September 2012

Wine industry sees problems growing grapes but none growing new customers


Every year, the Wine Industry Financial Symposium meets in the Napa Valley of Northern California to discuss the challenges, changes and trends the industry is experiencing. This year, according to the Napa Valley Register, the Symposium’s main theme was that of change and adaptation.

While the symposium’s forums may have revolved around innovation and the changes it can bring within the industry, a major concern was the shrinking harvests, as supplies have gotten consistently smaller from 2010 to present.

“California’s supply is at the point where we can’t move the needle much,” David Freed, chairman of the Silverado Group, told the source. “Americans are drinking more wine, and demand marches on at 2 or 3 percent of [the] year, [but] our supply is somewhat constrained for a number of years.”

Much of this tightening of supplies comes from stricter environmental regulations and increased competition among nut and row crop farmers in the Central Valley. Also, according to Freed, nearly 4 percent of all vines stop producing and have to be replaced each year.

But, while vintners may experience challenges with growing their crops, the industry is seeing a shift in their customer base. According to the source, 27 percent of Millennials – consumers aged 21 to 35 – make up their “core drinkers.” These individuals will consume wine at least weekly, which is the highest rate out of any demographic.

In order to take advantage of this rising demographic of core consumers, wineries may want to alter their custom labels to appeal more toward the younger age group. By investing in a Primera LX400 color label printer, businesses can create the wine labels they need to increase brand awareness in this core group.

How to label products and influence consumers


This blog has previously reported on the power that custom labels can have on customers. As many grocers and food retailers have begun using a stop light system to indicate which foods are healthier than others, they've also begun seeing an uptick in the sales of foods that are labeled with the go-ahead green dot instead of the think-again red one.

More evidence of this influence has come out, according to NPR, which reported on a new study by the University of Michigan that examined how individuals react to different labels on the same products.

The test was done by presenting two cookies in front of a subject. One was labeled medium, the other large. The medium cookie was chosen most often. This would make sense, except for the fact that each cookie was the same size. This shows that regardless of what the actual portion is, consumers are more likely to go with what the label says.

"Just because there's a different size label attached to the same actual quantity of food, people eat more," the study's author Aradhna Krishna told the source. "But also, [they] think they've not eaten as much."

What a company chooses to put on its food labels is oftentimes a combination of branding and business. For example, fast food companies may need to move more product and, therefore, will label a medium the same size that some companies may consider a large.

In contrast, smaller businesses may not be required to move as much material and, therefore, can afford to label their sizes more moderately, which can be used in overall marketing and branding schemes to promote more health conscious portions and products.

Regardless of the motivations for custom labels, companies can always benefit from producing high quality and attractive labels for their products. In order to do so, businesses should invest in a Primera LX900 color label printer.