Meet the mavericks tackling wine's generational problem

We're looking at a situation where within the next couple of years the majority of Australian licking consumers are mil Z, right? We need to be thinking as a category about how we're speaking to them. Unfortunately for young people and new people coming into the wine category I think young people feel that they can just easily have to be a little bit more than a little and tonic. I'll order it. You know, Martini or get anything but wine.

For that reason we're losing a lot of sales. There's not a lot of industries that are looked at like the wine industry where you get frowned upon for making something that people want. If we're creating a product that someone wants or there's a demand for, isn't that really what we're all here to do. Welcome to Trick's Adventures. People who make them. I'm James Atkinson, and this is a special episode of the show looking at the future of Australian wine, produced in part.

Coming up, I'll be speaking with Endeavour's head of fine wine, Andrew Sheddon, about some of the challenges the category is currently facing. In short, those of us who love wine are getting older and we're not buying as much as we And younger consumers, MIL-Zs as Andrew calls them, are choosing to drink beverages other than wine. Andrew says it is incumbent on the wine industry to rethink its approach if it is to appeal to these younger consumers. Labeling, brand. Marketing. about one.

Also this episode I speak with a couple of producers who have done just that. Cam Marshall of Range LifeWise of Zonzo Estate in the Yarra Valley. First up though I'm speaking with Andrew, who says wine today is facing tougher competition than ever. Beer Spirits and Premix. I think what those categories have done really well is identify Exactly what the modern consumer is after, exactly how they're spending their time with liquor products. And they've gone very specifically in creating products.

that match those customer needs and those occasions. And if I'm honest, I think wine has been slower in its response. There there and there are myriad reasons for this, but slower in the response to that level of innovation, that level of customer need. And that's created a a a situation where, you know, the competition for those, I suppose let's call them 20 somethings has never been more fierce. And I think what we're what we're seeing is

some of the other categories winning share with those consumers. But I think perhaps more worryingly for wine, we're not seeing them hooking into the wine category as as they have done traditionally. So as they go through their twenties and into their early 30s. The sophistication that you're getting in offers in particularly pre-mix and spirits means that the traditional need or the tr traditional want to move into wine hasn't been as strong as it always has been historically. So

It's really around that younger consumer that I think the other categories have done a very good job in innovation. Do you think that, you know, that there's maybe been a reluctance in certain elements of the wine industry to sort of innovate and create new products? Yeah, I think there's multiple things. Again, just from a pure technical perspective, you've obviously got wine as a agricultural, you know, once a year harvested product.

versus a lot of those other categories I was just talking about are are manufactured and can be turned around far more quickly. So you have to acknowledge that as a starting point. But then beyond that, maybe there's been a reluctance to to innovate because of w we like to talk about tradition a lot in wine and the importance of history uh and place and and so maybe there's been a reluctance From that perspective.

for for innovation in wine. But I also don't think there's been a need. Like if you look at it from a customer occasion perspective, wine has dominated some traditional customer occasions and really took the lead in things like um with meal and and in gifting. And and therefore it really fell to the other categories to innovate to try and uh to either A claw background in those traditional Heartland wine occasions or B expand customers into other occasions.

Andrew says the heartland occasions for wine have traditionally been midweek, lower tempo, at-home type consumption. These are the occasions that that we track that wine has traditionally held its largest share and still does. The issue is that they're the exact occasions that are in decline with the modern consumer. And the ones that are in growth are focused more at group occasions, particularly smaller to mid-sized group, are out of home.

So mid to higher tempo occasions, they are all in ascendancy and they are all the occasions that, you know, traditionally wine has played a, you know, third, sometimes even fourth fiddle to spirits to premix and and to beer. So Economic headwinds at the moment mean that you are getting crunch, or at least I think customers are more considered in how they spend their time and how they spend their money. Similarly, and you could you could reference this back to a post-COVID universe where

I think as as consumers, as we've come out of that, we are again more considered in how we use our finite social time. And all of that leads into if you're going to cut back on occasions, it is that you know, that at home, lower tempo, solo type occasions, and you're deprioritizing that over an ability to catch up with people to actually connect with other humans that you care about. So I think both of those things are are significant factors.

