Guest column: Who’s really buying wine off the top shelf?
By Brandon De Kock, 20 February 2023
It was back in 2019 that producer body Vinpro asked us at WhyFive, a consumer insight consultancy, what we thought middle-class-and-up wine drinkers looked like. (NB: When I say ‘adults’ or make any other collective reference in what follows, that’s who we’re speaking about, not ‘everyone’). It’s our area of expertise: the 13 million adults out of 43 million total who live in households earning more than R10K per month. Surprised there are so few? Welcome to the real world.
The starting point was to understand the wine landscape not as a consumer, but rather from an industry perspective, and just like the end-product, the more we swirled and sniffed, the more interesting things got.
A deskful of research later, I was armed with a multitude of vinous facts that would truly test the patience of my close friends for the foreseeable future. ‘Do you know that only 30% of all still wine is sold in 750ml glass bottles?’ Etc. But one stood out above all others: according to SAWIS, ‘high priced wine’ was anything over R33 a bottle (at wholesale). That category represented only 17% of all wine consumed, but 35% of the total industry value. Seriously? No wonder Vinpro was interested in what we had to say.
The story we ended up telling probably hasn’t changed much and like all good data-driven narratives, it’s like solving a crime: you connect discrete pins on a map (data points) with string (common sense) and hope it leads you somewhere. Let’s go…
To begin, alcohol is one of many ’75:25’ consumer categories we measure. 25% of all adults don’t do any exercise, 25% never go to the movies. You get the idea. And 25% of adults don’t drink alcohol or, rather, 75% of them do. That’s a lot of customers. So far so good.
We’re also able to identify segments clearly. Crystal clearly. When you sell wine into the Top End of the SA market, for example (that’s the 2.5 million people living in the top million households by income), you might want to know that 40% of your potential drinkers are under the age of 40, 50% identify as Black adults and 45% are in Gauteng. That’s just the highest earners in the country: as you get into the thick of the middle class, the youth portion increases significantly, as do the ethnic percentages. So what?
15 years ago, I witnessed an advertising pitch to a wannabe short-term insurer aiming squarely at the emerging middle-class: consumers with ‘practical assets’. To illustrate their prowess, the agency pasted up magazine images into a montage on white board (a classic old-school approach) and labelled it ‘your target customer’. All I remember was a caravan, a double-cab bakkie, a Springbok rugby jersey, a pack of Salusa 45, two golden retrievers and a bottle of Chateau Libertas.
Even back then, we suggested the assumptions may have been, er, somewhat dubious. The agency disagreed. The client has never been heard of again. Lesson #1: if you’re marketing premium wine in 2023, you do need to understand how dramatically the size and shape and behaviour of the SA middle-market has shifted in the 21st century.
As has been the case for the past decade, more middle-class consumers drink wine than any other alcoholic beverage. 42% of them are cork-poppers. It’s a one-horse race with beer coming in second at 28% and gin close on its heels on 25%. Why so dominant? All sorts of reasons from accessibility to ‘occasion appropriate’ come to mind, but on a practical level, wine has a 55:45 female/male skew, so it’s appealing to the entire market. Beer on the other hand is 80% male-skewed. And one of the reasons gin’s had a revolution is that it is the most gender-agnostic alcohol category of all.
What about price? The last time we measured it (post-lockdown) 70% of mid-market wine drinkers typically spent more than R75 on a bottle of red wine (50% when it comes to white wine). Also, there’s a direct correlation with income: the more you earn, the more you’ll spend on a bottle of wine. That may seem obvious, but it’s an important insight. It indicates that wine drinking and enjoyment (and ultimately spend) is a continuum. It’s a journey, not a destination. One that begins in the middle-class carriage.
Which brings us to the next point because that carriage is filling up in a fascinating way. Our socio-economic landscape is like a reverse Slinky spring with increasing numbers of unemployed being countered by an ever-expanding group of relatively wealthy, relatively young adults on the other end. Example: when Covid-19 hit, there were 2.1 million individuals earning R30K or more a month. Now there are 2.5 million. And we’ve added 50 000 million-a-year-or-more earners to the tax base in a calendar year. Imagine the broader effect of this process across the total potential premium-wine market.
We’re getting to the crunch. In a growing market, if you just hold your head (percentage-wise), you’ll see an increase in volume. We’re selling more new passenger cars now than we were before the 2018 global financial collapse. Grocery retailers are showing double-digit increases every year. More people = more consumers.
Now connect the pins. When it comes to wine, what we see over the past five years is a slight, but steady, downward trend. Yes, it’s still the top dog but it’s losing ground at a percent a year. Beer on the other hand has flatlined (so it’s selling more by volume than ever) and spirits as a total category is actually going up. It’s a story that’s validated by SAWIS et al and I can’t help thinking it’s all about unrealised potential.
Put bluntly, the data shows an ever-increasing number of aspirational people who can afford to buy and try premium wine – and really want to. If the needle isn’t shifting, it almost certainly has more to do with misguided (or ineffective) marketing than anything inside the bottle or shopper sentiment. New-to-category consumers need new-to-category messaging. Yes, it’s only my opinion, but I really hope we all do a better job as time goes on than the aforementioned short-term insurer!
- Brandon de Kock is a writer, photographer, speaker and consumer-insight specialist. During daylight hours, he is the director of storytelling for WhyFive, a leading South African marketing consultancy that specialises in understanding the top 30 percent of the population by income and have conducted the annual Brandmapp study for the past 10 years.
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