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Don’t call them “Generation Z”
By John Gillespie
For more than a decade, wine marketers have fervently sought the hearts and palates of the Millennial generation. Though still focused on Millennials, some wine marketers are beginning to pay attention to the oldest members of a new generation who are now in their early 20s and entering the beverage alcohol market.
The first issue to address? What to call them.
For many pundits and business writers outside and inside the wine industry, “Generation Z” is often used to describe those who are younger than Millennials. This is a misnomer that does not take into consideration the generational research and work of demographers in weighing the factors that go into generational boundaries and definitions.
There is, of course, a “Generation X,” which led briefly to “Generation Y” and now to “Generation Z.” But before “Generation X” became a description of the smaller generation following Baby Boomers, demographers referred to them as the “Baby Bust” generation, using the same metrics of rising and falling U.S. birth rates that defined Baby Boomers.
In 1946, when American service men and women returned from WW II, the birth rate in the U.S. literally boomed, and did not decline significantly until 1965, when the birth control pill was deemed a constitutional right of privacy by the U.S. Supreme Court. Thus, the Baby Boom generation was bracketed by birth years from 1946 through 1964. Those born from 1965 until 1976 (when the birth rate rose once more) were called the Baby Bust generation until a 1991 best-selling novel written by Douglas Coupland (a Canadian writer who is himself a Baby Boomer) painted an enduring portrait of disaffected “20-something” Southern Californians who held in common a disdain for the generation preceding them and its culture. The term “McJob” originated in the novel, as did the protestation “I am not a target audience.”
To Coupland, the “X” in “Generation X” had nothing to do with alphabetical order but referred to an “unknown,” as in mathematics. The term “Generation X” stuck because it perfectly described the demographic cohort it represented, and has been accepted by marketers and academics alike.
“Generation Y” was a short-lived “placeholder” term, replaced by one that is truly defining – Millennial – an apt description for the first wave of Americans to enter adulthood in the new millennium. So, just as there was no “Generation W” preceding Generation X, there will be no “Generation Z” following the Millennial generation.
There are no governing bodies or universally accepted methods for defining and naming the generations. In fact, the Baby Boom generation is the only generation with an established definition accepted by the U.S. Census Bureau. But there are two authoritative groups with a long history of tracking and reporting on the subject of generations – the publishers of the American Generations series of reports, and the Pew Research Center.
These two organizations are fairly close in the age ranges they set and the terminology they use to define the generations. A comparison of their definitions can be seen in the chart below, which shows the age ranges of the generations in 2019.
At Wine Opinions, we use the definitions set by the 8th Edition of American Generations to analyze survey data by generation. Pew Research has set an age range for Millennials that is the same span (16 years) as their age range for Generation X. The age range for Millennials set by American Generations uses the guidelines they have adopted for setting the span of other generations – the rising and falling of the birth rate in the U.S. Each of these methods is sensible and offers some advantages.
While generational comparisons and analysis are often useful in consumer research, these broad age segments are not always key drivers of behavior. At Wine Opinions we often analyze behavior and attitudes by gender, “age bands” (20s, 30s, 40s, etc.), region, media usage, and other such demographic or behavioral groupings.
With regard to the generation following Millennials, Pew Research issued a statement in March of 2018 stating that they had set their cutoff birth year for Millennials as 1996. Anyone born from 1997 through 2012, in the view of Pew Research, belongs to a generation they refer to as “Post-Millennials.” Pew believes it is too early to name this youngest generation, and they caution that their Post-Millennial ending birth year is still subject to revision. In American Generations, though, those definitions have been set. Noting that the birth rate in the U.S. stabilized in the mid-1990s, and fell once more in the onset of the Great Recession, the group they call the “iGeneration” is defined by the birth years 1995 through 2009.
In her book, “iGen,” Jean M. Twenge Ph.D., a professor of social psychology, notes that today’s teens are the first generation to have spent their entire adolescence in the age of the smartphone, and that social media and texting have replaced other activities for them. Dr. Twenge’s work draws on surveys of 11 million young people, as well as interviews, and details how the changing world around them has affected them.
