Generation Z

Author: Marco Negro

Italian wine is enjoying a moment of growth in all markets. However, we wonder how solid the positions gained so far are. What about the new generations? Are winemakers tuned in and understanding the interests of young consumers?

Events that were not even remotely imaginable just two years ago have kept producers on edge. Amidst the Trump administration’s seesawing threats of sudden tariffs and the uncertainties of Brexit, came the first pandemic in the age of globalisation. Average wine consumption held up, albeit at the expense of a shift in turnover from the ‘out-of-home’ sector in favour of organised distribution. For some months now, bottles have been reopened in the restaurant sector, while sales on the shelves continue to grow in all segments, including the average price segment. However, new threats are looming: the awakening of inflation and a substantial price increase for all wines. The reasons are to be found in the scarcity of the last harvest, as well as in the considerable price increases in raw materials, energy and transport. In this scenario of new uncertainties, can we at least consider current sales as consolidated?

Generational turnover

Time only flows in one direction; always forward. Sociologists have used different expressions to indicate the inexorable rejuvenation of consumer society. A certain ‘ Generation X’ was followed by ‘Generation Y’ and then ‘Generation Z‘. The members of the latter generation are gradually entering adulthood. They are young women and men who are about to graduate, thus beginning to lay the foundations of their careers. In the meantime, they consume, develop opinions and promote trends: all together they contribute to shaping the typical taste of their generation. Sociologists and advertisers keep track of young people’s progressive entry into consumer society by analysing their choices, empowered by new digital tools. Through smartphones, we do not only make purchases; we also manifest our interests and the corresponding level of participation and involvement. More subtly, from our pocket, electronic devices enable environmental localisation and listening, allowing advertisers to develop new personalised marketing techniques. What is the place of Italian wine in this scenario?

Two young people choose a wine from the shelves of a supermarket

One thing is certain. Many wine-growing regions have already realised, to their cost, that they have remained anchored to the consumption of a mature generation and have not attracted young consumers. Industrially produced Marsala and Vermouth have remained stationary in some elderly aunt’s larder. The red wines with a strong woody flavour, what someone jokingly called ‘the parquet wines’, are a Polaroid of the 1990s, when Italian winemakers were chasing the North American palate. The sweet sail of Asti Spumante had the wind in its sails in the Germany of the 1980s and 1990s, as well as in the Russia of the last decade. Asti Spumante consumption is still important in those nations, but no longer involves young people; in short, drinking Asti Spumante is no longer considered ‘cool’ among Germans and Russians of generations Y and Z.

The wear and tear of some denominations

It also happens that certain markets end up wearing out certain denominations. Take for example the United Kingdom and Northern European countries, where the unstoppable rise in demand for a certain Italian wine cyclically recurs, followed by a period of stabilisation and soon a collapse in reputation and interest. The distribution chains exasperate the competition between bottlers, concluding contracts year after year at ever lower prices, even resorting to the infamous downward auctions. Export volumes are certainly growing, but the phenomenon of the wearing down of the appellation also occurs. That wine will find itself being bought only more by virtue of its low price. In the UK it happened twenty years ago with Soave and not even ten years ago with Pinot Grigio. Let us all hope that the same fate does not now befall Prosecco!

Young people toasting with white wine for an aperitif

What happens to a denomination that sees its reputation lost? Why are the new generations no longer interested? Is it the young consumers who reject the wine chosen by their fathers’ generation? Is it the loss of reputation that is keeping the new generation away? At this point, one has to ask oneself about the role of the many ‘protection and promotion consortia’, whose raison d’être is precisely to safeguard consumer opinion of the denomination. It is understandable that these institutional bodies cannot prevent the free market economy or block the speculative phenomena of large-scale distribution. But can they convey the value of the agricultural wine chain? Could they inform the consumer of the cost of a bottle produced with ethical respect for the vineyard and the winegrower?

The denominations that have now ‘burnt’ their image are many, starting with Chianti, the best known Italian red wine in the world. Other similar phenomena are happening with the sale at very modest prices, bordering on indecency, of Barolo and Amarone in Denmark. The same is happening with Apulian wines in Vietnam and in general throughout South East Asia. There is a risk that this drift will also involve the huge volumes of Moscato d’Asti Docg sold in the United States and Korea. Individual farms, orphaned of a collectively defended reputation, must fall back on the corporate and family narrative. Others embark on their own path of claiming and communicating the distinctiveness of sub-zones.

The stories of diminished supply of raw materials and dependence on Russian gas have merged with an inefficient and increasingly costly logistics distribution of materials, articulated through dozens of passages on trucks and vans powered by diesel fuel. These are all factors that create opportunities for speculation and inflation; two terms that not only rhyme, but also feed off each other. Markets, in general, are disoriented. Distributors, from national to foreign ones, have found themselves with average increases well above the average value of inflation.

Little bricks of culture

As with any product in the food chain, for a bottle of farm wine, appreciation passes through the narration of its values. What has happened to some wines with a tarnished reputation reminds us that it is not enough to publicise the characteristics of a grape variety and the uniqueness of a terroir. Cultural aspects, which more than others must be transmitted to new generations of consumers, also come into play. Think of Italian 20-year-olds; the vast majority of them now only find their farming roots if they go back as far as their great-grandparents. There is also too much distance between their grandparents who bought wine in demijohns and them who learn wine descriptors from an ‘app’.

Young people drinking wine in a vineyard

Unfortunately, school curricula do not include the narration of the agricultural chain of pasta, bread, oil, meat and wine. The responsibility that is not discharged by families and the school system should be filled by those involved in dissemination. These same values should also be shared with chain buyers and importers. Explaining the concept of fair remuneration for family farms adds a building block to the cultural education of the younger generation. This protection and promotion of the agricultural processes in the vineyards, olive groves and livestock farms of the Bel Paese would have avoided the attrition of some of Italy’s agri-food products, which have unfortunately slipped onto the low price shelf.

Analysing and intercepting what ‘Generation Z’ consumers are sensitive to is the subject of sales analysts. What seem to be the trends that new Italian wine customers are showing interest in? To put it in a marketing term, what are the topic trends of generations ‘Y’ and ‘Z’? A consolidated consumption trend is undoubtedly that of organic wines. Consumption of rosé wines and the whole category of easy-to-drink sparkling wines, especially suitable as aperitifs, is still growing. Consumers in their twenties and forties are paying close attention to the term ‘sustainable’. The larger wineries have noticed this and the race for accreditation with certification bodies has begun. Time will tell whether this is a passing fad, true awareness or a simple economic lever to extract more remunerative prices. We await the name that sociologists will give to the next generation of consumers.

08th November 2021,

Marco Negro

Picture of Marco Negro
Marco Negro
Expert of communication of Italian wine. He has a knack for connecting people.
Picture of Marco Negro
Marco Negro
Expert of communication of Italian wine. He has a knack for connecting people.

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