After the countrywide elation of the Springbok win, it was back to reality in the office this week. The festive season is upon us, and it is an important time for the hospitality and wine industry. While we are getting ready to welcome guests to the estates, retail promotions and sale campaigns have long been confirmed. But with a slowdown in the global economy and a very challenging local environment, is growing sales volumes even on the table?
In 2022, Mike Schüssler’s research on what it takes to be middle-class in South Africa appeared on Businesstech.co.za Although it might be slightly dated, I can’t see that there was much positive development in our financial situation over the last year and I feel his insights are still very relevant. According to the article, South Africa was in the lowest 5% globally for employment and 4th lowest in the world when it comes to the share of people paying income tax. This isn’t really a surprise as fewer than 25% of adults in South Africa earn a regular salary from a formal employer (domestic workers and farm workers were not included in this calculation), the unemployment rate fluctuates between 30% and 35% and those who are deemed to be upper-middle class, earn upwards from just R87 000 per year. Despite a drop in fuel prices this week, there seems to be little respite as Wednesday’s Medium-Term Budget Policy Statement indicated tax hikes of up to R15-billion to be announced in February 2024. Very few of salary-earning South Africans feel like their salaries keep up with inflation and the continued increases in the cost of necessities such as food, water and electricity, education and housing, not to mention security, insurance and medical aid.
Consumers are under pressure, and they are saving on luxuries, which might include wine. Is the economic situation the only consideration when it comes to managing our wine sales expectations? Unfortunately, not. Trends in the world of wine consumption has shown a decline in wine’s popularity under younger generations for the last few years already. Wine brands have adapted and are trying to be less intimidating and more accessible, but somehow it seems we are not yet as successful as we would like to be.
Wine Enthusiast compiled a list on what wine brands can do to make wine more appealing to the younger audience, based on what Millennials and Gen Z wine professionals have to say. (Do read the article)
- Be aware of the cost of wine and wine related experiences.
- Explore – and persist in finding a solution – when it comes to the options of low or no alcohol, lower sugar, alternative packaging, etc.
- Add an experience factor to your wine, whether it is on an estate or creative ways for consumers to enjoy wine at home – think wine cocktails, recipes, etc.
- Be accessible, approachable and relatable. Ensure that your message is easy to understand and that you are not intimidating or snobbish in the way you present or communicate your wines and offering.
- Stay up to date with trends in the way you present and market your wines. Understand the important value of social and environmental responsibility.
- Be transparent about your practices and methods.
- Be “shopable”! Make it easy for consumers to get to your product – in the retail or online. Ensure that the payment mechanism is user-friendly, that your service delivery is exceptional and that your communication model works.
The success of wine tourism has made many wine brands more accessible. Many of us have also explored ways to comply with health, lifestyle and value trends – no and low alcohol products, alternative, lighter packaging, etc. It feels, however, that we have been more successful in developing restaurants, art experiences, food and wine pairings or vineyard related activities such as fynbos hikes than what we’ve been in making changes to the actual product.
Perhaps it is because those heading the wine industry, inherently love wine and struggle to compromise the integrity of the product in order to tick trend boxes? Perhaps maintaining wine’s character with reference to terroir and vintage influences, etc. has been a struggle for wine producers when the focus is on low or no alcohol, tin or plastic? Perhaps there isn’t an easy solution, but we do want to sell our wines. There isn’t a lot we can do about the broader economic outlook, but at least we have proper insights when it comes to the likes and dislikes of young consumers. Now the challenge is to persist in learning and finding ways to approach this younger market with a product that is relevant, likeable and perhaps, eventually, even coveted!