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Tag Archives: wine marketing

Big Wine growth 2016

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Big Wine growthThree sets of numbers — two public, one passed to me by my source in Big Wine — show just how dominant Big Wine continues to be, and how Big Wine growth will affect everything we drink.

The first public chart, reproduced here, was compiled by Lew Perdue at Wine Industry Insight, and shows that the three biggest companies — E&J Gallo, Constellation, and The Wine Group — control almost half of the U.S. wine market. In this, the eight biggest companies sell 60 percent of the wine in this country, which leaves more than 7,500 wineries to fight over the other 40 percent.

Those are almost the same numbers in the second public study, the annual Wine Business Monthly top 30 producers list, which are similar to the finding in the magazine’s 2014 report, when Gallo, Constellation, and The Wine Group controlled half the U.S. market. Meanwhile, the top 30 companies in the 2016 report accounted for 74 percent of all the wine sold in the U.S. Interestingly, that’s less than they reported in 2014, when the top 30 sold 90 percent of the wine; chalk that up to bigger companies, like Diageo, selling their brands to smaller companies.

The three biggest companies (again, Gallo, Constellation, and The Wine Group) controlled about half the U.S. market in the landmark 2011 Big Wine study conducted by Phil Howard at Michigan State.  

It’s important to understand how big big is. First, the Wine Business Monthly top 30 total just .04 percent of all U.S. wineries, which makes the infamous One Percent look like an all-inclusive kumbaya sing-along. Second, Jackson Family, which makes Kendall Jackson and is about as close to a national brand as wine has, isn’t one of the half-dozen biggest producers in the U.S. It’s eighth in the Wine Industry Insight chart and ninth in Wine Business Monthly’s rankings with almost six million cases. That’s still big, but the biggest companies are so gigantic that even some of their brands, like Gallo’s Barefoot, sell more than all of the Jackson Family portfolio.

In other words, every time we buy wine, the odds are better than not that we’re buying a Big Wine product even if we don’t want to. My colleagues in the Winestream Media pooh pooh this whenever I write it, arguing that wine drinkers have more choice than that. What about those other 7,500 wineries? The catch, and what they don’t understand, is that most of us don’t shop in places that sell wine from the other 7,500. We shop at Costco and Walmart and grocery stores, and those retailers account for almost half the wine sold in the U.S.

Case in point: Sales statistics for 2015 that my source in Big Wine passed to me for 10 U.S. states (none of which are California), and where Big Wine (defined as a company that appears in either the Howard study or the Wine Business Monthly top 30) dominates at all prices:

• 9 of the 15 best-selling wines between $15 and $20 are from Big Wine, including La Crema (Jackson Family), Louis Martini (Gallo), and Meomi (Constellation).

• 12 of the 20 best-selling wines between $12 and $15 are from Big Wine, including Wild Horse (Constellation), Kendall Jackson (Jackson Family), and Chateau Ste. Michelle (Altria). And I didn’t include Hess and Rodney Strong, both on the Wine Business Monthly Top 30 list but family run.

• All of the 20 best-selling wines between $9 and $12 are from Big Wine, including Menage a Trois (Trinchero), Cupcake (The Wine Group), and Apothic (Gallo).

 

Winebits 417: U.S. wine sales, cold beer, Big Wine

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wine salesBarely any growth: U.S. wine sales continued to plateau in 2015, reports Impact Databank — up just .02 percent for the year based on the number of cases, following a 1 percent gain in 2014. The rest of the news is even worse, says the report: The “estimated volume increase represents the smallest rise in [22 years]. And after steadily increasing from 1994-2011, per-capita wine consumption is projected to decline for the fourth consecutive year, as Americans bypass wine in favor of spirits, RTDs and cider.” RTD is an industry term for ready to drink, like flavored beers and spirits. The Wine Curmudgeon, noting the wine industry’s obsession with raising prices and trading up over the past couple of years, isn’t surprised. What’s the most basic rule of economics? If prices increase, demand decreases. But which, obviously, seems to be OK with the wine business.

