Marketing wine to multi-cultural America - ethnic, consumer-focused marketing programs

For the past few years, many in the industry have had the same conversation at conferences, seminars and symposiums. How can the wine industry educate new consumers about wine and increase its sales? Suggestions such as more wine events, changing the image of wine, targeting adult Generation X (Y, Z...), and consumer-focused marketing programs have been discussed. Yet, during these dialogues, the topic of ethnic marketing or outreach is rarely mentioned. Latinos, Asians (including Pacific Islanders) and African-Americans make up 38% of the United States population and have a combined purchasing power of $1.5 trillion (Fig. 1 & 2).

According to the 2002 Adams Wine Handbook, 32.2% of adult Latinos, 28.8% of adult Asian-Americans and 25.8% of adult African-Americans were wine drinkers in 2001. Those figures are up from 1998's figures, when 11.7% of adult Latinos, 17.2% of adult Asians and 15.3% of adult African-Americans consumed domestic table wine. Yet wine industry marketers overlook this demographic as having bona fide potential for current wine sales and investment opportunity for long-term growth.

The wine industry has always been at the forefront of responsibility issues, and to many a targeted campaign to increase consumption within ethnic groups may seem like a step back from codes of advertising and social responsibility. But America is a mix of culture, customs and history, and as the global tide of immigration, acculturation and purchasing power shifts, the wine industry needs to look at the opportunities and challenges faced with educating a more diverse population about wine, especially Latinos, Asians and African-Americans. And it will have to re-evaluate its U.S. wine marketing strategies and resources to complement its current programs.

Think Globally, Act Locally

Even though this bumper sticker mantra is seen ad nauseum, it rings true for any type of initiative with the goal of change. This includes business--the wine business in particular. According to Wine Institute, more than 90% of U.S. wine exports come from California. America's top 10 export wine markets are the United Kingdom, Canada, Netherlands, Japan, Belgium, Germany, Ireland, France, Sweden and Denmark, and yet U.S. Latino, Asian and African-American populations are greater than in many of these countries (Fig. 3). As stated above, research shows that wine consumption has increased across the board for each ethnic group. The percentage of U.S. ethnic wine drinkers still nearly meets or surpasses several of the top 10 export markets' total population figures (Fig. 4).

Exports play an increasingly important role in the wine industry by reinforcing brand recognition for world-class wines and growing the home country's economy. Companies exporting wine invest money into overseas offices, foreign marketing campaigns, trade policy negotiations, complex sales and distribution systems and, of course, cultural and linguistic differences, yet how is it that wineries willing to export have yet to catch on and invest into the "foreign" markets available within the U.S.? Looking more closely at the ethnic demographic of U.S. wine markets and buying habits, it may clarify what potential marketing messages can be used.

One of the common factors of wine drinkers and U.S. ethnic groups is that both live in some of the top wine metro areas and states. For example, 36% of the entire U.S. Asian population lives in California, totaling 3.8 million potential consumers. Add New York State and nearly 50% of all U.S. Asians are accounted for in these two states alone. That adds up to 1.4 million Asians who already consume table wine. The top three metro wine markets are Los Angeles, New York and Chicago, which are similar to the top three metro areas for Latinos, Asians and African-Americans (Fig. 5). The top three wine consuming states are California, New York and Florida, again almost mirroring the nation's largest consumer markets for Latinos, Asians and African-Americans (Fig. 6). Concentrating on ethnic marketing in top metro areas and states where wineries already have sales rep presence and/or distributor relationships may help facilitate trial programs without excessive financial and staff requirements.

Along with top markets, annual expenditures are another way to track buying trends and patterns for items that may help market wine. The relationship between wine and food is a primary focus for many wineries' general consumer, sales rep and restaurant education programs.

Considering figures from the U.S. Department of Labor Consumer Expenditure Survey (CEX) 2000, companies should focus on wines to be paired with foods prepared at home to educate the ethnic consumer.

CEX data indicates that the annual percentage spent for food at home is higher for both Latino and African-American consumers than Anglo consumers. This is the case even though both ethnic groups, on average, earn less than Anglos and have a lower total annual expenditure, yet spend more on food for home use.

Another interesting fact is that the dollar amount Latinos spend on food for home use still exceeds both Anglo and African-American purchases, regardless of income and total annual expenditure level. Fresh meats, poultry, fish and eggs are staple food purchases for both Larinos and African-Americans. Again these surpass purchases made by Anglo consumers. The connection between at-home food purchases, particularly meats, can help wine marketers promote their portfolios. Pedro Mascaro of Headquarters Advertising, a San Francisco agency that specializes in Hispanic advertising, states, "Wine with at-home food purchases is the key combination for wineries looking to present a clear message ethnic groups will understand."

