West, who once managed Grey Goose vodka at Bacardi, has risen to the position of chief commercial officer at Gallo Wines and Spirits over the past seven years, having joined the US-based company in 2018. As a result of such experience, he has strong views on what the wine trade needs to do if it is to prevent an economic-driven drop in demand turning into something more structural.
While he believes that the entire industry needs to work together to stem the decline, starting now, initially, he is at pains to point out that he’s positive about the future for the drink, having witnessed downturns before, and trade-driven turnarounds, although they concerned spirits, his former area of focus.
At the start of our discussion on Wednesday, West also told db that his upbeat outlook was in contrast to others in wine business who seems to think “the sky is falling”, before commenting that such over-reactions to current trends are likely to occur when “big companies are making decisions off quarterly reports” – rather than a longer-term view, which tends to be adopted by family-owned businesses, such as Gallo.
Furthermore, when turning his attention to the causes of declining wine sales, he sees the post-Covid correction in wine consumption, which he dubs a “reset following the highs of the global pandemic”, as a “minor discussion” compared to the “major discussion the wine industry needs to have”.
Indeed, for West, the fall-off in wine sales seen in the past couple of years relates to a long-running industry-wide focus to encourage existing wine drinkers to spend more, rather than attempting to entice potential new consumers.
“Over the past 30 years the trade has followed a trend and strategy of premiumisation, and it has been largely successful,” he recorded, adding, “But what we have not been concerned about as an industry was the coming demographic shifts.”
Considering the US market specifically, he told db that each year as many as four million people reach the legal drinking age, however, currently, “the boomers are ageing out of wine at the rate of two million per year, and that increases to 4.6m a year by 2030.”
According to West, what should concern everyone in the wine business is the fact that such a section of the population, who are aged over 60 years old, “control 70% of the disposable income [in the US] and have been very good wine consumers: they heard the 60-minute segment [in 1991] on the French paradox and adopted Mediterranean cuisines, with wine as part of that, and embraced wine tourism too, and this is the group that is ageing out.”
Continuing he said, “And because we followed a premiumisation strategy, no-one was heavily focused on recruitment, no-one was trying to bring younger consumers into wines in ways that felt inviting to them – hence we find ourselves in position we are in now.”
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