Sunday, September 22, 2019

Wine & Milk in Decline Due to Changing Science



I was intrigued at the above video which chronicles the advent and popularity of plant-based milk products like Almond Milk and at the same time the decline in the consumption of real milk. Milk and wine were both described as a healthy part of a normal diet at one point. So what happened? It's a little bit of Deja Vu.

      What Do Milk and Wine Have in Common?



It's hard to believe that milk, which was once viewed as critical for strong teeth and bones and mandated in school programs by the National School Lunch Act in 1946, has now reached the point where it's become unnecessary, if not outright unhealthy. 

We're not talking about alcohol here. We are talking about milk! Apple pie. Americana. Wholesome food.

Today the total volume of all types of milk sold, the price of milk, and the number of dairies are all in decline because of various negative scientific studies. That's not what I envision or hope for the wine industry. 

So how did milk's star fall over the past 75 years and more recently, how did soy, rice, coconut, almond, and oat milk become such strong and growing substitutes? The CBS program in the lead video notes how the plant-based milk craze started. It all started with our changed view of fat.

      Negative Science


Fat started to become a negative thing to the consumer in the 70s when new studies focused on "healthy calories" and animal fats. That took on greater weight when popular consensus consolidated around two studies in the late 1980s that identified dietary fat as the single largest factor contributing to obesity-related health issues.

Fat, just like alcohol today was at one-time cast as the villain with respect to health outcomes. Was it accurate?

While that view turned out to be flawed inevitably, the account caught on in the press and drove people to consume more lean meats like chicken and fish, eat margarine instead of butter, limit the consumption of cheese, and seek out low and fat-free foods. 

The dairy industry adapted. If fat is bad for you, let's sell more "skim milk" but change the name to "fat-free" milk and emphasize the evolving consumer trend away from fat. That was followed by extensions in low-fat milk, low-fat yogurt, ice cream, and cottage cheese.

The milk industry didn't just roll over and agree on negative science. It mobilized industry associations both domestically and internationally and pushed back on the validity of the negative science of the age, funded new research and they advertised, including the popular Got Milk celebrity campaign. 

At the same time, the broader food industry jumped on the consumer trend by creating fat-free cheese and different varieties of processed snacks and convenience foods, using hydrogenated vegetable fat instead of animal fat and using more sugar in the formulas.

And what was the result of all that science that ran down the health impact of eggs, red meat, cereal, wine, and milk? Today we have the highest level of obesity - EVER as noted in nearby chart. 

And in an irony that underscores the fallacy in the manner in which consensus and truth in science evolve, studies now indicate that butterfat is an invaluable component for certain body functions. Butter is once again good for you. Not margarine. But even more, today the current science suggests that eating less saturated fat DOES NOT lower a person's risk for coronary heart disease! Those emerging scientific facts drove whole milk sales higher over the last two years.

Consider how quickly the impact of positive health information contributed to the consumer changing back to real fatty butter and whole milk.

      The New Milk Threat


Plant-based milk has flourished of late, taking share from real milk because of notions of health and sustainability. Many believe that cow and cattle operations add materially to greenhouse gases and that methane is a major contributor to global warming. Add to that studies that focused on hidden sugars in breakfast cereals along with greater awareness of lactose intolerance, and the result is that total milk sales today are falling by the billions annually. 

Red meat has also gone through a similar swing as milk. Once too a necessary ingredient in the USDA Four Food Groups, it now suffers from scientific reports that link red meat to some cancers.

The combination of sustainability and the lingering questions about the value of red meat in a healthy diet lead many people to make the personal choice to move away from meat and adopt more plant-based diets including plant-based 'milk.' That seems to be the current health craze.

Interestingly, as the above video notes, much of the plant-based milk has additives, trace chemicals from processing, sugars, stabilizers, and even hydrogenated fat. It's processed food and the science isn't in on the health benefits and risks yet, but the tale that comes through today is plant-based milk is healthy and sales are soaring.

