Wines & Vines

January 2017 Unified Symposium Issue

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Direct to Consumer O ff-premise sales of domes- tic wine increased 3% from November 2015 to November 2016, according to Chi- cago, Ill.-based market-research firm IRI. Sales for the month topped $769 million, the biggest monthly tally of 2016. I R I s a i d 1 2 - m o n t h s a l e s through multiple-outlet and con- venience stores for the period end- ing Nov. 27 topped $8.6 billion, a 5% increase over 2015. Red wines have been leading sales growth in many categories, but a closer look at "super luxury" sales (wines worth $25 and more per bottle) show that Cabernet Sauvignon, Chardonnay and Pinot Noir top sales. Together with red blends and Sauvignon Blanc, they represent 95% of super-luxury sales in a price segment worth $165 million in IRI channels during the most recent 52 weeks. Chardonnay and red blends performed exception- ally well, both growing at 22%, well ahead of the 14% growth the category posted as a whole. A good economy and more ad- venturous consumers have helped drive growth, with consumer pref- erences generally turning in favor of finer domestic wines. A case in point is Chardonnay. A key variety in the portfolios of many California producers, the grape is attracting attention in other regions such as Oregon. These smaller producers are seeing a significant increase in demand for the variety, as consumers be- come more adventurous and dis- cover new expressions of the grape. In the case of Oregon, grow- ing distribution has fed demand from the trade and producers and helped boost sales during the past year, said Ellen Brittan of Brittan Vineyards in McMinnville, Ore. "This is a category that is growing and will continue to grow as the national market be- comes familiar with what we can do," she said. Distributors say good eco- nomic times have given consum- ers the willingness to try new wines, and off-premise sales make it more affordable than trying something new during an on- premise experience. —Peter Mitham Off Premise November Off-Premise Sales Rise 3%, IRI Reports N ovember, traditionally a strong month for direct- to-consumer (DtC) ship- ments, saw sales rise just 7%, which is modest compared to pre- vious years. However, data from Wines Vines Analytics and Ship- Compliant show that sales for the month topped $332 million, the second-highest tally of 2016. The number of cases shipped rose 20% to 668,450, a dramatic increase that reflects a growing DtC movement of lower priced bottles. Sales for the 12 months ending November 2016 rose 19% to $2.3 billion, continuing the strong year-over-year growth seen in re- cent months. The single-largest segment of DtC sales lies north of $60 per bottle. Worth approximately $1 billion, the price segment ac- counts for 45% of DtC shipments. As in other categories, Cabernet Sauvignon holds sway with 49% of the market, while red blends have their own sizeable following with 19% of the market. Sales for both varieties in the 12 months ended November 2016 totaled $735 million. Cabernet Sauvignon shed market share in the past 12 months to the third- and fourth-ranked varieties, Pinot Noir and Chardonnay. Pinot Noir rose 23% to $159 million in sales and 15% of the category, while Chardonnay posted a dramatic 31% increase in the period to $52 million and 5% of the category. —Peter Mitham DTC SHIPMENT SALES FOR $60-PLUS Source: Wines Vines Analytics/ShipCompliant model. 12 months through November 2016. Cabernet Sauvignon Red Blends Pinot Noir Chardonnay Merlot Syrah Cabernet Franc Sparkling 0 $100 $200 $300 $400 $500 $600 Millions n 2016 n 2015 Chardonnay OFF-PREMISE $25-PLUS RELATIVE SHARE Pinot Noir Sauvignon Blanc Source: , Wines Vines Analytics. Super luxury ($25-plus) domestic table wine sales in multiple-outlet and convenience stores; 52 weeks ending Nov. 27, 2016. Cabernet Sauvignon 41% 30% 6% 12% 11% Red Blends METRICS January 2017 WINES&VINES 13 DtC Shipment Value Rises While Volume Grows Faster

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