tag:blogger.com,1999:blog-1392866426745021699.post7856542863682596256..comments2024-03-18T15:23:18.900+01:00Comments on The Wine Gourd: Increase in US wine consumption over 10 yearsDavid Morrisonhttp://www.blogger.com/profile/11578729952036086391noreply@blogger.comBlogger3125tag:blogger.com,1999:blog-1392866426745021699.post-77059122926613547572017-09-05T12:07:35.735+02:002017-09-05T12:07:35.735+02:00If the 16% "core" drinkers are responsib...If the 16% "core" drinkers are responsible for propping up the U.S. wine market, then that reinforces this notion:<br /><br />Excerpt from The Wall Street Journal “Marketplace” Section<br />(November 26, 2008, Page B6):<br /><br />“Marketers Reach Out to Loyal Customers”<br /><br />http://online.wsj.com/article/SB122766322705958805.html<br /><br />By Emily Steel<br />Staff Reporter<br /><br />"It’s an adage of . . . business: Persuading a satisfied customer to return is cheaper than attracting a new one. Now, in the struggle to do more with less, that concept is becoming even more important.<br /><br />"Acquiring a new customer costs about five to seven times as much as maintaining a profitable relationship with an existing customer, says Marc Fleishhacker, managing director at WPP’s Ogilvy Consulting . . ."<br /><br />Focus your efforts on "base retention" (your current customers).<br /><br />Be opportunistic in "gaining share" by poaching customers from your competitors.<br /><br />And avoid squandering your marketing budget on trying to convert non-drinkers and infrequent drinkers into customers.<br /><br />(There is a good reason why they're not drinkers -- religious belief, poor health, low income, et cetera. Your marketing efforts won't be able to resolve any of those impediments.)<br /><br />A highly recommended book on growing your business is Michael Treacy's "Double-Digit Growth: How Great Companies Achieve It No Matter What."<br /><br />Read this Advertising Age trade magazine "op-ed" tout:<br /><br />From Advertising Age Online<br />(May 31, 2005):<br /><br />“The Business-Building Tools Marketing Execs Ignore”<br /><br />http://adage.com/article/jonah-bloom/cmos-share-gain-aspect-job/103337/<br /><br />By Jonah Bloom<br />Executive Editor of Advertising Age<br /><br />Bob Henryhttps://www.blogger.com/profile/02089688073031173053noreply@blogger.comtag:blogger.com,1999:blog-1392866426745021699.post-12010728769794295842017-09-04T12:26:33.205+02:002017-09-04T12:26:33.205+02:00"did U.S. wine consumption per person rise be..."did U.S. wine consumption per person rise because more consumers adopted wine as their adult beverage?"<br /><br />Actually, there is some evidence that the opposite is true (see Charlie Olken's blog post). There is a trend of consumers turning towards cider, craft beer and fancy cocktails, rather than wine.<br /><br />"did U.S. wine consumption per person rise because the 16% of 'core' drinkers were drinking more wine than ever?"<br /><br />The national increase in wine consumption is not evenly distributed across states, as shown in the blog post. It is very unlikely that the core drinkers are evenly distributed either. It is also likely that the effects of the recession were not evenly distributed across the states. So, untangling the "cause and effect" of your scenario would be very difficult. However, it is quite likely that you are right.David Morrisonhttps://www.blogger.com/profile/11578729952036086391noreply@blogger.comtag:blogger.com,1999:blog-1392866426745021699.post-64510773503045877692017-09-04T12:01:15.211+02:002017-09-04T12:01:15.211+02:00David:
You report:
"a 13% increase in wine ...David:<br /><br />You report:<br /><br />"a 13% increase in wine consumption per person between these two years [2005 and 2014]."<br /><br />July 1, 2005 U.S. population = 295.52 million<br />July 1, 2014 U.S. population = 318.56 million<br />U.S. population increase = +23.04 million<br />U.S. population increase = +8% between 2005 and 2014<br /><br />U.S. wine consumption per person = +13% between 2005 and 2014<br /><br />U.S. wine consumption per person grew at +67% [13% divided by 8%] above the underlying growth of the U.S. population.<br /><br />A circa 2010 market research report by Folio (a wine importation and distribution company founded by Michael Mondavi) projected that 96 percent of all wine in the U.S. is consumed by 16% of U.S. wine drinkers.<br /><br />That same report projected that 35 million adults drink virtually all of the wine sold in America.<br /><br />Between 2005 and 2014, did U.S. wine consumption per person rise because more consumers adopted wine as their adult beverage?<br /><br />Or did U.S. wine consumption per person rise because the 16% of "core" drinkers were drinking more wine than ever?<br /><br />I suspect the latter. And here's why.<br /><br />A particularly nasty U.S. societal disruption occured between 2005 and 2015: The Great Recession.<br /><br />Wine is an elective -- not necessary -- purchase funded from a household's or individual's discretionary income.<br /><br />(Discretionary income is the amount of income that a household or individual has to invest, save or spend after taxes and necessities are paid. Necessities a household or individual may have are rent, clothing, food, bill payments, goods and services, and other typical expenses.)<br /><br />The shock of high U.S. unemployment and high U.S. under-employment (part-time workers who could not find full-time employment) ushered in a new era of "frugality." [*]<br /><br />Those unfortunate unemployed and under-employed were not spending as much of their discretionary income on wine as they did before The Great Recession. Were not spending as much of their discretionary income on wine during the Achingly Slow Economic Recovery.<br /><br />Those who retained their jobs during the Recession and Recovery saw little or no reduction in their discretionary income. Saw little or no reduction in “the wealth effect.”<br /><br />(Aside: if you had no reason to sell your stock portfolio or residence in a falling market, then the “paper losses” were immaterial. You simply waited for the markets to rebound.)<br /><br />I assert that their wine purchases became the rising time that floated all boats.<br /><br />I welcome any member of the American Association of Wine Economists who has pertinent spending data at her or his fingertips join this comment, for the purpose of either validating the assertion – or refuting it.<br /><br />~~ Bob<br /><br />*See:<br /><br />From The Wall Street Journal “Main News” Section<br />(April 6, 2009, Page A2):<br /><br />“Frugality Forged in Today’s Recession Has Potential to Outlast It”<br /><br />Link: http://www.wsj.com/articles/SB123897160787290857<br /><br />[Use link to see accompanying exhibit]<br /><br />By Kelly Evans<br />“The [Economic] Outlook” ColumnBob Henryhttps://www.blogger.com/profile/02089688073031173053noreply@blogger.com