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50 Million Case Wine Opportunity?

Rabobank analyst sees opportunity to boost U.S. wine sales to Hispanics

by Andrew Adams
Rabobank U.S. Hispanic wine consumers
Source: Rabobank based on The Nielsen Co., U.S. Census Bureau, Wine Institute, 2013.
San Rafael, Calif.—While Americans are drinking more wine than ever, the U.S. Hispanic population still consumes far less wine than the general population. Tapping into that market could result in wineries selling an additional 50 million cases over the next 20 years, according to a new report by Rabobank’s food and agribusiness research group.


The report predicts Hispanics may buy 96.5 million cases of wine a year by 2033. The growth in just Hispanic consumption could account for as much as 40% of the total growth in wine consumption over the same period. “If U.S. wineries can develop strategies that positively affect the wine consumption rate of U.S. Hispanics, those strategies will have far reaching, positive benefits in other Hispanic markets,” said the report’s author and Rabobank’s wine industry analyst, Stephen Rannekleiv.


Growing segment of U.S. population
According to the U.S. Census Bureau, the Hispanic population is expected to grow to 22% of the total U.S. population by 2033. The white non-Hispanic population is expected to only account for 54% of the U.S. population in 2033 down from 64% in 2011.

Even just offering Spanish language information on a winery website or ensuring someone in the tasting room can speak Spanish would help a brand connect with Hispanic consumers, Rannekleiv notes. “Driving consumption growth among Hispanics will not necessarily be easy, but may be critical for the wine industry’s continued growth in the long term,” Rannekleiv says in the report.

The low rate of Hispanic wine consumption is one of the biggest ironies in the wine industry. Many of the men and women working in the vineyards and cellars producing wine are Mexican immigrants who don’t drink much of it.

Napa and Sonoma counties are home to some wineries like Ceja Vineyards and Robledo Family Winery in the Carneros AVA and Mi Sueno and Alex Sotelo Cellars in Napa Valley that are owned by Mexican immigrants. This week the California state Legislature will honor the 14-winery members of the Mexican-American Vintners Association

But despite the many contributions of Mexicans and other Hispanic groups to the wine industry, the beverage of choice in most Hispanic homes remains beer.

Yet that is changing. A study by the Wine Market Council found that of “core wine drinkers” Hispanics represented 3% in 2008 but 5% in 2012. Nielsen predicts an annual 6% growth rate of Hispanic wine and spirits consumption through 2015. That growth rate is double that of the U.S. non-Hispanic population. In its analysis on Hispanic consumer trends Nielsen reported, “beverage sales trends show powerful evidence of Hispanic consumers acting as the accelerators for growing categories and the brakes for declining ones.”

Survey of Hispanic consumers
Texas Tech University’s Texas Wine Marketing Research Institute cited the growing interest in Hispanic consumers for wine in a 2011 report on how wineries could reach the Hispanic market.

Dr. Natalia Kolyesnikova led a survey of several groups of Hispanics to gauge their interest and opinions on wine. Some general findings included red wines were preferred overall, older consumers tended to like dry wines and those who spoke only Spanish tended to favor sweet wines. Wine was generally viewed as a special occasion beverage and something to be enjoyed with steak or pasta and not traditional Hispanic cuisine.

Kolyesnikova said younger Hispanic consumers tended to be more open to trying wine. “Kids now are teaching their parents to like wine,” she said.

Another interesting result from the survey, Kolyesnikova said, was that seeing Spanish on wine labels was more important to younger consumers. One participant said if he had to choose between two wines — one with Spanish on the label and one with just English — he’d pick the wine with Spanish. Older people in the survey said Spanish on the label was not important to them.

Kolyesnikova is hoping to conduct another, larger survey that will cover three metropolitan areas in Texas and survey wineries to see what they’re doing to entice Hispanic consumers to buy their wines.

She said while the Hispanic market is still small compared to the total potential customer base for wine, wineries need to begin thinking about marketing to Hispanics to prepare for the future. “You have to do that, you have to address the growth of the Hispanic population and especially the younger population that’s really getting into wine,” she said.

The potential of the U.S. Hispanic market is not lost on wine marketers in France. The Bordeaux Wine Council recently unveiled its new “Viva Bordeaux” campaign, which features recipes by Miami celebrity chef Doreen Colondres paired with wines from Bordeaux. One of the recipes is for “Bife de Chorizo” with “mangu” or mashed plantains paired with a 2009 La Bastide Dauzac from Margaux.

Posted on 09.05.2013 - 13:22:36 PST
This is a great article. Vino Latino realized this untapped market a few years ago which is why we created a wine company that features wines only made or owned by Latinos within the USA.
Ramon Sandoval

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