Do wine drinkers trade up?
Trading up is one of the most basic assumptions in the wine business, fitting hand in glove with the concept of a gateway wine. The idea is that one starts drinking wine with the gateway — something cheap and probably sweet, like white zinfandel — and then moves up in price and quality, eventually buying expensive, highly-rated wine and talking like someone who writes for the Winestream Media. Talk to enough people in the wine business, and they’re convinced — or they let themselves be convinced — that this is the way the world works.
It’s much more difficult, though, to figure out whether this actually happens. More, after the jump:
Trading up seems logical, in the same way that teenagers start with cheap used cars and buy better and more expensive new cars as they get older and make more money. That this happens in wine just seems so sensible that it must be true. After all, isn’t that what each of us did? The problem is that we, alone, are a very small sample size, and there is almost no statistical evidence that wine drinkers trade up. In fact, what evidence there is suggests just the opposite.
“Wine drinkers are more skeptical that higher prices are a harbinger of higher-quality and are not as predisposed to trading up as spirits drinkers or beer drinkers,” says David Decker, the president of Consumer Edge Insight, which studied the issue last year. “This will make it more difficult for the wine industry to take price increases and to follow the spirits companies’ strategy of migrating consumers to more premium-priced brands. Premium wine brands need to do a better job making the case to wine drinkers why they cost more.”
A 2008 study, looking at the British wine market, found much the same thing: “These results, therefore, query the effectiveness of much research activity which is aimed at developing marketing strategies to encourage entry point and low involvement wine consumers to trade up. Instead the results suggest that further research is needed to identify whether or not triggers to trade up actually exist in these two groups of wine consumers.”
In this, the missing element is education. If wine drinkers don’t trade up, it’s because they don’t know enough about wine to feel comfortable doing it. Or, as one regular visitor to the blog said in an email: “I hate to spend money on a wine I don’t know anything about.” That comment is supported by a 2013 Canadian study, which found that a majority of the students in a wine education class drank wine more often and spent more money on wine after taking the class. The most intriguing statistic – 90 percent of the study participants said the class changed their behavior as wine consumers, and 91 percent said they felt more comfortable choosing wine when the class was over.
Given that, for most wine drinkers, wine education is something someone else does, the question should not be if they trade up, but that they would even know what it was.