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MARKET RESEARCHER INTERVIEW 36 WINES&VINES November 2018 J on Moramarco was still in the corporate wine world, working as CEO of New Jersey-based importer Winebow, in 2010 when he started a side project. He intended that his new company, BW 166 LLC, would focus on beverage alcohol data collection, analysis and advisory services. Moramarco named the new company, of which he is managing director, for a winery his grandfather had bought in Los Angeles during Prohibition. It was Bonded Winery 166, known as California Mission Vintage Co. In 2014 Moramarco left Winebow and began building Santa Rosa, Calif.-based BW 166 in earnest. It's just one of his current responsibilities, however. He is also editor and partner of Gom- berg, Fredrikson & Associates, a wine industry market research firm that he co-owns with Wine Communications Group, the parent company of Wines & Vines. Moramarco has worked in the beverage alcohol industry his entire career. He has operated as the CEO of companies including divisions of Constellation Brands and Hiram Walker / Allied Domecq for more than 20 years. He oversaw net sales spanning from $50 million to more than $1 billion and an- nual production of as much as 60 million cases. Moramarco earned a degree from the Uni- versity of California, Davis with a mixed major in enology, viticulture and agricultural business. Before his executive roles, he had functional respon- sibility at various times for pro- duction, finance, administration, marketing and sales. He recounts that he started in the vineyards as a laborer and progressed through both vineyard and winery jobs until his gradua- tion from UC Davis. Q What's wrong with being a winery CEO? Why did you want to become a data hound instead? Jon Moramarco: Having run wine companies and having stepped away from the public corporate world and private equity, it was really saying that it's been frustrating because there is always a lack of accurate data. How do we get to a point where people can actually rely on what they're looking at? It's still frustrating because there are so many bad numbers out there, and with the internet it's increased the amount of inaccurate information. It's not fake news; I think people actu- ally believe what they say, but they're just ill-informed. (One company) came out with a press release this week that said the U.S. market is now 350 million cases. They're missing 50 mil- lion cases. People still depend and rely on inaccurate information. Q What major trends are driving the wine market right now? Moramarco: I think the biggest trend, believe it or not, is just a continuing of the market we've had. So there's a stable base. Baby boomers continue to drive the market at the high end, and what's going to happen to the high end as baby boomers retire and possibly reduce their wine consumption? The second piece is as I look at younger demographics and the growth of rosé and the growth of prosecco, I think those are similar in use to what the baby boomers did with white Zinfandel 30 years ago. It's a light, approachable, drinkable wine. I think the other key driver in the marketplace that hasn't actually started showing itself is that the legal drinking age population in the last 25 years has grown about 1.2% a year, and 60% of that growth has been in ages 50-70. When you think about higher disposable income, peak earning years, other things, it's been beneficial for the wine industry, luxury goods and a number of indus- tries. You look at the next 25 years and the growth of legal drinking age population will slow to 0.9 percent based on Census Bureau estimates. That growth drives total beverage al- cohol consumption. But the bigger impact is that 60% of the growth in legal drinking age population will be people age 70-plus. I can't tell you what's going to happen. We've never done geriatric studies on wine consumption. Q So is it too soon for most wine marketers to give up on baby boomers? Moramarco: I think it's too soon. Honestly, I think that too many wine marketers especially at the high end are relying on baby boomers' income, and I'm not sure if Gen Xers and Mil- lennials are going to have comparable income levels. And are they going to choose to spend their money that way? Q Are craft beer and craft spirits taking business away from wine? Moramarco: I don't think they're taking business away from A CONVERSATION WITH Jon Moramarco The former winery CEO is now in pursuit of more complete and accurate market research on wine, beer and spirits By Jim Gordon