The the last one would be a general movement towards health and wellbeing. And again If you're going to moderate your um total liquor consumption across all categories, you you're going to very consciously choose the more sociable, the more social connection occasions over the lower tempo at home occasion. So all of these are playing into that that occasion shift.

When you think about the choices we had and the choices that younger drinkers have now, it it is mind blowing. When I first started in mine it was all about collecting big red wine. And there are multiple big national brands that do that exceptionally well and have created the biggest businesses in in the country doing it.

But their customers aren't getting any any younger. This is where I don't want to offend anyone. Yeah. I I you know their customers who collect those wines and buy that, they're getting older and not buying as much wine and when I was growing up we did what our parents did as far as Drinking. Younger drinkers um tend to blaze their own path these days. I'm astounded at how differently they drink to what their parents would. And you can just think of things like pet nuts.

flavoured wines, the whole natural wine movement. Um I can't imagine their parents at home uh uh introducing them to those drinks. So I think they have a whole different level of exploration into what they want and what they're looking for and they don't appear to be being told or inheriting their tastes. Cam Marshall founded Mornington Peninsula Winery Garagist with winemaker Barney Flanders in twenty ten.

Garagist is a very traditional wine company. Um we farm our own plots. We make wine from specific sites, even specific parts of vineyards. And absolutely love that aspect of the business. But we also saw a need to have some wines that were a little more um entry level, for want of a better term. we sort of term it w the garagist is about wines that you maybe have once a week or or on special occasions. But

I know the majority of people want wine they can drink multiple times a week. Um so we started a brand called Range Life Wine. And that's become that everyday brand. So there's ten different wines in that range now from Posecco to Pinot Griggio, Rosso, Pinot Nero or Pinot Noir. And that's been fantastic of having those wines that sell a higher volume.

And work really well. I'm not afraid to move out of the sphere of the the fine wine area of garageist. Um I I don't see it as a dirty word, so to speak, adding a flavour to a wine and making a a flavoured prosecco or uh playing with the alcohol levels, which isn't necessarily the most romantic way to go about making a wine. But if we're creating a product that someone wants or there's a demand for, isn't that really what we're all here to do? My name's Rod McKaelis.

director of Zonzo Estate in the Yarrow Valley. I started uh Zonzo as a restaurant in two thousand and seven. And then in two thousand and fifteen, sort of late 2015, we managed to purchase the property. Then we decided to create Sonzo State and start making wines. And I sat with some like leaders in the Yerivelli wine industry. And I sat with them and I told them that w I purchased the property and I was a bit nervous about making wine and

And I wanted to get a little bit of a gauge on what they thought. They said to me, You won't break even for thirteen years, you know. And I thought, I can't wait thirteen years, you know, this is that's ridiculous, you know, we've got to we gotta do this, we've gotta do this. Um So I got my team together and I said, Okay, for the next month I want you to study the traditional wine business. I want you to know the ins and outs of it. I want you to case study, I want you to know

Everything about the traditional wine business and how how everyone's doing it, how they're succeeding, etc. So they did that for a month. And I remember we sat down after that.

And they all had their notes in front of them and everything and I said, Right, so give me all your notes, I want them all And then I threw them in the bin and I said, Now I want you to forget everything you've learned and we're gonna do the exact opposite'cause I'm not waiting thirteen years. So we're gonna break the cycle. Andrew Sheddon says red wine has been the biggest loser overall as a result of these changing consumer dynamics.

We are definitely seeing a movement out of red, into white, into rose, into sparkling. That's that's definitely a thing. But even within that, James, you've then got a shift within red. uh away from traditional dominant varieties like cabernet and Shiraz into far lighter, more accessible categories like Pinot Noir has been uh in ascendancy for a long time. But You could then follow that through to Grenache, uh San Giovese, Tembraneo, Nero Davila, Nebbiolo, Gamay.

All of these, we call them Mediterranean lighter style reds are also in the ascendancy over the traditional styles. But if you go even further down into that and you look at say Shiraz and Cabernet that are in decline, it's the heavier, more traditional styles within those varieties that are in decline.

y you're still seeing growth in producers who are making lighter style Shirazes or Syrah's and lighter more ethereal styles of cabinet. So I think if you wrap all of that up, you're seeing a movement away from heavy and traditional swing all the way towards modern and light.

