Wines & Vines

September 2016 Finance Issue

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Direct to Consumer O ff-premise sales of domestic wine in July experienced the biggest monthly increase since January, as sales rose 6% from the same period in 2015, according to market-research firm IRI. U.S. sparkling wine sales alone grew by 11.5%. The 12-month growth rate also was 6%. Domestic table and sparkling wine sales in July widened the gap between 2015 and 2016 monthly sales, according to IRI. The rise in volume during the four weeks ending July 10 was 3%, based on multiple-outlet and convenience store data. Red blends passed Sauvignon Blanc as the fastest growing major varietal or type during the past 52 weeks, according to IRI. In a similar case of red overtaking white, Cabernet Sauvignon's growth rate overtook that of Pinot Grigio/Gris. Chardonnay and Cabernet Sauvignon re- tained the No. 1 and No. 2 spots in varietal sales, according to IRI. Pinot Noir passed Merlot for the first time, however. Off Premise IRI Reports 6% Growth; Red Blends Grow Fastest D omestic wineries in July direct- shipped wines worth 23% more than in July 2015, according to the Wines & Vines/ShipCompliant model. July is a no- toriously light month for shipping to consum- ers, however, so the rise was from a small base. Sales topped $81 million in July in the DtC shipments channel. Volume of DtC ship- ments was 236,452 cases. Chardonnay and red blends each moved up one step from a year ago among the larg- est selling varietals or types of wines shipped direct to consumers. Red blends and sparkling wines overtook all other major varietals or types as the fast- est growing categories in DtC shipments. From a small base, sparkling wines increased sales by 85%, while the much-bigger red blends category grew 27%. —Jim Gordon Source: , Wines & Vines Analytics. All table wines in multiple-outlet and convenience stores, 52 weeks through July 10, 2016. OFF-PREMISE SALES GROWTH RATE BY VARIETAL Percentage Change -5% 0 5% 10% 15% 20% Chardonnay Cabernet Sauvignon Sparkling Pinot Grigio Red Blends Pinot Noir Merlot Sauvignon Blanc OFF-PREMISE SALES BY VARIETAL 0 $250 $500 $750 $1,000 $1,250 $1,500 $1,750 $2,000 Source: , Wines & Vines Analytics. All table wines in multiple-outlet and convenience stores, 52 weeks through July 10, 2016. Chardonnay Cabernet Sauvignon Sparkling Pinot Grigio Red Blends Pinot Noir Merlot Sauvignon Blanc $ Millions DTC SHIPMENTS BY VARIETAL Source: Wines & Vines/ShipCompliant model. 12 months through July 2016. 0 $100 $200 $300 $400 $500 $600 $700 Cabernet Sauvignon Red Blends Pinot Noir Chardonnay Zinfandel Merlot Syrah / Shiraz Sparkling Millions METRICS September 2016 WINES&VINES 11 DtC Shipments Up 23% in Light Month DTC SHIPMENTS GROWTH RATE BY VARIETAL Percentage Change -10% 0 10% 20% 30% Source: Wines & Vines/ShipCompliant model. 12 months through July 2016. Cabernet Sauvignon Red Blends Pinot Noir Chardonnay Zinfandel Merlot Syrah / Shiraz Sparkling 85%

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