Commentary: Selling Wine To Hispanics
A provocative economic analysis was recently
released with the title, “Marketing Wine To Hispanics,”
and subhead “The 50 Million Case Growth Opportunity.”
The author, Rabobank’s Stephen Rannekleiv, says that because Hispanics are projected to be the fastest growing ethnic minority, and they don’t drink that much wine on average, they represent a fantastic marketing opportunity. If their wine consumption could be brought up to that of the average U.S. consumer, consumption among Hispanics will increase by nearly 50 million cases over the next 20 years.
“By Rabobank calculations, that increase of 50 million cases could be as much as 40% of the total growth in U.S. wine consumption over that period,” Rannekleiv writes. “Furthermore, learning how to market to U.S. Hispanics may provide brand owners with insights to help penetrate other Latin American markets (e.g. Mexico) in the future.”
But, as the author notes, there are some huge hurdles that must be overcome in marketing wine to Hispanics. One big one is that 65% of U.S. Hispanics are Mexican, and relatively few people think wine goes well with Mexican food.
That reminds me of a wine-tasting trip to Napa years ago. At one winery, a multi-generational Hispanic family asked a tasting room employee what wine would go well with Mexican food, and he replied that he only drinks beer with Mexican food. The family patriarch smiled politely, but from his quizzical look I could tell he was thinking the same thing I was thinking: “Why aren’t you trying to sell your product?”
But the tasting room worker is in the mainstream, and the study notes that as a result it can be difficult to get any wine at a Mexican restaurant, except for maybe a couple of house pours and sangria.
Teach Your Parents Well
But there was also good news to be found in the study. Research shows that while many younger Hispanic consumers reported they were introduced to wine by their parents, the reverse was also often true. Younger Hispanics, like other millennials (ages 21-34), are drinking more wine, and they are introducing it to their parents. It stands to reason, then, that marketers should target Hispanic millennials.
What does that mean for winegrape growers? We have reported in the past on the renewed interest in wine among young people. Research shows that they don’t have the same taste in wines as their parents, who generally prefer traditional varietals, dry reds and whites like Cabernet Sauvignon and Chardonnay. Millennials on the whole prefer sweeter wines, and the same is true of Hispanics as a whole. That means the future looks savory for a varietal like Moscato, a sweet white made from the Muscat grape.
Despite many new plantings over the past few years, some industry analysts expect a shortage of the wine in the future, which is reportedly the drink of choice for many young women in particular. For winegrape growers in California’s San Joaquin Valley, who produce about half the nation’s total, it’s especially welcome because Muscat flourishes in the valley heat. Sales of sweet red wines, which also fare well in warmer climes, have likewise soared.
Marketing to Hispanics makes sense because they are underserved now, and just think of the future. In 2000, they comprised 12% of the U.S. population, now it’s 16%, and in 2033 it’s projected to be 22%. That’s 20 years from now, which is the average high-yielding lifespan of a grapevine. Sure, most growers don’t — or shouldn’t — plant a variety without a contract, but it’s food for thought.