TWE explores new wine drinking occasions
Over the past three years Treasury Wine Estates (TWE) has conducted its largest ever usage and attitudes study, speaking to 3,000 consumers to better understand how they shop and why they drink.
Speaking at the 2018 ILG Conference in Bangkok, Kylie Farquhar the State Sales Manager at TWE told delegates how TWE was using the findings to introduce more people into the wine category.
The study showed a shift in the way Australians are drinking wine. In 2011, 6.1m Australians drank wine at least twice a week but in the last six years, 9.8 Australians drank wine, but just once a week.
The age bracket found to have the lowest level of engagement and therefore which presents the greatest opportunity, is the group from legal drinking age through to 34-years, aka millennials.
“We can see that from legal drinking age through to 34 years of age, 34 per cent of the people we surveyed had only drunk once in six months, and 20 per cent of them every week. There’s actually quite a significant difference as it comes through the age brackets. From 35 to 54 you’ve got 44 per cent of wine consumers that drink every week, and then in the 55 plus group there is 36 per cent,” said Farquhar.
“What this is showing us is that from legal drinking age through to 55 plus, it’s actually more and more important that we start engaging millennials into the wine category.”
So how can we engage more millennials? According to Farquhar the first step is understanding how and where they drink.
Where are people drinking?
The TWE study showed a decline in wine consumption at home and while at home is still the most important place for consumption, more people are shifting towards the on-premise.
“When you just look at spend, there has been a decline in wine consumed at home with a meal and that’s something we’ve actually felt so we’ve done a lot of work through our promotions to try and get people to enjoy a wine at home.
“Interestingly enough there seems to be a trend at the moment for people to go back out for those less involved occasions, so things like those Sunday sessions are really starting to play a key part. There is definitely a balance that’s shifting, so while wine at home is by far the most important place for consumption we are definitely seeing a really big shift towards that on-premise channel.”
In retail, the digital age has shifted the way consumers are making their choices as they are able to do price comparisons on their phones while in-store. And the survey found that more than 60 per cent of shoppers are actually deciding what brand of wine to purchase while in-store.
“It’s interesting that wine has the highest influence in-store than any other category in the liquor industry. When you have a look at things like beer and RTD, the majority of consumers that come into your stores already have a pre-decided brand that they are definitely going to purchase. It’s a little bit different when it comes into cider and spirits, but the significant influence is really more on the wine side.
“Then of course what is most important to all of us is when it comes to pure margin and profit, wine is the second largest category and it’s in the highest growth, but it also has your highest retailer margin as well. So we try to trial as many things as we can to get more people into the wine occasion and to allow more profit to come to your business overall.”
It’s all about refreshment
Farquhar said that TWE took the findings of the study and decided that a focus on refreshment would help to bring new and younger drinkers into the wine category.
“One of the key segments that we’re focusing on, not only this year but into the future, is all about refreshment and of course rosé, which is pretty much the biggest growth segment at the moment at more than 10 per cent of the market. We believe that bringing wine into that whole refreshment category is the biggest incremental growth activity that we could do in the next 12 months and beyond,” she said.
“Looking at the statistics, the number one growth brand with 82 per cent growth is Great Northern. The number one NPD in alcohol in the last 12 months is Iron Jack. The number one beer SKU in $21m worth of growth is Corona. RTD, which was in decline for a long time is now returning to growth and worth $94m.
“And we also look at something that has had the highest growth over the last 12 months with 80 per cent growth and that is the Aperol Spritz.
“So what is it about every single one of those products? They are clean and crisp, they are sessionable, they are spritzed and they’re chilled. So we believe that this is where opportunity knocks within the wine category.”
Next steps for TWE:
Over the last few weeks, TWE has launched a range of wine in cans under the brands of A’tivo, Squealing Pig and T’Gallant.
“In the US they currently sell about (40m cases) $15m of wine in a can per year, and a majority that in the US is still wine, so it is Chardonnay, Pinot Noir and Cabernet – and it is quite a significant segment. They also sell wine in a can in the UK but they do quite a lot of Prosecco over there and it’s actually in 38 per cent growth in the UK market at the moment.”
Taking all of their findings from the US and the UK, TWE found that the top selling wine in can from around the world was always either sparkling or spritzed and very varietal driven.
“From that, all of the cans that we’re launching into the market right now are spritzed. They’re all 250ml serves, they’re all eight per cent alcohol and they’re all wine, so they’re not an RTD. They are 100 per cent wine based and something very new to the market.
“We are going to put a campaign together over summer which is all about opening up that afternoon refreshment session and giving people an opportunity to potentially move away from the dominance of beer and into canned wine as an alternative.
“Our campaign is what we’re calling ‘The Big Chill’ so chill it, ice it, share it. By doing that, we believe together we will drive wine into more occasions, we will drive more foot traffic into stores and venues and then obviously a key part of this is trying to inspire new consumers into the wine market.”