At Wine Opinions, we are now getting consumer survey responses from the first wave of iGeneration young adults, ages 21 – 24. While the numbers are not sufficient yet for statistical significance, we are finding that when they are compared to the very youngest Millennials (25 – 29) there are a few encouraging signs. For example, in a very recent survey we found that wine consumption frequency of the two groups was only slightly higher for Millennials. Perhaps not surprisingly, the iGeneration group is somewhat more reliant than the Millennial group on wine advice from friends or family members, and they also gave a bit more weight to the value of wine scores or ratings when choosing a new wine, compared to Millennials.
In the coming year, we will learn more about the leading-edge iGeneration members as they enter the world of wine. We are now recruiting this age 21 – 24 cohort to our national Wine Opinions consumer panel and look forward to providing insights on their wine preferences, attitudes, behaviors, brand familiarity, media consumption, and other factors of interest to wine marketers through 2019 and beyond. Meanwhile, please call them the “iGeneration,” or “Post-Millennials.” Or wait for the Pew Research Center to offer its alternative.
WHEN DO RESPONDENTS TAKE SURVEYS?
By John Gillespie
A recent article published by Survey Monkey reveals a wide range of habits among survey respondents in terms of the days of the week and times of the day they are most likely to take a survey. At Wine Opinions, our 12 years of survey experience also shows some interesting behaviors by trade and consumer respondents.
The Survey Monkey data shows that most weekday survey responses begin at 7 AM and peak around 10 AM, then decline through lunch hours and reach a daily peak around 2 PM. Weekend days tell a different story. On Saturday, the morning responses are nearly the same as on weekdays, but afternoon responses are low. Sunday survey takers start later and reach a peak of responding at 9 PM.
There are very few notable differences between genders or age groups in terms of the time of their responses, though younger respondents generally start answering surveys a bit later in the morning than others.
Those taking surveys on their mobile devices follow a somewhat different pattern. They tend to take surveys later in the day, into the early evening.
At Wine Opinions, we have found that our consumer surveys get the best overall response if they are launched on a Tuesday or Wednesday morning and when a survey reminder is sent on Saturday. For surveys of the wine trade, Mondays and Fridays can be less productive than the middle of the week and the weekend.
Surveying Trends
By John Gillespie
With smartphone ownership at 77% of U.S. adults and rising, companies conducting online surveys face a considerable challenge in optimizing their surveys for respondents taking surveys on their smartphones. Aside from growing ownership and usage of smartphones, recent data from Inc. Magazine shows that the average smartphone owner checks that phone on average 150 times a day. And smartphone ownership now equals the ownership of desktop/laptop computers (78%) and is significantly greater than the ownership of tablet computers (51%).
This is especially relevant to surveys among wine consumers, because they skew demographically to the very highest percentage of smartphone ownership (those with some college or college graduates and those with higher than average household incomes). For this reason, we pre-test every survey in three modes – desktop/laptop computer, tablet, and smartphone.
While survey length may be an issue for those responding via smartphones, question composition and layout is an even greater challenge. So-called “matrix” questions where there are multiple column choices as well as multiple answer or statement rows are especially difficult to maneuver on a smartphone. The size and clarity of any product images included in the survey must also be taken into account.
Our surveys are optimized for both tablet and smartphone use, but we are always aware of the challenge posed by smartphone use, because today roughly one-third of online surveys are taken by smartphone users. And that is a number that will surely continue to grow.
The Wine Consumer Online Population
By John Gillespie
Wine Opinions was formed in 2005 – a time when the shift from random dialing consumer telephone surveys to online surveys of consumers was well underway. At Wine Opinions, be believed that the best and most efficient way to engage U.S. wine consumers was on the Internet, and our supposition has proven to have been correct, as today nearly all wine consumer quantitative surveys are conducted online.
Our market advantage is that we were the first research organization to assemble an online panel of U.S wine consumers, with significant skews toward those who drink wine frequently and those who frequently buy wines costing $20 and over.
A recent survey conducted by the Pew Research Center confirms our rationale. Nearly all U.S. adults are online, as only 13% say they do not use the Internet, compared to 48% not using the Internet in a baseline survey conducted in the year 2000.
Age is the greatest differentiator, with only 1% of those ages 18 – 29 not online, compared to 41% of those who are age 65 or older. There is also a skew among those not online to having less than a high school education (34% not online, compared to only 3% of those with college or higher educations). And there is a related skew among those not online to the lowest household income levels. There are only small differences among the genders or ethnic groups, but there is a somewhat greater skew among those not using the Internet to rural communities (22%) compared to urban (12%) or suburban (11%) communities.
