well served by frequently asking who made the wine that is in their glass.

Still, these mass-produced (and sometimes “faux old vine”) Zins aren’t all bad. A mass-produced cheap Zin is on par with a mass-produced cheap Cab, Merlot or Pinot. If not better.

Above all, what I am saying is that there is a special heritage here in the United States with Zinfandel. It’s a heritage too valuable to be lost to the dust bin of history.

Just like craft beer drinkers reclaimed their heritage, we also have an opportunity to reclaim a bit of ours. We can stick with the same ole, same ole or add a little chanpuru to our drinking options.

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