Generation Y and Branding

Also called "Millennials" or "Generation Why", this group is widely represented in a lot of countries and constitutes a major target for local and global brands. In the US, there are 70 million people under 30; in Vietnam, they represent 50% of the 90 million people; in China, they are 200 million strong and there are 367 million people under the age of 18, a huge potential market for this growing economy. In South Africa, they account for 35% of the population.

In countries where their number is not as significant, they are different from the Baby Boomers: in East European countries, the Millennials are the first post-communist generation and in Southern Europe, the first post-dictatorship generation. In emerging countries (South Korea, Russia), they are the first generation growing in a stabilized social environment.

The generation Y was born with Internet and finds it easy to interact with each other and then with the world. Forums, blogs, Facebook, iTunes and many other community sites are their favorite places to express themselves, share their ideas, tastes and distastes. Those young people think they can make life fit their specific needs and wants. Brands have to get used to engage in a two-way conversation with those potential consumers. Their favorite US brands, Trader Joe's, Ben and Jerry's and Whole Foods (to take into account only the brands connected to the wine and food business) communicate to their customers in a very personal and socially aware style. It's not so much what they communicate that how they do: Millennials like style, a real voice, and a bit of attitude. They love to blend personal and professional life: their workplace, the marketplace and the lifestyle have to stay connected in a meaningful way.

What does it mean for wine brands? In the US, the percentage of Millennials who consume wine has increased from 10% in 2004 to 17% in 2006. Even more interesting, Millennials and GenXers are more inclined to drink wine than beer.

How did they become interested in wine? For some of them, their parents drank wine and they grew up with wine on the table. “My parents are both big into wine”, said 22-year-old Jennifer Hammons to journalist Deborah Pankey, Daily Herald Food Editor on November 30, 2005. ”At first I didn’t like it, but then it grew on me.”

There is much the same scenario for young people in France: wine is a food always on the family table. Young children are encouraged to taste a drop of champagne or wine during family gatherings. Later in their teens, they are given a third of a glass of wine or champagne with their meal. Why do they then reject wine to go on to beer, cocktails or liquors? Very often, as sociologist Céline Simonnet-Toussaint explains in her book Le Vin sur le Divan, young people under 25 reject wine because it is the symbol of the family. Young people want to experiment with their freedom, but they come back to wine at around 25, when they get their first job, their first “real” apartment and start settling into their new life.

Others discover wine by themselves – during a trip to a wine country, like Napa in the USA, Burgundy in France, Tuscany in Italy, Priorato in Spain or Porto in Portugal. They get interested, go to wine classes or tastings, join a wine club and explore wine stores to get good advice. Mostly, like the women, they listen to their peers, surf the Internet to read about wine and discuss their new passion in forums.

The wine industry is aware of the need of young people for more knowledge. At the same time, this new generation of wine drinkers is very different from preceding generations. It is the “coca cola generation": they have a much sweeter tooth, they are “zappers”, having known TV and the Internet all their lives, and they are used to getting what they want and paying a high price for it. After all, they pay $3.50 for their daily Starbucks cappuccino and download their songs for $1 or their movies for $5 every day on their iPod or MP3. They know that everything has a price and usually a high price.

Taking these parameters into account, some wine makers considered designing wines specifically targeted at Millennials and GenXers: fun labels, fruity forward wines and a high price. Millennials do not hesitate to pay up to $20 for a bottle of wine! Indeed, they do not yet have any big financial burdens: no children, often a two-income household, no parents to take care of, a good salary and a large disposable income. Unfortunately for the wine industry, they rarely buy the same bottle twice, because there is such a huge choice of brands. They want to be the first to discover a new brand or a new trend, the first to try them and share them with their peers.

Nonetheless, major groups have designed brands for Millennials as they have for women. Constellation designed 3 Blind Moose, Four Emus, Monkey Bay and other “fun” brands. There is no talk of terroir or winemaking on the packaging. The label does not tell a wine story, but a story of having a good time and fun with your friends. Those brands sell well. Gary Glass, former Vice-President of Marketing for Constellation’s Centerra Wine Company, estimates that 3 Blind Moose sold 175,000 cases in 18 months on the market.

At the same time, young people are not as comfortable as their elders when they buy wine. They can be adventurous, but they also seek quality and certainty. Whether they are American, European or Japanese, they will rely on a classic wine from Europe or a well known luxury brand from the New World. Wine is still a little intimidating for Millennials. It is the wine industry's responsibility to help the young generation to appreciate wine.

India, emerging market and wine producing country

Among marketers, India is considered an emerging market more than a producing country. It happens that India is both and we shouldn't neglect the Indian wine, whose quality is getting better and better.

I just read in one of the numerous online newsletters I subscribed to that a Book and Wine festival held in Angers and Saumur, two wine producing areas of the Loire Valley in France, has two guests of honor this year: India and Israel. Why this choice? Both countries are now producing wine and developing wine travel.

India develops a strong wine industry through international partnerships, mostly in the western part of the country. In the Maharashtra state, there are the main two wine producers, Sula and Indage. In the Karnataka state, there is the third important wine producer, Grover. Indage created the first wine resort and spa, Tiger Hills Resort.

Because India is now producing its own wines, the Indian consumer is getting more and more sensitive to the taste of wine and interested in tasting other wines besides Indage and Sula. Education is a very important step for international wine marketers. If we want our wines to be appreciated on those emerging markets, we must organize tastings and events to educate the consumers.

Wine is usually drunk away from home and not with food because Indians kept the British habit of having a strong drink – usually a glass of Scotch whisky – before dinner. They do appreciate a drink before their meals. Why not a glass of wine, the new fashionable drink among young urbans? The most popular wines are the Cabernet Sauvignon, one of the grapes blended in the Bordeaux wines, and the Indian Cabernet Sauvignon and Syrah blend from the Nandi Hills in southern India.

To learn more and avoid the embarrassment of a faux-pas, young executives in international corporations get themselves a wine education through wine tastings and classes. They are educating themselves because they know it is important to impress colleagues and clients when at a corporate dinner.

What would prevent an Indian from drinking good wines? Mostly ignorance, but fortunately wine magazines and workshops are now common in the big cities. There is also the fear of mispronouncing foreign names. A young woman, with a good knowledge of wine, reported that her own wine retailer advised her to buy “kotay dou Ronnie”, meaning “Côtes du Rhône”. Is that so shameful? After all, a South African winemaker, Charles Back, had no scruple about naming his own wine “Goats do roam”, a play on the sound of the words!

Emerging market and producing country, India is now a major player of the wine industry with more and more consumers getting sophisticated and learned.

For more information on wine and India, I would recommend the very good blog: Sommelier India

The collapse of a brand: will Stormhoek survive the Orbital storm?

In "Wine Brands" I was very happy to tell the saga and then success story of the Stormhoek brand. Stormhoek was the first wine brand to apply successfully a viral marketing strategy on the Web. The sales of the wine sky rocketed but not enough it would seem to allow its main company, Orbital Wines, to florish.

Stormhoek was just brought by South African Origin Wines based in Stellenbosch. The main question now is every marketer's mind is: will the new owner turn Stormhoek into a straightforward trading brand, or keep up the interesting marketing strategy developed by Orbital wines?

Here is the story I'll follow up with a lot of interest in the next few weeks!

PS. Sorry for the interruption in this blog, dear readers. One of those very bad colds that turns the mind of the sick person into mulch!