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20 WINES&VINES January 2017 WINE INDUSTRY NEWS P ort Washington, N.Y.—Reports that restaurant traffic is declining may have concerned some wineries, but a closer look indicates that it doesn't seem to be affecting on-premise wine sales. The decline most affects fast food, which rep- resents 80% of the market but very little wine business. The NPD Group, a leading global informa- tion company, reports that visits to restaurant declined in the third quarter, and visits to quick-service restaurants declined for the first time in five years. However, Jon Moramarco, managing part- ner of research firm BW 166, which tracks wine industry data, says this may be mislead- ing. "My figures show that consumer spending on premise for alcohol is growing at more than 6% (for domestic wines) on a rolling 12-month basis." Two trends are immediately obvious: Value is rising faster than volume, indicating higher prices, and sparkling wines are grow- ing far faster than still wines on premise. Sparkling sales are only one-tenth of volume (6 million cases versus 63 million), but al- most one-third of value ($653 million versus $1,607 million). Moramarco noted that a number of data sources have tracked on-premise business ac- tivities going back many years, including the Census Bureau, Commerce Department and Bureau of Labor Statistics. Over time, consumers have moved more of their spending on food and beverages to on- premise venues rather than food at home. In 1959, 25% of consumer expenditures were on-premise. Today that figure is almost 45%. This trend has typically moderated during re- cessions, but nothing indicates a change in this historical trend. "Unlike overall food and bev- erage, consumers have spent between 35% to 40% of beverage alcohol dollars in on premise. Nothing indicates that consumers are shifting their share of dollars away from on premise or that overall on-premise spending is moderat- ing," he said. Why wine sales aren't affected The difference in traffic and wine sales is partly due to concentration of wine sales in conven- tional restaurants, not quick-service restau- rants. Also, he said that many reports about slowing restaurant sales are for same-store sales, but about 10% of restaurants turn over every year, so the statistics do not include the new restaurants. TOP STORY Slow Restaurant Traffic Not Affecting Wine Cherish every drop Reduce water usage by up to 85% with our tank and barrel cleaning devices By implementing our rotary impingement cleaning devices to their process, our customers have experienced: • 85% decrease in water and chemical usage • 80% reduction in time spent cleaning • 20% boost in productivity Alfa Laval Tank Equipment Inc. www.gamajet.com customerservice.exton@alfalaval.com ON-PREMISE WINE SALES CHANGE Domestic Imports Total Volume Table 3% -1% 2% Sparkling 8% 17% 12% Value Table 6% 2% 5% Sparkling 11% 14% 13% Source: BW 166. Shows percentage change in sales through November 2016 as 12-month rolling average.