No cold beer in Indiana: An early candidate for the 2016 three-tier Curmudgie is the federal appeals court that ruled that Indiana is allowed to forbid grocery and convenience stores from selling cold beer while allowing liquor stores to do so. The Indianapolis Star said that the 7th U.S. Circuit Court of Appeals said there were legitimate differences between selling beer in a liquor store and selling it in a grocery and convenience stores, a point of law which I’m sure I would understand if I were a lawyer. As a wine writer, it’s baffling, and only points to the foolishness of three-tier.

Big Wine winespeak: The Wine Curmudgeon enjoys noting the public utterances of those in the wine business, particularly when they demonstrate how little so many of them seem to care about wine quality. Because what does quality have to do with profit? The most recent comes from the woman who runs Treasury Wine Estates’ operations in the Americas, in which she used “masstige” twice, said that a marketing deal with the Texas Rangers baseball team would help sell New Zealand sauvignon blanc, and explained why young men will buy wine if it has a convict on the label. Is it any wonder I get so cranky so easily?

The 2015 Curmudgies

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2015 curmudgiesWelcome to the 2015 Curmudgies, the fourth time we’ve given the awards to the people and institutions that did their best over the previous 12 months to make sure wine remained confusing, difficult to understand, and reserved for only the haughtiest among us. This year’s winners:

Worst news release: Another banner year for releases that insulted my intelligence, committed any number of grammatical errors, and did nothing to promote the product. The winner is 24-Group PR & Marketing for a release for Three Hunters Vodka, which included this foolishness (and a hat tip to my pal Tim McNally, who sent it my way): “We live in a time when some of the most important choices we make come prepackaged and predetermined by companies who know nothing about us. The decisions we make about the things we put in our bodies are constantly manipulated by clever and misleading advertising, and misconceptions about nutrition and health.” Why would anyone write that about vodka? Also, it is a classic example of the pot calling the kettle black.

The regional wine award, or the more things change, the more they stay the same: To every restaurant in Dallas, and there are too many to list here, that doesn’t carry Texas wine. This is a disgrace given the improved quality and availability of Texas wine in the second decade of the 21st century, and speaks to the restaurant wine mentality that makes wine drinkers crazy. If Lucia can find a Texas wine to include on its otherwise all Italian list, so can the rest of you.

The three-tier system is our friend award: To the 200 Minnesota cities that, thanks to one of the oddest state liquor laws in the country, operate their own liquor stores. As the Star-Tribune newspaper reports in a solid piece of journalism, “In 2014, 34 Minnesota cities, all outstate, lost a total of $480,000 on their liquor outlets — money they had to backfill from their own coffers. Another 60 outstate cities saw sales drop from the previous year.” Given how much trouble so many cities, big and small, have doing basics like police and fire protection and garbage pickup, that some want to run liquor stores is mind boggling.

The Wine Spectator will always be the Wine Spectator: For James Laube’s February 2015 blog post, which included this: “If you want to save more and waste less [on wine], consider how much money you spend on wine that you don’t drink, and how many bottles of wine you opened last year that should have been opened sooner.” Wine that we don’t drink, huh? Wine that we let sit in the cellar too long? Wish I had those problems. That one of the Spectator’s top columnists wrote about it speaks to how little the magazine has to do with how almost all of us drink wine.

Would someone please listen to this person? The positive Curmudgie, given to someone who advances the cause of wine sensibility despite all of the obstacles in their way. The winner this year is Forbes’ Cathy Huyghe, who spent the month of November writing about the wine that most of us drink, and not what Forbes’ one percenters drink. “…[I]t has turned out to be one of the most eye-opening projects I’ve ever done. … The longer I’m a wine writer, the further away it’s possible to get from the wines that most people drink.”

For more Curmudgies
The 2014 Curmudgies
The 2013 Curmudgies
The 2012 Curmudgies

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