Understanding why people drink wine allows you to use their attitudes and behaviors to improve your marketing to keep your customers coming back. This research is exactly what Kathy Kelley, Professor of Horticultural Marketing and Retail Business Management at Penn State University loves to do. In her studies, she has found that sustainability is very important to customers however it can mean different things to different people. While 7 out of 10 adults in the United States consider purchasing food and beverage with a sustainability component a priority, one-fourth of these respondents could not articulate sustainability. This gives the industry a great opportunity to better communicate what sustainability means.

Communicating sustainability should be incorporated into a brand's DNA from point A to point B through all marketing channels including face-to-face, social media, print, and website. Storytelling is a great way to convey your brand values because consumers are more likely to remember stories. By describing specific practices and why they are important, you set yourself apart from the competition and create an emotional connection with your consumers. Kathy’s research on sharing cover cropping practices found that customers were willing to pay one to four dollars more per bottle after learning about the specific sustainable practices. Listen in for more tips on how to determine your customer demographic and refine your marketing.

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Transcript

Craig Macmillan 0:00

I'm your host, Craig Macmillan and with us today is Kathy Kelly. She is professor of horticultural marketing and retail business management at Penn State University. Kathy, thanks for being here.

Kathy Kelley 0:08

Thank you very much. I appreciate the invitation.

Craig Macmillan 0:11

Tell us a little bit about the work that you do and where your kind of research interests lie.

Kathy Kelley 0:15

So I've been a faculty member at Penn State since 2001. And I have a teaching extension research appointment, all three of my aspects deal with some sort of marketing component. And my research, I really became very interested in learning about why people drink wine, how to kind of use those attitudes and behaviors to help smaller producers, medium sizeed wineries, focusing on the consumer and use that to their their benefit. So I've really kind of done a bit of research in the mid Atlantic area to understand why we buy and then what type of product characteristics and tasting room components really make that an experience for consumers that the want to come back again and again to the facility.

Craig Macmillan 0:58

That is super interesting. So based on consumer research, how much do consumers care about the origins of the products they consume in terms of sustainability.

Kathy Kelley 1:06

So sustainability is very important to consumers and more so with the younger generation, then maybe generations that are a little bit more mature. But sustainability can mean quite a few things to many different people. Sustainability not only refers to the environment, but to the social, and the economic sustainability pieces of that three piece stool, but within one economic sustainability. One person may consider sustainability and include organic or certified organic foods, and another may not. So there is an interest in say sustainability. But there's some confusion as to what it really means. Talking with the students in my class, who are Gen Z's young millennials, you know, they really are interested in sustainability. But like the consumers at large, they might not be able to articulate it. We also have this component where consumers are not really that knowledgeable or a portion of consumers not really that knowledgeable about how their food is grown. So when you put the two together, you can see that the confusion grows even more. In Pennsylvania, for example, because of our excessive rain and humidity, it may not be possible for us to grow grapes organically. But we can use other certain types of sustainable measures, like cover crops to control weeds, and use other production methods to control diseases. Or we could use lighter weight glass bottles or be a recycling center for consumers to bring their wine bottles back to and then we use those pieces to inform consumers that we do partake, and we do incorporate certain sustainable activities in the wine production for the industry. And then we need to craft the message that it makes sense to the audience. But I do have to point out that there's been quite a few reports published recently about how sustainability is becoming more important to consumers, and one if I could point it out as morning consult, and they published a report in September called what sustainability means to consumers. And they divided the report up into different types of chapters, if you will, based on the topic and for food and beverages. They found that 7 in 10 us adults would consider purchasing food and beverages as a priority if it has a sustainability component to it. However, when they asked survey participants to describe what it means to be sustainable, one in four said that they didn't know they couldn't articulate it. Others referred to the packaging with such as reducing the amount of filler or the the types of components used to package the product to ship it to the store to the consumer. And others talked about how it was recycling that the facility recycled materials that they didn't use, or any scrap or call material was recycled rather than thrown in the trash. And then some talked about how it was less waste when growing food. So there's quite a bit of difference as far as what consumers say sustainability is. But we know that there's interest, it's just that we need to do a better job of communicating to consumers what sustainability means in the food and beverage space.

