Wines & Vines

February 2015 Barrel Issue

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if categorized as a varietal or type rather than a different category of wine. Among domestic sparkling wines, the brut style was the biggest category and increased in sales by 7% for 24% market share. Bubbly produced in the United States had 53% market share, and imports had 47%. Red blends overtook Pinot Noir in 2014 when considering wines from all sources, even though Pinot Noir sales increased by 9%. Red blends increased by 14%, and passed Pinot Noir by a few million dollars. Sauvignon Blanc, not to be outdone, shot up by 12% from a rela- tively small base. The biggest off-premise retail price segment for domestic wine was $8-$10.99. The segment saw 10% sales growth and towered over its lower and higher neighbor segments in overall revenue. Interestingly, the average price per bottle of brands in this segment drifted up and out of the segment's range in 2014, ending up at $11.43. The average price for domestic table wines in all forms and sizes of packaging was $6.04 per 750ml, IRI reported. In 750ml glass bottles, the average rose to $8.72. The comparable figures for imports were $7.39 and $9.03, suggesting higher costs to market and/or a consumer prejudice for imported products. Wines from both Washington and Oregon averaged higher than imports in price per bottle. —Jim Gordon METRICS February 2015 Wines&Vines 11 Direct to Consumer DtC Shipments Pass $1.8 Billion at year's End T he growth rate of direct-to-consumer shipments in 2014 more than doubled that of 2013, according to year-end data. (See related story on page 15.) With a 15% increase, the value of DtC shipments passed $1.8 billion, according to the Wines & Vines/ ShipCompliant Model. Volume reached 3.9 mil- lion cases, and volume growth was 14%, while the average DtC bottle price grew by 2%. The value of DtC shipments increased steadily from 2010 through 2013, then acceler- ated in 2014 (see chart at left). The average bottle price increased from $36.56 in 2010 to $38.40 in 2014. Cabernet Sauvignon led in sales, capturing 30% of the market share by value, one-year growth of 20% and the highest average bottle price by varietal of $66.32. Pinot Noir was second and red blends were third, but with nearly flat dollar growth. Oregon and Pinot Noir both trended up in 2014, the data showed. Direct shipments from Oregon wineries exploded by 45% in volume and 53% in value. Since Pinot Noir is Oregon's biggest selling varietal, there's an obvious tie to the perfor- mance of Pinot Noir in general, which enjoyed 22% growth in shipments and 9% in price per bottle, averaging $39.72. Wines direct-shipped from Napa County, Calif., wineries grew 16% in value, totaling $883 million, and rose 12% in volume for 1.3 million cases. Napa held 49% market share by value, and its average bottle price was $58.13. Wines from Sonoma County, Calif., grew 6% in value to $357 million and 14% in volume to 963,000 cases. One negative note for Sonoma was a drop in average price per bottle of 7% to $30.88. To keep it in perspective, however, the average price per bottle for domestic wines at major retailers was just $6.04 last year. Washington state wineries outperformed the average by direct-shipping 19% more cases in 2014 and getting 20% more in sales. Wash- ington's average price per bottle rose to $35.95. Small wineries that produce 5,000-49,999 cases took a 9.5% increase in average bottle price while pushing volume up 7%. Their sales buoyed by 18%. Limited production wineries (less than 1,000 cases) were the only size cat- egory that lost volume, value and price. —Jim Gordon Source: Wines Vines Analytics/ShipCompliant model annual DtC ShIPmentS $ Billions 2010 2011 2012 2013 2014 $2.0 $1.5 $1.0 $0.5 0 Off-PremISe SaleS by varIetal Source: , Wines & Vines. Includes domestic and imported wines, multiple-outlet and convenience stores $ Billions Chardonnay Cabernet Sauvignon Pinot Gris Sparkling Merlot Red Blends Pinot Noir Sauvignon Blanc $2.0 $1.5 $1.0 $0.5 0 n = 2013 n = 2014

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