The story of milk's decline reminds me of wine, which has gone from being part of a healthy lifestyle under USDA guidelines to now being viewed as unhealthy and like red meat, linked to very slight increases in some cancers in studies. 

      How Did Wine Become Unhealthy?


In much the same way as milk and red meat lost demand with the consumer, wine is losing today in the popular narrative because of negative studies that often start with an agenda to reduce consumption.

At one point in the 90s and early 2000s, science and the public narrative had wine as a HEALTHY component of life, possessing a positive impact on coronary heart disease and stroke.

The French Paradox, the Mediterranean Diet, and the work of Arthur Klatsky, MD who proved that moderate alcohol consumption led to better health outcomes compared to abstainers and abusers, all contributed to a positive health view of wine for the consumer and sales soared starting in the middle nineties.

Since then the anti-alcohol movement, caught behind in the battle for minds, has waged a consistent and progressive battle to rewrite the story. While the wine business has focused on peripheral skirmishes and lavished in strong consumer demand, the neo-prohibitionists and their paid research tried to 'explain' the French Paradox [link], rewrite Arthur Klatsky's work [link], and go on the offensive by funding studies to try and link cancer and wine. [link] They have been successful.

Then in February 2011, the World Health Organization which was emboldened with scientific momentum, met to plot strategy to "reduce the harmful effects of alcohol." 

Left alone, that statement would have found agreement even from alcohol producers. We all recognize the negative effects of alcohol abuse and all want to limit those harmful effects. But reducing harmful effects wasn't the outcome and perhaps was never the purpose. 

Instead, the WHO has worked at reducing TOTAL alcohol consumption, starting by attributing everything imaginable to alcohol, from venereal disease and hepatitis to mental illness. 

After demonization, they then drafted policies such as calling for higher taxes, requiring labels to be placed on wine reflecting the WHO cancer findings, and "enacting and enforcing bans or comprehensive restrictions on exposure to alcohol advertising across multiple types of media, and enacting and enforcing restrictions on the physical availability of retailed alcohol." (Global Status Report 2018, p 15) 

The real goal of the WHO is the reduction in worldwide consumption of alcohol. They don't distinguish between healthy consumption or unhealthy consumption patterns. They don't care about the science that shows moderate consumption adds to positive health and life outcomes.

Wine's Response to the Negative Health Message


How has the wine industry responded to the overt threat that is leading to declining growth rates? 

Like milk that went non-fat, the wine business is working on developing lower alcohol and non-alcohol offerings … and that's it so far. Advertising like the Got Milk campaign? Nope. What about the wine industry organizing to combat the paid science? Nope. Nothing but silence from our industry so far.

Just like the food industry created processed food alternatives, the alcohol beverage industry is coming up with many alternatives such as spiked seltzer, and the non-alcohol industry is feeding other trends with sports and health beverages that both take share away from wine.

The wine industry is content thus far to talk about hospitality, the user experience, long days and cool nights, and how special our soils are. Maybe that's enough?

What's Your Opinion?

  • What should the wine industry do about this issue?
  • Can we learn anything from what the Milk Industry has done?
Please join this site on the top right-hand side of the page, and offer your thoughts below. I respond to everyone.

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15 comments:

  1. Rob,
    The knock on milk and meat are two entirely separate issues. The health problem with milk is that the key ingredient, if you will, is associated with a much, much higher risk of cancer. This was demonstrated in a groundbreaking study by T. Colin Campbell, Ph.D., a dairy farmer turned Cornell University scientist. The story of his research was published as "The China Study." It's well worth reading.

    The problem with meat, on the other hand, is that switching from eating meat to a whole food, plant based diet has been repeatedly shown to result in a reduction and reversal of cardiovascular disease: Stop eating meat and within three years arteries that were almost completely closed are wide open. Other studies have found switching halts MS. See "How to Prevent and Reverse Heart Disease" by Caldwell B. Esselstyn, M.D., for details, including the pictures of arteries.