So it sounds like we're sort of seeing a switch to cooler climate style Shiraz and Cabernet and also potentially there are wines that maybe suit, you know, Australian food a little bit better than some of those bigger, riper styles as well. Wouldn't agree more. I think we're getting a lot more sophisticated in the way that we talk about and engage with food as a modern Australian society as well. And obviously our palate has shifted significantly.

uh over the last one, two, three decades as well, as we really embrace the flavours of the region, of the wider Asian region. So all of those things have mean that w we're definitely seeing that shift towards more food friendly styles of wine. I've got to be honest, I think it's come later than I thought. If you look back on it, you would expect that move to have maybe happened five, ten, fifteen years ago, but the shift has certainly happened now.

What are some of the category norms that need to be challenged for wine to maintain its market share and recruit new consumers? I say all of them. And I I s I I say that. You know, with an early disclaimer that there will always be and there must be a role for the traditional way we've approached the category. So that the way we talk about it, the way we brand it, the way we bottle it, the way we present it. That's never going away. But if we want to make sure that we have

continued sustainable growth in wine, we do need to challenge every category norm. And I'd start with, I'd start with packaging as the first point. You know, again, at a with meal occasion or on a premium gifting occasion, a 750 mil bottle of wine is still very, very appropriate. But if you're out with your friends, having a barbecue in the park.

And you haven't brought a corkscrew or another couple of vessels, it it's it's not. Or if you're at home by yourself and you just wanna have a single glass because you're trying to moderate, uh a seven hundred and fifty mil bottle is not appropriate. So Challenging those packaging conventions and thinking about things like bagnums or pouches or the myriad of other options that are out there, I think, is really important.

I think liquid innovation is another area we need to go and focus on. We've seen flavors driving a lot of the growth expansion in in other categories. So really challenging what we're doing around traditional varieties and And can we look at additives and other things to really blow up our understanding of what the category really is? I think is really, really important.

But I think it goes all the way down from not just those extreme elements of innovation around packaging and liquid, but it could go down, James, to something as simple as marketing and branding and just how we are talking about wine as a product. and flipping it from traditional conversations about points and clonal varieties and age of vine to let's just start talking about

how customers can actually use these products in their everyday lives and why wine will enhance the occasions in which they want to spend their time. E even that simple level of marketing innovation would go a long way to repositioning uh wine at the center of the modern consumer's social occasion.

what you just said really resonates because I kinda talk to some of my friends who drink wine but are not enthusiasts and if you just start talking to them about a vintage, for example you just see their eyes glaze over and I just wonder whether a lot of us who are in the industry

We're in a bubble and we we kind of don't appreciate how little so many consumers, you know, care about some of the things that we all care about. I think that's spot on. And by no means am I saying that we shouldn't ever do it. There's one percent of the population who are hyper engaged in wine. I think you and I might be in that one percent, right? Who who want that level of information. Sho it should be there.

But it's just not what we should open with because I I do think ninety nine percent of the population don't get it. They aren't engaged that level or certainly yet. So we need to talk to them about why wine is relevant to them on their level. So make it available, make the information available, just don't open with it.

The first wine released by Rangelife was of all things a garganiga, the principal grape variety in the Suave region of northeast Italy. I really like accessible wine and things that you can drink and you don't always have to overthink. And I think there are some really premium versions of Soave or Garganaga. Um Soave you're allowed to have Treviano and Chardonnay as well. But garganica is the main variety.

And I just liked its accessibility. It's one of those wines that you can have a table full of people and you don't know which wine to order. You don't want to get a Chardonnay because someone doesn't like oak and you don't want to get a Sauvlanc because someone's got a thing against Sauvignon Blanc. You can put garganague or soave on the table and everyone's gonna like it. It's not

Probably the best wine you're ever gonna have, most examples of it. But there's rarely anyone that will find there something they don't like about it. So The big challenge was its name. It's the ugliest name in the wine industry, Garganega. So, you know, you put that on the front of a bottle and rarely

Is anyone gonna pick that up and say, Oh, I wanna know more about this? So I did a wine bottle with a label that had no names on the front. It was just an image. We were lucky enough to access some graphic design from a guy called Aaron Draplin. in the United States, who's a bit of a rock star in the graphic design community. And he had a series of uh images that just matched wines perfectly.

