Your Questions Answered – how to target certain market segments
John Fetto
Byline: JOHN FETTO
WATERING HOLES
To the Editors of American Demographics:
I am doing research on the wine industry and want to know which locales have the highest correlation between income and wine consumption. I think that New York City and San Francisco would be among the top places where oenophiles with higher incomes congregate, but I want to learn what other places might be on the list. Samuel S. Hageman Banc of America Securities Charlotte, N.C.
Dear Samuel: For the most part, wine consumers and the wealthy are one and the same. According to New York City-based market research firm Mediamark Research, Inc., individuals whose annual household income exceeds $200,000 are 86 percent more likely than the average American to drink wine (including domestic and imported dinner and table wines as well as champagne, cold duck and other sparkling varieties). In fact, 52 percent of adults in the highest income bracket say they drink wine compared with 28 percent of those who earn between $50,000 and $74,999 and only 15 percent of Americans who bring home less than $25,000 a year.
That being said, one might assume that places with a high concentration of wealthy individuals are also typically home to more than their fair share of oenophiles. But just to make sure, we asked our friends at San Diego-based research firm Claritas to scour the U.S. for locales populated by individuals who are at least twice as likely as the average American to claim household earnings of $500,000 or more annually and whose propensity to drink imported wine is at least 50 percent greater than average. (Unfortunately, we were unable to set our sights on wine drinkers overall and chose to concentrate on those who drink the typically more pricey, imported brands rather than the domestic brands.) The 19 counties that meet these criteria are listed in the accompanying chart.
As you guessed, New York City and San Francisco are locations where residents have both high incomes and a predilection for downing imported vino. Seven of the 19 counties identified by Claritas are located within the New York City metropolitan area, and four are in the San Francisco Bay Area. The Boston and Washington, D.C., metro areas have two counties and four counties, respectively, in the top 19. Residents of Orange County, Calif. (just outside of Los Angeles), and of Lake County, Ill. (just outside of Chicago), round out the list.
BEST-STOCKED CELLARS
Counties whose residents are at least twice as likely as the average American to claim household earnings of $500,000 or more a year and who are at least 50 percent more likely to say they consume imported wine. Ranked by propensity to drink imported wine.
TO PUT IT IN PERSPECTIVE
To the Editors of American Demographics:
My store sells Third World handicrafts. As a fair trade organization, we seek to market the crafts of Third World artisans and to inform Americans about those artisans. I have had trouble finding the numbers to make a meaningful comparison between the income of my customers and that of the craftsmen we work with. Can you help me find such numbers? Specifically, I would like to find out how the income of the average American – or better yet, of the average San Francisco Bay Area resident – compares with the average income of people in other parts of the globe. Brian Smucker Baksheesh Sonoma, Calif.
Dear Brian: When compared with the other people with whom we share this planet, Americans are not just wealthy, we’re loaded.
According to an estimate provided by the Washington, D.C.-based World Bank, the combined gross national income (GNI) of all countries totaled $31.3 trillion in 2001 (the latest year for which data is available). Divvy that up among the world’s 6.1 billion inhabitants, and you get just $5,170 for every man, woman and child on Earth.
Of course, we all know that global profits are not equally distributed. Of the 234 nations for which data is available from the World Bank, the U.S. claimed a third of the income earned worldwide in 2001, or $9.9 trillion – more than any other single country. If America’s GNI were divided equally among its 284 million residents, there would be enough for $34,870 per American – 6.7 times the world average!
Even so, Americans are still not the richest people on the planet. That title goes to the residents of Luxembourg, a country where the per capita GNI is $41,770, according to the World Bank. Also ahead of the U.S. are (in descending order) Liechtenstein, Switzerland, Japan, Norway and Bermuda. At the opposite end of the wealth spectrum, however, are such countries as Ethiopia, Burundi, Sierra Leone, Niger and Eritrea, each of which has an annual GNI per capita of less than $200. (To see how some other countries compare to the U.S., see chart below.)
In low-income countries where the annual GNI per capita is $745 or less, the average life expectancy is only 58.9 years, compared with 77.5 years in the U.S. Eighty out of every 1,000 newborns die in low-income countries each year, versus only seven in the U.S. Just 59.8 percent of children are immunized against measles in those nations, compared with 91 percent of children stateside. And there are only six computers per 1,000 residents; in America there are 625.
Although the World Bank does not report how different regions of the U.S. fare in comparison with other parts of the world, figures from the U.S. Census Bureau can help shed some light for us. According to Census 2000, the median household income of Bay Area residents is 1.5 times that of the nation as a whole. In other words, San Franciscans can most definitely afford to pay a fair price for a handwoven tapestry or a handmade woodcarving.
TRICKLE DOWN?
The gross national income (GNI) per capita of the United States is 249 times that of Sierra Leone.
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E-mail: jfetto@primediabusiness.com
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