Tag Archives: wine sales

wine news

Winebits 362: Wine sales, Cava, imported wine

u.s. wine sales ? More wine: We’re continuing to drink more wine than ever in the U.S., up about 1 million cases in 2014 over the previous year, reports Shanken News Daily. The percentage increase isn’t much, just 0.3 percent. But that there is growth, despite the after-effects of the recession, shows that wine may have finally established itself in this country as something more than a niche product. As the Shanken story notes, “consumption has increased nearly 80 percent over the past two decades,” and per capita consumption has finally risen past its 1970s levels.

? Bring on the sparkling: Cava, the Spanish sparkling wine, has long been a Wine Curmudgeon favorite, but it faces intense competition from Prosecco, the similarly-priced bubbly from Italy. The latter is typically sweeter and fruitier, and the Italians have parlayed that into double-digit growth over the past several years. Freixenet, the biggest Spanish producer and the top imported sparkling in the U.S., saw sales fall four percent last year. Why does that matter? Because exports account for around two-thirds of global Cava sales. Hence concerns that competing with Prosecco on price alone could lead to what happened with Australian shiraz and Argentine malbec — lots of cheap wine of varying quality. I’m not sure that Freixenet’s plan to add more expensive wines to differentiate itself from Prosecco is any better, given that Cava quality is so good at $10 and $15 there is little reason to trade up.

? Bring on the imports: How global has the the U.S. wine consumer become? Imports account for about one-third of the wine we drink, and that figure is expected to increase over the next two decades to as much as 45 percent. In the first half of 2014, though, we drank less imported wine than in the previous year (but the dollar value of the wine we drank increased by five percent). The biggest winner in those six months was New Zealand; the biggest loser was Australia. Sales from Italy and France, the top two exporters to the U.S. were mostly flat, though the dollar amount of what they did sell increased eight and six percent.

wine advice

Ask the WC 6: Box wine, wine closeouts, open wine

wine questionsBecause the customers always have wine questions, and the Wine Curmudgeon has answers in this irregular feature. Ask me a wine-related question .

Wine Curmudgeon:
Are there any box wines that you would find acceptable for someone who can’t afford $15 or $20 for wine every night ? I have been buying several of the Almaden wines and find them quite good. Are they, or is it just my unsophisticated taste buds? Could I be getting a better taste for my buck?
Bottles aren’t necessary

Dear Bottles:
Box wine comes in varying degrees of quality, just like wine in bottles. Many are of higher quality than the Alamaden, though they won’t be as sweet. You can try Bota Box, Black Box, Bandit/Three Thieves, and Big House, for example. But realize you don’t have to spend $15 or $20 for a bottle; check out the $10 Hall of Fame or the $10 wine link at the top of the page.

?

Curmudgeonly one:
How do wineries get rid of excess inventory, if they make too much and have to sell it off? Can you find good deals on wine this way?
Looking for a bargain

Dear Looking:
It’s difficult to do thanks to our friend, three-tier. Can’t have a warehouse sale, since it’s illegal, and it’s rare to find a wine retailer that specializes in closeouts and discontinued items like Big Lots because the process is so difficult. Some retailers buy excess wine and discount it, but there isn’t much rhyme or reason to how they do it. You need to find a good retailer and ask them to let you know when they have that kind of sale. In fact, most excess wine sits in a distributor warehouse until it is sold, returned, or destroyed (which is what multi-national Treasury did in 2013).

?

Wine Curmudgeon:
How long will an open bottle of wine stay good? Is there anything I can do to make it last longer?
Can’t drink a bottle in one sitting

Dear Can’t drink:
The answer to this used to be simple — if you didn’t finish an open bottle within 24 hours, it oxidized and tasted like bad brandy. Hence, closures like the VacuVin. But improvements in winemaking have complicated the issue, and I’ve had wine, including cheap wine, that stayed drinkable for a couple of days after it had been opened. My suggestion? Put it in the refrigerator and hope for the best if it’s there longer than 36 hours.

More Ask the Wine Curmudgeon:
? Ask the WC 4: Green wine, screwcaps, mold
? Ask the WC 3: Availability, prices, headaches
? Ask the WC 2: Health, food pairings, weddings

winerant

The wine business has much to answer for

wine edcuation

Whatever you do, don’t help me make an informed decision about what to buy.

It was bad enough that the woman, standing in the Texas winery tasting room, proclaimed that Texas wine wasn’t any good, and that she suspected the Texas wine she was drinking came from California. What was worse was when she told the tasting room employee that she only drank cabernet sauvignon and malbec, and that she wasn’t going to drink this red blend because she wouldn’t like it.

