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MARKET FACTS
Sales Up, Up, Up for Pinot, Rosé, Screwcaps
Nielsen's annual snapshot chronicles wine growth in 2006

San Rafael, Calif.—The Nielsen Company's annual snapshot of the retail beverage alcohol market brims with good news about wine sales. Flipping through 20 pages that summarize findings from more than 700,000 on-premise and off-premise locations, covering sales during 52 weeks ending Jan. 13, 2007, it seems that each page is more positive than the last.

Percentage gains in sales of wine led both spirits and beer results; average prices for wine are up, sparkling wine sales are up, premium rosé is way up, domestic wine is up more than imports, screwcaps are way up in percentage, and wines from Washington, Texas and North Carolina are up much more dramatically than California wines.

The Nielsen numbers in the Beverage Alcohol Annual Snapshot don't reveal how well the producers are doing financially. Indeed they note that a large portion of the increased wine sales come from heavily promoted items, which can be less profitable, but still the data is very impressive. Nielsen highlighted the following trends as especially noteworthy for wine:

Most wine segments are benefiting from trade-up to higher priced wines. The average price paid per bottle in 2006 was up 4.1%.

  • Growth is spread across many varietals, with Pinot Noir (up 20.3% in dollars), Pinot Gris/Grigio (17.9%) and Riesling (25.2 %) especially strong. Old standby Cabernet Sauvignon, with a much larger base, was still up 11.1%.
  • The activity in new brands and packaging innovations was large-scale, reshaping the wine landscape. Nielsen tallied no less than 423 new wine brands that sold at an average of $8.06 per 750ml. Screwcaps saw sizzling 24.6% growth and accounted for 4% of all 750ml table wine sales.
  • Domestic wine sales rose 7.2% compared to a still healthy 6.2% for imports. Within the domestic category, wine originating in North Carolina jumped 28.1% last year, while Texas wines grew 13.5% and Washington wines rose 12.5% from a larger base.

If Riesling can grow, then rosé (not blush) can, too. Rosé priced above $6.50 grew a startling 23.9% from an admittedly tiny base, Nielsen reported, and rosé sparkling wine went up an amazing 42.9%. Blush wines were flat.

Nielsen also made the following predictions for this year:

  • Consumers will continue to trade up, and will enjoy increasing access to wine via expanded channel availability and regulatory changes.
  • Both ends of the age spectrum—millennials and boomers—will benefit wine.
  • Vintners will continue to try new products, messages and packages to make wine less pretentious and more approachable to the mainstream consumer.
  • Health benefits, real or perceived, will continue to spur sales, especially in reds, and will make organic wines more available.
  • Aggressive pricing on California wines due to a large harvest in 2006 and a record harvest in 2005 will continue. However, international wine inventories are shrinking, meaning less pressure on prices from that source.

— Jim Gordon


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