Issue link: https://read.dmtmag.com/i/705606
w w w. v w m m e d i a . c o m J u l y - A u g 2 016 | V I N E YA R D & W I N E RY M A N A G E M E N T 2 5 w w w. v w m m e d i a . c o m because of their numbers added to competition in finding jobs out of college. Gen Xers have a lot more money to spend than millennials and, when you look at the research [SVB has] done as being biased toward fine wine production, you'll see Gen X is easily the second- greatest consumer of fine wine." To McMillan, Gen X is a much better target for a typical American winery selling wines at $20 and up, because millennials on the whole have less disposable income and are less likely to be spending it on luxury goods like $100 Cabernets, a Lexus, BMW or Mercedes (Bay Area techies excepted, of course). Millennials are a more appro- p r i a t e t a r g e t f o r t h e b i g g e s t winery businesses like Gallo, Con- stellation, Bronco, The Wine Group or Trinchero — all groups that can produce wine at lower price points and then scale up production to keep up with growing demand. "They're going to make money by buying juice or grapes cheaply and selling it for more. You get t h o s e c h e a p g r a p e s f r o m t h e San Joaquin Valley and, to some degree, up to parts of Lodi. The $8 to $14 red blend is a category that took off, and I think it has the fin- gerprints of millennials all over it. You can make a reasonably inter- esting blend in that price category using some Zin, Syrah, Cabernet and maybe leave a little residual sugar or mega purple. It's a great entry point for consumers who are just developing their palate," says McMillan. What troubles McMillan about the over-reporting of millennial con- sumption is that businesses rely on those numbers to develop business plans, and they may use the data to solicit funding from banks, venture capitalists and investors. That can have real consequences in the busi- ness world. "I felt like I had to say some- thing, because I had a client who was raising money from venture capitalists based on these figures that millennials are consuming 42% of the wine in the United States. It's just not fair to people who depend on the data to put out those kinds of numbers. There's no victo- ry in doing this for me. More likely people are going to think this is a pissing match. I'm just trying to do what's right," says McMillan. Tim Teichgraeber cut his teeth in retail wine sales before becom- ing the wine columnist for the Min- neapolis Star Tribune. Today he is a contributor to the San Francisco Chronicle, Tasting Panel, Opus Vino and other publications, when he's not working as an entertainment lawyer in San Francisco. Comments? Please e-mail us at feedback@vwmmedia.com. MARKET WATCH TIM TEICHGRAEBER