Millennials Drive Demand For Premium Wine

Rabobank has published a new report on the role of millennials and Gen Xers in driving “premiumization” in the global wine industry, and the divergent channels that wine marketers are using to pursue these new consumers.

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In the report, the bank’s Food & Agribusiness Research team says that millennials and Generation X consumers are shaping and changing the global wine consumption market. The global wine community currently has a great deal of interest in the more premium end of the global market.

“The rise of some premium-focused emerging markets, such as China, has played a key role in stimulating global demand for more premium — mostly red — wines, as rising incomes and exposure to western cultural norms have taken effect,” says Rabobank analyst Marc Soccio.

Wine suppliers and wine retailers have sensed a growing appetite for wines beyond the mainstream. “Somewhat paradoxically, the markets are still seeing many premium wine producers struggling for growth and profitability as their capacity to reach out to modern-day consumers has become more limited,” says Soccio. “As the high-volume grocery retail channel in particular is becoming the realm of bigger brands and suppliers, smaller brands have little choice but to seek new ways to connect with the pockets of consumers looking to head upmarket.” Many of these smaller brands are attempting to reach consumers through online retail channels.

“Increasingly, it is the newer generations of consumers who are shaping global wine consumption, and these consumers have a higher level of awareness of wine and wine quality than any generation before them,” Soccio says.

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Source: Rabobank Group

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