Why Napa Valley Should Not Cater to GenZ and Late Millennials
Leaning into the Affluent Class is the Valley's Best Opportunity
Despite its reputation as the premier wine region in the U.S. and its long history of success, Napa Valley is not immune to the impact of the downturn in wine sales we have seen of late. Nor are its vintners and members of the entire hospitality community disconnected from the discussion of “what’s happening” and “what can we do?”
I have a suggestion for Napa Valley. Stop thinking of Boomers, Gen X, Millennials, and, for heaven’s sake, GenZ. Instead, double down on being a destination for the Affluent Class.
If I were being thorough, I’d show here a long list of links to articles detailing how Napa Valley wineries are reaching out and working to appeal to Millennial and Gen Z drinkers in an attempt to draw them to the Valley and into their tasting rooms. The articles would point to “Vibes”, culture, storytelling, casual atmospheres and tasting rooms that emphasize “cool”. The point would be to encourage the “next generation” of wine drinkers to choose Napa.
And the fact is that many of the Napa Valley wineries pivoting to attract younger visitors are and will continue to succeed in this effort. But it’s not the age of the visitor that is unique and sets them apart. It’s that they are more affluent than others in their age group.
Visit Napa Valley is the official destination marketing and management organization for Napa County. In their 2023 Napa Valley visitor profile, we learned the following about visitors to Napa Valley in 2023:
Mean Household Income: $170,000 ($80,000)
Percent with College Degree: 74% (38%)
Those figures inside the parentheses are the average for the United States in 2023. The average visitor to Napa Valley has twice the average household income and is twice as likely to hold a college degree.
These are not normal people.
Perhaps the most interesting set of discussions about what ails the wine industry has been conducted by Adam Casto, the winemaker at Napa Valley’s Ehler’s Estate, via his podcast, “What’s the Problem”. His guests have been a Who’s Who of wine industry legends and personalities, with a good chunk of them being Napans. The discussion about how to attract younger drinkers to wine and to Napa Valley has been an important part of the more than 50 interviews he has conducted over the past year.
An interesting aspect of all of Adam’s discussions is a relative lack of serious discussion about the affluence of the average Napa visitor. If Napans wanted to pat themselves on the back for having wildly succeeded, it would be about their success in bringing very high-income individuals to the Valley. But there is a weird reluctance to discuss this. Yet it is the central feature of the Napa Valley visitor demographic.
The theory behind leaning into positioning Napa Valley as the destination for the Affluent Class is that there is almost nothing the collective Napa Valley hospitality community can do to dispel this impression. It exists already, and there is little to no benefit to playing it down. Moreover, retreating from the Affluent Destination model would require making the Valley’s attractions more affordable, such as lowering tasting room fees, room rates, dining costs, and, of course, the cost of wine.
For those Napa Valley wineries, hoteliers, and restaurateurs reading this, go ahead and raise your hand if you plan to significantly lower your prices.
(chirp, chirp, chirp)
The question that needs to be asked by the Napa Valley hospitality community is not how many younger (Gen Z or late Millennials) are visiting Napa Valley, but how many affluent people are choosing Napa Valley, regardless of age. No other wine region in America can so convincingly claim it is the wine destination of the Affluent Class as Napa Valley. As wine regions across the country work so hard to distinguish and create an identity to promote, Napa has an identity that can’t be matched or claimed by any other wine-producing area in America.
Leaning into its reputation as a playground for the wine-inclined affluent means a few things. It means charging visitors what is necessary to fulfill the expectations and aspirations of the Affluent Class. This goes without saying. It means creating winery experiences that require investment for creation and maintenance. It means hotel offerings that provide impeccable pampering and the cost that comes with it. And it means charging appropriately for the unique dining experiences that the Affluent Class is willing to pursue.
But it also means maintaining the region’s reputation as a source of world-class wine. This, too, requires investments as the Valley’s vintners are well aware.
The idea of leaning into its reputation as the destination for the affluent shouldn’t be a novel concept for the Napa wine and hospitality industry. They have been doing it for the past 40 - 50 years and have been doing it well. I press this idea as a way to suggest Napans not give into the notion that the Valley must pivot to attracting younger people. Younger people will come to Napa Valley, but it will be affluent younger people. And that’s OK. The Millennial generation is and will produce a crop of affluent consumers. So will Gen Z. What seems unlikely is that affluent Late Millennials and affluent members of Generation Z will eschew the kind of comfort, intimacy, pampering, and indulgence that every past and older group of affluent people have always embraced.
Napa can provide an attractive experience for less affluent and middle-income visitors. These folks, whom I’m very familiar with, can find lovely wines under $100 per bottle in Napa. They can find places to stay during their visit that cost less than $300 per night. They can find delicious dining for less than $50 per entry. But what’s true is that Napa is not set up to cater to these visitors. And the Valley should not pivot to do so.
Many people would like to own a BMW. Many people would like to fly first class. Many people would like to own a Rolex. But most can’t. And that’s OK too. There are far more interesting and diverse experiences and products aimed at middle-income people than at affluent people. And as most of us know, a life of value and satisfaction need not be driven by possessing significant wealth.
But those who do possess significant wealth will almost always look for and purchase experiences and products that are unusual and, hence, more costly. Napa is one of those experiences. Risking the Valley’s perception as an exclusive enclave of the best hospitality has to offer in an attempt to attract a certain demographic based on age is folly and risky. A much better idea is to hone its pitch to the affluent as an enclave and experience where authentic luxury grounded in rural beauty and bounty can be had…at a price.
If you model this out over 10-20 years, many wineries, restaurants, and hotels would go out of business, and we would have +/-10k less acres of wine grapes. Not saying this is good or bad, but it might be the equilibrium that we surpassed 10-20 years ago.
Mostly agree. The performative nonsense for the past couple decades is embarrassing. Wooing and groveling to people that won't buy your wine unless the TP in your porta potty is 90% post consumer product is not congruent with Napa Valley luxury buyers. Focus on buyers, not crowds of pious blow hards. People buying a $100 bottle of wine don't care about the fluff. Let alone the $400 bottles. If we were selling organic patchouli oil to people that live in a commune, yeah, bring out the condescension cosplaying as feel-good vibes. That said, this valley does need to make more consumable wine, not collector wine. Think $60 retail/ $90 wine list. Once the price goes over a threshold, it doesn't get opened as much and therefore does not need a repeat purchase. One time sale vs repeat business. Also, affluence does not equal class, taste, or interest. I have met plenty of wealthy people that devote no energy to fine food and wine.