Episode Transcript
[00:00:04] Speaker A: Why do we drink what we do? Why do some drinks become classics while others languish at the back of the drinks cabinet?
[00:00:11] Speaker B: Is it just because we prefer those drinks? Or are there underlying economic, social or technological trends that shape our choices?
[00:00:19] Speaker A: And that's what we're going to explore on A Question of Drinks.
[00:00:22] Speaker B: Join us as we explore the hidden side of the drinks cabinet. The decisions, reversals and underlying forces that shape the beverage market. I'm Luli Halstead.
[00:00:32] Speaker A: And I'm Felicity Carter. And together we host A Question of Drinks.
Luli, you're looking suntanned again. Where have you been? Is this another one of your sabbaticals?
[00:00:47] Speaker B: It's great to see you as well, Felicity. Well, I did actually spend last week working from Spain, but I did use the opportunity to do ethnographic drinks research while I was there.
[00:00:57] Speaker A: Ok, Is that your way of saying that you went and sat in bars?
You.
[00:01:03] Speaker B: Sort of. Sort of. But. But I can report back that the wine is certainly front and center in many bars and restaurants in Catalonia.
[00:01:12] Speaker A: Oh, thank you for telling us that. We will never have a guess.
[00:01:15] Speaker B: Yes, which I thought you'd be pleased to know. Which also conveniently leads us nicely into this week's question for listening.
[00:01:22] Speaker A: Oh, I see what you did there. Slid right past the thing. Okay. Yeah, yeah. So what is today's question?
[00:01:27] Speaker B: Well, thank you for asking. So today we're doing something a bit special. So this is part two. Looking at the question. Has wine become irrelevant?
[00:01:37] Speaker A: Ah, yes. All right, so if you haven't heard our previous argument discussion in the last episode. Yes, a discussion we discuss where the wine has become culturally irrelevant.
[00:01:48] Speaker B: Yeah. And you, Felicity, boldly said, yes, it has.
[00:01:52] Speaker A: Well, with caveats. With caveats, I said the mass market is in trouble. So fine wine and what you might call artisanal wine are both in great shape. But in this episode, you, Luli, are going to argue the question of whether the middle of the market is still as commercially relevant as it was.
[00:02:09] Speaker B: Yes, and I suspect this one, this episode will provoke lots of feedback and people, either silently or potentially out loud, shouting at us. Felicity.
[00:02:18] Speaker A: But the good thing is we can't hear them. Yes. So there you go. Makes no difference.
All right, so given the enormity of the question, Luli, do you have one of your handy frameworks ready to help us get started? Started?
[00:02:31] Speaker B: Of course I do. What would an episode of A Question of Drinks be without a framework? So, first you'll prosecute the middle mass market of wine. Why? The commercial case looks weak, and then I'LL defend it. Why Wine still has relevance if it stops pretending the old model will save it, though.
[00:02:52] Speaker A: All right, we've both got lots of views on this.
[00:02:54] Speaker B: Yes, as always, Felicity. And to put my view up front, I mainly disagree with what you said last time, Felicity. I believe the mid range wine market is still totally relevant today. But. And this is the big but, perhaps in a different way to its relevance of the past.
[00:03:11] Speaker A: In a different way that's wriggling. It's not like I'm arguing that it's disappearing altogether. I'm just arguing that in the future it's smaller and less culturally central than it was.
[00:03:21] Speaker B: Okay, fair enough. So you were pretty Debbie Downer, weren't you? And gloom and doom in our last episodes, from what I remember.
So for anyone who hasn't listened to the last episode, let's start with an overview of. Of why we're asking this question, shall we? So what's the context for even discussing this? And particularly the commercial end or the commercial part of the winemaker market and why it's become irrelevant?
[00:03:46] Speaker A: Oh, yeah, why we're arguing.
[00:03:48] Speaker B: Yes, exactly. Sorry, why we're arguing it's become irrelevant.
[00:03:51] Speaker A: So the big data point here is from the organisation of vines and wines, the OIV, which shows that global wine consumption in 2024, two years ago fell to its lowest level since 1961. And it's still going down. But maybe we should add some context that.
[00:04:07] Speaker B: Okay, so why don't we kick off? Do you want to give us the edited highlights of wine's history, Felicity, so we can put this in context? Because I think that's actually really important.
[00:04:17] Speaker A: Yeah. Okay. So wine has been made for at least 8,000 years, starting in the Caucasus region, more modern day Georgia, before it spread through ancient cultures.
[00:04:25] Speaker B: Yeah. So the history matters because wine has never been just kind of one thing you were saying there. It's sort of spreading through cultures. So it's moved through religion and status and daily life and trading, changing roles as that progression has happened.
[00:04:41] Speaker A: You know, as you say that, it's just occurred to me beer didn't change its role. Beer has sort of historically held the same role for. And it's interesting.
[00:04:47] Speaker B: All right, so.
[00:04:48] Speaker A: Yes, but it's changed its role. So the Greeks had this symposium where wine was part of a ritualized discussion about philosophy and life.
And later wine became central to both Judaism and Christianity. So it wasn't simply a drink, it carried symbolic and spiritual weight.
[00:05:05] Speaker B: Yeah. Not forgetting the wedding where water became wine. So pretty strong brand endorsement for wine.
[00:05:11] Speaker A: There.
Very strong. Yes. And wine also traveled with Roman civilization. So it was elite, sacred, everyday and practical. It had everything from ritual and status to being the drink of soldiers and laborers.
[00:05:22] Speaker B: Yeah, and I think that's really the key point, isn't it, that wine has survived because it's kind of changed its roles. And based on the historical evidence, I'd say wine is kind of absurdly persistent, actually. Which conveniently supports my case that wine still remains relevant today.
[00:05:39] Speaker A: Oh, well, yes. Yes and no. I mean, I don't disagree. Wine is not irrelevant, but it's that the importance it's had in the middle of the market is threatened, and that's where most wine is bought and sold.
[00:05:51] Speaker B: Okay, so with that, why don't you start by putting the case forward for the prosecution? So, why is the mass market for wine in trouble, Felicity?
[00:06:00] Speaker A: Well, just look at the numbers. Fortunately, the OIV released its latest figures just in time for this episode, just a few days ago, and it said the drop in the worldwide consumption of wine in 2025, which was 2.7%, which doesn't sound so bad, except that's a cumulative drop of 14% since 2018.
[00:06:19] Speaker B: Yeah, and I suppose the key question that comes out of that is, where is this happening?
[00:06:25] Speaker A: If it was happening in one market, it wouldn't be so bad, but it said it's happening in nine of the top wine markets in the world. So China, France, and the US unfortunately, are playing an outsized role.
[00:06:36] Speaker B: And what's your explanation for why this is happening?
[00:06:40] Speaker A: Well, I think in the short term, I think cost of living would be number one. So wine is a discretionary purpose, so it's not surprising that sales do fall when times are tough.
[00:06:50] Speaker B: Yeah, kind of. Which is a perverse. We could think about that in a perverse way as being good news, because it means that when the economic outlook improves, which we all hope it will, sales, therefore, should rise.
[00:07:02] Speaker A: Yeah. Unfortunately, I think there are deeper structural forces at work. So, one is that wine has lost some of its automatic occasions, particularly around food.
Another is that wine isn't always aligned where the culture is now heading.
[00:07:16] Speaker B: Okay, so you're sounding worryingly organized on your prosecution there, Felicity, so I'm going to need to put up a very good defense against this. So carry on.
[00:07:24] Speaker A: Yeah, well, and I will say the stark irony of this is we're going to record this, and I've actually got some wine in the fridge for when we finish recording.
It's not irrelevant around here, but. Okay. So, anyway, you've probably heard it all volumes are down. Younger consumers are not as interested. Mature markets are softening. There's the health and moderation trend which is affecting alcohol across the board. On and on and on.
