Wine Drinkers

Part
01
of three
Part
01

Shopping Behaviors of Wine Drinkers

The most common factors involved in why customers choose certain wines are bottle labels and brand recognition. In addition, wine companies also use different brands to target different wine consumers based on their persona. Below, you will find more details.

Please note that although Wonder doesn't use sources older than two years, our research through recent market and industry reports didn't produce enough data so we had to rely on some slightly older sources. The reason for the unavailability of more recent data is probably because this kind of research is not performed annually.

Eye-catching labels and brand recognition

According to Nielsen in August 2017, "As of June 2017, more than 3,500 new wine products had hit shelves in the last year, representing 14% of all items in the category and 4.5% of category sales volume. But the influx isn’t just giving consumers an array of new brands to choose from; it’s forcing retailers to make tough choices about how to use their finite shelf space." They go on to say that, "only 29% of consumers know which brand they intend to buy before they enter a store. The remaining 71% of consumers are making their decisions as they peruse the options on the shelf."

One way of gaining the attention of prospective customers is through label design. Nielsen goes on to ask, "...does a design grab consumers’ attention quickly? In a recent label analysis of 20 wine brands that utilized eye-tracking technology, 57% more consumers saw the most visible bottle than the least-visible bottle within the first few seconds of looking. Since consumers can’t consider purchasing a wine that they don’t see or notice, strong standout is a key requirement for effective design. Once consumers notice a bottle, the label needs to compel them to purchase it. For this reason, manufacturers should assess to what extent their designs reflect the brand’s personality and effectively convey key messages. Which elements are working well, and which aren’t?"

Eye-catching bottle labeling can lead to our next important tactic: brand recognition. The Texas Wine Marketing Research Institute and Rawls College of Business at Texas Tech University show in their study from 1991-2006, that there was an “Unmistakable trend: the better the recognition rating a wine brand received, the more likely it was to survive. No such link existed between quality evaluations and a brand’s success.” The study offers more helpful insights such as when seeking to be a more recognized wine brand, one must understand what makes their brand different and then promote those benefits to their niche target market. The customers must also be understood in order to ascertain what makes a brand unforgettable to them and what marketing promotions will hold their interest.

Constellation Brands, the world’s largest wine seller, did a study in 2008 called Project Genome in which they surveyed the purchases of 10,000 premium-wine consumers, defined as those who purchased wine priced at $5 and higher–over an 18-month period. They also tracked actual purchases using Nielsen Co.’s Homescan® consumer purchase panel, which employs in-home bar code scanners and surveys to map consumer buying behavior across a demographically diverse population. The study was updated in 2014, adding more research and giving us the six different kinds of wine consumers.

The Six Different Types of Wine Consumers

The first is “overwhelmed,” in which the customer is somewhat bewildered, frustrated, and confused by all of their choices. They are seeking easy to understand information on their options but may pick a wine based on label design or may get so frazzled that they might not buy anything at all.

The second type of wine buyers are “image seekers.” They are just discovering wine and are influenced by status symbols, prefer Merlot, check restaurant wine lists online and research their scores, and are most likely to be male Millennials.

The third type is the “Enthusiast.” They like to entertain their friends in their home, consider themselves knowledgeable about wines, like to browse wine sections in stores, are influenced by wine ratings, and 47% buy wine in 1.5L as “everyday wine” to supplement their “weekend wine.”

The fourth kind of wine consumer is the “everyday loyal.” Wine is a part of their regular routine and they are brand-loyal, enjoy wine from established wineries, like to entertain at home, and use wine to make occasions more formal.

The fifth type of wine consumer is “price driven.” Price is their main consideration and they believe you can find good wine without spending a lot of money. They shop at a variety of stores to find the best deals, use coupons and know about sales ahead of time, and typically buy a glass of house wine when dining out due to the value.

The sixth type of wine customers are the “engaged newcomers.” They don’t know much about wine but like to drink it and are interested in learning more about it, are likely to be young/millennials, and consider wine to be a part of socializing.

The Power of Millennials

According to Nielsen, "Boomers and Millennials represent two of the largest consumer groups in the U.S., and that means understanding what influences their alcoholic beverage purchases will help retailers, suppliers and manufacturers offer the right in-store assortment and execute the right marketing strategies to help influence undecided shoppers..." and "...When comparing Millennial and Boomer shopping differences, the study results showed largest distinction pertained to the degree to which each generation has a specific brand in mind for their planned purchases. This is likely due to a combination of degree of experience with alcoholic beverages that comes with age, as well as the differentiated nature of generational attitudes and behaviors. More than half the time (52%) Boomers make a shopping trip knowing which brand they plan to purchase, compared with less than a quarter (24%) of Millennials. As Millennials have fewer planned brands in mind when heading to the store, it leaves ample opportunity for retailers and suppliers to influence their in-store purchases." Catering to the Millennial demographic is especially important because, as reported on February 2017, "...according to a new report released by the Wine Market Council, an industry association of wine-related businesses, the majority of 'highly involved wine drinkers' are Millennials, and that they drink beer, wine and spirits 40 percent more than the overall adult population."

