So, The Wine Industry has a Demand Problem: Three Critical Exercises Brands Can Do Today to Strengthen Reach

Business employees man, woman drinking wine on corporate party meeting clinking wine glasses. Group of business people partying drinking wine socializing chatting together. Flat character illustration isolated on white background.

By Maggie Zeman

Every January like clockwork, the US wine industry anxiously awaits the release of the Silicon Valley Bank State of the Wine Industry Report. Presented at a live virtual event each year, the author Rob McMillan, EVP and founder, Silicon Valley Bank Wine Division, delivers what has become a bellwether for what’s to come in wine. This year the initial news was good for the industry. While we can’t review the entire 66-page report here, suffice it to say 2021 experienced a noteworthy bounce-back post pandemic. Restaurants reopened and wineries welcomed tourists back to tasting rooms once more. As brick and mortars slowly reopened, wineries also experienced an increase in direct-to-consumer e-commerce and digital marketing sales. This can be seen as a good sign. Consumers who purchased wine online during the pandemic are not abandoning online purchases post Covid.

Now for the bad news. Wine industry growth turned negative in 2021 after slowing dramatically in recent years. What does this mean? The wine industry is facing a demand problem. Baby Boomers are aging out of wine at a time when the industry is facing tough competition from other categories — spirits, beer and seltzers — for the 25+ audience. What is the industry to do? Enter WineRAMP, an initiative formed by McMillan and three other wine industry executives to engage the industry and stop the slowing demand for wine. This consortium of wine industry companies hopes to create a joint promotion campaign designed to ultimately improve sales growth to existing and new consumers. It remains to be seen if the wine industry will answer the call of WineRAMP and come together to create what amounts to a national Wine Board. While some are against it, many have already joined in hopes a collaborative effort can drive consumer demand.

In the short term, wineries must check their brands to make sure they’re doing what they can to increase their awareness. Here are 3 critical exercises brands can do to strengthen reach.

  1. Update Your Customer Profiles: Have you profiled your target customer lately? As we discussed in an earlier blog post, brand personas need to be updated about every 12 to 18 months. It’s particularly important if you’re retargeting your brand to new audiences, or finetuning your message.
  2. Amplify Your Own(ed) Story: We continue to tell our clients that content is king. When that content is your own, and you combine it with earned media (press hits) and paid content (sponsored posts or digital advertising) you’ve hit the trifecta of brand amplification. Do an audit of your content strategy to determine if you’re hitting your messaging on all cylinders or if you need an upgrade. (We’re here to help with your content strategy.)
  3. Consider What Matters Most to Your Audience: We know younger consumers increasingly use their purchasing power to support brands that align with their own values. Identify how your brand is authentically engaging with sustainability and advocacy efforts. Then decipher how your brand aligns with this critical target audience and amplify those efforts via your digital marketing and communications strategies. This will ensure you’re connecting your brand with this competitive audience in real time.

Recruiting and retaining loyal consumers requires actively managing your brands and your marketing efforts. Take these actions now to future proof your business.