[00:07:47] Speaker B: Yeah, I'll just add in a quick high level interrupt. You say you've got wine in the fridge to drink after we've recorded. We are recording very late afternoon, going into early evening, not at 10 o' clock in the morning.
[00:07:59] Speaker A: Would that make a difference?
[00:08:00] Speaker B: No, just to save you on that one. Anyway, so what you said, back to the data, all of those things are grim. Yes, but we should say straight away that the low volume does not necessarily equate to low relevance. So plenty of things become less frequent without becoming meaningless. Effectively. What I'm trying to say here, not very articulately, is that they change their relevance.
[00:08:27] Speaker A: Well, I want to be clear that I'm not arguing that wine is becoming, you know, it's not going to disappear. What I'm arguing is that there's a structural shift underway that is hollowing out the middle and the bottom as well, I should add.
[00:08:40] Speaker B: And I'll agree on the decline story, clearly I have to, I can't attempt to disagree with the very clear data that we see in front of us.
Although there is, I think as a sector we've really talked ourselves into the idea that Gen Z hate wine, have abandoned it. And interestingly the data does not support that. But, but I'll save that defense from when I get to my side.
[00:09:06] Speaker A: No, but you know, my natural wine friends tell me that their fairs are absolutely packed with people. So I guess the question is not whether Gen Z hates wine, but more whether are they going to drink it often enough to make up for the loss of the baby boomers.
[00:09:20] Speaker B: Yeah. So back to data. So my favourite place to be. So let's start with the kind of real decline that you were just talking about there from the OIV. So if we look at IWSR's data, it shows that last year total beverage alcohol volumes again across the 20 top consumption markets for alcohol globally were about 2% below 2019 levels. But, and this is the big thing, their IWSR report wine volumes were down just over 20%.
So that's one in five bottles for Steve since 2019.
[00:09:52] Speaker A: Oh, look, those numbers are even worse than the OIV. I hate to say it, but I think that kind of supports my case.
[00:09:59] Speaker B: Yeah, it does, it does. And there's a. And I just want to kind of point out the difference between the OIV and the IWSR numbers. There because the IWSR numbers look much worse. Although the OIV aren't that great either.
What I the reason that those numbers are more doom and gloom from IWSR is here we're looking just at the top 20 markets globally, whereas OIV are referring to total world wine consumption. I guess the downside, and I'm almost supporting your argument here, is meaning the story is even worse in the bigger markets.
[00:10:31] Speaker A: Yes. And we have to point out that the broader alcohol market is also having a tough time. It's just that wine is having a worse tough time.
[00:10:38] Speaker B: Yeah, and as IWSR just point out, that's kind of roughly 20% one in five fewer bottles of wine sold across those top 20 markets this sort of seven year period.
[00:10:48] Speaker A: Yes. And unfortunately the US is a key market for wine. And Silicon Valley Bank's 2025 State of the U.S. wine Industry Report says demand is still looking for a bottom and they expect wine volumes to decline, you know, past 2025 and even longer.
[00:11:04] Speaker B: Yeah. And IWSR also described the global wine market as facing structural volume decline in mature markets, over reliance on older drinkers and climate related difficulties.
[00:11:17] Speaker A: Okay, all right, so point is that there is a real decline story happening.
[00:11:22] Speaker B: Yep. So I have to accept that one.
But potentially there's always a reason for the latest bad numbers. You know, whether we're blaming Covid or inflation or tariffs or duty or weather or glass costs or those pesky Gen Z or exchange rates, you know, we seem to have an excuse, I guess, is what I'm saying.
[00:11:45] Speaker A: Or a reason in some ways. It's not an excuse. I mean, the world of COVID really did change, the whole world. It put everything on its head. We're in a sort of fundamentally more unstable time than we have been. And so all of these things matter.
But people are not simply drinking less wine, they're also drinking differently.
[00:12:05] Speaker B: Yeah, and this is where I want us to be really careful, actually, when we're kind of considering this, particularly thinking from a data point of view, because consumers still want pleasure and we still want pleasure and sociability and ritual and status and release and all those other things that wine brings into our lives.
What they're increasingly finding, though, is that we're getting those elsewhere. So it doesn't mean that wine can't win back some of those moments or occasions or drivers. It does mean though, that wine is less automatic, less habitual, and therefore potentially less resilient than the competitors. So, yes, point to the prosecution. You've got that one. But not the whole Case, I would
[00:12:48] Speaker A: say, well, this is where you come in, Luli. I think we need some sort of solutions from you because the wine trade will love you so. But let's start with some of the structural reasons, shall we? Particularly the fact that wine has lost some of its traditional place, particularly on the dinner table.
[00:13:02] Speaker B: Yeah, and I'm going to have to agree with you on that one. But carefully, as always.
[00:13:06] Speaker A: Yeah, so. So the thing is, you now have to convince people to choose you. Rather it's not habitual anymore. And of course, there are competitors, there are other alcohols.
[00:13:13] Speaker B: Yeah, exactly. So the old question was, what wine are we having with dinner? And the new question is, you know, do I want a beer? Do I want win a cocktail and RTD? No. Or low water sleep? Or save £12 or $12 of my
[00:13:28] Speaker A: money, you know, and that's the question. Do you have £12? Yeah. So, yes, wine has to earn its place occasion by occasion.
[00:13:35] Speaker B: Yeah. Yeah.
And that means that the old ones have weakened and the new ones potentially are not understood as well, particularly by people working in the wine sector.
[00:13:46] Speaker A: Yeah, well, of course, I wouldn't argue that There are no occasions left. I mean, celebrations still belong to sparkling wine.
[00:13:53] Speaker B: Yeah. And conferences wouldn't exist without warm white wine, which I was reminded of just yesterday when I was at conference. It's like. It's a reminder. And there was warm white wine. It was like, you know, it's like when you're on a plane when the white wine is always served. Tepid.
[00:14:12] Speaker A: God. Or in the case of 1, 1. One plane I was on, it was actually sort of orange. And not because it was an orange wine.
But I have to say, your. Your plain wine isn't. Isn't going to draw a lot of symp, considering how many exotic places that your plane rides take you to. It doesn't matter if it's warm wine if you're on your way to Belize or Spain or somewhere.
[00:14:33] Speaker B: Okay, fair point.
[00:14:34] Speaker A: But.
[00:14:34] Speaker B: But I have worked out a solution, Felicity. So when I order my wine, I also order. I'm going on a tangent here. I shouldn't admit this. I go on. I also order water with ice in, and when nobody's looking, I put the ice cubes into my wine.
[00:14:49] Speaker A: I tell you, just ask for the wine with ice. Isn't that the solution?
[00:14:53] Speaker B: Yeah, but I'm too embarrassed to do that because I think I'll be jud, which I know is ridiculous.
[00:14:58] Speaker A: You are my role model for tough, independent thinker. I never thought of you as somebody who'd Come up with sneaky ways to slip in an ice cube.
[00:15:07] Speaker B: Okay, we all have our vulnerabilities.
[00:15:09] Speaker A: Apparently we carry on.
[00:15:10] Speaker B: Carry on.
[00:15:10] Speaker A: Apparently we do, I guess.
All right, so wine. Wine used to be brilliant with the dinner table. So it was just. It was habitual, shared, central to community, part of the meal. Of course, we're talking about Europe here.
[00:15:21] Speaker B: Yeah.
[00:15:22] Speaker A: And that was the model, but it's losing that.
[00:15:25] Speaker B: Yeah, and that's true. So at home eating, obviously is still huge. It's where most of our food consumption is done. So it'd be tempting to say, you know, people are not still eating at home.
