The passage of time and ageing are both inevitable in this life and the way in which we deal with that is becoming an increasingly pressing issue in the 21st century.
Life expectancy is increasing by four months a year, while birth rates have fallen by 40% across the world. Data indicate that by 2036, something quite striking will occur: there’ll be more people older than 60 than younger than 10.
Hence the Silver Economy, the set of economic activities that focus on the needs of the elderly, is becoming increasingly prominent in the commercial decisions of companies. How does wine come into this? The answer lies in consumption habits. The segment (people older than fifty who are slowly going grey) have something in common: their economic power allows them to plan for an active old age focused on health, wellbeing, tailored technology and leisure services.
Mariana Torta, Brand Ambassador & Manager LATAM at Wines of Argentina (Wofa) says that the relationship between the Silver Economy and wine is generally very good. “They consume small amounts of premium wine on weekends and trips. It’s also something they share with friends, as a hobby, with a home cellar, part of social status. It’s all linked.”
However, the opportunity for Argentine wines isn’t just tempting the Silver Generation, it’s also wine tourism, a business unit that has grown in recent years and must be borne in mind. “It’s another source of income for the wineries, where they can provide dining and sell their wines directly,” says Torta.
And as the sommelier notes, it’s a segment that wineries should be focusing on, “because they’re open, receptive, have plenty of disposable income, many years of consumption ahead of them and they’re also teaching their children to drink wine.”
Too big a niche to ignore
According to the United Nations, in 1990 there were approximately 95,000 people over a hundred years old in the world. Today, that figure has risen to half a million and it is expected that by 2050 there will be around 3.7 million people who have celebrated their centennial. But that’s not all, projections indicate that the Silver Economy will account for 44% of global consumption by 2030 and 50% by 2050. In Argentina, it accounts for 35.5% of the overall population.
To put this in perspective, if it were a country, the Silver Economy would be the third largest economy in the world, just below the United States and China.
An opportunity for growth
In Argentina, several wineries are already tailoring their sales strategies to target the Silver Economy. One of them is La Coste de Los Andes, located in the Uco Valley, in the terroir of Gualtallary. Lucas Giménez, director and winemaker at the company, says that his wines are products that adapt to the requirements of consumers for several reasons: the way they’re designed at the vineyard and winery, and the price range (between $40,000 and $60,000).
“We aim to have an extensive portfolio. We can’t miss out on new trends and forms of consumption but it’s clear that at certain price points the Silver Economy is ready to pay for their desired lifestyle. Which is why we’ve expanded our range in the premium segment to six,” says Giménez.
He believes that the increased importance of the Silver Economy is closely linked to changes in consumption habits and a increased demand for premium products across the world. “Before, it was common to drink a wine every day, however now consumers leave it for the weekend or special occasions. That’s a change in consumption habits.”
His strategy goes beyond wine given the prospects of growth in the segment: they’re also focussing on wine tourism. “We’ve studied it and are following through. The link with Chateau La Coste allows us to have an early reading. We have wine tourism experiences with a restaurant in Los Chacayes and we’re going ahead with the construction of a hotel, a restaurant and a winery in the same place,” said Lucas Giménez.
Another case is Bodega La Celia, one of the pioneers of the Uco Valley region. In their case, they believe that the segment is a key opportunity to connect with a group of consumers with ample disposable income and increased interest in quality products.
“We know that although globally wine is facing challenges, the Silver Economy segment is still key as the group has significant buying power and is willing to invest in quality products. At Bodega La Celia, we’re working on creating an emotional connection with the segment through exclusivity and recognition of the quality of our wines, especially in the premium range,” said Agustina Izura, Brand Manager at the company.
Izura believes that Argentine wine has a big opportunity within the Silver Economy. “Especially because Argentina has positioned itself internationally through the quality of our wines, earning international recognition. The segment values the stories behind each product and Argentine wine has a rich tradition and direct link with the unique terroirs of our viticultural regions.”