There are now nearly 17,000 members of the Wine Opinions consumer panel nationally, covering all major demographic segments, and they are a valuable and continually growing resource for wine marketers seeking insights on the probability of market success for their products.
A Conversation with iGeneration Wine Drinkers
By John Gillespie
At Wine Opinions, we recently conducted an online panel discussion with 10 wine drinkers, all of whom turned 21 in 2016. These young adults are among the leading edge of the generation following Millennials – called the “iGeneration” (defined in American Generations, 8th Edition).
This was a purely qualitative exercise, a discussion of beverage alcohol usage among the participants – several of whom were still in college, with others just starting careers. They were recruited and screened for their current usage of wine. Half of the group stated their wine consumption to be, on average “a few times a week,” while two stated wine consumption to be about once a week and the remaining four participants stated their wine consumption to average once every 2 – 3 months. They were equally divided between males and females, though females on the whole were the most frequent wine drinkers.
Asked to describe their typical wine drinking habits, one of the female respondents put it this way: “I will have a glass of wine when my roommates and I hold ‘wine nights’ or ‘wine and cheese nights’ where everyone brings a bottle of wine or a block of cheese and we all spend time in the house laughing and catching up.”
As might be expected, cost was a major factor across all types of beverage alcohol purchases, but most were willing to pay $10 for a glass of wine in a restaurant and up to $20 – $30 for a bottle of wine to enjoy at home, though their most frequent wine purchases were in the $10 – $15 per bottle range. Of interest is that none of group expressed any “fear of wine” or uncertainty in their wine shopping experiences, and several cited good values in wines they had recently purchased from both Trader Joes and Costco.
In the 8th edition of American Generations, the authors set the birth years of iGeneration as 1995 – 2009. There are 61 million members of iGeneration (fewer than Millennials or Baby Boomers, but much greater in number than Generation X). They are the most ethnically diverse generation of all: “A minority majority generation.”
As these newly-minted adults move into the beverage alcohol market, Wine Opinions will be conducting more qualitative and quantitative research on their tastes, attitudes, purchases, and usage of wine. There will certainly be much to learn.
“Big Data” Makes an Entrance on the Wine Market Stage
By John Gillespie
The wine industry is no stranger to the use of data in making vineyard and cellar decisions, and market research data is critical for brand positioning and sales/marketing planning. Research companies like Wine Opinions provide data and analysis gathered from quantitative surveys of U.S. wine consumers or the wine trade for wine marketing companies, wine trade associations, and wineries large and small. Wine Opinions has performed this service for our clients over the past 11 years.
Recently, we have added capabilities to our research services, allowing Wine Opinions clients to source consumer survey respondents from the Wine.com customer database (selecting respondents with specific brand purchase history) and trade survey respondents from the database of SevenFifty.com.
We have also been pleased to see new data sources appearing which are of great interest to both wine market researchers and brand owners. These are streams of “big data” based on consumer behaviors measured mainly by the usage of apps downloaded to mobile devices.
Two examples getting attention recently are well worth noting by anyone interested in learning more about U.S. wine consumer behavior. The first of these is from Enolytics, an Atlanta-based firm dedicated to “bringing the power of big data to the wine industry.” While they are a new firm, they are off to a very good start. Enolytics partnered with Hello Vino, a leading app for wine shoppers, on a project that focused on consumer search and shopping activities, including a number of factors such as day of the week, time of day, season of the year, and major U.S. markets. The result is a report entitled “When is Wine O’Clock?” which is certainly of interest to wine marketers.
Another report was recently released by Vivino, a wine shopping and information app of some importance. In May, 2016, Vivino published a report based on a survey of their users’ wine drinking habits, with a focus on when and where they are most likely to be enjoying wine. As with the Enolytics and Hello Vino report, the findings are certainly of interest.
In a recent survey of 1,072 high frequency wine drinkers, Wine Opinions asked respondents to indicate (from a list) which wine apps they used on a weekly or more often basis. Among the wine shopping apps, Vivino was the top choice (9.6% of respondents citing weekly or more often usage). And while this is not an overwhelming number, it is nonetheless significant, and the popularity and usage of wine shopping, information, delivery service, and other such apps continues to grow at an impressive rate. “Big data” offers wine marketers a new and vast opportunity to target wine drinkers and fine-tune marketing initiatives. It is certainly a welcome addition as a source of information and knowledge.