Craig Macmillan 3:59

And that sounds like a larger scale, picture communicating just kind of in general, what about a specific company or brand? Obviously, differentiation in the marketplace is crucial to the success of any brand. And this is often done by a compelling story to the consumer about the brand. We also might be telling a story from an industry standpoint, why is it important for a winery or vineyard to include the sustainability related aspects of their business in their story?

Kathy Kelley 4:24

So I'm a real proponent of of storytelling. Storytelling is a great way to convey to consumers the business's purpose or its why, who they serve and the solutions they provide. And we are more likely to remember stories than facts. So if a wine brand has a compelling story to tell about what they're doing to minimize their impact on the environment, they should certainly use it and they should share that information. But the store needs to be authentic. If a brand's story is not genuine, and it is clear that the sustainable efforts are implemented merely to boost their profitability, consumers can tell and could likely decide not To pursue that brand. But brands who make sustainability a central part of their business need to identify consumers with the same interest and learn more about these consumers, these likely buyers, so they need to learn about their needs, their wants and behaviors that can help them develop the narrative, it would then be ideal to ask likely buyers with an interest in sustainability to react to the story, so that it does make sense to them so that the words that are used are appropriate. And then this information can help wine businesses determine whether the message resonates with consumers. And when it does, it becomes more powerful than just providing facts.

Craig Macmillan 5:38

Now, is that a face to face human to human kind of communication? You mentioned that you have to have some response from the consumer or are there other communication at a distance ways that you can engage to other consumers interested or how to get through them?

Kathy Kelley 5:52

Absolutely. So in the tasting room it makes sense that it would be somebody behind the tasting bar sharing the information, kind of striking up a conversation, seeing what's important to the consumer talking about certain sustainability efforts that the wine brand is doing. But also social media is really key with the ability to have you know, images and video, and even you know, one and two way conversations with you know, different platforms, it should be incorporated into the brand's DNA from point A to point B, which would be the consumer, it really has to flow through, it has to be authentic, there's just so many ways to kind of focus in on what that component is that that is so meaningful to the brand. And it's an emotional thing to you know, consumers are so emotional, emotional beings, that when a wine brand is able to convey the emotion as to why sustainability is so important to them, then that builds a stronger connection between the wine brand and the consumer. And the consumer is more likely to respond in a positive way. And you know, frequent that brand tasting room or purchase that brands product.

Craig Macmillan 6:58

That's a question I hadn't thought of until you just mentioned it. And that is emotion, do we know very much about what kinds of emotion are a tap to sustainability products or how emotions are attached to a company, and it's talking about sustainability.

Kathy Kelley 7:12

So I don't have that particular data set in front of me. But emotion is very important to any type of purchase that we make. 94% of our decision making processes based on our emotion that we use emotion in some capacity to make a decision whether we're going to particular pharmacy to just get medication, because it's an absolute need, or something like wine, where it's more of a pleasure seeking type of product, or we're seeking pleasure by purchasing it or as the after effect of of making that purchase. Emotion is very important. There is research that shows that about 64, 65% of both men and women have stated that at one time, they've either developed an emotional bond with a brand, or an emotional bond with a brand's product. So emotion is very important in our decision making process.

Craig Macmillan 8:02

Is it a feeling of satisfaction, a feeling of happy, positive feelings is it a feeling of obligation? Like, how do I know what I'm feeling? I just feeling? What is it that I'm feeling kind of specifically, I guess, do we know do we have any idea?

Kathy Kelley 8:20

So I don't have access to the literature. And I haven't really looked at the exact emotions that sustainability. What particulars of an emotional branch of state sustainability resonate with consumers, I can take a guess. But that's about it.

