Between the digital disruption and the next generation of consumers entering the market, we often wonder, “what’s next?” While many industries look towards the future for these answers, the wine industry often struggles to see beyond next month’s sales targets. This lack of vision may reap short term results, but in the long run it will be detrimental to the industry as we lose touch with consumers and miss growth opportunities.
Angus Hughson is acutely aware of this, and for the past 20 years he has dedicated his time steering wine towards the future. Angus leads with a forward thinking approach, from pioneering eCommerce in the industry with Cracka, to making wine media more accessible through Winepilot and his new venture with Andrew Caillard MW, The Vintage Journal. Beyond this he has a PhD in Psychology, has run wine bars in London and is a highly experienced wine communicator contributing to The Australian and Gourmet Traveller WINE. Leveraging this expertise, we explored wines past, present and future.
What impact do you personally want to have on the wine industry?
I am always looking to what’s next, where our industry is heading, and that’s been the kind of roles I have taken, from e-commerce startup at Cracka to media with Winepilot and The Vintage Journal. I really enjoy the challenge of getting people to consider the future of their business, past the next vintage, and what they need to stay relevant to their customers, both now and in the coming decades.
My main focus is wine not losing relevance for many consumers as our industry is doing a poor job at connecting with those outside of the traditional older demographic, particularly younger and sadly female wine drinkers as well. Wine is a beautiful thing but it gets lost for many people. I want to make wine easy for consumers but also tell stories in a way that deeply engages with them, independent of their age, gender or underlying interest in wine.
I think our media as it stands is great for high interest consumers but could be so much better for many consumers, particularly thanks to such a high proportion of older male wine communicators. There should be an equal number of male and female wine writers plus more younger voices coming through. And if someone does not address this soon, a hell of a lot of Australians will drink less wine than their parents, if any wine at all. This is not the future, it is already happening.
Since you first entered the wine industry, what have you noticed have been the biggest game changers?
Digital has changed our world and wine is no different. It democratises wine and puts information at everybody’s fingertips. I see a number of companies that understood that a decade ago, invested and are now reaping the benefits.
Opening Our Borders
Twenty years ago Australians were drinking very little imported wine but now it is a big category. Most importantly it has introduced winemakers, sommeliers and consumers to different styles. The rise of lighter weight reds, thanks Beaujolais. The rise of cool climate Syrah, thanks Northern Rhone.
The last decade in particular has seen a rise in the average quality of Australian wine with hundreds of boutique wineries honing their skills while making serious and complex wines. Grenache, Chardonnay, cool climate Shiraz, alternative varietals. I hope the China bust and COVID on-premise changes do not undo all that good work.
Better educated staff, particularly in the on-trade. The rise in quality and diversity of Australian wine could not have happened without a workforce that would support those wines. The WSET and Master Sommelier programs have got better buyers and sommeliers in a number of key buying and selling positions who are providing improved and more diverse offerings to their customers. This has been a key driver for alternate varietals by Australian wine consumers.
What can we learn about the impact they had, and how can we be more prepared to leverage new opportunities as they arise in the future?
None of these things just happened. They all started slowly and gained momentum. Key individuals in all brands need to spend time looking into the future rather than just the day to day. Our industry has a long lead time, due to the time it takes for grapevines to grow quality fruit, so wine businesses need to be looking ten years ahead and investing in their future rather than waiting for it to happen and then being reactionary.
In terms of vision, what should wineries be focusing on now?
Building a culture of innovation and forward thinking that puts at least a partial focus on what the wine market will look like in the future and how to be better prepared for it. The market is changing faster than it ever has before and the wine industry sales volumes are heavily skewed towards an older demographic who are already in the process of drinking less. Businesses unprepared for the loss of these key consumers over the next ten or twenty years will face significant challenges as Australian wineries will be competing for a shrinking local market. And ask the same of your business partners – are they future proofed?
What do you predict the “next big things” to shake up the industry will be, and how can wineries prepare for these?
Plenty – Climate Change, No/Low Alcohol, Digital and Demographics.
Vignerons around the country know the climate is changing, but what are they doing to prepare for it (considering the long lead times)? I think our industry often sticks its head in the sand and hopes for the best. China is a perfect example – putting your eggs in one basket without some kind of plan can have disastrous consequences.
Wineries should be aware of what this could potentially mean for their region and how they can at least start to consider a response. Every winery needs a climate change plan.
The key here is change is very swift and that speed increases every day. The most powerful forces for digital in ten years have potentially not even launched yet. If you don’t have a good understanding of digital now you’ll be even further behind next year.
Every winery needs to think about who their current average customer is today. Good chance they are older Australian men and women, both through retail, on-premise and the winery. Younger Australians are never going to drink as much as those customers wineries are going to lose as this older demographic first slows and then stops drinking. The younger demographic is much more health conscious and also more ethnically diverse with many not from traditional wine drinking backgrounds. Now is the time for wineries to engage with these younger consumers, some of whom will in the future become your best customers.
The upcoming demographic changes in Australia ties in quite neatly with a greater general focus on digital. The vast majority of wineries need to upskill to get a broad understanding of the digital environment and its importance for younger consumers. Then they can devise their own digital strategy to better engage with younger consumers.
The biggest of the lot that could potentially make up 10% of the market in ten years. There is still plenty of room for premium wineries without a low/no alcohol version but medium to large wineries should all be playing in this space. If you need a historical guide to the likely success of low/no alcohol wine, look at beer. In a couple of decades, sub-standard light beer with low market share has now increased to be a significant player in the market, with plenty more growth to come.
For medium to large wineries, research and new product development on low and no alcohol should be a key priority.
How well do you feel the wine industry is attempting to engage the next generation of consumers so far?
Not well at all. Some of the large companies are having a good stab at it and innovating but they are often criticised within the industry. The 19 Crimes and Snoop Dogg collaboration is gold – getting non-wine consumers into the category. It’s a big win almost unparalleled in recent times.The problem is many wineries and staff only see the people that visit their cellar door – their best customers. They need to be visiting the retail stores, restaurants and bars in capital cities here and in export markets. There they will see the tastes and demand from their future customers to first understand the trends and then prepare to engage with these customers.
From a digital world, content is king and younger consumers are never going to pay for content. And online is where younger consumers are going to search for information about wine and wineries. Most wineries have no digital strategy to engage with younger consumers relying on old fashioned reviews and scores that sit behind paywalls and are written for an older audience. A lack of a coherent digital strategy outside of ecommerce for any decent size winery in this day is a big miss.
What strategies could wineries adopt to connect with the new market?
I think wineries need to first get an understanding of the problem before working on solutions:
- Research your key markets and the changing demographics of the wine consumer to understand who your target consumer is, now and in the future
- Undertake some kind of strategic analysis to assess how well your business is currently performing and likely to perform in a changing markert
- Create a broad digital plan to not only drive eCommerce sales but also building greater connections with consumers online
Consider new product development for a changing marketplace.
So should wineries ditch traditions and jump on the digital wave?
No – digital is only part of the armoury, and important for the future, but useless in the long term without a good quality basis and strong brand value.
BUT the writing is absolutely on the wall now. Wineries need a digital strategy, and that does not just mean a website that sells wine. eCommerce is a piece of a much larger puzzle. That is a total strategy of how your brand will be seen, marketed and talked about online to engage with a broad array of consumers, now and in the future.
To read more from Angus check out out Winepilot and The Vintage Journal with Andrew Caillard MW.