What do premium wine consumers look like? Who are they? That is what Lulie Halstead and Juan Park explained last Thursday 17th November in Barcelona, at the Wine Intelligence Workshop on Premium Wines. Keep reading, the information is highly valuable.
Buying wine is like buying goods. And when we purchase goods, our brain looks for a balance between reward and pain. The reward from Premium products needs to be extremely high, because the pain of paying a high price for it is very painful. Packaging, quality, easy payment, helpful service and pairing recommendations, shorter waiting time to get the wine … all that needs to be part of a package that makes our wine a highly rewarding purchase.
So premium wine, like other premium goods, is not only what we get when we purchase the bottle. Wine is also everything related to that purchase, what in marketing we would refer as Added Value. That is why consumers go back to the same brands very often : they know all the probabilities, and that reduces the risk of pain.
If we want to be successful selling wines, we need to work with our clients’ expectations, not only focus on selling them good wines. The wine category is very competitive, so increasing prices is not the solution to increase brand reputation. Reputation comes from branding, quality, services and a complex combination of what we are really selling when we sell a Premium Wine.
We can’t forget that, at any price point, the wine is a luxury, a reward moment : self-reward when we are tired and open a bottle after a long day; social reward when we share a wine with friends … When we design the back label of the wines, are we thinking about rewards? Or do we stay with technical information?
The worldwide luxury market is growing
The average growth for the world wine luxury market is 5%, and fine wines & spirits is growing at a rate of 4%. Other categories that are growing are personal luxury goods (6%), 5% luxury cars, 6% gourmet food & fine dining or 7% luxury cruises.
But what is a Premium Wine? We can define it from a Price perspective. Premium wine in Spain is any wine that cost € 8 or more, in USA is $ 15 or more, in the UK is 8 pounds or more, AUS $ 15 or more in Australia and 16$ or more in Canada.
So every market is different, but all share the definition for Premium Wine Drinkers : those who drink wine once or more per week, whereas in China and Rusia, Premium Wine Drinkers are those who drink wine once or more per month.
Luxury or Fine wine is not Premium wine
Longevity of the wine, balance and harmony in taste, and being made in a famous wine region are some of the most important values that consumers look for in a fine or luxury wine. They expect that the wine has been sustainably produced, has a high price and is a wine that you want to talk to others about.
Being consistent across vintages and being made by a producer that has been making wine for many years and / or a famous wine maker are also important. High ratings from wine critics are also expected.
So Premium Wine is not the same as Fine and Luxury Wines. That is because, by most people’s definitions, fine and luxury wines are Super- Premium and Ultra- Premium, while Premium Wines are defined by the price. It means, Fine and Luxury wines, in general, those wines that are above price point fixed for Premium wines (€ 8 in Spain, $ 15 in USA…).
What about China?
Hong Kong is the market with the largest proportion of premium wine. Many wines go from there to China, so it doesn’t mean that the wines are consumed in Hong Kong. But it is a Premium market, as Switzerland and USA.
Before the last market changes in China, it was expected to be the most growing market for premium wines. This is changing, and Lulie Halstead gives us a very interesting view on that : “my personal view is that even there are big opportunities in China, I would be nervous if I had to rely in China for the growth of my brand”.
You can learn more about the Chinese wine market following Natalie Wang (Vino-Joy)
Who are the Premium Wine Drinkers?
USA is still the most attractive market for Premium Wines, as it has the largest number of premium wine drinkers. It is followed by China and Brazil when we talk about number of Premium Wine Drinkers.
But who are Premium Wine Drinkers? In some markets like Germany, Portugal and Japan they are men and women 55 years old and more. And in some other countries as Brazil, Russia or Australia they are younger (less than 34). In the middle we have China, Spain, Canada and UK.
And what makes them decide to buy one wine and not another? Information on the label or back label (37%); family, friends or colleagues’ recommendations (35%); visiting a winery (30%); shop staff in the wine store (26%); online reviews by wine experts (24%) and wine brand’s website (22%).
Going back to the USA, 39% of the Wine Premium drinkers in this market drink wine once a week. It is interesting to learn that the spending for wines on-premise has increased a lot the last few years, while retail prices have remained the same.
Finally, Premium Wine Drinkers in USA are highly influenced when visiting a winery and by the information on the label or black label. Family, friends and colleagues (sharing time with them, learning together and listening their suggestions) is the main driver for purchasing a wine. We find more of them in California and Texas mostly.
Why it is so important to learn all of this?
A winery needs to know who their clients are. What do they like, their lifestyle, where they drink wines, how much are they willing to pay for a wine… Market Research is needed to work on a successful Marketing Strategy for the company and the Brand. What is your winery doing to learn more about your clients?
The Global Workshop Series presented by Wine Intelligence, Premium Wine Drinkers, has much more information. This is just a short overview of what the investigation can offer to Wine Brands.