The wine industry needs to say: “Cheese” (seriously)

I have previously suggested that The wine industry is asking the wrong question, when asking how to market wine to Millennials, rather than asking what Millennials actually want to drink. This is, of course, but one perspective on the general issue that: Global wine consumption has been declining for a long time.

Naturally, there are other perspectives on the global decline of wine consumption and sales. For example, the wineRamp group has noted that “there is a demand problem that needs to be addressed”, and it thus has the explicit objective to: Grow demand for wine in the US marketplace. That is, they wish not only to slow the decline but to positively increase consumption. To this end, they have suggested that It’s time for an American Wine Marketing Board, to oversee the turn-around.

So, what does any of this have to do with the title of this blog post? Well, it is easy to criticize, but the criticism goes down a lot better if something positive is presented, as well. That is, of course, precisely what the wineRamp group is trying to do. The downside of this, unfortunately, is that the people who don’t like the proposed actions will just criticize the proposed alternatives, as well. So be it.

By way of saying something positive in this post, I am going to compare vineyards to cow pastures, of all things. These pastures have cows on them, and cows produce quite a lot of different products. That makes these pastures fundamentally different from vineyards in the wine industry, which mostly just produce grapes for making wine (wine grapes are rarely edible, for example).

The upshot is that cow farmers understand this basic principle: What you lose on the swings you gain on the roundabouts. Consider the following pair of graphs, taken from: U.S. dairy consumption trends in nine charts. The first one shows declining consumption of milk in the USA over the past 40 years, which looks to me almost exactly like the decline in wine consumption in the same location over the same time. The second graph shows the exact opposite trend, with increasing cheese consumption. Both milk and cheese come from the same cows — indeed, the European Union has formally defined cheese as a "matured dairy product", because bureaucrats need such definitions in order to pass laws. *

You can see my point about swings and roundabouts — the cow farmers are doing okay; and, indeed, a third graph (not shown here) shows a general upward trend in “all dairy products consumption, milk-fat milk-equivalent basis, per capita”. So, these farmers can weather the ups and downs of any given milk product. My new question, then, is: what are the wine industry’s roundabouts? What is the wine industry’s equivalent of cheese?

The wineRamp suggestion is basically support for marketing (Wine, the wallflower: Industry honchos plan joint marketing push). This fits neatly into my point in this post: Remember ‘Got Milk?’ As demand shrinks, fine wine needs a USDA Marketing Order. Does it work (cf. “Where’s the Beef?” ; “The Incredible, Edible Egg”)? This marketing approach does not require diversification (eg. fresh milk plus cheese), but simply money. There are, of course, many ways to sell, these days (How Wine Access fled old media tactics and chased consumers into the subscription economy).

There are many future marketing suggestions, after all (Want to fuel your winery’s future growth? Engage women and younger consumers). This may not work, of course, since advertising itself is not always enough (TV wine ads: Black Box targets younger consumers — but still doesn’t get it right). After all, consumer preferences change continually (What wine lovers really want), and not just for wine alone (Wine needs to fit in with changing consumer meal prep.). In short (Wine’s biggest unanswered, market-killing question: Why?):

The currently stalled WineRAMP effort to create a consumer market promotion similar to “Got Milk?” is fundamentally flawed, and would be doomed to failure even if funded, because it lays out no plans for market definition, messaging or other statistically significant, actionable data on the “why” questions.

There are other possible responses to declining domestic consumption, of course. For example, the focus could be on diverse export markets (How wine businesses can prosper in an era of uncertainty):

Business as usual is no longer. For the global wine sector, the uncertainty of the 2020s is in stark contrast to the relative stability of the preceding three decades ... businesses with a broader sweep of export markets may benefit from a portfolio effect which hedges their exposure if one of those markets suddenly deteriorates because of tariffs, economic crises or war.

Another important alternative is to diversify the product itself; and this is, to me, the basic issue of this blog post. What else can the wine industry produce except wine? To use yet another metaphor: if all your eggs are in one basket, then that basket must have no holes. The reality seems to be that the wine industry has an ever-increasing hole in their only basket.

I suspect that there is no industry-wide response to this issue. To quote Rob McMillan (Turning the tables on Rob McMillan — wine industry analyst): “It’s not an easy task finding agreement in this industry.” So, individual producers will need to think about diversification. If, as has been suggested, market share is being lost to the spirits category. then make spirits, as well as wine. If young people are preferentially drinking seltzers, then make seltzers, as well as wine. You get the idea.

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* This created problems for Ricotta, of course. This has always been called a cheese, but it is not matured in any way. My wife and I once went to the Ricotta Festival, in Vizzini (Sagra della Ricotta e del Formaggio), in Sicily, and the Ricotta was literally taken straight from the cauldrons and put into our bowls.