After Michael Preis presented us the very disturbing statistics about the decay of wine industry, I could not stop to wonder if that was happening because consumer behavior shifted or because the power players in the wine industry didn't deliver customer what she wants and market it properly?
As SVB State of the US Wine Industry 2020 report suggests, wine industry is doing poor job attracting young audience; wineries don't understand the evolving consumer profile, don't have ability to critically evaluate their organization's capacity to react, develop solutions and execute quickly, then evaluate their success or failure to continuously improve. Emerging wine consumer, on the other hand, has way too many alternatives to waste her time on poorly positioned beverage with major pricing issues.
Here are some of the issues the wine industry will have to address as it's approaching the inflection point:
1. Marketing. As we know from one of the cases, the biggest push of US wine industry happened after TV promotion of the health benefits of moderate wine consumption. I believe, it is time to sharpen and personalize this messaging to millennials and generation Z and deliver it at scale, of course, backing it up with data and body of research.
2. Fresh business models. $70b industry is ripe for disruption, yet whenever we think or talk about D2C we picture minor minor improvements in tasting room and wine club experience. Despite substantial automation of New World wineries predictive analytics based on usage data is still minor part of wineries operations.
3. Efficiency. Wine industry power players will need to implement Amazon and Walmart's strategies of operating at super thin margins. Acute oversupply represents interesting opportunity to refine pricing and reconsider packaging.
As a venture capitalist, I see 2019-2020 stagnation as the industry's largest opportunity to improve efficiency, customer experience, expand horizontally and experiment with new technologies and business models. I agree with Michael that all these alternative spirits are here for a while but I seriously doubt that spirits will survive or even dominate wine industry in a sustainable fashion if the industry manages to deliver young customer what she values the way she is ready to consume it.
Links:
https://www.svb.com/globalassets/library/uploadedfiles/reports/svb-2020-state-of-the-wine-industry-report-final.pdf
https://www.prnewswire.com/news-releases/total-us-wine-market-tops-70-billion-300779605.html
As SVB State of the US Wine Industry 2020 report suggests, wine industry is doing poor job attracting young audience; wineries don't understand the evolving consumer profile, don't have ability to critically evaluate their organization's capacity to react, develop solutions and execute quickly, then evaluate their success or failure to continuously improve. Emerging wine consumer, on the other hand, has way too many alternatives to waste her time on poorly positioned beverage with major pricing issues.
Here are some of the issues the wine industry will have to address as it's approaching the inflection point:
1. Marketing. As we know from one of the cases, the biggest push of US wine industry happened after TV promotion of the health benefits of moderate wine consumption. I believe, it is time to sharpen and personalize this messaging to millennials and generation Z and deliver it at scale, of course, backing it up with data and body of research.
2. Fresh business models. $70b industry is ripe for disruption, yet whenever we think or talk about D2C we picture minor minor improvements in tasting room and wine club experience. Despite substantial automation of New World wineries predictive analytics based on usage data is still minor part of wineries operations.
3. Efficiency. Wine industry power players will need to implement Amazon and Walmart's strategies of operating at super thin margins. Acute oversupply represents interesting opportunity to refine pricing and reconsider packaging.
As a venture capitalist, I see 2019-2020 stagnation as the industry's largest opportunity to improve efficiency, customer experience, expand horizontally and experiment with new technologies and business models. I agree with Michael that all these alternative spirits are here for a while but I seriously doubt that spirits will survive or even dominate wine industry in a sustainable fashion if the industry manages to deliver young customer what she values the way she is ready to consume it.
Links:
https://www.svb.com/globalassets/library/uploadedfiles/reports/svb-2020-state-of-the-wine-industry-report-final.pdf
https://www.prnewswire.com/news-releases/total-us-wine-market-tops-70-billion-300779605.html
No comments:
Post a Comment
Note: Only a member of this blog may post a comment.