Damien Wilson, Prof. at Sonoma State University at the Wine Business Institute gave a presentation on growth and sustainability in the wine industry, both locally and internationally.
 
Damien Wilson, Prof. at Sonoma State University at the Wine Business Institute gave a presentation on growth and sustainability in the wine industry, both locally and internationally.
 
He has an extensive background in enology and wine business. He worked in Australia, spent 10 years in Burgundy, and has been in Sonoma County now for approximately nine or 10 years.
 
The commercialization of wine production and consumption has developed over the past 40 years. Although wine has been produced for centuries, it was only in the 1970s and early 80s that a broad appeal was developed for this form of alcohol. As the Boomer generation matured, they developed an increasing appetite for and sophistication about quality wines. As a result, multiple "small" wineries developed which produced very good wine. This wine was consumed by a cohort of people who had "grown up" on wine. This group is now beginning to decline in numbers, and is consuming less product as they grow older.
 
Commensurate with this change in production, the industry has seen changes in the number of distributors (decreasing) and producers (increasing). The economies of scale make it more expensive to produce a high quality wine in small quantities. With fewer distributors, each is looking to have a larger product share in the market, and it is difficult for the small wineries to effectively distribute their product. This makes it somewhat difficult for small producers to gain much of a market share.
 
Mr. Wilson showed several graphics demonstrating the progression from introduction to a class of alcoholic beverage to enthusiasm about that product. Factors that influence introduction are cost, shared interest within the social group, and social acceptance. As people develop a taste for a product, their enthusiasm for refinements with that product grows.
 
The wine industry is having some difficulties capturing the interest in wine, as it competes with craft brews and distilled spirits. These are favored by the Gen X’ers as well as the Millennials. Studies show that after the age of 40, it is hard to change one's enthusiasm for a different class of alcoholic beverage. This means that those young people are not having the opportunity to be exposed to wine in their formative years of responsible consumption, and as such are unlikely to develop new tastes for wine as they get older.
 
It requires an intense, sophisticated and sustained marketing approach to encourage wine consumption in these new generations. The wine industry in France has seen a decline because they have taken no active efforts to promote their product, thinking that "it is so good it doesn't need any promotion". As a result, the wine industry is declining greatly in that country.
 
Business of wine production and sales requires an active and ongoing evaluation of its markets and techniques to develop an interest in wine at an early age that will have time to mature over the years.
 
Representative slides from his presentation are in the photo album on our Club website.