But if we look at Sakana's 2024 eating patterns in America report, it shows that at home eating, as we all know now, really includes a much wider range of behaviors. So it can mean solo eating, delivery, reheating, standing at the kitchen counter, one person drinking, the other not. Or a deeply modern dinner occasion, I guess, of sort of opening the fridge, stepping staring into it and deciding to
[00:16:02] Speaker A: have toast or ordering whatever looks good on Uber Eats.
[00:16:06] Speaker B: Is that your default position?
[00:16:07] Speaker A: Oh, I wish I'd dream about Uber Eats where I live. And this is. This is true. The only thing that you can get delivered is pizza.
[00:16:15] Speaker B: How can that possibly possible? I never knew your life was so deprived.
How is that possible? Anyway, back to wine. So wine is not always the obvious option, therefore, to accompany those occasions we've just been talking about. So a 750ml bottle assumes a level of shared commitment of which many of today's eating occasions simply don't have that level of kind of community or commitment.
[00:16:40] Speaker A: Yeah, and socialising is very fragmented too.
[00:16:43] Speaker B: Yeah, but none of this makes wine irrelevant. It means wine has to stop behaving as if the sort of formal dinner table, in the sense we were just talking about, is the only suitable occasion. So wine can be highly relevant to casual hosting, to travel, as we were just talking about on airplanes, to relax food aperitifs by the glass discovery. But I guess it has to show how to turn up there properly.
[00:17:07] Speaker A: Okay, I am looking forward to hearing you explain how wine that isn't already doing it can muscle in on that territory.
[00:17:14] Speaker B: Okay, well, one thing I would change, if you want to know, is how complex wine is from a consumer's point of view.
[00:17:22] Speaker A: So the idea being that beer and spirits are easy and wine is complex.
[00:17:25] Speaker B: Yeah, that's right. And when it comes to wine, you know, people need that. Consumers need to decode grape and region and sub region and vintage and producer and the List goes on.
And to a certain extent, I guess, you know, whether the person selling the wine is judging them.
[00:17:41] Speaker A: Can I go off on a tangent for a second?
[00:17:43] Speaker B: I love your tangents, and I'm surprised you've asked for permission.
[00:17:46] Speaker A: Yeah, well, I've been dying to blurt this out at some point for years now. For years I've watched new wine businesses and consultancies springing up, and they always go on LinkedIn or social media and they promise that they're going to take the confusion out of wine and they're going to make it less snobby. It's this all purpose USP and I. I've decided that the wine trade created the idea of the wine snob so that people can start a business offering to demystify.
[00:18:13] Speaker B: Ever the cynic.
[00:18:14] Speaker A: Ever the cynic.
[00:18:16] Speaker B: In fair.
Look, in fairness, wine is complex, though, isn't it? So I'm thinking about, you know, when I'm out with friends and the wine list appears. I don't know if this happens to you. It always gets sent straight to me, which I hate, because it feels like kind of lots of pressure and that I'm again feeling like I'm going to be judged on the decisions that I make.
[00:18:36] Speaker A: I just order whatever with abandon. I. I've got this idea that if someone has gone to the effort of putting a wine list together, they probably know what they're doing and I'm safe. I just order. I just stab my finger and say, I'll have that. And it works.
[00:18:50] Speaker B: And that describes the difference in our confidence because many people find that wine list really complex and quite stressful. I don't think I'm alone in that one.
[00:19:00] Speaker A: Well, wine is complex. It's part of its charm.
[00:19:03] Speaker B: Yeah. And engaged drinkers love that depth, don't they? So casual drinkers just want to know whether it will taste good with their dinner, their mood, their toast, whatever it is.
So wine has not only made itself hard to buy, it's also made itself very serious, which does matter, especially when someone wants something special, but doesn't matter when they maybe just want something cold, like a glass of white wine on a liquor.
[00:19:27] Speaker A: Here's my next rant. This is what I've been storing up for a while. So I think. I think that retailers and wineries have made wine as easy to buy as it is possible to do. All right, so at the commercial end, which is where most people are buying, we've got varietal labeling. So you can see, is it a Cabernet Sauvignon? Is it a Chardonnay? And then you've got all these retailers who, who found brilliant ways to. To declassify things. So, you know, you walk past, here's the French reds, here's the Italian reds, here's the Italian whites, you know, and I think. I think if you walk through the average modern supermarket, you're actually getting quite education in wine without even realizing it because of the way it's been shelved.
[00:20:04] Speaker B: Yeah, but I think that's clear to you because you understand wine. But for most normal people, people. I'm not trying to imply you're not normal.
[00:20:13] Speaker A: I know what you're thinking.
Just get out. Get it out there.
[00:20:16] Speaker B: Yeah. In this case, when it comes to wine and knowledge of wine, you are not normal.
Most people, most consumers are just standing in front of this wall of endless choices.
[00:20:26] Speaker A: Yeah, sure. But the thing is, nobody has ever told me what is the answer to that, because the fact is there are thousands upon thousands of wines out there. You know, just think about walking to Systembalage where there's, you know, 300 wines maybe on one shelf in front of you. So unless you want a retail that's only going to carry, say, 10 wines at a time, how can you make that, you know, enormous number of bottles simpler if you don't know what you want? The only possibilities are you ask somebody you choose based on price or you choose based on whether you like the label or not.
[00:20:58] Speaker B: Yes. And I made part of my living out of working for a number of retailers around the world who were asking that exact same question, which is how do we organize our wines so that it is best for the consumer choice? But price, label, as you were just saying there, label design are absolutely key.
Should we take a case study at this point?
[00:21:22] Speaker A: I think we need a case study. Yes. We're getting very theoretical. Give us a real case study.
[00:21:26] Speaker B: Okay. Real world case study. So let's look at La Va femme in the uk, otherwise known as the chicken wine. So consumers like me couldn't necessarily pronounce it.
They didn't need a lecture.
[00:21:39] Speaker A: You did a lovely job just.
[00:21:40] Speaker B: Oh, thank you. You know, my stumbling with pronunciation is never good. Any. For me, it's the chicken wine. Because for me and many others, we don't need the lecture on the Rhone. We're not trying to sit there decoding Appalachian law. Basically, they, as consumers, they see the chicken, they remember it, they find it again and they buy it. So from a case study point of view, the rose sales of the chicken wine have surged in the UK with reports of around 60% annual increase. That's more than 5 million extra bottles sold a year. Yeah.
[00:22:16] Speaker A: So the chicken was what Luli would call a heuristic mental shortcut.
[00:22:20] Speaker B: Exactly. You're learning stuff. I'm so proud.
[00:22:24] Speaker A: So I'm gonna be, I'm gonna be taking all your clients soon, Luly.
[00:22:30] Speaker B: Well, I can go on planes more then, can't I?
[00:22:32] Speaker A: Drink more white wine.
[00:22:34] Speaker B: All right, so, okay, so back, Back, Back to where we were. So this heuristic, as you've just kindly pointed out. So it's not just my theory.
My homegrown Gen Z focus group.
[00:22:47] Speaker A: Otherwise known as your homemade one. Yes.
[00:22:51] Speaker B: Known as my children, nieces, nephews, and all of their friends. So it literally have mentioned the chicken wine to me completely unprompted. So not la vieille vie femme, not Rhone.
None of that. None of the sort of charming, rustic French heritage stuff they just said. Oh, yeah, the chicken wine. I love that. That's one I go back to. So that's the reality of how memory works.
[00:23:13] Speaker A: So, yeah, so I'm not for a moment doubting the value of mental shortcuts and heuristics, but because I am a cynic, I am going to note that the wine already had extremely strong distribution, which means more people had more opportunity to look at it and remember the chicken.
[00:23:29] Speaker B: Indeed. But then Byron Sharp would say that's the whole point of brand awareness, physical and mental availability.
But it might be the other way round that it got strong distribution because of its memorabilia.