We put all the information on the back of the label because I know anecdotally if someone picks up a bottle of wine in a retail environment, they're fifty percent more likely to buy it once it's in their hand. So I wanted them to pick it up with no information on the front.

So they had to look at it and see what it was. And then I knew I was halfway there to getting them interested. Once I looked on the back, um it says Garganaga. What is Garganaga? For a quick answer, SMS can and it had literally my mobile number, no computers. No uh tricks, nothing. And I had this cut and paste spiel that I would send back to people and what we stumbled across, the clever bit that we didn't know we were doing, was that direct engagement with consumers.

So when we sell wine in any environment as as wine producers at the moment, there's usually a link. We don't have any sell at all, so we've either got a restaurant or a retailer or an online platform in between us and the customer. This gave them direct access to us. Often I get funny questions, you know, are you a bot, is this automated?

Once they realised I was a real person, I'd get photos of them enjoying the wine, you know, people celebrating. I had some restaurants that really got in on board and encouraged people to do it. Some people put it on their wine lists, you know, if you want to know what this is. And it just broke down that barrier and it made it more about a a connection between people than worrying about this ugly name.

And I think I got a lot of long term customers out of that. But it seems to have found a little niche. I I don't want to say it's the biggest selling wine in my portfolio, but it outperforms a lot of other varieties that you would think would be bigger. And with Endeavour Drinks it's it's been in there and never come out and and they love having that as something a bit different.

Some of the rangelive products are some of the wines that directly come to mind. They absolutely pop on a shelf. And they pop again, particularly because a lot of the products around them are a bit more traditional and and therefore they are so different. So

I would challenge anyone to go and walk into a Dan Murphy store, turn left and go and have a look at what's happening in the craft beer fridge or in the pre mix fridge and just have a look at the explosion uh in brands that are there that are using

colours, they're using wording, even the language that we're using on back of can, back of bottle to talk about a product. The the level of marketing innovation you've seen in in in that space is very, very impressive. And then walk across to the wine section and there are there are some great examples of it. But it is nowhere near prolific enough. And I still think there is there is a massive amount of room for really thinking about

um branding, thinking about marketing message and and making sure that it's relevant for the consumer that you're going after. And increasingly, you know, we're we're looking at a situation where Within the next couple of years, the majority of Australian licking consumers are mil Z, right? Um we need to be thinking as a category about how we're speaking to them.

I love wine, obviously, you know, this is why I'm in the business. But like unfortunately for young people and new people coming into the wine category, it is very uh daunting and it can be a little bit difficult to understand and I think it's been made that way. It doesn't have to be that way. And

you get a young person that wants to order a glass of wine and they feel so intimidated, you know, is the am I ordering the right wine with my right meal? Are they is the waiter gonna think I'm silly for ordering a red wine with chicken or, you know, what if I can't pronounce this correctly, or I don't know the taste profile. Or all the it's just been made so difficult. It's like, you know, I think young people feel that they can just easily go and get a gin and tonic.

I'll order a gin tonic, I'll order a you know, espresso martini, I'll I'll get anything but wine and I think For that reason we're losing a lot of sales, possible sales to, you know, young clientele who could enjoy m enjoy wine probably a little bit more simply.

In early 2023, Rod began experimenting with a blend of limoncello and prosecco that has taken Australia by storm. Yeah, I kept googling like lemon cello spritz and No one had done it before. And and I sort of like, no, surely. But like there just wasn't. We just kept Googling, Googling. Couldn't find anyone that had made a pre made lemon cello spritz. And then we had sort of hinted on socials that we were making lemon cello. We kept putting it up, what's gonna happen here and and what have you.

So I said to the guys here that I want to sort of blow run out of the water and I wanna launch the spritz first'cause no one's waiting for that. Everyone's just thinking the lemon cello. So that's what we did. How early on in the process was it that you started talking to Endeavour about ranging the product? Uh, early because they're a central part of our business. Um, you know, as soon as we finish a product like that, we send it off to them to gauge interest and

Normally we would get a smaller local ranging, you know, somewhere up to thirty stores to just see how it clicks along. And that's what they did with the eleven cello spritz or Zoncello. And then in September though it went into every Dan Murphy store. So That was a huge lift. I think we hit the like me and bottle market about eight months in. It went crazy. We we just were peeling lemons. My life was just I was peeling lemons yesterday, so I'm still doing it. relentlessly still at it. So

I think there's a misnomer that innovation can only happen if you've got massive resources and and you're a larger commercial wine producer. I I think Zonzo would prove that that's not the case. They're a small producer out of the Yarrow Valley who just saw a consumer opportunity.