What struck me, as I watched this scene unfold over Labor Day weekend, was that it was so wine ? the woman’s dead certainty she was correct, despite knowing nothing about what she was talking about; the refusal to try something different, because it was different; and the sense that the winery was trying to put something over on her.

And this doesn’t include the other foolishness I’ve seen this fall, like the woman at a Kroger Great Wall of Wine with $50 worth of beef in her cart who was agonizing over $10 cabernet sauvigon and who couldn’t have been more confused if she had been trying to read the Iliad in the original Greek. Or the bartender at a chi chi Dallas wine bar who treated me like I was an idiot because I wanted to talk about Texas wine and cheap wine.

Does that happen with any other consumer good? Only wine, and for that we have the wine business to thank. More, after the jump:
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wine news

Winebits 352: Red wine, wine brands, three-tier

wine news red wine ? Bring on the red wine: Americans, apparently, drink more red wine than white. This is not news, though for some reason a writer at the Washington Post who doesn’t write about wine (and there seem to be so many of them) thinks it is. Red wine has traditionally outsold white, but a white, chardonnay, remains the best selling wine in the U.S. The people at the Post have one of the best wine writers in the world working for them; I don’t know why they insist on pretending to be experts when there is a real expert at hand. One other thing, as long as I’m being cranky: Given that online retailing accounts for just 5 percent of U.S. wine sales, is a survey from an on-line retailer a better source than Nielsen or the Wine Institute?

? Bring on the new brands: One of the great mysteries in the wine business is how many wines actually exist. It’s also a mystery why it’s a mystery, since wine is regulated and this should not be difficult to determine. But it is, and the best guess has been about 15,000, which includes different varietals but not different vintages. Turns out that may be just a fraction of the total, according to Ship Compliant, a company that helps wineries through the maze of regulation. It found that the federal government approved 93,000 labels in 2013. However, since that could include changes to old labels or old wine given a new name, as well as wines that were proposed but never made it to market, there probably aren’t 93,000 wines available for sale. Which, given the size of the Great Wall of Wine, is no doubt a good thing.

? Bring on the lawyers: The Wine Curmudgeon notes this item not because he expects anyone to understand it unless they are a liquor law attorney with a large staff, but to remind the world, again, of the pointlessness of the three-tier system unless you are a distributor or attorney. It details a court case in which a distributor is suing a producer even though the producer followed the letter of the law. Or something like that. Regardless of the outcome, it will make no difference to anyone who buys wine. Incidentally, this is a jury trial. I can only shake my head in sympathy for those poor jurors, and hope they have lots of wine at home for afterwards. Update: Hours — literally — after I posted this, the suit was settled. No doubt they were terrified the jury would laugh at them, go home, and open a beer.

Image courtesy of Houston Press food blog, using a Creative Commons license

winetrends

Why grocery stores love wine

grocery store wine salesBecause they sell so much of it — and a lot more than most of us realize. Hence the reason for the Great Wall of Wine.

Wine was the seventh biggest category by dollar amount for supermarkets in the 52 weeks ending June 15, recording $6.9 billion in sales. That’s up 3.7 percent from the same period a year ago, and works out to an average of $9.27 a bottle. The figures come from a study by the IRI marketing consultancy and published in the Supermarket News trade magazine.

How impressive are those numbers?

? They don’t include wine sales in New York or Pennsylvania, two huge markets that don’t allow supermarkets to sell wine. Yet, even without those two states, grocers account for about 20 percent of U.S. wine sales.

? They don’t include wine sales at Target, Walmart, and Costco. Throw those in, and that 20 percent total should increase by more than a few points.

? Wine was bigger than a host of established items, including cereal, coffee, bottled water, cookies, and soup. Some of that was because wine is more expensive; we bought three times more cans of soup than bottles of wine. Even so, it’s an impressive total, given the restrictions on wine sales. In Texas, for example, we can buy soup as long as the store is open, but we can’t buy wine on Sunday until noon.

? Wine’s growth was bigger than soft drinks, which lost 3.9 percent, as well as cereal (down 4.3 percent), ice cream (down 0.3 percent), frozen pizza (unchanged), and toilet paper (-0.2 percent). I can’t even pretend to make sense of that. Since when did we need wine more than toilet paper?

These numbers, more than anything else, explain why there is so much opposition to supermarket wine sales in the 19 states where it’s still prohibited. We’re not buying jug wine at the grocery store. That $9 average price means we’re buying many of the same wines we’d buy at wine shops and liquor stores, and small retailers don’t want the competition.

The irony is that, as has been noted on the blog, small retailers may prosper competing with grocers, since they offer something supermarkets can’t — someone to answer questions. The Great Wall of Wine has nothing to do with service.

