Tourism Promotion, Loyal Consumers of Colorado Wine Essential to Market Growth, Colorado State Study Finds

As Colorado’s wine industry continues to grow its share of mainstream wine markets, faithful buyers of Colorado wine will become increasingly important in introducing new consumers to Colorado wines, according to a Colorado State University marketing report. Also, Colorado’s wine industry is well positioned to use the state’s recreational attractions to draw new consumers.

The core of Colorado wine buyers, described to be very knowledgeable of the state’s wineries, represented only 4.2 percent of all wine consumers but accounted for 27 percent of Colorado wine sales, according to the report. The report was funded through a grant from the Rocky Mountain Vintners and Viticulturalists Association, Colorado Department of Agriculture’s Value Added Feasibility Program and the Colorado Wine Industry Development Board.

Perhaps the greatest potential for growing sales of Colorado wine lies in consumers who are savvy to Colorado’s wine industry, given that they know what they are looking for, but may still be seeking a great find from among Colorado’s wineries. Colorado-savvy wine consumers accounted for 21.3 percent of all wine buyers, but only 7.7 percent of all wine sales and 13 percent of Colorado wine sales.

"The loyal Colorado wine consumers are essential to the industry here to maintain the current revenue growth of Colorado wineries as well as introducing new consumers to Colorado wines," said Dawn Thilmany, a professor in Colorado State’s Department of Agricultural and Resource Economics and author of the study.

Core Colorado and Colorado-savvy wine buyers are likely to have incomes ranging from $50,000-$100,000 annually, showing they have significant buying power, but perhaps without strong ties to luxury and prestige purchases, according to the report. Core Colorado wine buyers were found to have spent an average of $479 on all wines over three months, with an average of $293 – more than 60 percent of their wine budget – spent on Colorado wines.

The study also examined relationships of wine consumers and their social activities. Not surprisingly, nearly 78 percent of respondents reported regularly engaging in fine dining experiences and drinking wine while doing so, a common trend throughout all U.S. wine consumers. More unique to Colorado wine consumers was the fact that 58 percent of respondents regularly participated in travel and sight-seeing activities, often with an outdoor-related element. The report concluded that joint marketing efforts between wine and other recreational industries would be an effective way to attract new wine consumers, given Colorado’s wide range of outdoor activities, many of which attract an abundance of out-of-state visitors.

"Colorado’s wine industry is well-positioned to take advantage of the state’s strong existing tourism industry," Thilmany said. "Packaging wine excursions as breaks during more physical activities within a trip, such as rafting, bicycling or fishing, could be very beneficial to growing Colorado’s overall tourism draw."

Colorado’s wine industry, based primarily on the Western Slope, continues to develop. During the 2004-2006 growing season, $11.8 million in wine and wine grapes sales led to more than $21 million in induced economic activity, according to previous studies by Colorado State. Colorado wine production experienced a five-fold increase over a 10 year span, with 113,600 liters produced during the 1994-1995 growing season to 689,000 liters (918,539 bottles) produced in 2004-2005.