    While there are indications that plant-based milk may be as healthy if not healthier than dairy milk, that's not the same thing as saying the health aspects of meat are the same as milk. Meat is far, far more dangerous.

    But, if someone is fighting cardiovascular disease, it probably makes sense to switch to a plant-based milk from a dairy milk. The operative word is "probably."

    The problem with the wine business -- and, for that matter, the beverage alcohol business in general (as I have argued for more than a year in my newsletter, "Kane's Beverage News Daily") is that it has failed to mount a full-throated defense of its products.

    The science is pretty clear: moderate consumption of alcohol, especially red wine, is associated with reduced risk of cardiovascular disease (CVD)compared to either abstaining or excessive consumption. And CVD is a far larger health risk than cancer. Period.

    That's the undisputed science. Why the wine industry (and, for that matter, the entire alcohol industry) isn't shouting it from the rooftops is simply beyond understanding.

    As former U.S. Sen. Alan Simpson (R-Wyo.) used to say, "A charge unanswered is a charge admitted."

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    Replies
    1. Joel - thanks for the long and thoughtful response.

      I am probably like most consumers when it comes to evolving and changing science. I throw my hands up and just go with moderation and let the researchers sort it out. That said, I'm glad the new science allows me to eat butter again.

      As a public person in the wine business however, I'm in total agreement with you. The science about the health benefits of moderate consumption of wine has been proven for decades. The fact we as an industry stopped promoting positive health findings decades ago, and today aren't trying to shape consumer views by promoting the science and defending against those who are paying for outcome based science is perplexing.

      I recognize the important nuance that permit holders can't promote the health benefits in alcoholic beverages, but that doesn't stop industry associations who aren't permit holders and aren't regulated by the TTB from doing so.

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    2. Joel and Rob:

      The wine industry lacks a modern-day Robert Mondavi who charismatically and tirelessly championed the cause of California wine.

      (Members of the press coveted doing interviews with him.)

      We have no one today standing on the proverbial street corner soap box with a megaphone shouting "the good news" on health benefits.

      The narrative today is wineries being good stewards of the land (e.g., reducing their reliance on irrigation water during the drought through dry farming; sustainable or organic farming; lowering their carbon footprint).

      Gen X-ers and Millennials don't have mortality on their minds. So that health message doesn't resonate with them.

      That message more directly affects Baby Boomers who are already adopters of wine. (Whose purchases are tampering off as they head into retirement. So don't look for a unit sales "lift" from them.)

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  2. Wine Industry associations are currently occupied with demonstrating their efforts to achieve sustainability, however that may be defined, and you rarely hear anything else from them. Time to add a few more messaging points related to the benefits of moderate consumption. Many of my readers and students have never even heard of the Mediterranean Diet let alone that it includes wine.

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  3. What is the equivalent of the Dairy Council(s) for wine? I have been struck by the lack of general messaging about wine. I also have noticed that it seems that fewer people are ordering bottle of wine in restaurants. Cocktails are more prevalent as the starter. I think as people become more individual in their tastes, they are less willing to 'compromise' on the bottle for the table.







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    1. UNK 8:14 -
      There is no National Organization, probably because most wine is grown in only a few states. The California Wine Institute is the public policy organization in California. The Family Winemakers of California are a crossover between marketing and policy. Oregon and Washington have there own version of those. Then there are AVA based organizations like the Napa Vintners in each region that generally are marketing organizations.

      Restaurant sales are down, with sales dropping on volume by 1% in the past 12 months ending in June. I believe they are dropping because people drink less in restaurants today for various reasons too long to go into here, but also because wine by the glass is more expensive than cocktails. The consumer isn't going to pay $18 for a glass of ordinary premium wine when there are great $12 cocktails on a menu.