Craig Macmillan 8:34

That's exactly I can take a guess I feel the same way. I've had a lot of experience working in tasting rooms, including recently. And when you communicate with the customer, sometimes you get a really clear picture of kind of what they're about. And other times you really can they're very opaque. And yet you know, that those processes are going on? It's just hard to tell. And it's hard to tell which what processes can interfere with other processes and which ones are gonna be most effective. So you mentioned a little bit about social media, website, stuff in the tasting room. Does describing specific sustainable farming practices make a difference in consumer attitudes towards a product do you think? And are consumers interested in specifics?

Kathy Kelley 9:12

So I believe that describing the specific sustainability practices used in the vineyard to grow grapes is important for a few reasons, it's likely that you'll be able to educate consumers about a topic that they may not be familiar with, or it kind of sparked some interest in them where they you've used some key words, and they understand that because that's in their vocabulary, and also provides a level of transparency. You're not just saying that you're sustainable, but you're talking about the different steps you're taking to be sustainable, and it's part of the storytelling process. So for example, we conducted a survey and we published the results in the International Journal Wine Business Research and 2021. And we had identified wine consumers who were likely to sample wine from vineyards using cover crops as a way to suppress weeds and reduce herbicide applications. And we felt it was important that our survey participants responded to questions based on a specific scenario. We just didn't want to say that the wines were sustainable. We wanted to talk about what we were doing in the vineyard to make them sustainable, so that we will get more accurate data. So we did not want them to just make assumptions about why we use cover crops, but we told them specifically that they were to suppress weeds. So before they responded to questions about their likelihood to sample such wines, they read a short passage about herbicides being used in the vineyard, and that they were used to maintain a weed free zone under the grape vines, but that herbicides could potentially leak in the groundwater and cause soil erosion that by planting cover crops under the grape vines, we may be able to control weeds and reduce chemical input or eliminate herbicide use overall, this is something that's being used by Makayla Centinari. She's an Associate Professor of viticulture at Penn State University. And this is what a good portion of her research is on how do you suppress weeds in a vineyard using cover crops. We were also interested in investigating what consumers are who as a consumer group, we're willing to sample wines made from these grapes, but also pay $1 to cover the costs of implementing the cover crops. Because we know that based on some cost of production materials that we had, and some statistics, that it was more expensive to plant cover crops and to maintain them as opposed to applying herbicides to control the weeds. So we did have to provide that information to consumers. Because it's very much part of the purchasing process. Not only is it what the label on the bottle, the wine looks like but it's also the price that the wine sells for. So we did find consumers who were not only just willing to pay $1, more for that bottle of wine, because we had told them about the benefits of using cover crops in the vineyard. But we actually found segments of consumers who are willing to pay up to $4 more for the bottle of wine. So for us, we think it's very much that we have to provide the situation for the consumer, not just for the study. But for other studies as well, I don't think that we would get as rich have a dataset, if we just did sustainable or grown using x, we have to explain why that is. And again, it's a little bit of understanding what the consumer want. But it's also a little bit of explaining to consumers what what the product is. So it works for research. And that's something that I would strongly suggest wineries do as well, being very transparent. Talk about the specifics. Again, there's many different benefits to the business as to why you would want to do so.

Craig Macmillan 12:33

you know, probably don't have that on this. But just just to kind of talk about it for a minute. How much energy do you think a consumer is willing to put in to understand or conceive or think about these kinds of things? And the reason that I ask is, I think most of us at least being for myself have a relatively short attention span. And so I might seek out a product or try to find a product with a particular set of qualities like oh, this is, you know, less impact on the planet, or there's a social justice component to it. Personally, I'm only willing to go so far to put in so much energy. What is your take on that? How, how much energy do you think people were willing to put in? And so I guess what I'm asking is, how much of a window do we have? Either in terms of text or time or imagery, or ease of access to information? What's the what's the window like? Do you think?