Photo courtesy of Houston Press food blog, using a Creative Commons license

winetrends

Another study agrees: We buy wine on price

wine genome studyThe biggest surprise in the Wine Genome study from Constellation Brands, one of the biggest wine companies in the world? That one-fifth of us buy wine on price.

“We knew they were out there, but the widening span of the study showed how deeply the recession cut,” said Dale Stratton, the Constellation official who oversaw this version, the third, of the company’s Project Genome, designed to identify the most common types of of wine drinkers based on purchase behavior, motivation, and preferences. “The recession had a big impact and significantly changed consumer spending habits.”

Stratton laughed when I asked him about this. No, he said, it’s not that Constellation (whose brands include Rex Goliath, Mark West, and Robert Mondavi) didn’t expect price to be important. Rather, it’s that price-driven wine drinkers were the biggest category of the six, doubling the number of Enthusiasts — those who “love everything about the wine experience,” including researching purchases, reading reviews, and sharing wine with others. In other words, the Winestream Media’s audience. The other thing to note here? The Enthusiasts account for 15 percent of profit, compared to 14 percent for the Price-Driven group. Harrumph.

The study, which updated a 2004 effort, is full of surprises — unless, of course, you visit here regularly (and you can see a nifty infographic describing each group here):

? The third-biggest group, at 19 percent, are Overwhelmed, which means pretty much what it says: “I don’t enjoy shopping for wine, and find it complex and overwhelming. This, says Stratton, reinforces the need for wine education, not only for consumers but for those who sell wine — distributors, retailers, and restaurateurs. Hearing this was surprising enough, but I almost dropped the phone when Stratton said that winespeak is one of the reasons the overwhelmed are overwhelmed. Maybe, he said, retailers and wine writers should find simpler terms to use.

? Women, who have traditionally skewed higher for wine purchases at the lower end, are becoming more important at the higher end. The Enthusiasts, who were about 65 percent male in 2004, were close to 50-50 this time. “This means more women see wine as a hobby,” says Stratton, and that means more women attend tastings and shop at wine-specific retailers.

? Wine snobs, called Image Seekers, are still with us, and in a big way. They account for 18 percent of wine drinkers, but contribute 26 percent of profits, more than any other group. Given the wine they drink, that’s probably not surprising.

? Welcome the Millennials to wine, in the form of the Engaged Newcomer at 12 percent. This group is young, wants to learn more, and recognizes that wine is intimidating. They also spend more on a bottle than the other groups, about $13.

One other point worth noting: This kind of study is common for consumer packaged goods like laundry detergent and ketchup. That Constellation can do for wine what Proctor & Gamble does for its products speaks volumes about how much the wine business has changed, and that it is becoming more mainstream.

“Wine is increasing household penetration at a good clip, and the audience has broadened,” said Stratton. “And it’s going to continue to change, as the American population changes.”

winerant

Wine sales, price, and what doesn’t get enough attention

wine sales priceRegular visitors here know that cheap wine outsells expensive wine in the U.S., and that the Winestream Media spends most of its time genuflecting about wine that most of us don’t buy. And when I say most of us, I really, really mean most of us, thanks to these two charts totaling U.S. retail wine sales — expensive and overall — from wine industry trade magazine Wines & Vines. Here are the charts — overall and and expensive.

Several caveats: The charts don’t match on dates; expensive wine covers the 52 weeks ending June 2014, while the other chart is June 2012 to June 2013. This probably helps pricey wine, since its business picked up substantially over the last year. Also, since these are retail-only numbers, expensive wines that focus on restaurants are almost certainly under-counted. Finally, since the number of cases sold for the less expensive wines isn’t on the chart, I used third-party sources in the discussion below where necessary.

Still, the numbers are stunning:

? The best-selling expensive wine (more than $20 a bottle) was Santa Margherita, with 147,925 cases and $36.5 million in sales. The best-selling wine overall was Barefoot, with $323 million and some 11 million cases. How big is that disparity? In grocery stores, it’s the difference between Kroger, a national chain, and Save Mart, a company only people in certain parts of California have heard of.

? The 15th- through 20th-ranked expensive producers all had $4 million or less in annual retail sales. It’s not so much that those totals are two-thirds of what Barefoot sells each week, but that I have a friend who owns a Dallas magazine company whose annual sales are $2 million. You’d think high-end, well-known pricey brands would be doing exponentially better than someone with a one-city media company.

? Menage a Trois, 16th on the overall list, doubled the dollar sales for Santa Margherita, and every producer on the overall list sold at least one-third more than Santa Margherita.

? Only two brands on the overall list, which tracks retail wine sales, cost more than $10 a bottle, and one of them, Kendall-Jackson, was at $12.

Hence anyone who doesn’t believe that only five percent of U.S. wine drinkers buy wine that costs $20 or more hasn’t been paying attention.