[00:23:42] Speaker A: Well, okay, so I guess that I would ask then the big question is, can the other 299 wines next to it do the same thing? Can all of them create distinctive assets that will offer that mental and availability?
[00:23:57] Speaker B: Yeah, well, I, I, I, I honestly think a lot of them could do a much better job. I'm really sure of that. But I think the rig, the really crucial point here is that we're not dumbing it down. It's not a, about dumbing down wine, about not recognizing its magnificence and beauty. It's about that shortcut that we were just talking about. And meanwhile, cocktails have become theater and RTD has become kind of easy pleasure.
[00:24:23] Speaker A: Yeah, I will, I will bang on about the fact that there are far fewer beer companies in the world and spirits companies in the world and, you know, just the problem of the thousands and thousands. All right, so distinctiveness. People do distinctiveness. All right, so here's another, another problem. So for years, wine benefited from the idea that it was somehow different from other alcohol.
[00:24:43] Speaker B: Yeah. So the, the sort of notion that a glass of wine being good for your heart narrative.
[00:24:48] Speaker A: Yes. So we had the French paradox and we had positive stories about antioxidants. So that meant people could consume wine without feeling they were damaging their health. Or some people did consume red wine because they thought it was good for their health.
[00:25:01] Speaker B: Yeah. And again, if I think back to the. My research days at Wine Intelligence, you know, we certainly heard that from female particular consumers in China who we kind of termed as a group of. Of drinkers. We actually called them health sippers because they were literally drinking, you know, taking a glass of red wine in the evening as part of a positive.
[00:25:25] Speaker A: Did they say whether they enjoyed it or was it just a medicinal thing for them?
[00:25:29] Speaker B: Primarily medicinal. Right, yeah.
[00:25:32] Speaker A: Interesting.
[00:25:33] Speaker B: Yeah, yeah. And now, of course, we've got the World Health Organization saying that there's no safe level of alcohol. That means what, wine's part of that as well?
[00:25:42] Speaker A: Well, it's actually bigger than that. So whenever you see the dangers of alcohol being discussed, and this is true in a lot of campaigns that are going on right now, the prop in the picture is always a glass of red wine. It is in your face, the idea that no red wine is hazardous to your health.
[00:25:58] Speaker B: Yeah. Do you know, I've noticed that because there was a campaign in Australia recently, wasn't there, that had in. In Adelaide on the. The metro trains in.
[00:26:06] Speaker A: Right in the heart of wine country too.
[00:26:07] Speaker B: Exactly. With a big glass of red wine. Why are they always featuring red win in those?
[00:26:12] Speaker A: It's because people think that red wine has some benefits. So if you're the public health body and you want to get people to reduce or slow down their drinking, you go and attack wine first. So everybody knows that vodka's bad for you, but making people feel scared of wine makes them scared of all alcohol at once.
[00:26:31] Speaker B: Okay, that really makes sense. Thank you.
But wine can still fit into, can't it? A more moderate drinking culture, so smaller serves, lower ABV transparency, you know, the whole kind of quality over quantity quantity thing as a credible way forward.
[00:26:47] Speaker A: Yeah, I would have said yes if you asked me that a year ago. The problem with this is that all of the alcohol simultaneously are rushing to claim this space because of this pressure from. From public health. So beer in particular is making a big deal of the fact that it's only, I don't know, whatever beer is 5% ABV. Diageo are running ads showing a gin and tonic against a big glass of red wine, saying that a single serve of steel spirits is the more moderate option.
[00:27:12] Speaker B: Do you think consumers believe that?
[00:27:16] Speaker A: I don't know. And I think most people drink moderately anyway, and they know that. So they often see health warnings and they don't think it's for them. The point being, though, is that the specialness of wine is being eroded by all of this at the moment, that it's under all these other pressures.
[00:27:31] Speaker B: Okay, do you want to talk about some of those pressures, then?
[00:27:34] Speaker A: Yes, yes, why not? Let's get serious. Okay. So first of all, there's the structural problem. There's just. There's overproduction, and there has been for a long time. There's just too much wine in the world. And the most enthusiastic drinkers of it, the baby boomers, are beginning to retreat from the market, if I can put that delicately.
[00:27:50] Speaker B: I like the use a euphemism of retreat there, Felicity. Yes. Yeah. So this is not just about marketing, though. It's also about what's in the ground from a vine perspective, what's in the tank from a storage protect perspective, and I suppose, really importantly, what styles the industry has been built around.
[00:28:10] Speaker A: Yes. So we've got lots of evidence, including from the oiv, that the red wine demand has weakened, especially in major European wine markets in France, Italy, Spain, and here in Germany.
[00:28:20] Speaker B: Yeah. And that. Yeah, exactly. And that matters not because these are. Because these are definitely not the fringe markets, and those are the countries that sort of help define the wine culture that we've been talking about.
[00:28:32] Speaker A: So the global picture is quite nuanced. Red still dominates. Dominates in some markets, but the direction of travel in many markets is very clear. We're also, believe it or not, seeing signs of a shift from red to white wine in places like China.
[00:28:45] Speaker B: Exactly. Which we are. Can you. Can you imagine if we'd have talked about that? It would have felt impossible 15 years ago, 10 years ago, probably even five years ago.
[00:28:54] Speaker A: Are you a red or a white wine drinker, Lou?
[00:28:56] Speaker B: White.
[00:28:57] Speaker A: It's interesting because I used to drink red, and now I'm absolutely a white drinker. I've got white in the fridge. Anyway, so the argument is not red wine is over. It's that there's a lot less demand for those sort of fuller, more alcoholic red wines than there used to be.
[00:29:11] Speaker B: Yeah. And without setting myself up for a weak defense. The sector has planted and produced, we could say, for a demand curve that no longer exists. Yes. It doesn't exist in the same way. Sorry. It no longer exists. Has changed.
[00:29:25] Speaker A: Yeah. And Australia, I think, is a really good Example of this, and I'm not picking on Australia, it's that Australia publishes really excellent reports and figures, so it's much easier to see. So Wine Australia's 2025 report says that production exceeded SAL by around 52 million litres. Inventory rose 5%. That's how much they've got stuck in tanks. And there was an estimated excess of around 262 million litres of wine in stock. That is a lot of tanks sitting there full of wine.
[00:29:54] Speaker B: That's a lake with a stock to sales ratio going on there. And the style issue matters too, doesn't it? Because in the Australian, red wine production recently rose much faster than white wine, despite this kind of curve that you were talking about, this demand curve. And Wine Australia says the increase in the crush was almost entirely red grapes.
[00:30:16] Speaker A: Yeah. Now, what they do in Europe when they have this kind of lake is they get into crisis distillation. But the Australian government is much more hands off. It doesn't. It doesn't offer to come and rescue you.
And I have to say, this isn't just an Australian story. If we had these kinds of figures freely available from France and Spain, we would probably see something very similar.
[00:30:34] Speaker B: Exactly. Because overplanting isn't universal. It's sort of the same everywhere and globally, production has actually been. Been historically, interestingly, lower, and yet we're still seeing this sort of differential between supply and demand.
And part of the reason that we see a lower production, of course, is because of climate and disease pressure.
So perhaps the better argument is that wine has a structural imbalance problem.
[00:31:00] Speaker A: Yes. And unfortunately, you know, having frosts in Burgundy that wreck their harvest is of no consolation to people whose tanks are full of commodity resources, red wines. So Burgundy will sell whatever they can produce and it makes no difference to people, you know, in Languedoc.
[00:31:16] Speaker B: Yeah, exactly. And the climate change is making that mismatch harder to solve, isn't it? Because red wine, in many places, red wines are now becoming heavier and higher in alcohol as a result of climate change. Just ironically, as consumers are moving towards lighter, fresher styles.
[00:31:33] Speaker A: Yes, and that is the squeeze right there.