Kathy Kelley 13:20

Yeah, so I think that's a pretty important question to consider. Because when I'm thinking about the students in my class, and there's data on this, that somebody has suggested that the millennials have an attention span of 12 seconds, Gen Z, the young, who are younger than Millennials have about eight seconds, as far as an attention span. And then when it comes to the internet, both groups having shorter attention span, so it kind of goes along with the what do you do as far as promoting your product to your core group, your target market, first of all, you have to identify them. So if I was going to craft this sustainable message for a winery, I would first of all understand what wine consumers like dislike, and then find that segment within those consumers that are interested in sustainability. I'm never going to get everybody to want to buy sustainable wine. So I have to focus on those where it makes the most sense the likely buyers, and then I have to talk to them about how do you learn about particular types of issues? How do you learn about sustainable? How interested are you? What are your habits. Do you recycle? Do you not do X, Y or Z because of some sort of limitation or barrier and me as a winery, if it deals with wine? Can I make that offer you a solution for that. The students in my class again, those millennials, those Gen z's, they they really can flip the switch really quickly on whether the information is going to grab them or not. So with social media, luckily, photos do such a great service to us to convey a message so it's very much about crafting a visual that that is going to capture their attention and then hopefully be the hook for them to read more either in the description the caption or another website, the frequency of how how many times you send that message out, you've got to kind of think about what the social media suggestions are for number of Instagram posts, when to post them. It is a mix of knowing who your audience is knowing what words or emotions to use in the message, and then knowing how to craft that message so that it hits the right target audience at the right time, and is compelling enough to convert them to a buyer or to seek you out for more information.

Craig Macmillan 15:25

How do I find out who my consumer is?

Kathy Kelley 15:29

So there are acouple of resources online that are free. Some have particular types of data that's behind a paywall. But there are certainly ways to find information about consumers without mentioning a particular type of association or organization that provides information for free. Certainly, if you search the web for in quotes, wind marketing, wind consumer, or you set up Google Alerts to find that information for you, you'll find that there's information that is even published in our mainstream wine business, wine marketing journals. A good deal of information is published by the restaurant industry, or you know, you may not be just looking at wine data, you may want to seek out data about consumers of all alcoholic beverages or spirit drinkers or beer drinkers different information is out there, just take a little hunting then to find the specifics. But then once you find those resources, I think that you, you just continue to return to them. Certainly other options include paying a consultant to do research. But also winery should invest their time into, you know, looking at their list of subscribers, if they have a news, e newsletter, or if they have some sort of membership club and really using that those names and surveying them, asking them to learn more about specific topics. And not just sustainability. But other types of topics that will if they had that information, and they gathered it from likely buyers, would help them in being more economically sustainable.

Craig Macmillan 17:02

That's encouraging, because I was afraid I was gonna have to spend a year and a half with focus groups. Other people take care of that for us. Thank goodness, that's great.

Kathy Kelley 17:13

And so the data might be skewed to perhaps California just because of the size of the population. But you can then use the information kind of think about it, see what could potentially work for your business and then query your own consumers to learn about their their attitudes and behaviors.

Craig Macmillan 17:31

Well, I guess today has been Kathy Kelly. She's professor of horticultural marketing and retail business management at Penn State University. This has been great thank you for for sharing all of this work and knowledge that you have. Where can people find out more about you or related topics?

Kathy Kelley 17:45

Well, thank you again for inviting me. My information is published as far as the types of articles that are right based on research that we've done, and then just general articles about wine marketing can be found on the Penn State Extension website. Our grape and wine team has a number of articles from viticulture technology to the ones that I write on marketing and business management, and then others that kind of fall in between those three main topics, feel free to reach out to me anytime.

Craig Macmillan 18:13

Fantastic. And we will have those links in the episode page on our website. So please check it out. Again, Kathy has been great.

Kathy Kelley 18:21

Thank you very much.

Transcribed by https://otter.ai

161: Use Storytelling to Sell More Wine

Sustainable Winegrowing