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For the global Treasury Wine Estates (TWE) based in Australia, knowing which beverage alcohol consumers prefer and where or when they like to consume it is of the greatest importance.
According to its Website, between Australia and the U.S. alone, TWE oversees more than 30,000 vineyard acres. In Australia its winemaking and production facilities span South Australia, New South Wales and Victoria. They are joined by facilities in Marlborough, New Zealand as well as California’s North and Central Coasts. The company owns more than 70 brands and claims to sell about 40 million cases annually across more than 70 countries.
That’s why TWE spent about three years conducting a consumer usage and attitude study. Over that time, TWE engaged with 3,000 Australian consumers. The company’s Australian State Sales Manager, Kylie Farquhar presented the results at a recent conference; she told an audience of retailers the TWE study pointed to a decided change in the way Australians consume wine, and what they want from the product.
Seven years ago just over six million Australian adults drank wine a minimum of twice each week. By 2017, the number of wine drinkers had increased to just under ten million, but the minimum consumption had dropped to once each week. About one-fifth of Millennials represented in the multi-year TWE survey had been consuming wine at least once each week. In contrast, more than 40% of Generation Z (ages 35-54) and more than 35% of Baby Boomers (over 55) drink wine at least once a week. Shockingly, about one-third (34%) of Millennials claimed to consume wine only once in six months. To TWE, the marketing and sales opportunity is obvious: Millennials.
What is it Millennials want?
It seems Millennials may prefer to socialize with a glass of beverage alcohol in their hands but not at home; at least that’s what the survey indicates. It showed a shift from consuming at home to on-premise consumption. More important, however, is the way they are buying wine at retail. According to the survey, 60% of wine brand decisions take place right in the store, through an app. And the survey indicated that the wine brands desired are the ones that refresh, led by rosé, the sales of which now account for more than 10% of overall wine sales.
In fact, the operative sentiment when it comes to consuming any beverage alcohol isn't whether to consume it at home or at a bar. The operative sentiment is: refreshing. Farquhar pointed out that the number one beverage alcohol growth is in the beer sector (Great Northern), and that another beverage alcohol brand, Aperol Spritz, grew in 2017 by about 80%. These are products that refresh.
In wine, more than anything a slight fizz says refreshing, and it's even better if that wine fizz bursts out of a can.
TWE’s findings have been behind launches of existing brands in cans like A’tivo, Squealing Pig and T’Gallant in the Australian and New Zealand markets. According to TWE, the U.S. market already consumes about 40 million cases of wine in cans . The company has determined the top selling wine in cans in the U.S. and U.K. happen to be sparkling or mildly fizzy, so their three brands in cans are scheduled to appear in the U.K. and U.S. markets in 2019.
TWE bills its spritzed wine in cans as 100% wine-based and light at 8% alcohol by volume. Each can holds 250 milliliters of wine, which appears to be the going market packaging trend for the majority of wine in cans.
If the trend toward so-called refreshing wines in cans moves from a passing fad to an absolute cultural shift, the future for table wine priced at retail between $10-$15 a bottle is bound to suffer; the same bulk production that supplies that market can easily be sugared up and spritzed up on its way to the can. In addition, producers can probably make more money by volume from light wine in a can over table wine in a bottle. But it's doubtful wine in cans is going to be able to gobble up all the bulk volume available--which is probably why the commodity end of the wine business remains willingly vulnerable to fads.
