Ontario Wine - Insight Conference, March 1 2016

Damien Wilson/Insight Ontario, March 1, 2016

A presentation for the Ontario Insight ConferenceMarch 1, 2016

Wine Business Institute Wine Sector Outlook

Damien Wilson

The challenges on the horizon that the wine sector faces

@WineBusProf

Damien Wilson/Insight Ontario Conference

Theme 1: Baby Boomers and Wine…

American Route To Market Hourglass…1995

2016

~1,800 Wineries

~3,000 Distributors

9,461 Wineries*

~700 Distributors


Theme 2: From Introduction to Enthusiasm

?

LET’S TAKE A LOOK AT THOSE WINE-LOVING BABY BOOMERS…

Theme 1: Baby Boomers and Wine


The difference in branded, premium wineFrom Silicon Valley Bank 2015

Boomers number more than 3x Millenials in highest price categories


The Outlook in Wine ConsumptionSVB STATE OF THE WINE INDUSTRY 2016


What we know about wine consumersAN ILLUSTRATION OF HOW CONSUMERS COME INTO THE CATEGORY


From the OIVWINE CONSUMPTION OVER THE PAST 50 YEARS IN BILLION LITRES

Boomers coming of age window

Xers coming of age window


Millennials’ Coming of Age WindowFrom Euromonitor 2015

2000 2001 2002 2003 2004 2005 2006 2007 2008 2009 2010 2011 2012 2013 20140

50

100

150

200

250

300

350

Market Size at Retail Selling Prices in Billion US$, 2014 valueWorld +15%

Western Europe -15%

N.America & Asia +50%


The Unknown…KNOWING THAT WINE PREFERENCE CORRELATES WITH LIMINALITY…

Millennials coming of age window

IN A MARKET RELYING ON WINES OF A LOCATION…

Evidence Submission #2


In France: decline. No other way to explain itFrom France AgriMer

~45Million ~31Million


But an even bigger problem is pending…From France AgriMer


In case you missed it…• Awareness of French wine>Bordeaux>Every AOC• Regions with salience attract a price premium - From Combris

(1997) to Schamel (2006), to Oczkowski (2010) and numerous others

• Tellingly, there’s a premium from generic to specific but loss of awareness brings pricing discounts through loss of potential sales (Gillespie 2005)

• Specifically, AOCs in France have doubled since the 1970s• So, as the prestige of French wine has increased, no mechanism

existed to bring new drinkers to category

https://docs.google.com/forms/d/14NM7oUG2i6_kMAEe59tr8auP-Girt-geSgY_P9awk1s/edit?usp=forms_home

https://docs.google.com/forms/d/14NM7oUG2i6_kMAEe59tr8auP-Girt-geSgY_P9awk1s/edit?usp=forms_home

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HOW ABOUT ONTARIO?Evidence Submission 3


Beginners choose yes/no wine…Novices on the left, the enthusiast on the right….


Use evidence more than emotion

• Alex my Nemesis

1. Wine Making gets the attention. Deal with it.

2. Make sure they know your value

• VQA Riesling outsells PG more than 2 to 1 • But consumers otherwise don’t

gravitate to Riesling• Don’t assume your customers understand. Find

out• Measure your brand’s character

Just because you want it to be that way….

Own Image


Brand CharacterMeasuring Character: How you

behave when no-one is watching

BRAND CHARACTER: How consumer’s behave when you’re not watching


Research has found…

• Sales rely on two things:

1. That consumers are aware of your wine, and

2. That your wine is available where they like to purchase

• Millenials are growing, and they like wine• But they are influenced differently to

previous generations• Know how they perceive you

• The journey from Novice to Expert provides the answer to the riddle behind sustained growth in the wine sector

How the boffins are trying to make your job easier

Image found at : http://goo.gl/V92k5N

http://goo.gl/V92k5N

http://goo.gl/V92k5N


For my details, photograph the QR code

• Getting growth back will rely on understanding transition from wines of style, then variety, then….?

• Enthusiasts love the minutae of wine trivia, but non-wine enthusiasts just want a wine that’s not bad!

• With tomorrow’s market witnessing the end of boomer dominance, wine needs to embrace the transition process from novice to enthusiast, and encourage transit through that process

IMAGE TAKEN FROM: HTTPS://GOO.GL/CTVLF4

https://goo.gl/CTVLf4

https://goo.gl/CTVLf4


Growing the Ontario wine market…

• Trading-up (only) is a false economy• Refresh the market with new

consumers. Constantly• We suspect that every time a wine

consumer is irritated by a wine snob, a kitten dies.

• Please think of the kittens when encouraging more consumers to drink wine from Ontario

IMAGE TAKEN FROM: HTTPS://GOO.GL/NM942G


Thank you!

DAMIEN WILSON - @WineBusProf