Food As A Cultural Communication Tool

Two extraordinary events occurred the week of Nov. 3, 2002. In one week Latino foods were on center stage of the retail and culinary world. The first Hispanic food and beverage show, Expo Comida Latina, was held at the Los Angeles Convention Center, Nov. 3-5. Later that same week the Culinary Institute of America, Greystone in Napa Valley hosted Worlds of Flavor International Conference and Festival: Traditions of Spanish and Latin Flavors. For wineries, it was an opportunity to meet potential marketing partners targeting Latino consumers and explore how wines may be matched with traditional and "nuevo" Latino foods. Though Wines of Spain and Wines from Mexico were represented at the conferences, there was no program or exhibitor presence of U.S. wines at either event.

At the CIA conference, chaired by Rick Bayless, chef-owner of Chicago's Frontera Grill and Topolobampo, more than 40 top culinary authorities from Spain, Mexico, Peru, Ecuador, Brazil, Chile, the UK and the U.S. explored historical and cultural connections between the Americas and Europe. When asked if the current Latin flavors craze would wane, Bayless answered, "As immigration continues to the U.S. from Latin countries, you will see growth of Latin restaurants and influence of Latin flavors in American culture."

Culture and family are a primary factor for food-focused celebrations. Ramona Gonzalez, owner of Casa Gonzalez, a bridal boutique in Lodi, Calif. with a primarily Latino clientele, states, "Latino customers know the importance of celebrating with family and they make sure their weekly gatherings and once-in-a-lifetime celebrations reflect that tradition. Special foods are prepared to strengthen cultural ties between generations." This observation is cited in the International Dairy, Deli and Bakery Association's "The Hispanic Consumer" 2000 report, which found that 79% of Latinos believe it is important to celebrate holidays and cultural events related to Hispanic heritage and 83% prepare traditional Latino foods for holidays like Christmas.

Food and culture can be a key factor to wine education among Latinos, and can be applied to Asian-Americans and African-Americans as well. According to Bill Imada, chairman of 1W Group, a leading Asian-American advertising agency, "It is important for (the wine industry) to be a bit more aggressive when it comes to helping Asian-American consumers match wines with food. Asian consumers want to know what wines complement the foods they enjoy."

This statement was reiterated by Jose Aquino, a 30-year-old Filipino-American, during a recent visit to a Napa Valley winery tasting room. "I don't know how many Asians eat Italian food everyday, so it would be good for wineries to discuss how wines personally affect me. How can they be paired with my family's foods and traditions?" Tasting room staff, national sales reps and other wine industry professionals can emphasize the flavors of ethnic foods and how their wines can enhance meals.

Ethnic marketing can expand sales to the at-home food consumer, but by utilizing winery resources already established, additional sales can result in other target markets as well. Michael Parr, export manager, Asia-Pacific and Canada at Wente Vineyards states, "Our national sales reps are using the company's export materials produced in Chinese dialects, Korean and Japanese to communicate our wine portfolio to U.S. Asian restaurants and retailers. Buyers find the educational materials valuable and appreciate the outreach. This in turn has expanded our presence to this market."

Bill Bishop, president, Willard Bishop Consulting, agrees. "Top management commitment is a must in order to strategically invest in learning what suppliers and retailers need to better understand about their ethnic consumers." Knowing that ethnic groups are growing in record numbers, that ethnic wine consumers are increasing and purchases of at-home food items are at higher levels, wine companies must establish themselves as credible investors in ethnic marketing practices in order to see a long-term rate of return.

Walk The Walk, Talk The Talk

Felipe Korzenny, PhD, principal and co-founder, Cheskin Market Research, urges, "Companies looking to gain ethnic customers need to have an integrated marketing plan and not just load the responsibility on one ethnic employee on staff." This advice is repeated in "Grow with America: Best Practices in Ethnic Marketing and Merchandising," a Coca-Cola Retailing Research Council of North America report. The study was created to give retailers the tools to attract and retain ethically diverse customers and to identify actions that supermarkets must take to be successful ethnic marketers. Following is a summary of the report's recommendations for retailers and an outline of each best practice, adapted for wine.

Best Practice Retailers make ethnic marketing part of their organization's operating philosophy and they reinforce it consistently.

* They apply the same discipline to the ethnic market planning process as they do to other potential market segment opportunities.

* They assign a dedicated leader who can impact the business by having cross-functional authority to drive and effect category management, vendor and wine company decisions.

* They think like the consumer segments they are trying to attract and allow that intelligence to drive category and assortment strategies.

* They develop a vision for ethnic marketing that includes short- and long-term revenue goals.

* They set measurable expectations at all levels of the organization and ensure that goals and reward structures of appropriate divisions are linked to achieving incremental ethnic business.

Best Practice #1: Think like your ethnic customers so you can serve them better.

* Define who your ethnic customers are.

* Cultural knowledge is critical to being authentic.