[00:31:36] Speaker B: It is. I agree that that's. That's a hard charge to dismiss, because vineyard plantings, as we know, can't pivot at the spade at the speed of demand change.
But that also means wine's problem potentially is not a lack of relevance, therefore, it's just this adaptation lag.
[00:31:54] Speaker A: Look, I would agree with you except for one problem. So if this was just an oversupply problem, you just Wait for the market to clear the tanks or for people to give up and, you know, release the wine. The problem is that demand for red wine is not being, you know, taken up by demand for other styles. So whites and sparklings are still in demand, but they're not. Not enough to soak up the, you know, demand for reds, if you know what I mean. The total volume hasn't increased enough.
[00:32:19] Speaker B: Yeah. So the basically saying that the increase in white, sparkling and rose hasn't made up for the loss in red.
Yeah. Yeah. Okay. Concede. Strong case there, Felicity. We have the numbers problem, we have the occasion problem, the friction problem, and the mismatch problem.
[00:32:37] Speaker A: I mean, it's quite a problems. Just. Just thinking out loud about it. I do think that when some of that red is cleared and some of the new white plantings come online, things will not look as dire as they do right at the moment. But, yes, there's a lot of. A lot of problems.
[00:32:50] Speaker B: Yeah, but I don't think these problems necessarily prove that wine is irrelevant or the mid market of the wine is irrelevant, which is sort of your thesis here. I think they prove, as I said, that the old model of relevance is un. Under pressure.
[00:33:04] Speaker A: Look, we're being very agreeable.
Pushback. I want to hear the solutions, Luly.
[00:33:12] Speaker B: Okay, so I'm happy to make the case that wine is still very much relevant, still culturally powerful, and still has a future, just not necessarily on the terms that the industry would prefer.
[00:33:23] Speaker A: I think that's a bait and switch. Lily, you are agreeing with me that there is a serious structural change that wine has to naturally navigate.
[00:33:30] Speaker B: Okay, I'm much more sanguine about it than you are, because the I believe that drinks categories actually are quite cyclical. So they rise, fall, disappear, come back again, find a new audience, and suddenly everyone behaves as though they've invented the wheel.
[00:33:45] Speaker A: So are you arguing this is just part of a normal cycle?
[00:33:48] Speaker B: Yeah, partly. I think I'm going to, yes. So an example, Felicity, of what I'm talking about. Remind me of your favorite drink, Lidl. Gin and tonic? I believe so. Gin. A classic example of cyclical behav. And drinks.
[00:34:02] Speaker A: I've already told you, I have moved on to the Raver Negroni, Luli.
[00:34:07] Speaker B: Oh, yes, I remember you told me that. But it's got gin in it. So still. So still.
[00:34:12] Speaker A: And you get 10 drinks for €9. It's fantastic.
[00:34:16] Speaker B: Is that how you calculate whether you like something?
[00:34:19] Speaker A: How do you calculate? Yes, that's right.
[00:34:22] Speaker B: Flavor, style.
[00:34:23] Speaker A: Sorry, sorry.
[00:34:27] Speaker B: Heritage. Heritage, history.
All of those Things.
[00:34:30] Speaker A: Oh, sure you do, yeah. You go to the shelf and go, oh, that's got history. I'll have that, thank you.
[00:34:34] Speaker B: Yeah, no, because I'd be arguing against myself, of course I don't. Anyway, so gin, we were talking about gin. I bought it up because we would. I was talking about cyclical behavior. So give us a quick 101 history on gin.
[00:34:47] Speaker A: Okay, so gin really arrives in the 18th century and it takes Britain by storm, but in a very, very bad way. The so called gin craze, which lasted roughly from 1700-17, consisted of cheap gin, mass consumption and you might call it moral collapse, famously captured in Hogarth's gin Lane in 1751.
[00:35:09] Speaker B: So basically we're saying gin begins as a public menace.
[00:35:12] Speaker A: It was a hell of a public menace. Anyway, then it became unfashionable and it didn't come back at anything like the same level until the gin Renaissance of the 2010s.
[00:35:21] Speaker B: Exactly. So my point entirely. So we have this huge change, the renaissance, particularly starting in the uk, but then in other markets as well, where in the UK gin sales reached 66 million bottles in 2018, which was up more than 40% on the previous year. That's 40%, Felicity. And in the number of UK distilleries has also tripled in this time period.
[00:35:46] Speaker A: So you just have to wait 400 years and you'll be fine.
[00:35:50] Speaker B: Exactly.
[00:35:51] Speaker A: And the other thing is, gin had a great return right up until it didn't. So consumption peaked at 96 million bottles in 2020, but it had fallen to 68 million bottles by 2023.
[00:36:03] Speaker B: So I think you've just helped me make my case there, because what we're saying is basically gin had a moral panic, unfashionable spirit, Craft darling, supermarket flavor explosion and then sort of a post boom. Correction.
[00:36:17] Speaker A: I have to say, this is the very, very long view of, of drink cycles. I mean, honestly. But yes, I mean, categories do cycle, but a category coming back doesn't mean the old business model came back. So when consumption of gin fell after 2020, a lot of distilleries went out of business.
[00:36:34] Speaker B: Yeah, okay, I have to agree with you there. I am trying to sort of put the case forward for a point.
Yes. Yeah.
[00:36:41] Speaker A: I used to go to this, this conference every year and there was a, there was a press section and I'd go and park my coat there and there was this fantastic woman with this flaming red hair and she was always in charge of the press section. And one year she wasn't there and I said, where is she? Do you know what? She'd gone off to start her own gin brand. And. And she made a fortune.
[00:37:00] Speaker B: Good on her.
[00:37:01] Speaker A: Yeah, that's right.
[00:37:04] Speaker B: Good on her.
Yeah. And if we're thinking about this kind of cyclical behavior, we can think of cocktails as well. So they've done sort of a similar thing. So we've gone from glamour to kitsch to craft to premium theater. But potentially an even better example of this is RTD's.
[00:37:22] Speaker A: Ah, the category that's so hot and booming right now.
[00:37:25] Speaker B: Exactly. So, yes. So they were in the wilderness for a long time. Long time. So wine coolers were huge in the 1980s, as I'm sure you can remember, and then fell away hard. Then in the UK and elsewhere, we had Alco Pops, and in the 90s and early 2000s, Bacardi Breezer, Smirnoff Ice WKD all over the shelves and often
[00:37:46] Speaker A: consumed in nightclubs alongside hard drugs.
[00:37:50] Speaker B: Personal experience.
[00:37:52] Speaker A: No, I missed out. I actually read that in public health literature on the history of young people and drinkers.
[00:37:59] Speaker B: Of course, I. I knew the answer to that.
Anyway, RTD's came back again in a new form more recently in the form of hard seltzers, and then increasingly canned cocktails. And now we're seeing spirit, premium spirit rtds.
[00:38:13] Speaker A: I know I keep dragging, you know, this off topic with little asides, but can I just say, I know hard seltzers are a big deal in the us, but I cannot see the appeal. I went to Lidl and in amongst the gin and tonics, they had seltzers. So I tried one and then just fizzy water with a hint of alcohol. Anyway, they all disappeared because they just don't resonate in Europe. And I have to say, why do they resonate anywhere?
[00:38:38] Speaker B: Can I just say, Felicity, this is the point at which you are not the target consumer.
[00:38:43] Speaker A: But neither was anybody else. It turned out they just didn't work in this market.
[00:38:47] Speaker B: There are plenty of target consumers for whom hard seltzers and RTDs work.
[00:38:53] Speaker A: Do you know any?
[00:38:54] Speaker B: Yes, I know plenty of them when I do my ethnographic research. But let's not take us off topic because let's come back to that and RTD's. We can come back to that another day. But the point is that the format kind of works everywhere. So RTDs are not a brand new human desire. They are the return of convenience, flavor, portability, low commitment and low cognitive labor that we.
