Next time you walk through a liquor store looking to purchase a bottle of wine to bring to a party, think about what’s more important in your ultimate decision. Is it the image that is reflected on the label or is it what you think the wine will taste like? Most likely, you will buy the bottle that looks good and conveys an image that is consistent with what is desirable to you and those in your social group.
Numerous studies have confirmed that the consumer’s perception of the taste of wine, beer and spirits is very much driven by the design of the label. The package is, indeed, our key influence when we first decide to purchase. As we drink the product, the bottle then serves to reinforce our experience and makes us remember the brand for future purchases. While we can’t discount the importance of a quality beverage for long-term growth and success, the case can be made that awareness, consideration and trial is driven primarily by the label design.
There are thousands of options as we walk through the aisles of a liquor store. Success requires that brands know their core consumer and then differentiate themselves from other options to attract the interest of that core consumer.
“Wine is fashion, and beverage sales are our runway. Wines, like fashion, have reached a point where marketing and merchandising play as important a role as making the product itself.” – P. Sugarman
A strong brand identity and package is imperative for commercial success in this highly competitive category.
While the 21 to 30 year-old segment is the perennial bulls-eye for beer marketers, the millennial generation (those born between 1980 and 2000) are now the fastest growing wine consuming segment, accounting for approximately 26 to 28 percent of the category, according to the Wine Market Council. They are also driving major changes in the wine (and spirits) segment, as marketers quickly adjust to best appeal to the very different purchase drivers of these consumers. As the millennial segment is comprised chiefly of novice wine drinkers, they are first drawn in by the brand image of the wine. Also, as most purchasing decisions are being made at the point of sale, desirability needs to be quickly communicated. Impressions move very quickly from sight, to mind, to heart and then to purchase.
For now, the pricing sweet spot with millennials is $10 to $12 a bottle. While the $60 Cabernet from Napa might not want to utilize labels that appeal to this consumer, the wines that do wish to ride this very large wave will be well served to pay attention. The Wine Market Council reports that more than half of the millennial segment will choose a wine based on having a “fun and contemporary looking” label. Also, they are not wine snobs or impressed by big brands. They are adventurous in their choices and lean toward somewhat sweeter varietals. According to Dr. Liz Thach, management and wine business professor at Sonoma State University in the Wine Business Institute, “millennials are turned off by labels with a picture of a chateau on them. They think it’s their grandfather’s wine.” For millennials, the less traditional label is better – don’t take yourself too seriously.
So, my advice to those beverage makers wishing to grow sales and shares is to target your brand and marketing efforts at the quickly expanding millennial market. The youngsters and hipsters will be driving drinking trends for at least another decade as the older and traditional (baby boomer/senior citizen) wine drinker rides off to the great vineyard in the sky.