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  4. Rob, Certainly an interesting topic and I realize this is a far larger issue than just Napa, but as a collector of Napa wines, in my personal experience, to me the larger ignored component with the majority of wineries I interface with is a lack of solid marketing, especially to existing customers, which I call a winery's 'small data' not whether or not the current health research is pro or con alcohol consumption.

    Having spent my business career in marketing and fundraising, I am consistently surprised by the lack of attention paid by wineries to their marketing efforts directed to their existing customers, who should be any business' bread and butter accounts. Mailchimp list's emails get directed to my 'promotions' inbox so they are mixed with hundreds of unimportant messages just one step up from Spam. That is not one-to-one communication.

    Rather than approaching their DtC customer with new, creative efforts, the vast majority of marketing I get is the same old, same old. 'Buy now or else', 'critics' point assignments (often by critics, online sites, and unknow individuals), and the same nonsensical verbiage that means next to nothing to everyone other than Boomer wine snobs. Plus if I have already opted in for your email communications, why continue to send me high end, very expensive direct mail? While I still check my real mailbox daily, our Gen X daughter and Millennial nephews only bother with theirs every two weeks or so.

    I am also seeing an unsettling increase in errors in my Club shipments. When I can personalize it is running about 50-50 on correct shipments received. Even more worrisome I see incredibly poor response to correcting those errors! In a very recent Club shipment year old tasting notes for the prior year's vintage were included. When questioned about this the response was 'we knew, but it was too late to change'. My thought: then email the proper info as soon as you realized this mistake to alert all your Wine Club customers. Don't make them ask you to correct your mistake! Problem resolution should be a primary concern to owners, but (as is the case with two erroneous shipments) months later there I still have no resolution and no communications regarding them.

    At the same time I find myself dropping out of any Wine Club where I cannot customize my shipment. Plus for the first time in what I expect will be a new 'movement', being told my 3-bottle, 4-times a year Club level is being eliminated for a new 4-bottle, 4-times a year minimum level. As a customer I read this as 'let's not bother to market, rather let's be lazy and just soak our best customers!'

    Just one collector's two cents, plain.

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    Replies
    1. Scott,
      Thanks for your remarks, painful as they may be to read.

      You are espousing the view of a high-end consumer who can afford great wine, and expects professional and great service. You are also a boomer and have a preexisting bias to wine, so if there are negative studies that come out, you are the type that (like me) doesn't believe the findings in some part, because I don't want to. But either way, we just don't believe that message when we read it.

      Sadly, while wineries are good at growing grapes and making wine, we aren't as good as wine retailers who understand the value of data and the consumer experience.

      The wine industry is improving on the DtC experience at the winery. We are quite hospitable and care about our customers. We do fall short, maybe more times than we should when it comes to executing in the club as some of your comments reference.

      I appreciate your comments and would encourage you to voice them to the wineries in which you are a member. The constructive words of someone in the family will be heard.

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    2. Scott:

      Numbers behind the advice to market first and foremost to your current customers -- the so-called "low hanging fruit" . . .

      Excerpt from The Wall Street Journal “Marketplace” Section
      (November 26, 2008, Page B6):
      “Marketers Reach Out to Loyal Customers”
      URL: http://online.wsj.com/article/SB122766322705958805.html
      By Emily Steel
      Staff Reporter

      "It’s an adage of the business: Persuading a satisfied customer to return is cheaper than attracting a new one. Now, in the struggle to do more with less, that concept is becoming even more important.

      "Acquiring a new customer costs about five to seven times as much as maintaining a profitable relationship with an existing customer, says Marc Fleishhacker, managing director at WPP’s Ogilvy Consulting . . ."

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    3. Scott:

      Your historical 3-bottle, 4-times a year Club level becoming a new 4-bottle, 4-times a year minimum Club level increases the unit sales by 4 bottles.

      That's less onerous than wineries seeking higher selling prices.

      I was an early mailing list patron of Harlan Estate. Dropped off after a decade when the price was equal to leading First Growths. (Who they "benchmark" themselves against, and price accordingly.)

