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Another study agrees: We buy wine on price

winetrends

wine genome studyThe biggest surprise in the Wine Genome study from Constellation Brands, one of the biggest wine companies in the world? That one-fifth of us buy wine on price.

“We knew they were out there, but the widening span of the study showed how deeply the recession cut,” said Dale Stratton, the Constellation official who oversaw this version, the third, of the company’s Project Genome, designed to identify the most common types of of wine drinkers based on purchase behavior, motivation, and preferences. “The recession had a big impact and significantly changed consumer spending habits.”

Stratton laughed when I asked him about this. No, he said, it’s not that Constellation (whose brands include Rex Goliath, Mark West, and Robert Mondavi) didn’t expect price to be important. Rather, it’s that price-driven wine drinkers were the biggest category of the six, doubling the number of  Enthusiasts — those who “love everything about the wine experience,” including researching purchases, reading reviews, and sharing wine with others. In other words, the Winestream Media’s audience. The other thing to note here? The Enthusiasts account for 15 percent of profit, compared to 14 percent for the Price-Driven group. Harrumph.

The study, which updated a 2004 effort, is full of surprises — unless, of course, you visit here regularly (and you can see a nifty infographic describing each group here):

• The third-biggest group, at 19 percent, are Overwhelmed, which means pretty much what it says: “I don’t enjoy shopping for wine, and find it complex and overwhelming. This, says Stratton, reinforces the need for wine education, not only for consumers but for those who sell wine — distributors, retailers, and restaurateurs. Hearing this was surprising enough, but I almost dropped the phone when Stratton said that winespeak is one of the reasons the overwhelmed are overwhelmed. Maybe, he said, retailers and wine writers should find simpler terms to use.

• Women, who have traditionally skewed higher for wine purchases at the lower end, are becoming more important at the higher end. The Enthusiasts, who were about 65 percent male in 2004, were close to 50-50 this time. “This means more women see wine as a hobby,” says Stratton, and that means more women attend tastings and shop at wine-specific retailers.

• Wine snobs, called Image Seekers, are still with us, and in a big way. They account for 18 percent of wine drinkers, but contribute 26 percent of profits, more than any other group. Given the wine they drink, that’s probably not surprising.

• Welcome the Millennials to wine, in the form of the Engaged Newcomer at 12 percent. This group is young, wants to learn more, and recognizes that wine is intimidating. They also spend more on a bottle than the other groups, about $13.

One other point worth noting: This kind of study is common for consumer packaged goods like laundry detergent and ketchup. That Constellation can do for wine what Proctor & Gamble does for its products speaks volumes about how much the wine business has changed, and that it is becoming more mainstream.

“Wine is increasing household penetration at a good clip, and the audience has broadened,” said Stratton. “And it’s going to continue to change, as the American population changes.”

Winebits 161: Constellation sale, Chinese wine fraud, Pennsylvania wine laws

Constellation exits Australia: The world's biggest wine company has sold its Australian labels as it continues to retrench in the wake of the recession. Constellation Brands is selling its 80 percent stake in a venture that includes Hardys and Banrock Station to an Australian private equity firm for about $230 million. After the sale, it will no longer be the biggest wine company in the world; that honor will go to E&J Gallo. The other catch? Constellation paid $1.1 billion for the Aussie brands when it bought them in 2003, and its timing was perfect — the Australian wine business was entering a slump which has only gotten worse. Which leads the Wine Curmudgeon to wonder: How does a company stay in business after it sells something for only 20 percent of what it paid for it?

Tainted Chinese wine: Six people have been detained, several wineries shut down and bottles pulled from shelves in China after authorities found wine containing several chemical additives. An expose broadcast by state television found that that wineries were doctoring their products with sugar water, coloring agents and artificial flavorings, and then falsely using famous brand names. No wonder Chinese collectors are paying so much for high-end Bordeaux — at least it's really wine.

Pennsylvania de-regulating booze? Pennsylvania is a control state, which means all alcohol is sold through state-owned stores and nowhere else. It's the poster child for the control system — but all that may be about to change. Says Philly.com: "But 2011 may usher in a different outcome for the state Liquor Control Board and the 620 wine and spirits stores it runs: Gov.-elect Tom Corbett appears committed to yanking state government out of the business of selling alcohol once and for all." We talk a lot here about government regulation and where it's headed, and there have been big doings over the past couple of years. But Pennsylvania getting out of the booze business? That would be the biggest news yet.

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