Marketing wine to multi-cultural America

Wines & Vines, Jan, 2003 by Sandra Gonzalez

For the past few years, many in the industry have had the same conversation at conferences, seminars and symposiums. How can the wine industry educate new consumers about wine and increase its sales? Suggestions such as more wine events, changing the image of wine, targeting adult Generation X (Y, Z...), and consumer-focused marketing programs have been discussed. Yet, during these dialogues, the topic of ethnic marketing or outreach is rarely mentioned. Latinos, Asians (including Pacific Islanders) and African-Americans make up 38% of the United States population and have a combined purchasing power of $1.5 trillion (Fig. 1 & 2).

According to the 2002 Adams Wine Handbook, 32.2% of adult Latinos, 28.8% of adult Asian-Americans and 25.8% of adult African-Americans were wine drinkers in 2001. Those figures are up from 1998's figures, when 11.7% of adult Latinos, 17.2% of adult Asians and 15.3% of adult African-Americans consumed domestic table wine. Yet wine industry marketers overlook this demographic as having bona fide potential for current wine sales and investment opportunity for long-term growth.

The wine industry has always been at the forefront of responsibility issues, and to many a targeted campaign to increase consumption within ethnic groups may seem like a step back from codes of advertising and social responsibility. But America is a mix of culture, customs and history, and as the global tide of immigration, acculturation and purchasing power shifts, the wine industry needs to look at the opportunities and challenges faced with educating a more diverse population about wine, especially Latinos, Asians and African-Americans. And it will have to re-evaluate its U.S. wine marketing strategies and resources to complement its current programs.

Think Globally, Act Locally

Even though this bumper sticker mantra is seen ad nauseum, it rings true for any type of initiative with the goal of change. This includes business--the wine business in particular. According to Wine Institute, more than 90% of U.S. wine exports come from California. America's top 10 export wine markets are the United Kingdom, Canada, Netherlands, Japan, Belgium, Germany, Ireland, France, Sweden and Denmark, and yet U.S. Latino, Asian and African-American populations are greater than in many of these countries (Fig. 3). As stated above, research shows that wine consumption has increased across the board for each ethnic group. The percentage of U.S. ethnic wine drinkers still nearly meets or surpasses several of the top 10 export markets' total population figures (Fig. 4).

Exports play an increasingly important role in the wine industry by reinforcing brand recognition for world-class wines and growing the home country's economy. Companies exporting wine invest money into overseas offices, foreign marketing campaigns, trade policy negotiations, complex sales and distribution systems and, of course, cultural and linguistic differences, yet how is it that wineries willing to export have yet to catch on and invest into the "foreign" markets available within the U.S.? Looking more closely at the ethnic demographic of U.S. wine markets and buying habits, it may clarify what potential marketing messages can be used.

One of the common factors of wine drinkers and U.S. ethnic groups is that both live in some of the top wine metro areas and states. For example, 36% of the entire U.S. Asian population lives in California, totaling 3.8 million potential consumers. Add New York State and nearly 50% of all U.S. Asians are accounted for in these two states alone. That adds up to 1.4 million Asians who already consume table wine. The top three metro wine markets are Los Angeles, New York and Chicago, which are similar to the top three metro areas for Latinos, Asians and African-Americans (Fig. 5). The top three wine consuming states are California, New York and Florida, again almost mirroring the nation's largest consumer markets for Latinos, Asians and African-Americans (Fig. 6). Concentrating on ethnic marketing in top metro areas and states where wineries already have sales rep presence and/or distributor relationships may help facilitate trial programs without excessive financial and staff requirements.

Along with top markets, annual expenditures are another way to track buying trends and patterns for items that may help market wine. The relationship between wine and food is a primary focus for many wineries' general consumer, sales rep and restaurant education programs.

Considering figures from the U.S. Department of Labor Consumer Expenditure Survey (CEX) 2000, companies should focus on wines to be paired with foods prepared at home to educate the ethnic consumer.

CEX data indicates that the annual percentage spent for food at home is higher for both Latino and African-American consumers than Anglo consumers. This is the case even though both ethnic groups, on average, earn less than Anglos and have a lower total annual expenditure, yet spend more on food for home use.