Uh, they saw people coming up to their cellar door wanting to drink limoncello, wanting to drink limoncello spritz and they just thought, you know, here is a perfect opportunity for us to put a product into the market and they did and They hit on a on a time when citrus was really exploding. It's been very popular in in the premix category as well. They put out a product that is brilliantly branded. You know, talk about something that pops on shelf and is very appealing.

Again, they talk about it in all the right ways. And I I I thought that was going to go well when it landed in our range, but I had no idea how well it was going to go. It it is clearly the number one new product that we've put into the wine range in in recent years and continues to grow.

What we're trying to achieve through our fun range, which is, you know, the um Bellini, the peach nectar and proseco, the Chiccio, which is the pistachio spritz, our latest um release, and the Soncello, is that you know, once the New Age wine drinker tries these products, hopefully they can attach themselves to our brand and as their palate develops in the future and and they want to move on to white wine, red wine, etc.

that they um trust our brand enough to continue on. That journey with our brand. you know, as an example for why this is important to total wine, the rest of the Zonzo portfolio is growing massively as well. So we're seeing excellent growth in their traditional, you know, Chardonnay and and Pinot Noirs. Just getting a massive brand halo from what the Zoncello Limoncello Spritz has been able to do.

Rangelife, meanwhile, has created an offshoot brand called Spritzecco, which is a range of Prosecco's flavoured with Yuzu, Bitter Orange and Davidson Plum. Ours are a little uh lower in sugar. Uh they're about twenty-eight grams a litre, which doesn't sound low, but once you have bubbles and We call them more adult flavours, um that aren't necessarily perceived to be as sweet. You don't see the sugar as much.

And we've also uh added a little bit of wormwood which is a bittering agent. Now no one would ever know that was in there and you probably wouldn't taste it, but what it does is pulls back the sugar a little bit. And we're trying to make a product that's aimed not necessarily at the really early drinkers or it's trying to make it a gateway to Prosecco rather than

uh lollywater for want of a better term and you know again that's not being critical. There's room for everyone in this. So we've tried to do more adult flavours and that's why Yuzu as opposed to lemon. Um, would the average consumer know the difference between lemon and yuzu? You know, maybe not. We just thought it was a bit of a different angle and it gives us a way to make it taste a little different and a little more adult.

Strangely, um when I worked for Montana Wines, this would have been back in the early two thousands, two thousand one, two thousand and two, they had a really strong brand called Lindauer, which was a broad. And they released Lindau Fray's, which was a strawberry flavoured sparkling wine, which at the time had sections where it went absolutely bananas and others everyone just frowned and said, How could you do that to such a good product? you know.

Why would you d but they used natural strawberry flavour. Everything about it was legitimate. It wasn't um, you know, made in a laboratory, so to speak. So what we're doing isn't anything new by any stretch of the imagination. And I'm sure with your podcasts and talking to people you'll learn that everything we do is just cyclical. you know, very open in this discussion with you today. Like we've faced so much ridicule from people in the industry. To my face.

in, you know, like being talked about, you know, in negative ways, um, because of our approach and because, you know, we've created some different wine products or some first to market wine products obviously. You know, I don't understand it because we do such a good job of like building that, you know, the wine category in the end of the day and we spend so much money marketing it.

There's not a lot of industries that are looked at like the wine industry where you get frowned upon for making something that people want. Yeah, think about that in the context of every other product that we buy or

make or the wine industry is a really interesting one to work in and um people have very firm ideas of how things should be done and they don't want to stray for that. And I have a lot of respect for that because some of those people are making Some of the best wines you'll ever drink, but

I think there's room to think really broadly and say, well, hey, there's a there's an avenue here to make something that someone wants. We all know in the industry that it is a declining market. If it keeps going that way, it's not a bright future for Wayne in Australia. We need to lifen it up a bit. make it a bit more inviting and a bit more fun and a bit more trendy for that matter.