Conclusion

In this booming and changing market where 3,500 new wine products were released just from 2016-2017 leading to more competition on the shelves, wine companies must understand that millennials' habit of having more willingness to try new brands, and therefore offer the best chance at gaining new customers, must first be initiated by catching the customer's eye with bold labeling in order for the product to be bought and brand recognition be built.
Part
02
of three
Part
02

Wine Drinkers Competitive Landscape

Three competitors of Santa Margherita wine are KRIS wine, St. Michael-Eppan, and Alois Lageder. These three companies were selected based on the region their wine comes from, the quality of their Pinot Grigio (Santa Margherita's best-known variety), and their inclusion on this list of alternatives to Santa Margherita. This list is more than two years old but is the most comprehensive comparison of Santa Margherita to its competitors. A complete comparison of all three companies is available in this spreadsheet.

findings

All three companies grow and manufacture their wine in the same region of Italy. This region is known as both Alto Adige and South Tyrol, and is one of the three regions that Santa Margherita grows and manufactures wine in. Each company produces Pinot Grigio along with many other varieties. The price point for the wine offered by each company ranges from $14 up to $40 for higher-end wines.

There are limited materials available disclosing the target market for these three wine companies. For this reason, assumptions were made based on their social media pages (when available). KRIS wine's target audience is estimated to be younger women based on the contents of their Instagram page and usage of that social media application in general. St. Michael-Eppan's target market is assumed to be both men and women of an older age based on their YouTube channel and lack of presence on social media sites geared towards younger people. Finally, no information was available for Alois Lageder's target market. This is likely because it is a German company located in Italy and therefore very difficult to find any English materials giving details about the company.

CONCLUSION

KRIS, St. Michael-Eppan, and Alois Lageder are all competitors of Santa Margherita wine. Information comparing all three companies is available in this spreadsheet.
Part
03
of three
Part
03

Wine Brands

INTRODUCTION

Wine brands are increasingly using social media listening tools and data mining to gather insights into customer preference and therefore customer purchases. Nielsen, a data gathering company, has used eye-tracking methods to find that packaging and design influence wine purchasing decisions. We have examined customer preference because customer preference directly influences purchasing decisions.

SOCIAL MEDIA LISTENING AND DATA MINING

Wine brands are increasingly turning to consumer conversations on social media platforms to gauge how they are responding to different wines. Crimson Hexagon analyzed social media conversations from 2010-2016 to determine what matters to wine drinkers. They found that the three factors mentioned the most were affordability, quality, and a wide selection. Social media users mention brands in a positive or negative light usually based on these three factors. The wine brand Gallo, for instance, is criticized for its quality and selection, but has received positive attention for its affordability.

Wine brands can also take advantage of data mined from government and international sources too. For example, the World Health Organization found in 2010 that there is "interest expressed by European and United States consumers for introducing nutrition and health information on wine labels." This study did find differences in opinion linked to wine consumption habits and lifestyle, however.

Wine companies are using data mining from social media platforms to determine brand preferences. Olapic, a company that works with brands to determine online marketing strategy, says that alcohol brands are increasingly focusing on the lifestyle consumers want, not the product itself. Corona, though not a wine brand, shows how brands can successfully associate themselves with a certain lifestyle, like vacationing. Brands also strive to connect themselves to a location or mindset, such as with Irish Guinness, Kentucky Bourbon, or wine from Napa Valley, for example. Finally, successful companies are interacting with consumers on social media platforms to show them new ways to utilize their product. Brands can show new cocktail creations or ways to cook with their wine, for instance.

EYE TRACKING

The data gathering company Nielsen has found that what the packaging on wine bottles looks like is a crucial factor in customer purchases. Only twenty-nine percent of wine consumers know what brand they want before they enter a store, and seventy-one percent decide in-store. Sixty-four percent of consumers in general try a new product because its packaging draws their attention. Therefore, having brand packaging that stands out is key. In an eye-tracking analysis of twenty wine brands, "fifty-seven percent more consumers saw the most visible bottle than the least-visible bottle within the first few seconds of looking. Since consumers can’t consider purchasing a wine that they don’t see or notice, strong standout is a key requirement for effective design."

Furthermore, Nielsen found that "more than half of fast-moving consumer goods (FMCG) professionals cite subjective decision-making within their company as a top complaint when asked about the biggest pain points in their company’s design process; 75% indicated that design decisions at their companies are made based on judgment or design by committee." They have found that consumer feedback, however, is the best way to determine what designs will grab consumers' attention. The new wine brand Dark Horse, for instance, states that its package design was a "key factor" in its impressive first year profit of sixty-one million dollars.

CONCLUSION

Wine brands are increasingly using social media tools such as data mining to figure out customer preference and therefore customer purchasing habits. Brands have used data analysis, social media listening, and eye-marketing technology to find out what matters most to consumers and to catch their eye. Wine brands that pay attention to conversations on social media and use consumer feedback to develop eye-catching packaging and labels will likely experience the most success in the current market.
Sources
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