[00:39:20] Speaker A: And they're cheap. They're cheap, yes. Forget that.
[00:39:22] Speaker B: Yeah. And that's really important. Important, but it's kind of back to the System One, System Two, Brain processing we've talked about in previous episodes. The lower the effort, the System one, the more consumers will choose it.
[00:39:36] Speaker A: Okay, so we've got gin was ruined, then revived. Cocktails were glamorous and they were embarrassing. Then they're glamorous again. We had wine coolers and then Alco Pops and then hard seltzers and then canned cocktails.
[00:39:48] Speaker B: Exactly. So consumers have always moved between categories as social codes change.
[00:39:54] Speaker A: So in other words, wine might just be at the nadir of its popularity and then the wheel will swing and it will all come back again.
[00:40:01] Speaker B: Sort of. Not exactly. So I think wine needs to find its next role is really what I'm saying. The next serve, and most importantly, the next occasion, its next way of making people feel like it belongs in their lives.
[00:40:14] Speaker A: Look, Lily, I don't disagree with any of this, but I have to say, by your own argument moment, this is pretty bad news for the broader wine market.
[00:40:23] Speaker B: It is. But don't write the obituary just yet, Felicity, because I have another piece of evidence which I think supports the case, which is the interest shown in wine by younger drinkers.
[00:40:34] Speaker A: All right, so have you been hanging out at natural wine festivals, Luli?
[00:40:38] Speaker B: No.
No, I have not. Because.
Because I've got the data, Felicity. I can.
Yeah. So what we're finding is that Gen Z, if you look at the independent evidence, we find that Gen Z consumers have not abandoned alcohol, they're just drinking in a different way. So IWSR's BEV track data shows that Gen Z alcohol participation in key markets is actually rising, you know, from around 66. So 2/3 of Gen Z consuming alcohol up to nearly 3, 3/4. And in the US there's been an even bigger jump over the last five years in terms of the number of younger consumers who are of legal drinking age who are consuming alcohol.
[00:41:28] Speaker A: Yeah. And of course, you know, Gen Z's not one group, and it's because the. The group that came of age during COVID are actually quite substantially different from the other Gen Zs. Yes. And there's emerging evidence that those young people who were stuck at home during the last years of school or university are now binge drinking and binge drinking in dangerous ways, in complete contrast to the older Gen Zs. But going back to your BEV track numbers, can you define what those numbers actually represent? So, you know, from 66 to 73%, is that people just having one more drink a month, or is this regular Drinking.
[00:42:02] Speaker B: Yeah, okay, no fair point. So that data is consumption of. So the respondents, the people, the percentage I was Talking about the 66%, 75% is the number of people who consume alcohol at least once in the past six months. So it's not about frequency, it's. And it's not about amount of alcohol, it's whether you actively participate in alcohol at all.
However, what we are seeing is that the way they may moderate is changing. It's becoming more conscious. And IWSR also does show younger consumers are more situational about alcohol, but that's different from disappearing.
[00:42:43] Speaker A: What do you mean by more situational about alcohol?
[00:42:46] Speaker B: More, more thoughtful about where and when they are consuming, Making more deliberate choices
[00:42:53] Speaker A: to be a consumption people today, honestly.
All right, so, so Jen said, what about wine specifically?
[00:43:03] Speaker B: Okay, so IWSR's 2026 wine trends work says younger drinkers are becoming a larger share of the regular wine drinking population in kind of key markets like uk, ger, Sweden. So when I say that, obviously they are aging into wine. So we would anticipate that to happen as our boomers, as you say, age out.
But what it is demonstrating, I guess we can take a bigger picture view from this, which is to say that younger drinkers are not abandoning wine, they're just not drinking it quite as frequently or with at each occasion potentially drinking as much. But there's also credible data from sources like the Wine Market Council in the US which also support that view. So it's not just coming from one source.
[00:43:50] Speaker A: Well, don't tell me they're all drinking xxl.
[00:43:54] Speaker B: Okay, you're gonna have to explain that one to me.
[00:43:56] Speaker A: Oh, I saw this at Wine Paris a couple of years ago. Just, it's just taken the market by storm. So XXL is this very sweet, very high strength wine. I think originally it was a Moscato from Moldova. It was infused with aromatized flavors and it's taken the market by storm. So within a couple of years since 2023, they've gone from a standing start to selling millions of cases. And it's very much Gen Z and it's driven by TikTok because the bottles look great.
[00:44:22] Speaker B: Yeah, it sounds like a kind of update of the 1980s wine cooler look.
[00:44:26] Speaker A: That's exactly what it is.
[00:44:28] Speaker B: Yeah, and I'm glad you brought this up because this is where the I, I, a generational point really matters. So it's inherently the job of young people to behave differently from their parents. That's kind of our job to do when we're growing Up. And. And that is not new. But the individual actions taken by each generation might change. But the pattern, an ancient pattern.
[00:44:49] Speaker A: Yeah. So every generation is basically abducting a drink that says, this is me, not my beans.
[00:44:55] Speaker B: Yeah, exactly. So my parents, for example, had Bordeaux and classic European wines because I got bought up in the UK in my earlier drinking days. Piat d' or was huge because it was accessible, branded, easy to understand, and available in every convenience store, which mattered when we were. When I was younger. And then of course came into the uk, the new world wave. Cloudy Bay Wolf Bl, Australia, New Zealand Varietal, Fruit Forward Clari.
And much less deference to the old European codes.
[00:45:25] Speaker A: Well, when I was growing up, we had rum and coke.
And now younger drinkers, of course have spritzes, cocktails, RTD's, chill reds, natural wine, bloody, blah, blah, blah. Tequila.
[00:45:37] Speaker B: Yeah, exactly. So the behavior is consistent. Each generation finds drinks to let it. To let us basically sort of mark our distance from the previous generation. It's just the choices that change. Which links back to my cyclical argument.
[00:45:52] Speaker A: Yeah, so that people are rejecting what their parents drank. So I told you about my theory of wine that the wine mums of Instagram movement probably put off the younger generation who just don't want to drink wine like their mothers.
[00:46:03] Speaker B: Yeah, so you've just brought up an excellent case study to support what I'm saying.
But IWSR's data also supports the idea that younger wine drinkers are more experimental, more open to new formats, more engaged, and often more willing to spend more per occasion. It also identifies growth opportunities in no and low in light wine sustainably led offering sparkling as we know, which is benefiting from casualization of consumption.
[00:46:32] Speaker A: Now listen, data person, I want real evidence that anybody is drinking no alk wines, particularly younger people. Put it on the table.
[00:46:41] Speaker B: I will remain deeply unpopular for saying this, but nonetheless I'm going to say it.
[00:46:46] Speaker A: Felicity, that hasn't stopped you in the past, Lily. Hasn't stopped me. Come on, say.
[00:46:52] Speaker B: Okay, I don't believe that there is a significant market opportunity for no alcohol wines. There, I've said it.
We as consumers have much better tasting alternatives when we don't want to drink alcohol.
And that typically is more convenient, comes in better containers than no alcohol. Wine is what I'm talking about here. So I don't see the market demand for it. Except for potentially. The one market demand I see is a niche demand for non alcoholic sparkling wine as it better meets as sort of product occasion fit.
[00:47:25] Speaker A: I've said it I completely agree with all of that. And I think one of the problems is the technical problems around non alcoholic wines are just so big around. You know, it's easy to remove or to get the fermentation to lower the alcohol in beer, but it's impossible in wine, and I can't see those being solved.
[00:47:41] Speaker B: Yeah, I agree with you. I agree with you. So back to our Gen Z. Let's get us back on track. So they're coming into wine through sparkling spritz style occasions, through lighter styles, potentially through natural wine. And those are not signs, Felicity, that wine is irrelevant. That signs that younger drinkers are rewriting the category entry points.