* Do the homework--no quick solutions or answers.

* Invest in the tools to understand.

* Get out into the marketplace.

* Proactively educate your organization.

Best Practice #2: Define your ethnic merchandising "look" and organize to execute it.

* Define who you want to be.

* Empower ethnic marketing executives to impact the business.

* Flexible category management models are critical.

* Ethnic merchandising continues to evolve-evolve with it.

Best Practice #3: Tailor your offering to appeal to your ethnic customers.

* How you offer your assortment is as important as what you offer.

* The right ethnic brand assortment is key (e.g. experts on flavor and food preparation are key).

Best Practice #4: Create a sales culture that enhances the wine experience and "connects" with the community.

* Nothing will deliver a more positive wine experience to ethnic customers than quality and quantity of interaction.

* Native language in sales is critical in establishing a connection with this consumer. They must be able to ask questions, make requests and even complain in their own language.

* It is critical that sales reps and staff from the region lead local community relations efforts.

* Procurement from/partnerships with local ethnic businesses will ensure credibility and support community leaders.

Best Practice #5: Recruit and retain a diverse staff to help you successfully serve your target ethnic customers.

* Achieving an authentic diversity position implies rigorous inquiry into corporate culture and openness to recreate it.

* Successful multicultural recruitment and retention strategies require willingness to adapt hiring criteria and training processes.

* HR must help the organization understand how culture and socioeconomic background shape employee behavior.

* You are strategically educating your first generation of ethnic wine consumers-invest in the resources to achieve that goal.

Best Practice #6: Develop a marketing plan to communicate value at all points of customer contact.

* Ethnic marketing is not spot marketing-it's 365 days a year.

* "Do the walk before you talk the talk," or risk credibility.

* Advertising, circulars and flyers should deliver relevant branding and value messages in-language. Include multicultural actors or models in general English advertisements for TV and print.

* Act locally. What you do in your sales regions will speak volumes of your community commitment.

The report concludes that consistent commitment positions these retailers for gains in sales. Along with increasing customer satisfaction and loyalty, it also positions them to grow with America as the marketplace changes.

Applying best practices to current wine programs

For some wine companies, the above outline may seem overwhelming. Currently, many wineries are too busy trying to maintain their mainstream customer bases to pull resources to enter a new demographic market. But by applying selective best practices at a basic level to a winery's current sales, media and public relations strategies, a wine company can ultimately move toward the full scope of a committed ethnic marketing program.

Support the local ethnic market. Bill Imada recommends, "If you want to reach a larger number of people at one time, sponsor and attend major local Asian festivals. Chinese Lunar New Year and the Filipino Pistahan Festival are good ways to secure exposure and visibility. Since there are nearly 400,000 Asian-owned small businesses in California alone, it also makes sense to work with smaller professional associations.

Sales staff working one-on-one with local groups can also bring rewards. Founded in May, 2002 by Renee Rowe, the African-American Wine Tasting Society (aawts.org) helps members gain more exposure to wine. "Wine is intimidating already. We create a welcoming setting so people of the same interest and background comfortably can taste together and openly share their experience." Chapters are forming in Hartford, Detroit, Chicago, Los Angeles and New York City, and the recently launched Web site has received an estimated 40,000 hits. Rowe suggests continued industry support for diversity-focused wine groups such as hers. "I have received a lot of support from the local wine distributors and we have our events booked through May. Our members note and remember which producers' representatives are taking time out to educate us about their wines."

Diversify your media outreach. Include ethnic media and freelancers who write in English and in-language for ethnic outlets. Review your current media lists and note how many individuals listed represent ethnic media. If you don't have any ethnic media, start adding them. By not sending winery news releases, event invitations and product information to ethnic print, radio, TV and online outlets, wine companies miss educating key community and business liaisons that can help tout a winery's message to nearly 40% of the U.S. population. Work with public relations professionals, whether on staff or hired agency representatives, who understand ethnic media, cultural differences and the wine industry. These professionals communicate your message in their language, comprehend cultural attributes, and embody a personal commitment and history of the target community.

Imada encourages, "Don't be afraid to tell ethnic media that you need help. Many outlets are very willing to help and become creative partners to work out a mutually beneficial deal with companies they work with. It's a win-win for both parties."

Advertisements should reflect the ethnic marketing direction as well. Including diversity in current TV and print placements and scheduling ads in publications such as Essence and Hispanic Business helps to reinforce the message to ethnic consumers. In the Oct., 2002 issue of one of the top wine consumer publications, wine companies placed 15 ads that featured images of people. Only one advertisement by a European wine promotional group featured a photo of a black chef along with other non black companions. Three ads depicted either a winery family member or winemaker and the remaining 12 were more Anglothemed. No Asians were represented in any of the advertisements.

