U.S. table wine fuels wine industry's growth
July 15, 2013
• Tapping the Millennial taste buds
• “Wine is competing effectively with spirits and emerging categories such as craft beer”
Domestic table wines were a major driver of the wine market in 2012 despite a weak overall economy, says a new report from Technomic Inc., a Chicago, Ill.-based food industry information company.
U.S.-made table wines accounted for two-thirds (67.9 percent) of total wine volume and grew 2.1 percent year over year, the report says.
“Although the overall rate of growth in 2012 was slower than in 2011, wine is competing effectively with spirits and emerging categories such as craft beer, and keeping consumers engaged and increasingly interested,” says Eric Schmidt, director of research at Technomic. “New product introductions and evolving flavor profiles enhance wine’s relevance for both at-home consumption and occasions in bars and restaurants, particularly among young adult consumers.”
Two domestic table wines led the overall wine market. Franzia WineTaps, from The Wine Group, remained the largest wine brand, although its volume declined (-8.1 percent). The second-largest brand, Barefoot Cellars from E&J Gallo, grew 15.4 percent.
According to the just-released 2013 WineTAB report from Technomic, part of its Trends in Adult Beverage (TAB) series, wine volume grew 2.2 percent to end the year at 345.1 million 9-liter cases, and retail dollars reached $32.3 billion, a 3.6 percent increase. Wine’s share of total adult beverage volume increased slightly to 10.7 percent.
“Domestic table wines offer something for every taste preference, lifestyle and budget,” says Donna Hood Crecca, senior director at Technomic. “Today’s consumer understands that American wine producers offer everything from eclectic high-end selections to premium boxed wines to fun, flavored specialty wines.”
Suppliers were active with new product innovation, particularly domestic table winemakers, the report says. More than half of the nearly 240 new table wines to hit the market in 2012 were domestic, and many were new varietal or style additions to existing portfolios, often with sweeter flavor profiles and sometimes without varietal or appellation information on the label.
“Wine consumers, especially Millennials, gravitated toward more approachable and drinkable wines suitable for a range of dining and social occasions,” says Ms. Crecca. “Specialty wines such as sangrias and chocolate wines really took off. Wine is now part of a casual lifestyle, and domestic wine marketers are looking to satisfy that growing demand with intriguing products.”
Supply constraints presented challenges for many domestic wine marketers in that quest, Technomic says. Domestic grape and wine production has not kept pace with growing consumer demand in recent years, causing many wine suppliers to turn to international sources. However, several increased their plantings or acquired additional vineyards and wineries in 2012.
One Central Valley supplier of vineyard equipment tells CVBT that he sees growers planting new vines at a feverish pace and sometimes in comparatively untapped areas of the state.
While domestic wine was a primary driver of the industry, imported table wine grew 1.6 percent and accounted for slightly more than one-fifth of total wine volume.
Millennials, especially Millennial women, were a primary focus for wine marketers, and wine marketing highlighted lifestyle and flavor attributes. Advertising expenditures for wine rose 10.8 percent.
E&J Gallo, The Wine Group and Constellation remained the top three wine supplier companies, according to Technomic’s figures. Total portfolio volume growth was achieved by E&J Gallo and Constellation, while The Wine Group’s volume declined.
The largest increase was realized by DFV Wines (28.3 percent), driven by the growth of its Bota Box line of premium boxed wines, pointing to consumers’ growing acceptance of premium wines in alternative packaging.