05.17.2010  
 

Domestic Wine Sales up 6.8% in April

Off-premise sales hottest for Sauvignon Blanc, Pinot Noir, Meritage

 
by Jim Gordon
 
Sales Growth Domestic Table Wine
 
 
San Rafael, Calif. -- U.S. off-premise table wine ended a healthy month of growth in April, increasing overall at 6.8% in dollars compared to the same four-week period last year. Sales were up for all price-points of domestic table wines except bargain basement wines under $3 per bottle, as the wine industry continued its slow recovery from the recession.

The data from Symphony IRI Group as of April 18 looked particularly encouraging for many boutique wineries, since the highest price-point of $20 and above saw the fastest growth rate of 28.3%. Sauvignon Blanc, Pinot Noir and Meritage-style reds enjoyed the greatest increases by varietal, according to Symphony IRI scan data from tens of thousands of food and drug stores across the country.

The longer measure of 52-week year-on-year growth was flat from the previous month at 5.2% (vs. 5.3% in March). Still, it was a solid performance and may reassure vintners that their customers have found a new normal in which they are comfortable spending a bit more each month.

Big picture

The 6.8% dollar growth during the most recent four-week period easily beat the 5.1% growth during the previous four weeks, and added up to $339 million for domestic wines. Imports, conversely, went down 1.8% to $92 million during the same period, as domestic market share approached 79%.

The only major loser category of U.S. wines was non-varietals in 1.5L packages. This group dipped 8.2% in dollars to $4.9 million. Good old varietals in 750ml bottles saw 8.9% growth and rang up $219 million in sales.

Price-points compared
Sales Growth Price Segment Wine
 
 
The dramatic growth rate for domestic tables wines at $20 and up (the highest price-point that Symphony IRI measures) improves on an already good track record over the past year. The rates are 28.3% for the most recent four weeks, 23.7% for the most recent 12 weeks, 22.7% for 26 weeks and 18.5% for 52 weeks.

This off-premise trend has got to be an encouraging one for many producers of high-end wines who still lament that their on-premise sales remain well below pre-recession levels. Looking at the volume sales for this $20 category, the growth rate is one point higher than the dollar growth, indicating that some price discounts are at least a small factor.

At just under $12 million sales for four weeks, the top price-point is relatively small, however. The next segment down, $15-$19.99, had double the dollar sales, but a slower growth rate, 8.3%. Stepping down one level more to the $11-$14.99 price-point, which tallies more than five times as many total dollar sales as the top tier, there is more good news. It grew at a very healthy 12.3%.

Hot varietals

What do the sales data tell us about the consumer's taste preferences this spring? They opted for more light whites and light reds. Combined sales of domestic and imported Sauvignon/Fumé Blanc were $18 million, up 13.4% over the same four weeks last year. The three highest price tiers saw the best growth rates for Sauvignon Blanc.

Similarly but not quite as dramatically, Pinot Noir sales were up 10.6%, and Meritage reds were up 10.8% in the four-week period.

Wine sales state
 
Chardonnay, by far the biggest varietal category, had very solid sales of more than $100 million and a growth rate of 4.7% overall. Cabernet Sauvignon, the No. 2 varietal category, did better in growth rate at 7.7% and totaled $67 million in sales during those four weeks.

The news was discouraging on Syrah/Shiraz sales, however, as the category dropped 9.8% for the most recent four weeks. It seems to reinforce the existence of a surplus of Syrah/Shiraz grape tonnage and bulk wine in California that observers have been noting in the past few years.

Sales by state of origin

Symphony IRI sorted its 2009 totals for Wines & Vines to rank the wine-producing U.S. states in order of most off-premise sales. California is the giant, of course, with $3.8 billion in sales. Washington and Oregon came in No. 2 and No. 3, but then the rankings contained some surprises.

New York State usually ranks in the top four by vineyard acreage and total wine production, yet Texas won that slot in terms of sales at the big chain stores that Symphony IRI measures. Possibly even more surprising, North Carolina was a solid No. 5, followed by Michigan, Indiana and Missouri. Ohio and Virginia round out the top 10. New York comes in at No. 11, probably because of the state's unusually restrictive regulations, which prohibit wine sales in supermarkets.

Figures quoted in this article come from the Chicago-based SymphonyIRI Group, which uses check stand scan data to provide market information and services to industries including consumer packaged goods, retail and healthcare.
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