Millennials Do Indeed Love Wine
By John Gillespie
A key finding from the Wine Opinions report – American Wine Generations – has been questioned on social media but the findings are verifiable.
On Twitter, having looked at the graphic posted below, one tweeter opined, “Do you think that 75% of Millennials have been to wineries?” And another chimed in, “This is a preposterous statement and can be dismantled from many angles.”
But the facts speak for themselves. What those tweeters neglected was that winery visitation measured in a recent Wine Opinions consumer survey was from a survey limited only to High Frequency wine drinkers (those who, on average, drink wine either daily or several times a week). Only one in three U.S. wine consumers is a High frequency wine drinker, but they account for about 85% of all the wine purchased. In short, they are the people who truly love wine; they are involved in wine and interested in learning and discovering more.
So that fact that among these wine drinkers, 75% of the Millennials in this group report that they have visited at least one winery in the past year is rather unremarkable. Greater percentages of High Frequency wine drinkers who are Gen Xers and Baby Boomers have visited at least one winery in the past year (77% and 78% respectively) so this bit of data should come as no shock to anyone.
Further, Millennials make up a significantly smaller proportion of High Frequency wine drinkers than Baby Boomers (38% of all High Frequency wine drinkers are Baby Boomers, while 30% are Millennials). So, we are talking about a much smaller group of Millennials than Baby Boomers.
Anyone looking dispassionately at the facts will agree that the 79 million U.S. Millennials are of critical importance to the wine industry and its future. And there are, in fact, more wine-drinking Millennials today than there are Baby Boomers. We should rejoice in the fact that (like older generations) wine has a special appeal to a good many Millennials, and this includes winery visitation.
Wine Generations at the Crossroads
By John Gillespie
2015 and 2016 are milestone years on the U.S. wine market.
In 2015 the World War II generation sank to single digits in millions, less than the population of New Jersey.
The youngest member of the Swing generation, though more than a dozen years behind the World War II generation, turned 70 in 2015 and Generation X saw their oldest members reach 50.
And at the end of 2015, the very youngest Millennial turned 21 on New Years’ Eve.
In 2016 the oldest Baby Boomers will turn 70 years of age.
In 2016 the youngest member of Generation X will turn 40 and, most importantly of all, the next generation – the iGeneration – enters legal drinking age in 2016 as their oldest members turn 21.
Taken together, these two years will be transformational to the U.S. wine market.
At Wine Opinions, we have conducted the most extensive generational research of wine drinkers ever, and our findings are detailed in our American Wine Generations report.
Don’t Overlook Generation X
By John Gillespie
Much of the discourse about generations and how they influence the wine market focuses on the long reign of Baby Boomers as drivers of the market and the fact that Millennial wine drinkers as a group are now edging ahead in total wine consumption. Soon, as the oldest members of iGeneration reach legal drinking age, a new topic of conversation in the wine industry will emerge, as marketers speculate on the tastes, beverage alcohol preferences, and rates of adoption of wine among this group of 61 million.
Lost in all of this is Generation X. While there are 79 million Millennials in the U.S., and 75 million Baby Boomers, there are merely 49 million members of Generation X. However, their importance to wine marketers has never been greater and continues to grow, as they reach their peak earning years.
According to the Bureau of Labor Statistics, the average household spending by generation in 2014 was $43,942 for Millennial households, and $58,202 for Baby Boomer households. But for Generation X, average household spending was $63,137. And the same report showed that average household spending on entertainment was highest among Generation X households.
Moreover, Gen X consumers are willing to spend on higher priced wines. A recent report from an online wine seller shows that the average bottle price of wines sold to Generation X customers was higher than that paid by either Millennials or Baby Boomers.
Recent Wine Opinions consumer surveys also point to the importance of Generation X wine drinkers. Among all high frequency wine drinkers surveyed, Generation X wine drinkers have, on average, made more winery visits than Millennials in the past year. And though conversion in tasting rooms to winery club membership is still highest among Baby Boomers, some 35% of Generation X winery visitors in the past year joined a wine club, compared to 24% of Millennials who did so.
Wine marketers – especially those selling wines over $20 – would be well advised to pay attention to consumers between the ages of 40 – 51. They are spending more than any other generation, they spend nearly as much on wine as Baby Boomers, and they are outspending Millennials.