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This question was presented in an article titled -
Dark Days for Cult Cabs in today's Food section of the LA Times. Cult Cabs are Cabernet Sauvignon based, limited production and high scoring wines that in better times sold for more than $300 per bottle. Demand has weakend and you don't have to be an economist to figure out that this downturn is tied to the Great Recession but I would like to pose another theory - The Millennials are now old enough to drink.
The term Millennials describes those born between 1980-2000. This is the tweeting, Facebooking, texting and tech-driven generation. They are more likely to get their wine recommendations via social media, texting or their friends. In other words, the point driven cult model doesn't apply to them and price wise these wines most likely don't fit their budget. But are the Millennials purchasing wines to begin with? According to a
recent article by Dr. Liz Thach for winebusiness.com - they most certainly are,
"Even during this recession, we've heard how the Millennial generation has continued to drive wine sales--albeit at slightly lower purchase prices. They are credited with a 46% increase in wine consumption for 2008, as well as positive wine bar patronage and new wine club sign-ups at a time when most wine clubs are losing members (Wine Market Council). With more than 50% currently under the age of 21 and an estimated population size of 81 million, they are a formidable consumer group. Because of this, most wineries are now paying attention to the older end of the generation--ages 21 to 32."
The Millennials are also the first generation with no direct link to prohibition and their Baby Boomer parents were probably more likely to embrace drinking wine at the dinner table. Millennials seem to have a more positive attitude towards wine and view it as an integral part of their social life rather than some sinful activity. With massive amounts of information available at their fingertips, this generation wants to knock wine off of it's pedestal, expose it's mystery and learn more about it. They go to wine tastings, throw dinner parties and participate in tasting groups. While their parents can't imagine sullying a wine with a screw cap, Millennials know it's there to protect the flavor. I have noticed this generation is also more open minded when it comes to trying wines from newer regions or unknown grape varieties, especially if the recommendation comes from a trusted peer. They buy wine from Argentina, Spain and Greece and they aren't afraid to get into Albarino, Gruner Veltliner or Aglianico. Millennials relish connecting wine to it's origin and they love to pair it with foods of all kinds - both high end and casual. Millennials don't seem to be driven by mailing lists, points, scores and status. The prestige of wine doesn't matter - what's more important is the authenticity of the experience.
Millennials are acutely aware they don't have to spend a great deal of money for a good bottle of wine. Remember, they've done the research and they exchange information with their friends. They know they don't have to pay $50 for a bottle of California Cabernet Sauvignon when they can buy 5 bottles of Malbec from Argentina for the same price. They don't seem to be as interested in aging wine for the future. Wine is not a trophy, it's something you drink tonight while watching the season premiere of "Lost".
So on the top end, prices are being driven down because of the recession and those who were spending $50-$60 on a bottle are spending less but on the bottom end, you also have this new group of younger drinkers who are buying a great deal of wine but also at lower prices. Are the wines aisles being stocked with more affordable selections to take care of the needs of the recession group or the Millennials? It's probably a mixture of both but I have a hunch the lower prices are likely to stick around for a while. The recession group has become accustomed to finding decent wines for less money and it will take more convincing to get the Millennials to spend outside their bargain priced comfort zone.
But what does this mean for Cult Cabs, are they truly dead? My answer is no but the criteria for what constitutes Cult Status will change. The pool for higher end wines will most likely shrink and those that are in it just for the prestige and cult status without offering a purposeful message or mission will fall away. There are always going to be certain wines that are worth a premium and I'm sure Millennials will eventually find these wines and splurge but their reason for doing so will be because they connected with the winemaker, visited the region or recognize the rarity of the product. This new consumer is very informed and not afraid to ask questions. They know your competition and they know what is out there. Taking an unknown critic's review or some abstract score at face value is not enough for them. They want to feel, taste and be a part of the entire experience. As for the recession group, time will only tell if they return to their previous buying patterns.
I asked my friend Lauren, who is 30 and an avid wine enthusiast, if she would ever pay $300 for a bottle of wine and she responded, "Do you know how much wine I could get for $300?" That's a very good question Lauren, and I'm sure she knows the answer.