      I just received my latest issue of Wine Spectator, which touts the new release Harlan Estate.

      I got whiplash doing a double take when I read the current selling price:

      ONE THOUSAND FIVE HUNDRED DOLLARS a bottle.

      Yikes!

      (And no thanks.)

      Delete
  5. You may not be aware, but it's not permitted for wineries to promote any health benefits from wine consumption. It doesn't matter if it's backed with lots of scientific data (paid or unpaid) or not. I see in this entry, and in others as well on the same topic: "why don't wineries do this..." The fact is: we are barred from doing it. Check out the Wine Institutes Code of Advertising Standard before you recommend we do things we aren't permitted to.

    5. Wine advertising shall make no curative or therapeutic claims except as permitted by law.

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    1. Anon 2:06 - I can't tell if you are addressing these comments to me or not. You might be informing another person who was asking about this point.

      But to clarify for others - wineries (permit holders) can't make health claims. I'm not suggesting they do.

      Associations such as The California Wine Institute can however defend and promote the science that flows from studies on wine, including those that demonstrate health benefits. They used to have a staff of 5 people who did just that, but decided to end that part of their efforts when consumers clearly understood that wine did have positive health benefits. Unless something has changed in the law, they should still have that ability. I am told by someone internal that they are currently revisiting opening up that role again but I'm unaware exactly where they are in the process.

      While wineries can't make curative claims, something that wineries could do is talk about features of their product that might be related to health. For instance, a permit holder (subject to TTB label approval) could put calories on their labels. They could say things like the wine is made from sustainable farming practices, or say they are organic if the wine does indeed fit that definition. But we could go further. We could say wine is gluten free, is non-GMO, has no egg protein, has no sugar or we can announce the amount of sugar in a bottle.

      Look at the way many RTD cocktails are advertised today. They often include any of those pieces of information and they are also licensees that have to live by the same TTB standards as wine.

      All that said, I'm not a alcohol beverage attorney. I'm sure there is an attorney who could correct me or could expand on my comments here if there is anything askew in what I'm saying.

      Delete
  6. "Wine & Milk in Decline Due to Changing Science"

    Can you tell us a little more about why you think wine is in "decline"? If you pull any Nielsen or IRI data it shows positive growth for wine in both value and volume over the last 52 weeks. Winemetrics on-premise data shows growth in wine list and BTG placements with prices increasing.

    You've stated that there are "declining growth rates" however that's not the same as saying something is in decline.

    If it's a legitimate narrative it would be great to understand how it's validated.

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    Replies
    1. Anon 4:24. Excellent question!

      I try and paint a balanced picture. Sadly, the balance has tipped negative. It’s raining, but the sky isn’t quite falling yet.

      It's hard to fit a title into a few words so I am using the word "decline" in the title to talk about declining volume. It wasn't easy coming up with the title in this case.

      Directly to the question and contrary to your perspective, Nielsen data on a trailing 12 month basis through June shows value sales of table wine was up 1%, while the volume of wine sold had a negative 1.7% rate of growth. (sales decline)

      There are positive volume sales in the DtC channel, but adding that volume growth back in to Nielsen still doesn't quite get total volume back above zero for wine.

      Also, I have new and very reliable data from a source which I am still negotiating the terms under which I can use it, but it shows that total volume sales in restaurants, grocery/drug, and Private Label combined are also below zero through June on a trailing 12 month basis.

      BW166 information shows sales declines of .74% by volume in 12 months through June; roughly equivalent to the other data. I haven't looked at IRI data.

      So the data are in some general range of agreement on a volume basis.

      I do talk a lot about the trends in speaking engagements and in other blog posts, so I sometimes forget not everyone reads and listens to me regularly. But when it comes to the blog, I don't footnote my source information. It's more informal in that way, but I do cite data sources in the Annual State of the Industry Report. If you are interested, you can read that report at www.svb.com/wine-report.

      Thanks for keeping me honest.

      Delete

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