Source: Wine Opinions

Napa Valley, Calif. -- A new report by the firm Wine Opinions fills in the outline of the consumer and trade wine buyer after a prolonged period of recession. It's not a pretty picture for many vintners, but it does contain bright spots for North American wineries, including rising sales at winery tasting rooms and an improved image of California wine regions such as Lodi, Paso Robles and Sonoma County.

More than half of regular wine drinkers surveyed say their financial situation has gotten worse or much worse in the past 12 months, and many of them have traded down in wine purchases. This verifies the assumptions of many in the wine industry.

But even the minority of consumers who say their financial situations have improved are cutting back on high-end purchases and on-premise buying, while not necessarily trading down when they do buy. "The recession is psychographic as well as income or wealth-driven," the report states.

The 75-page report, titled “Market Track Volume 1”, is based on surveys of high-frequency wine drinkers and members of all three tiers of the wine business. One finding that bucks conventional wisdom is that no evidence surfaced to show that consumers are retreating to the “tried and true” or traditional brands or types of wine. John Gillespie, one of the principals of Napa Valley-based Wine Opinions, indicated that open-ended questions revealed almost no citations of such a trend either by the trade or consumers. Seven of the top 10 wine types cited as gaining share by the trade were new or rediscovered wines.

Looking at survey respondents attitudes toward California wine, Paso Robles and Sonoma County have gained the most consumer support over the past twelve months, while Napa and Monterey were weakest, the report states. Among the trade, Napa sales were reported as negative, Paso Robles and Lodi were strongest, and most other regions were positive.

One of the most noteworthy findings, Gillespie said, was an uptick in the amount of wine California residents are purchasing from the Lodi region. In-state sales to California residents grew “more so than you might expect, with more weakness on the Napa Valley side, because of price points” traditionally associated with the area’s wine products.

Gillespie said that from the trade’s perspective, Argentina, Chile, and Spain are the import countries that have benefited most from the consumer trade-down trend.  Past-twelve-month net sales increases of wines priced under $20 were significantly higher for these countries than for others.

The most positive changes by sales channel were seen in tasting room and direct sales, thought the survey sample was small in this category. More trade respondents reported an increase in tasting room/direct sales (38%) than experienced a decrease (27%) over the past year (a net shift of +11 points).

The Wine Opinions’ consumer panel sample used for the firm’s most recent study was comprised predominantly of consumers who drink wine several times per week and gravitate toward high-end wines and wine retailers.

In findings that Gillespie and Wine Opinions colleague Christian Miller previewed at the recent Wine Industry Financial Symposium, few members of the trade regard Napa Valley Cabernet Sauvignons priced over $50 as irreplaceable.  About 1 in 4 said that Napa Valley Cabernet Sauvignon wines under $50 are the best alternative (22%), but a near equal proportion favor Cabernet Sauvignon wines from Washington State (24%).  There were also significant numbers who believe that comparable wines from Sonoma County (16%) or Bordeaux (14%) are the best alternatives. 

A PDF of Wine Opinions’ Market Track Volume 1 report is available for $395 at wineopinions.com.