By Renée Allen, CSS, CSW, FWS
The United States has been the largest wine market by volume since 2010 and shows no signs of slowing down anytime soon. Approximately one-third of Americans drink wine, or roughly 120 million people. With these kinds of numbers, one would think there are plenty of consumers to go around. But opportunities for consumers to purchase wine are also on the rise. With increasingly varied ways to buy wine and more options than ever for connecting globally, the business of selling wine has become highly competitive.
Americans have easy access to wine; there are more than 550,000 locations (both on- and off-premise) selling it. With Americans drinking more wine off-premise than on (home consumption resoundingly outpaces consumption at bars and restaurants), wine buyers are looking past the corner package store to other venues, including giant liquor stores, warehouse stores and store private labels (think Kirkland at Costco) to fulfill their wine buying needs. Requiring a mere click of a mouse, direct shipping is one of the fastest growing sources of vinous supplies. Direct shipping by large wine producers increased a whopping 183% from 2015 to 2016.
With so many options available, wine retailers are searching for ways to protect their corner of the market.
Does Size Matter?
The initial debate is typically one of scale — whether it makes more sense to offer the largest selection of wine possible or to provide a smaller, yet more eclectic variety. Giant liquor stores keep the largest inventories, often dominated by lower-priced items and popular brands. The typical Total Wine & More offers more than 8,000 wines. This style of store appeals to consumers who crave countless choices. They are also better bets for the imbiber who wants to pop in to pick up her favorite bottle of chardonnay each week without having to worry that it will no longer be there.
Sometimes Less is More
For retailers with more modest inventories, what they lack in size can be made up for with interesting, hard-to-find items and a more frequent rotation of stock. Often carrying only 100-150 wines, this type of store appeals more to those wine enthusiasts who are overwhelmed by endless aisles of options. One current trend that may favor the smaller retailer is that of premiumization. Improved consumer confidence ratings in 2017 translate to wine drinkers “buying up” to more expensive brands, a trend that is expected to continue for the foreseeable future.
Savvy Sipping Millennials
Millennials and Baby Boomers accounted for the majority of the estimated $60 billion of wine consumed by Americans in 2016. Research has shown that, not only do Millennials drink more wine, they are also more knowledgeable about it, opening opportunities for niche marketing. Stores that offer the wines of only one country or winemaking region, for example, are becoming more common as consumers seek to learn more about the wine they drink.
Wine Buying for Dummies
With so many wines from which to choose, retailers are becoming more creative when categorizing wines. Traditionally, wines have been shelved according to region. But unless a shopper has studied the appellations of France, it can be very confusing to know just what’s in those bottles. A popular alternative is to group according to grape. However, with so many grapes (there are actually more than 1,300 winegrowing grapes), and so many blends, this method can get messy. In an effort to ease the buyer’s burden, some retailers are reordering their rows into more practical categories, such as price, profile, or pairings. This point and pick procedure does have certain merits. Shopping by price narrows one’s search substantially. The profile approach would be welcome to a customer who likes red wine but hates to tackle tannins. Simply direct them to the “light reds” section. Those stopping by for a bottle to enjoy with dinner might delight in a store arranged by pairing suggestions. Having pork roast for dinner? Peruse the panoply of porcine-friendly wines in Aisle 3.
A Little Knowledge…
Whatever the size of the outlet or method of organization, a key element to successful sales is education. There is no substitute for having knowledgeable sales people available to consumers. When there is informative interaction about a bottle of wine, there is a greater likelihood of making a sale. Other educational offerings, such as shelf talkers, wine recommendations, and an opportunity to taste wines before purchasing, further bolster sales. With what can be an overwhelming topic, knowledge empowers consumers. And, the more a consumer knows, the more he or she wants to know, which ultimately translates to more sales.
Renée Allen is the Director of Education for the Connecticut-based Wine Institute of New England. She is a wine and spirits educator and writer, as well as a wine judge. She can be contacted at www.wineinstituteofnewengland.com.