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Remember ‘Got Milk?’ As demand shrinks, fine wine needs a USDA Marketing Order, McMillan says

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The Wine Press

As the demand and growth rate for fine wines decrease, four national wine experts are seeking a USDA Marketing Order to promote wine in the United States.

Rob McMillan, founder and executive vice president of St. Helena’s Silicon Valley Bank Wine Division, announced the effort during his annual State of the Wine Industry Report on Wednesday, Jan. 19. Past USDA Marketing Orders included efforts that included the catchphrases, “Got Milk?” “Where’s the Beef?” and “The Incredible, Edible Egg.”

McMillan said his research has shown that consumers drink alcoholic beverages across all categories, including beer, spirits, hard seltzers, flavored malt beverages, ciders and RTDs, which are Ready-to-Drink beverages. “Our competition are beer and spirits,” he said. Joining McMillan during a 90-minute videoconference were Danny Brager, head of Brager Beverage Alcohol Consulting, Dale Statton, Wine Market Council president and Paul Mabray, CEO of Pix.

McMillan posed an interesting question after attending a party where there were many young people: What would you bring as a hostess gift to a party?

Barger has ties with The Harris Poll, who questioned nearly 2,000 adults on three days last November. The results: Those who are 65 and older would overwhelmingly (49%) bring wine, while those from 35-64 would bring equal amounts of wine and beer, roughly (30 percent each), along with spirits, seltzers, malts and ciders.

“I noticed what people were bringing. And it was RTD, Ready to Drink, cans of things, it was some beer and it seems like the nice beer got consumed pretty quickly and the more routine beer sat in the iced bucket. Some people brought really nice bottles of spirits that were expensive," McMillan said. “The cocktail culture is out there. I was surprised to see just a few bottles of wine consumed. It was stacked toward the other stuff.”

He said the poll results represented “another point of alarm,” because the consumer who is 65-plus probably has retired, drinks less wine and has fewer dollars to spend on fine wines. “That generation is going to sunset as a dominant consumer,” which is important to understand and recognize, McMillan said.

The group from 55 to 64 only brought wine 29 percent of the time, a 20 percent drop from the older generation. “If you haven’t decided to make wine top of mind by the time you’re 55, are you gonna change much the rest of your life? I don’t think so,” he added.

“What we’re left with now is consumers that treat alcohol beverages more equally. They don’t put wine in a special category. Everybody is drinking across categories.”

Joining McMillan in the USDA Marketing Order effort are Brager, Stratton and Mary Jo Dale, of Consumer Vineyard.

“Dale, Danny and myself have been looking at long-term issues that have to be solved for our industry, for sustainability and growth. We would like to see a rising tide again for the industry,” McMillan said.

The group has gone through a feasibility study with MBA candidates from the UC Berkeley Hass School of Business, under the guidance of senior executives from McKinsey & Company; has raised $650,000 from the industry, which is enough to start the USDA process, estimated to cost $2 million; and have created a solution, WineRAMP (the Wine Research and Marketing Project) beginning with a website, WineRAMP.org.

The next steps are for the industry to take over the effort and hire staff to “engage with everybody and try to get everyone’s feelings,” put an industry board in place to determine what an R&P order would look like, McMillan said.

Two years ago, when he first started the effort, McMillan thought it has a 1 percent chance of success; today, he estimates it has a 50/50 chance.

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