Tuesday, October 25, 2011

Potential Marketing Approaches to the French Occasional/Non-Wine Drinker Segments

French wine consumption has been in a steady downward spiral since the 1970s, fueled to a large extent by an increase in occasional and non-wine drinkers.  In previous posts I have examined institutional and market-level initiatives aimed at stemming the tide.  In this post I will propose some approaches to long-term exploitation of the occasional and non-wine-drinking segments.

According to the French National Institute for Agricultural Research (INRA), of the 51 million potential wine drinkers in France in 2010, 41% were non-wine-drinkers while 43% were occasional drinkers.  According to Lorey and Poutet, most of the members of these two segments are 40 years of age or younger.  Further, according to the same source, 46.7% of French women are occasional drinkers while 40.8% are non-wine-drinkers.  These categories are of interest to the wine producer because, according to INRA, occasional winer drinkers consume five to six times less wine than does a regular consumer.  Further, they are of interest because the regular consumer segment is declining.  According to INRA, "Since 1980, each generation includes a lesser number of regular consumers than the previous and the share of the regular consumers within a same generation does not increase with aging" (CCE).

A number of reasons have been advanced (Demoisser, Lorey and Poutet, Winebusiness.com (5/2/08)) for the reduction in French wine consumption but the one that stands out for me is the disassociation of wine from meals.  Historically wine was viewed as a part of the meal in France and everyone participated in all aspects of the meal.  This not only contributed to high wine consumption levels, it also provided a template for the next generation.   The meal was a vehicle for culture transmission.  And, according to Lorey and Poutet, the father was the driver of that vehicle.

In recent years fast food has gained in popularity (damned American culture).  According to the Wine Spectator (2/20/08), in the preceding 10 years the number of family meals and business lunches had decreased by 50%.  The key takeaways here are (i) that there was a loss of the main wine culture transmitting vehicle and (ii) the people who would have been in that vehicle are somewhere else drinking something else.

Wine consumption in France has suffered because it has fallen off the wall; and no one has tried to put it back together again.  No attempt has been made to position the category wine in the mind of the consumer.  Instead, winemakers have pursued Parker scores in order to build their brand (and their sales) while the larger population, who know nothing about Parker (and couldn't care less), have been left to their own devices.  This is, I feel, is one of the opportunity areas for targeting the segments of interest.  The regular drinker knows why he/she drinks wine; the occasional/non-wine drinker should be advised towards this end because, for the neophyte, wine is not easily approached.  I believe that the wine industry in France needs to undertake an effort to re-establish a tight linkage between food and wine.  It should partner with the food industry, grocery chains, and restaurants to speak to the symbiotic relationship between wine and food with events, advertising, road shows, etc., all targeted at this point.  Rather than the focus being on where wine is from, it should shift to what it goes well with.  This approach provides the targeted segments a reason to pursue wine and would be equally relevant for eating in or out.

A second key opportunity is the opening up of wine regions to broad-based tourist activities as a way of attracting and converting occasional/non-wine drinkers.  If a locale is easily accessible, has a lot of wineries that can be easily visited, and has high quality food options, either at the wineries or close by, people will come.  And many of these people will be other than regular drinkers.  And if they have a great time, they will want to be part of that culture.  They will want to do it again.  And they may even go to their favorite restaurant back home and order wine with a meal.  Or go to their favorite after-work hangout and order a glass of wine.  A classic example of this phenomena is Napa Valley which with its tasting rooms, restaurants, and events has played a pivotal role in the growth of wine drinking in the US.  And wine drinking regions in places like Long Island, Virginia, and other places across the globe are pursuing that model in spades (For more detail on this trend see George Taber's book, In Search of Bacchus.).

Many years ago, 60 Minutes ( a CBS news magazine) ran a segment on what it called the French Paradox which highlighted the fact that even though the French consumed higher amounts of saturated fats than US residents, their incidence of coronary heart disease was lower than in the US case.  The show implied that this effect was due to the higher amounts of red wine consumed by French citizens and this been borne out by subsequent research which attributes a beneficial effect of 1-2 glasses of red wine per day.  There is a clear health benefit associated with moderate consumption and there is some concern that this turn away from wine by, especially the young French, are causing them to lose this "Paradox" benefit.  According to the Wine Spectator (2/20/08), if the potential drinkers were consuming one to two glasses of wine per day, French per capita consumption would be at 90 liters versus the current 54.  The health benefits of moderate wine drinking should be emphasized as part of the long-term positioning of the beverage with occasional/non-wine drinkers.

Today's generation communicates by Twitter, Facebook, etc., and go out on the web to collect data for purposes of comparison.  I have sought out many a small French producer online only to come up blank.  In addition to investing in vineyard renewal projects, the French government should also invest in a technology infrastructure for some of these small producers, thus improving their visibility, especially to this youngest generation.

In a study by Liz Thach and Francois d'Hauteville (see winebusiness.com, 5/2/08), French Millenials (aged 21 to 31) were asked why they did not drink wine.  Their answers were as follows: Wine is old; wine is expensive; they did not like its taste; it was confusing; and they had strong anti-alcohol sentiments.  These answers provide additional avenues of focus for a specific sub-segment of the segments of interest.  If wine is viewed as old, producers need to find a way to make it appear hip to youngsters (this would most likely require advertising programs which associate wine with a life style or with an iconic individual); if wine is viewed as expensive, then there may need to be entry-level alternatives, or pricing by market segment; if they do not like the taste then we may need to use fruitier wines to encourage initial participation, knowing full well that palates change as people are exposed to different things.  And finally, producers may have to experiment with packaging options to appeal to the lifestyle and habits of this generation.

These potential approaches are advanced as a means of starting a dialogue on the topic because exploiting the occasional/non-wine drinker market is not a problem unique to France.  I look forward to your views on this matter.

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