Millennials fuel growth in LCBO wine sales

Article seen on Thestar.com

September 13, 2016 - Lisa Wright

Gwen McGuire is not a wine snob, but she really knows her vino.

In the past year alone, the Toronto communications professional has toured and sipped her way through all three of Canada’s key wine-producing regions: Niagara, Prince Edward County, and the Okanagan Valley.

“I’m really picky about wine, but I like to mix it up a little bit,” says McGuire, who is in her early 30s.

The Toronto resident prefers Old World reds, particularly from France, with notes of cedar and spice. But she’s opening up her palate to some refreshing whites and rosés now that she’s a decade into her grape escapes.

“It’s an activity. It’s about the shared experience and the lifestyle,” she says.

The LCBO says millennial-aged customers like McGuire are fuelling a head-spinning surge in wine sales. Ontarians slurped back $1.96 billion in wine last year, a 5.4 percent increase over the year before. And the booze retailer sold $456 million in Ontario wine — an 8 percent hike over the previous year.

According to the Wine Market Council, millennials accounted for 42 percent of all wine consumed last year in the U.S., and the LCBO says it’s seeing the same trend anecdotally in Ontario (the retailer does not track sales by demographic).

“Quite simply, they are a big and important generation, and by 2020 they’ll make up 40 percent of all working-aged Canadians,” says Kerri Dawson, vice president of marketing at LCBO.

And they’re a thirsty bunch. Of the 3.4 million millennials in Ontario, 2.6 million consume alcohol, she said.

While some university-aged millennials are going to keg parties and pounding shots, those in their mid-20s to mid-30s are seeking more of an experience when imbibing, she says.

Dawson notes they’ve adapted to wine culture faster than their baby boomer parents because they were exposed to it sooner. One-quarter of them spend over $20 on a bottle of wine, she said.

“They like experimenting, and they’re curious to try new things. It’s a badge of honor for them to know varietals,” she says.

The LCBO is now gearing more of its marketing toward this discerning generation. The booze retailer is pairing up with winemakers this fall to bring Ontario VQA wines to music festivals and bridal shows, starting with the Toronto Urban Roots Fest on the Fort York grounds from Sept. 16 to 18.

The liquor board says it’s trying to appeal to a “young, hip” crowd by promoting Ontario wines from Chardonnays and Rieslings to Merlots and Pinot Noirs, and by having taste tests to see if the people in attendance know which varietals they’re drinking — for prizes, and for bragging rights.

“They’re definitely interested in spending their money, and they need the guidance,” notes LCBO product consultant Victor Borja-Sheen, pointing to the massive selection in the Vintages aisles.

He sees a lot of millennials “trading up” in wines beyond the $15-a-bottle range, and not batting an eye in purchasing $20-plus bottles. (About 40 percent of the LCBO’s wine business is still in brands retailing for $10.95 a bottle or less.)

The 40-year-old recommends all his favorites on his twitter page, @TorontoVino, which has 16,000 followers. The wine expert also credits Instagram and social media generally with the popularity of wine among younger drinkers.

“Everything is visual. You want to invest in that lifestyle,” he says.

McGuire personifies the trend. “I only go 100 per cent straight to the Vintages section” of the LCBO, she says, and typically drops $20 to $30 on a bottle to enjoy with friends.

Though most wine is purchased by women, it’s also becoming more accessible to men, who are the target market for different formats, such as wine in a can, a growing trend in the U.S. and overseas that’s expected to catch on in Canada.

“Sometimes, customers hesitate to open a full bottle of sparkling wine for what they consider to be only a ‘minor’ celebration,” says Astrid Brummer, LCBO’s acting category manager of Ontario wines. “Having small serving cans makes it convenient to celebrate anything, anytime.”

In particular, the LCBO is finally starting to see rosé wine take off, not just with a younger demographic but with men, too (it’s sometimes referred to as “brosé”).

“It’s far removed from what people think it is,” says Marcel Morgenstern, director of sales at PondView Estate Winery in Niagara-on-the-Lake, Ont.

They have a dry cabernet franc rosé out this summer, which is the season for the pinkish drink. PondView has steadily increased rosé production since launching in 2009 due to growing consumption, he says.

The LCBO says rosé wine sales have jumped 17 per cent to $46 million in the last two years.

The negative perception men once had of sipping a pink-hued wine is slowly shedding, the way it eventually did for champagne, says Morgenstern, adding: “These are serious wines.”

Meanwhile, the LCBO has noticed sherry is having its moment, too, especially in bars, as the beverage shakes off the image of being too sweet and mainly suitable for cooking. Sherry sales are up almost 10 percent in the last two years, to $2.7 million.

The retailer is holding a “Sherry Shakeup” event on Sept. 27 at the Gladstone Hotel, where winemakers and mixologists will pour premium sherry styles solo, in cocktails and with tapas for $75 per person.

Wine by the numbers

2.6 million: Millennial-aged Ontarians who consume alcohol

$1.96 billion: LCBO wine sales last year

17 percent: Jump in rosé wine sales over the last two years

10 percent: Jump in sherry sales over last two years

$10.95 and under: Price of the bottle that 40 percent of the LCBO’s wine customers buy