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Constellation survey says most consumers are 'Overwhelmed'
Friday, March 14, 2008
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What kind of wine consumer are you? Are you an enthusiast? A traditionalist? Or overwhelmed?

Project Genome, a research program of Constellation Wines U.S. that is believed to be the most comprehensive examination ever taken of the wine buying habits of American consumers, has defined six categories of buyers, complete with characteristics of each, what they buy and how often, and, from a marketing standpoint, what motivates them to buy wine and how to best communicate with those buyers.
The research study, subtitled Home and Habits, was unveiled at a news conference last week at Franciscan Estate in Napa Valley, with more than 15 other media people around the nation participating via a conference call.

This is the second version of Project Genome undertaken by Constellation, nearly tripling the number of consumers tracked in the first survey and, according to company officials, making it more accurate and extensive.
The first study, released about three years ago, involved 3,500 consumers who answered 100 questions about their buying habits along with other lifestyle attributes. In the second go-around, 10,000 consumers were studied through the Nielsen Company’s Homescan consumer purchase panel, which measured their purchases over an 18-month period in all types of wine-selling outlets, including wine shops, liquor stores, warehouse clubs, supermarkets, drug stores and mass merchandisers. In addition, online interviews were conducted to refine the details and classify the consumers into the six categories.

No typical wine consumer
“It (the study) showed that there is no such thing as a typical wine consumer,” said Jose Fernandez, chief executive officer of Constellation Wines North America.

The six categories identified in Project Genome bore that out. They range from those who are very knowledgeable about wine to those to whom wine is mystifying and intimidating.

Leslie Joseph, vice president  of consumer research and consumer affairs for Constellation, had revealed the six categories of wine buyers in the first version of project Genome, but refined them and provided more details about each in the newest one.

The Enthusiast

 This person is passionate and knowledgeable about wine, loves wine, loves learning about wine and loves drinking wine, Joseph said. The Enthusiast usually has other luxury items in the shopping cart, and likes to hang around the wine section and read labels.

Wine is a global experience to the Enthusiast who appreciates and understands sophisticated wine information, and will drink all varietals. The Enthusiast reads wine publications and is likely influenced by ratings and reviews, and by appellations.

One surprise — 47 percent of Enthusiasts buy wine in 1.5-liter bottles, drinking it for their everyday wine. Another surprising fact: 49 percent have not bought a  bottle of wine costing more than $15 in the past six months. Only 12 percent of consumers are classified as Enthusiasts, but they account for 25 percent of all wine sales. Included in this category are Luxury Enthusiasts (3 percent of consumers), who have a personal relationship with the wine buyer at a favorite shop, and in restaurants, usually order off the reserve list.

The Image Seeker

For this person, wine is a status symbol. While they may have only a basic knowledge of wine, that knowledge is driven by an awareness of the latest trends. Image Seekers like to experiment and are open to new wines and wines from other countries, and will try screw capped wines, 3-liter boxes and tetra paks.

“That (innovating packaging) gives them a chance to show off their knowledge to their friends,” Joseph said. Another attribute: “When they go to a restaurant, they go online to check the wine list ahead of time.”

But when Image Seekers aren’t certain of what to buy, they typically go for the more expensive wine. In this category, too, there was a surprise — despite the message in “Sideways,” merlot accounts for 20 percent of their wine purchases and is the number one varietal consumed by Image Seekers, while pinot noir was farther down the list.

The average age of Image Seekers is 35, which makes it the youngest of the six segments. This group accounts for 20 percent of consumers and 24 percent of purchases.

The Savvy Shoppers

 These are the folks who look for the best buys for their money. Joseph said “they read store circulars, shop for values and know where the closeout section of the store is, and they buy six bottles at a time to take advantage of the (additional) discounts (offered by many stores).” They use coupons and rebates and get satisfaction when they pay $10 for a $15 bottle of wine.

When ordering wine in a restaurant, the choice is usually the house wine because they feel it’s a better value. The survey showed that Savvy Shoppers averaged 67 bottles of wine purchased over the last 18 months, and represent 15 percent of consumers and 15 percent of wine sales.

Traditionalists

 “They value things that have a history,” Joseph said. “They have homes with things handed down from generation to generation, and they like to enjoy wine from traditional wineries” — well-known national brands.

To them, wine makes an occasion more formal, and they enjoy entertaining at home. They don’t try new wines very often. They  won’t order wine in a restaurant if they don’t recognize any brands on the list, and they tend to stay with cabernet sauvignon and chardonnay. But they are willing to spend money to buy a good wine. Traditionalists account for 16 percent of consumers and 15 percent of purchases.

Satisfied Sippers

People in this group are not very involved with wine, don’t know much about it, but know what they like to drink. They don’t care where the wine came from, and wonder why anyone does.

They don’t enjoy the experience of buying wine, so they tend toward the 1.5 liter bottles and usually buy the same brand. Satisfied Sippers shop where it’s easy to find the brand they want and they buy 16 percent of their wine at warehouse stores, a figure second only to the Image Seekers, who buy 20 percent of their wine in warehouses.

Satisfied Sippers make up 14 percent of the consumer population, but account for only 8 percent of purchases.

Overwhelmed

 This is the largest group of consumers, 23 percent of those surveyed.

“They don’t know where to start,” Joseph said. “They don’t understand things like oak, they just ask, ‘Will this go with dinner tonight?’”

Sometimes they select wine because of the label, but say it’s bewildering because they don’t know how the wine will taste. They look for basic information that’s easy to understand, but if it’s too confusing or there’s no information at all or no one is around to answer questions, they don’t buy anything.

In a restaurant, they are easily intimidated and figure it’s safer not to order wine at all, rather than have something that doesn’t taste good.

During the first Project Genome survey, the results indicated that about half the wine purchases by the Overwhelmed group were white zinfandel, but refinements now show that maybe they just had a difficult time remembering what they bought, Joseph said. It turns out that 80 percent bought white wine, 77 percent bought red wine, and just 36 percent bought white zinfandel. While Overwhelmed accounted for 23 percent of consumers, they bought only 13 percent of wine.

Under-communication

“Increasing consumption among the Overwhelmed is the greatest opportunity for us,” Fernandez said. But it will require a different way of marketing — “We use language we understand, but they don’t,” he said. “We under-communicate with these customers.”

Joseph added, “We need to do a better job of helping these people know what the wine will taste like.”

The results will assist Constellation — and other wine producers — in planning marketing strategies. “We can hone in on where people are and how to reach them,” Fernandez said. “We haven’t zeroed in enough on some people who like wine but are not as interested in how wine is made but how it fits into their lives. We can make sure we have the right mixture of products in the right place … we can tailor the product mix for each store.”

Ed LeMay, senior vice president for channel management, said Project Genome will help the company understand customers “like never before. We can improve our promotional materials and we can (create) educational materials. We can use language that resonates with them.

“The sky’s the limit,” he added. “We’re just scratching the surface.”    

Asked why Constellation would share such valuable information with the rest of the wine industry, Fernandez responded, “because everyone benefits.” If consumption increases only a few percent, he explained, “we’ll get our share.”

While the Overwhelmed group appears to be the best target for increased consumption, Fernandez pointed to the Image Seekers, saying they are “Enthusiasts in training. In the sense that there is a ladder (of progression through the segments), the Image Seekers of today are the Enthusiasts of tomorrow.”

Information about Project Genome can be found at http://www.cwinesus.com/genome2008.html.
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