How Post Pandemic Wine Consumption Trends Are Shaping Demand
The COVID-19 pandemic had a dramatic impact on the wine industry. This was particularly true for online vendors of wines. From March 2020 on, in the face of widespread lockdowns and the closure of most bars and restaurants, online sales of wines, according to the Nielsen data, increased by around 234% in 2020. During the peak of the lockdown period in April 2020, online wine sales spiked more than 500%.
One unanticipated benefit of the increase in online sales was an increase in the availability of real time data on consumer buying trends. Current data is showing that many, although not necessarily all, trends that emerged during the COVID-19 pandemic are persisting, even as the country emerges from the pandemic induced lockdowns.
To get a better understanding of those trends, I recently sat down with Joe Fisch, the Chief Executive Officer at Wine Access, to talk about the current state of the online wine market.
Its basic subscription program is a quarterly shipment of six wines, selected by its team of six experts, for a $120 fee. It also operates co-branded subscription programs with Michelin, and with wine writer Madeline Puckett’s Wine Folly.
According to Fisch, the subscription program has an 85% retention rate, and has grown by more than 400% since inception, although this was admittedly from a low base.
The company has 40 employees and is based in Napa and San Francisco. Wine Access was named the Top Online Wine retailer of 2020 by Wine Enthusiast magazine.
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JM: What are the top three white and red wines by generation?
JF:All four generations enjoy Cabernet Sauvignon the most. Cabernet Sauvignon leads red wines by category, and is trailed by Pinot Noir and Bordeaux wines, respectively.
For the non-millennial generations, the white wine preference ranks as follows: Chardonnay, Sauvignon Blanc, Pinot Grigio. For Millennials, Sauvignon Blanc maintains the top spot, followed by Chardonnay and Pinot Grigio, respectively.
JM: Any significant differences between demographic groups?
JF:Sauvignon Blanc is continuing to trend upward for Millennials, while Chardonnay still holds the top spot for the both older and younger generations.
Pinot Noir, while still second in the top three wine varietals for the younger generations, is becoming more popular. This may indicate that as younger wine drinkers begin their journey, they might be gravitating toward wines with high name recognition like Pinot Noir.
JM: What about regions? Any regions increasing or decreasing in demand by demographic?
JF:Regarding regions, Napa Valley, Sonoma County, Bordeaux, Tuscany, and Burgundy are top regions for all generations. Where we see a difference is with the Champagne region. We are seeing a rise in popularity of Champagne among younger generations.
JM: Historically, Chardonnay was the best-selling white wine. When did Sauvignon Blanc start overtaking it?
JF: Chardonnay holds the title of the most popular white wine varietal for every generation aside from Millennials where Sauvignon Blanc edged it out slightly being bought 1.1 times more than Chardonnay. As we are still in the early years for Generation Z to be of legal drinking age, we could see the youngest wine consuming generation following the lead of the generation before them, but the decreasing popularity of Chardonnay relative to Sauvignon Blanc remains to be seen.
JM: Is the increase in demand for the New Zealand fruit forward style or is in toward a drier, more herbaceous style?
JF:The New Zealand style is definitely in demand as Sauvignon Blanc sales for that region came in second to Sonoma County, which led Sauvignon Blanc sales. Following, New Zealand, Napa Valley and Sancerre are the second and third most popular regions for the varietal.
JM: What trends are you seeing for rosé?
JF:While rosé is purchased year-round, as one could imagine, sales increase dramatically during the summer months. From May-August 2020, six times more rosé was sold than in the non-summer months. The increase in popularity is even shown year-over-year as rosé was two to three times more popular in the summer months of 2020 than it was in the summer months of 2019.
We are also seeing that rosé is very popular amongst the Generation X and Millennial generations and not as much for the Baby Boomers and Generation Z. It will be interesting to see if Gen Z’s tastes begin to change as they enter their wine journey and expand their wine education.
JM: Is demand for sparkling rosé on the same trajectory as dry rosé?
JF:The trend seems to be on the same trajectory as dry rosé, but is looking like it is more popular than still rosé with the younger generations.
JM: Which region is having the most success with rosé?
JF:Provence Rosé represents 51% of all rosé sales. Pinot Noir Rosés from the Napa Valley (17%) and throughout California (25% – Sonoma, Mendocino, etc.) are also popular.
JM: Any significant trends in demand by price?
JF:Wine sales were up at every price point from 2019 to 2020, which was likely a result of the global events that took place throughout the year. Wine consumers were not just reaching for lower priced bottles, some of the biggest gains in sales relative to 2020 were seen in the $100 to $300 per bottle price range. Throughout the generations, the average price per bottle was relatively consistent regardless of age.