[00:47:59] Speaker A: Oh, there it is. The category entry points.
[00:48:00] Speaker B: Yeah, you got it in there.
[00:48:01] Speaker A: All right, so tell me truthfully, Luli, do you think this cohort will adopt wine at the volumes needed to arrest the decline?
[00:48:12] Speaker B: No, I don't think it will will, and I don't think it will be the same. And partly I think this is because drink trends are now moving at top speed.
[00:48:23] Speaker A: You're not very chirpy, Luly.
[00:48:24] Speaker B: I want that. I want that. I know. I'm trying to push back, I'm trying to pull back the. The chirpiness, but let's keep going on the drinks trends and the moving of drinks trends. Because a serve can appear in a bar in Mexico City or a kitchen in Brooklyn and be in somebody's hand or. Or at least in their career. Consideration set.
[00:48:44] Speaker A: Consideration set.
What was a consideration set?
[00:48:48] Speaker B: Something I'm aware of that I might want.
[00:48:51] Speaker A: Okay. Okay, thank you.
[00:48:52] Speaker B: There you go.
Almost immediately. So social media, online retail delivery apps, digital comms, etc, mean consumers are exposed to far more drink styles and occasions much faster.
[00:49:05] Speaker A: Which means, of course, that the overall alcohol market may become more subject to mini booms and busts.
[00:49:11] Speaker B: Yeah, and the competition will certainly increase. So wine's not just competing, as we know, with the drinks in the next aisle, you know, other wines, it's competing with every drink image, serve, ritual and identity. Cue that consumer sees online as well as in person in real life. So tequila cocktail in a rooftop bar, a canned margarita at a festival, a zero alcohol sparkling in a wellness fridge, a chilled red in a natural wine bar. All of that arrives in the same feed.
[00:49:39] Speaker A: Look, I can see your point, but I have to say, in a world where demand changes that quickly, for a start, wine can't change that quickly. No, because you can't plant and replant that fast. But you're going to see distributors carrying less stock. You're going to see Retailers switching, you know, units very quickly, and the trade in general would become more cautious about taking on volume. A lot of wineries couldn't survive that world. If they can only sell 10 cases one month and then lose the listing, that would be. That would be the finish of them.
[00:50:06] Speaker B: Yeah. Except the wine also has assets that no other drinks have. So wine still has a powerful connection to place, to farming, to history. And at its best, it kind of can carry or provoke memories.
[00:50:18] Speaker A: Oh, Lily, not you. Of all people. You can't turn into a lyrical wine romantic. I won't have it.
[00:50:24] Speaker B: Oh, stop it. I'm trying to defend the case, Felicity. I'm pulling out all the stops of everything I can think of here. So my point is that wine can be chosen less often, but it may carry more meaning when it is chosen, which I know puts me in the danger zone of contradicting myself, but I'm trying, Felicity. I'm trying.
[00:50:45] Speaker A: Well, I have, I have to say, seriously, what you're suggesting is actually really bad news for most wineries because what they need is a reliable sales stream.
[00:50:53] Speaker B: Yeah, agreed. It would be much harder for businesses, as you were just saying, built on volume.
[00:50:57] Speaker A: Well, actually, I. From what you're saying, I think it would go the other way. So big brands that can switch up new labels and new blends quickly would actually stand to benefit in this brave new world, but the small and medium sized wineries, they'd go under.
[00:51:10] Speaker B: Yeah. And there's, of course, there's always a place for those wineries that have place and meaning. As you would stop right here.
[00:51:16] Speaker A: I think I thought we'd be in the upbeat section of the podcast now. Nothing, nothing that you have said has made me change my mind that there are large segments of the wine market that are in deep trouble.
[00:51:27] Speaker B: I've tried my best, Felicity, to put a positive case forward. I've dragged every piece of data I can possibly use to support this case. But we've also talked about how wine has really made life harder for itself by being attached to the styles and formats that now don't always match where our occasions are going.
[00:51:45] Speaker A: All right, so. So I think at this point, this podcast needs some of your marketing wisdom. Luli, what would you say to wineries? Not the big, well resourced ones, but the smaller ones? How should they ride out what's coming?
[00:51:57] Speaker B: Okay, so first of all, to be clear eyed, that wine has lost three advantages that used to make relevance so much easier for us and that can no longer, therefore be relied on.
[00:52:08] Speaker A: Okay, let's have the Three advantages.
[00:52:11] Speaker B: Okay. So the first one is habit. So wine, as you've mentioned earlier, used to be embedded. It was part of the meal, the table, the dinner table, part of life in many markets. But now wine has to be chosen deliberately and that means it has to compete with all other beverages for the occasions.
[00:52:28] Speaker A: Yes. And I guess your second point would be that, that loss of the specialness of wine, the loss of the status of it.
[00:52:34] Speaker B: Yeah, exactly. Almost like we planned this, Felicity.
[00:52:37] Speaker A: Yeah, I mean status has always been built about wine being a very reliable sort of market of sophistication you knowing about. And I think actually, you know what, I think this is still true. I think that at the upper end of the market, I think that increasingly it is important to have wine knowledge, you know, the classic markers of civilization. But I think at the middle of the market, that doesn't count for very much anymore.
[00:52:58] Speaker B: Yeah. And the third condition for wine, and this is in its more recent history, is that used to have a clearer sense sense of where future growth would come from.
Industry.
[00:53:13] Speaker A: You mean it could rely on the baby boomers and it could hope that China would keep expanding and it assumed that red wine would be central and most importantly, it believed that premiumization would solve the volume decline.
[00:53:26] Speaker B: Yeah. And I think the key point here is that the industry doesn't know potentially with any comfort is who replaces, as you've alluded to, who replaces the boomers at the same level and value and frequency.
[00:53:39] Speaker A: But is there anybody who can replacement? I mean, it does sound a bit luly like you're making my argument, which is the middle casual market is in real trouble.
[00:53:49] Speaker B: Okay, hold on there, Felicity. So what I'm arguing is that the old way of doing things, producing the wine and then it was sort of bought by people are over. But wineries that ask the right questions will not only survive but thrive.
[00:54:02] Speaker A: Right. Hit us with the right questions.
[00:54:04] Speaker B: Okay, so the first up, you won't be surprised me to say this, which occasions is wine actually useful for post podcasting drinks? Because consumers are not walking around, we're not walking around thinking I must support the long term structural health of the wine category. Although that would be quite nice. They're, you know, we are thinking, what do I want to drink with my pizza, my friend? What I can or I want to spend on a Tuesday night.
[00:54:29] Speaker A: So wine has to be occasion fit to use.
[00:54:33] Speaker B: Yes, exactly. One of my favorites. And the best way to do this is to potentially to think about format. So I'm not saying clearly that the, the standard 750ml bottle is going to disappear. It's clearly not.
But we must be more relaxed about half bottles, better cans, premium boxes, single serves, wine based RTDs that fit into how we, how we actually live.
[00:54:58] Speaker A: Yeah. Now I have to admit I actually have two separate thoughts.
[00:55:00] Speaker B: Oh, okay.
[00:55:01] Speaker A: So on the one hand, on the one hand, I really like innovation. I really do. I think wines in aluminum, co fermented wines, the whole nine yards. You know, human creativity is a great thing. Yeah, but, but okay, but if wine tries to compete as just another beverage, it's always going to lose against spirits and beer because it just doesn't work very well as a mass market beverage.
[00:55:24] Speaker B: Okay. Yeah. Not every wine has to go into a can. But the more flexible the format, the more the category entry points there are.
[00:55:33] Speaker A: Oh, how did I not walk into that one category?
[00:55:35] Speaker B: Entry points set me up for it. Yeah, wine has to become easier to buy, but without becoming stupid. And, and it can still be premium. I guess that's the point I'm trying to make. It needs better communication around taste and flavor. And not because consumers are idiots. They're not. But because they're busy and there are many other drinks that work better for them.