Michael Sherman, general manager of KTSF-TV, one of the nation s primary Asian-language broadcast stations, states, "China Crosstalk is the nation's only live Chinese-language talk show (think Charlie Rose-style format). This show airs live not only in the Bay Area, but is also carried live throughout the U.S. on the International Channel, reaching 12 million cable households." The show features guests and topics covering politics to lifestyle which interest its viewers. Sherman sees wine as a potential topic of interest, as many U.S. Asians purchase wine for gifts to family and friends in the home country.

The American wine industry must look for new ways to approach the diversifying population if it wants to grow its sales. As demographics shift and segmented buying power increases, the wine industry will be more dependent on multi-cultural consumers to purchase its products. Understanding the current and future U.S. population changes, the industry can prepare to invest in an integrated education and marketing program that incorporates messages of wine with meals, particularly those prepared at home. By supporting local ethnic markets and reaching out to ethnic media, wine companies can begin to take small steps toward a best practices approach to a fully evolved ethnic marketing component of their businesses. Soon, conversations at wine industry conferences, seminars and symposiums may begin to look and sound more like the global consumers wineries are trying to reach both abroad and within the U.S. *Salud!

Fig. 1

Total population figures (millions) and percentage aged 21+

                     2000         2020         2050
MARKET            TOTAL  %21+  TOTAL  %21+  TOTAL  %21+

U.S. Latino       35.3   59%   55.1   71%   98.2   66%
African-American  34.6   64%   41.5   69%   53.4   72%
Asian-American    10.6   70%   18.5   70%   35.7   71%

Source: U.S. Census 2000

Fig. 2

Purchasing power and projected growth (billions of dollars)

MARKET             1990   2000            2002            2007

U.S. Latino         223  490.7           580.5           926.1
African-American  316.5  588.7           645.9           852.8
Asian-American    117.6  254.6           296.4           454.9
Total             657.1    1.3 trillion    1.5 trillion    2.2 trillion

Source: Selig Center for Economic Growth, University of Georgia, 2002

Fig. 3

U.S. ethnic population compared to top 10 U.S. wine export countries
(rank)

                  POPULATION
MARKET            (MILLIONS)

(4)  Japan          126.9
(6)  Germany         82.2
(1)  UK              59.7
(8)  France          58.9
U.S. Latino          35.3
African-American     34.6
(2)  Canada          30.8
(3)  Netherlands     15.9
Asian-American       10.5
(5)  Belgium         10.3
(9)  Sweden           8.9
(10) Denmark          5.3
(7)  Ireland          3.8

Source: The World Bank Group, U.S. Census 2000

Fig. 4

U.S. population of ethnic adult wine drinkers compared to total
population of top 10 U.S. wine export countries (export rank)

                  POPULATION
MARKET            (MILLION)

(4)  Japan          126.9
(6)  Germany         82.2
(1)  UK              59.7
(8)  France          58.9
(2)  Canada          30.8
(3)  Netherlands     15.9
U.S. Latino          11.3
(5)  Belgium         10.3
African-American      8.9
(9)  Sweden           8.9
(10) Denmark          5.3
(7)  Ireland          3.8
Asian-American        3.0

Source: The World Bank Group, U.S. Census 2000; Adams Wine Handbook 2002

Fig. 5

Top Wine Metro Areas


TOP WINE METRO AREAS       LATINO METRO AREAS

1. Los Angeles-Long Beach  Los Angeles-Long Beach
2. New York                New York
3. Chicago                 Chicago

                                                   AFRICAN-AMERICAN
TOP WINE METRO AREAS       ASIAN METRO AREAS       METRO AREAS

1. Los Angeles-Long Beach  Los Angeles-Long Beach  New York
2. New York                New York                Chicago
3. Chicago                 Honolulu                Washington DC

Source: Adams Wine Handbook 2002

Fig. 6

Top Three Wine Consumption States

(buying power in billions)

TOP THREE WINE      LARGEST LATINO       LARGEST ASIAN
CONSUMPTION STATES  CONSUMER MARKETS     CONSUMER MARKETS

1. California       California ($170.7)  California ($104.1)
2. New York         Texas ($93.7)        New York ($31.9)
3. Florida          Florid ($52.4)       New Jersey ($18)

TOP THREE WINE      LARGEST AFRICAN-AMERICAN
CONSUMPTION STATES  CONSUMER MARKETS

1. California       New York ($67.1)
2. New York         California ($52.3)
3. Florida          Texas ($46)

Source: Adams Wine Handbook 2002; Selig Center for Economic Growth, The
University of Georgia

(Sandra Gonzalez is president of Vino con Vida (vinoconvida.com), the first and only wine communications firm specializing in the U.S. Latino consumer. She also writes wine columns in English and Spanish for several Hispanic publications. She may be reached at edit@winesandvines.com.)

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