December 2017 Issue of Wines & Vines
 
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Cabernet Sauvignon Reigns as King

 
by Wines & Vines Staff
 
 

While the biggest news for the wine industry in 2017 was the devastating complex of fires in California’s Sonoma, Napa and Mendocino counties, arguably the best news was about a grape variety heavily planted in all three of those regions. Cabernet Sauvignon, long at the top of the sales heap among red wines, reached even greater heights this year as off-premise sales grew nicely, DtC sales grew rapidly and deals involving prime Cabernet Sauvignon brands and vineyard sites made headlines.

“I think Cabernet is king. It’s still as hot as ever,” said retailer Gary Fisch, owner of Gary’s Wine & Marketplace with three locations in New Jersey. Even though his stores stock a lot of Bordeaux, Spanish wines and other imports, “They always come back to Cabernet. When people buy wine to have in the house, to stock up, they buy Cabernet. They buy Chardonnay when they need it.”

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The broadest measure of success for the grape variety that originated in Bordeaux hundreds of years ago from a chance crossing of Cabernet Franc and Sauvignon Blanc comes from the massive off-premise sales data set compiled by market-research firm IRI. Growth in off-premise wine sales in general has been slow and steady at 3% this year, yet Cabernet Sauvignon grew by 5% from a huge base.

Trends within the varietal saw bottles priced $20-$24.99 and $25-plus having the strongest sales growth, at 16% and 15% respectively, pointing to willingness by consumers to trade up.

Cabernet in less expensive price segments grew dramatically, too, even as average-priced bottles dipped slightly. This reflected, in part, strong competition. The biggest price reductions took place in the $8-$10.99 and $11-$14.99 segments, even as sales in the segments increased 5% and 9%, respectively. Meanwhile, the biggest growth rate was among premium boxed Cabernet Sauvignon selling at $4.50 per 750 ml and up; sales in the latest 52 weeks increased 21%.

Cabernet Sauvignon is the top-selling varietal or wine type in direct-to-consumer (DtC) shipments from U.S wineries, which overall saw value and volume grow in sync, with each rising 17% from 2016 levels. Cabernet Sauvignon alone saw a $748 million move in 12 months through August, also up 17% from a year earlier.

“Our direct trends are really good, with Cab being the most popular red varietal,” Emilie Eliason, vice president of marketing with Crimson Wine Group, told Wines & Vines.

 

Another sign of Cabernet Sauvignon’s dominance was the purchase in March by E. & J. Gallo Winery of the Stagecoach Vineyard property in Napa Valley. At a cost of at least $180 million, according to Napa County records, the vineyard gives Gallo a secure long-term source of primarily Cabernet grapes to include in its Napa Valley brands such as Louis M. Martini, Orin Swift and William Hill. The 1,600-acre Atlas Peak property contains more than 600 acres of vineyards with a variety of soil depths and types, exposure and microclimates.

Stagecoach already was supplying grapes to Martini and William Hill, as well as about 90 other wineries. Some of the clients are quite large, though many are boutique operations. More than 30 wineries use the Stagecoach name on their labels. Gallo has promised to fulfill existing contracts, but it was not clear how many of those wineries would eventually lose Stagecoach as a source.

Another deal that highlighted the growing demand for Cabernet Sauvignon was Constellation Brands’ purchase of Napa Valley cult Cabernet producer Schrader Cellars, announced in June.

Schrader wines are sourced from premier vineyards of Napa Valley including the Beckstoffer To Kalon Vineyard in Oakville. And since Constellation already owned the Robert Mondavi Winery and its portion of the To Kalon Vineyard, the deal suggested that Schrader could expand its production, if desired.

Schrader’s highly rated and limited-production wines are sold direct to consumer through a mailing list with an offering also available in fine dining restaurants. The collection joins Constellation’s newly established fine wine organization, TRU Estates and Vineyards.

Is there a chance Cabernet sales could go the way of Merlot? While Merlot grew relatively quickly in the 1990s and then trailed off in the 2000s, retailer Fisch believes Cabernet Sauvignon is here for the long haul. “I don’t see it going away any time soon. Not for domestic wines. The way Americans eat, even if they’re going to lighter foods, they still want Cabernet.”

 

 

 
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