Imported brands speed wine sales growth

U.S. wine consumption took a great leap forward in 2006, rising an impressive 3.4 percent and continuing the sector's climb for the 13th consecutive year, according to the 2007 edition of the Adams Wine Handbook, published by Adams Beverage Group, a division of business publisher M2MEDIA360.

"Wine sales have sustained this long-term growth thanks to the industry's success in appealing to a wide range of consumers," said Charles Forman, vice president and group publisher, Adams Beverage Group. Sales were so strong that if the wine industry's expansion continues at this pace, the United States will become the largest wine market in the world by the end of the decade.

Overall, wine consumption rose to 283.1 million 9-liter cases in 2006, domestic wine sales rose 2.6% to 209.4 million cases, and imported wines rose 5.7% to 73.6 million cases.

Wine now appeals to a broad spectrum of the population, including the much sought-after Millennials (consumers 21-30). In a recent Gallup poll, for the first time, a majority of respondents claimed wine as their alcohol beverage of choice. Together, Millennials and Baby Boomers account for more than half of today's wine consumers.

Brands marketed to Millennials-like Pinot Evil, Killer Juice and Dog House-are consistently more approachable to novice drinkers. The continued popularity of Yellow Tail and its place as the top imported wine in the United States has set the stage for other new "critter" brands. Yellow Tail has even prompted French wine producers to create new consumer-friendly labels for Burgundy wines.

Another dynamic in the wine market is the ongoing evolution in packaging. Screw caps are becoming more of the standard of new brands in the United States, and premium boxed wine, easy to store and transport, has grown recently. The continued association between moderate consumption of wine and decreased risk of disease was further highlighted in 2006 with the release of a study that found resveratrol, a substance contained in red wine, extended life span in mice.

The growth among imports shows little sign of slowing, with wine imported from Italy, Australia and France up 6.7%, 6.8% and 21.9%, respectively, in 2006. Italy still holds court in the imported wine segment, with a 29.3% share in 2006. Italy boasts the leading on-premise brand, Cavit, which grew 13.2% to reach the three million case mark in 2006.

French wines continued their resurgence in 2006, marking the second consecutive year of gains. The recent upswing occurred despite leading French brand, Georges Duboeuf, declining 7.4% to 750,000 cases.

The largest brands in the foreign segment are Yellow Tail at 8.1 million cases (+7.3%); Cavit at 3 million cases (+13.2%); and Concha y Toro at 2.7 million cases (-2.6%). The largest brand in the domestic segment and the overall industry is Franzia Winetaps, a brand whose volume declined 3.2% to end the year at 22.8 million cases. Number two domestic, Carlo Rossi, jumped 2.6% to 12.7 million cases. Twin Valley, a brand that lost 5.9% in 2006 to 8.9 million cases, rounds out the top three domestics.

Champagne and sparkling wines continued to grow in 2006, gaining 3.8% to end the year at 13.4 million cases, marking the fifth consecutive year of gains for the category, with imports increasing at a faster rate than domestics, mirroring the trend in the table wine market. Dessert and fortified wines continued to decline last year, although the sake and imported port and sherry segments each continued on an upward climb. Vermouth declined in 2006, falling 1.6% to end the year at 1.8 million cases. The category continues to remain virtually stagnant over the past 10 years. Volume in the category has been sustained in recent years due to the popularity of the martini.

The Adams Wine Handbook 2007 contains wine consumption by category, state and metro market. Brand data, retail sales, consumer demographics, and industry statistics are included.

Source: Adams Beverage Group

Web site: http://www.adamsbevgroup.com/