[00:55:57] Speaker A: Look, you know, I keep hearing this about wine's communication problem, but nobody has ever been able to tell me what the trade should be doing to simplify what are literally thousands upon thousands of varieties and regions.
[00:56:11] Speaker B: Well, if I. As if I knew you'd bring that up, Felicity. I have a great example here from the world of LinkedIn.
[00:56:16] Speaker A: You just happen to have a handy example sitting there, did you, Lily?
[00:56:19] Speaker B: I do. So handy, courtesy of a post from Ben Gordon. He showed a photo of a wine by the glass list from a restaurant called Day Dream in, which is in Portland, Oregon in the us. So if you imagine the list, rather than sort of being classified, this is their wine by the glass under sort of white, red, you know, Chardonnay, Sauvignon Blanc, or by origin France, Australia, you know, Washington state, etc. They listed their selection of wines by the glass. So the reds, whites and roses under names like Juicy Pear, which is a Grunavette liner from Washington State, or City Pop, a Croatian sparkling, or one of my favourites, Californian Kitchen Sink, which is a blended Californian red.
[00:57:05] Speaker A: So they're basically treating the wine list like a cocktail list.
[00:57:08] Speaker B: Yeah, and I think there's a huge opportunity to write wine lists and also actually back label and retail descriptions much more using this sort of cocktail list logic. Not because it's gimmicky not because we're dumbing down, you know, the list of wines I just talked about, you know, they've got on their list of pretty eclectic wines, but it's just can be more useful. It tells me what as a consumer, what it feels like to drink, to tell me what I want. Tells me whether it's a crisp aperitif, a juicy red. You know, really gives that a kind of expression of, of how the wine is going to taste and brings me into it much more as a consumer.
[00:57:45] Speaker A: Look, I'm sure it's a great list, but I am going to point out that if everybody does that and you're the person standing in front of a wall of 500 bottles, you're still going to be overwhelmed by the complexity. So that approach works if you've got a very, very curated list.
[00:58:01] Speaker B: Yeah. And I guess there's a sort of retail success waiting to happen here, isn't there? If somebody organized their shelves that way,
[00:58:06] Speaker A: potentially I would be very interested in that experiment. Luli, give me your predictions about what happens next.
[00:58:13] Speaker B: Okay, so my verdict is that people are accepting that the wine world is in trouble without thinking about what they can do about it to stop the decline. And there have been some good answers for a very long time. Distinctive brand assets focus on consumer rather than what the producer wants to make. And less emphasis on prestige and more focus on occasion and fun.
[00:58:35] Speaker A: Yes. Now this is the middle of the market we're talking about for fine wine. All right, so, so that this doesn't get arcane, I think what we need is we need a classic example from this point.
[00:58:46] Speaker B: Oh yeah. Oh, fairs. So Fourth Wave Wines in Australia, amazing business who have launched a number of wine brands recently, many designed by the fantastic team at Denomination Design. And I think they keep coming out with perfect examples of what I'm talking about here.
[00:59:05] Speaker A: Okay, so Fourth Wave wines are masterful at this. Do you want to talk about anything in particular?
[00:59:09] Speaker B: Yeah. So recent, relatively recent, recent launch. And I could talk about many of theirs, but let's talk about Bento. So imagine an elegant, really elegant wine bottle with a beautiful label that looks like a kind of hand drawn, Japanese, Asian inspired art.
[00:59:26] Speaker A: And how does that, and how does that tell the consumer about the right occasion for the wine?
[00:59:30] Speaker B: Good question. So it starts with the name Bento. So from the Asian bento box, then the label design and which I talked about with this kind of hand drawn, sort of Asian inspired. And then the positioning and the back label cop do the same job. So if you'll forgive me Let me just quote from their, their positioning that they talk about. So, quote. Inspired by the fast paced, flavor packed world of Asian dining, Bento is designed for those lost wine occasions. The BYOs, the shared dishes, the street food, feasts, the noise, the heat, the spontaneity here to reclaim wine's place at the modern dining table.
[01:00:10] Speaker A: So they're being very, they're being very, very explicit. It's like, here's this wine, here is where you put it.
[01:00:14] Speaker B: All right. Yeah, yeah, exactly, exactly. And that's the point. The name, the label, the serve, the food world, the occasion, they've lined it all up so it doesn't ask the consumer to decode all the things we've talked about. It says, this wine is great, it's full of energy, it's to support the chaos of real life casual dining. And visually the bottle screams that positioning before you've even read that, if indeed you ever do.
[01:00:37] Speaker A: Yeah, Bento is a good example. And I, I have to say, Fourth Wave Wines is a strange Australian company keep absolutely knocking it out of the park. So last year I interviewed Nicholas Crampton, who's the founder of the company, on my other podcast, Drinks Insider, and it was my most downloaded episode ever because he's so clear about what makes a successful brand. I think the fact that I put in the title how you how to sell 67 million bottles or whatever it was, I think it might have been a clue.
[01:01:01] Speaker B: Yeah, that's why people downloaded it. So summarize what he said because I, I loved that episode and really enjoyed listening to him.
[01:01:08] Speaker A: Oh, well, just basically all the things that you said, he was channeling. He was, he was about, you know, what's distinctiveness, you know, the fact that you have to have really good wine. I think, I think somewhere on the podcast he actually says, you know, when you're very sort of nakedly commercial in wine, because he does, he does try and find out what the market actually wants and then delivers it. People always assume that you're not offering people really, really good wine. But he said that the important thing is also really, really good wine. You know, all of the distinctive brand assets and the sort of things that you talking about.
[01:01:39] Speaker B: Yeah, the current moment matters, but it's not the whole story. And I think the danger is panic on one side and potentially complacency on the other.
[01:01:49] Speaker A: Yeah. And I think I want to add to sort of what I said said earlier, which I think it's really important that wine doesn't try and turn itself into a fast moving consumer good to try and get out of this trap, first of all, because it's always going to lose against RTD's. But. But also, and this is a bit more sort of philosophical, but wine has always been a bit special and magical because of this way that it symbolizes transformation that we said earlier.
And this is something that's way beyond the scope of this podcast. But the role that wine has as a cultural good is one of the things that actually protects it politically.
[01:02:19] Speaker B: I agree. I don't think the wine has to. I'm not saying wine has to turn into washing powder at all. But I think we can agree potentially that the days are over when wineries just assumed that if, if they make it, consumers will come. Yeah. So I think, can we conclude that wine is not completely irrelevant even in the mass market, but wineries have a huge opportunity right now if they stop behaving as though the consumers are on a pilgrimage to find them. The market has shifted, the occasions have shifted, and waiting politely to be discovered is not a strategy anymore. Yes.
[01:02:52] Speaker A: And as we said in our last episode on this, when things are in disarray, this is actually a moment where you can really make your mark. This is actually a time to be ambitious. All right, so if you enjoyed this episode, assuming you did, whether you were outraged or not, please rate it, review it, and maybe even share it with somebody who says young people don't drink wine anymore.
[01:03:17] Speaker B: Share it with them. Especially.
You've been listening to welcome to A Question of Drinks, the podcast that explores why we drink, what we do.
[01:03:28] Speaker A: And we're here to answer your questions. If you want to know more about anything drinks, from the marketing history to the economic underpinnings to why this drink is popular and not that one, send
[01:03:38] Speaker B: us an email, send us any questions you'd like us to discuss, and quite frankly, the more random and niche, the better. And we'll have a go at answering them. We can be reached on a question questionofdrinksmail.com that's a question of drinks all one wordmail.com and we would hugely appreciate
[01:03:58] Speaker A: you reviewing and rating this podcast before you go. Five stars are much appreciated.
