Tag Archives: wine sales

Premiumization: Are wine drinkers really trading up?


premiumizationThat’s the top trend in wine this year, that we’re feeling better about the economy and trading up: Buying more expensive wine than the wine we bought during the recession, moving from $4 bottles to $8, from $8 to $12, from $10 to $15, and from $15 to $20.  The wine business calls this trend premiumization, and the salivating at the prospect has reached epic proportions.

That’s because the wine business doesn’t necessarily want to sell cheap wine — it’s not as profitable and it doesn’t carry the prestige that selling more expensive wine does (a much more important reason than consumers can possibly imagine). Plus, selling cheap wine requires more work. You can move a tanker truck of $25 wine in 20 minutes if it gets a 95, but cheap wines don’t get 95s, the competition for shelf space is ferocious, and most cheap wine is sold by the biggest retailers, who demand the best deals and which makes cheap wine even less profitable.

Hence premiumization, which some of the smartest people in wine say is here and isn’t going away. I’m not so sure, and I don’t say this just because my livelihood is cheap wine. As I continually remind people, there has never been a definitive study made public that demonstrates that wine drinkers trade up. Everyone just assumes it’s so. But does anyone know a wine drinker who went from Barefoot to Bogle to Hess or Rodney Strong to Silver Oak?

More, after the jump:

Winebits 376: Apothic, restaurant wine, wine consumption


apothicA revolutionary product? Gallo’s Apothic, which revolutionized sweet red wine when it was introduced in 2007, may be doing it again. The company has released Apothic Crush, a slightly sweet red wine with 14.5 percent alcohol. In this, it appears to be the first sweet high alcohol wine that actually admits to being sweet and high in alcohol. For most of wine’s history, sweet table wines had less alcohol than dry wines not only because that’s how fermentation worked, but because no one thought consumers would drink a high alcohol sweet wine. But that has changed, first with the trend toward riper, more alcoholic wines, and second, with improvements in winemaking technology. In this, who knew Robert Parker, who has championed riper, higher alcohol wines, would pave the way for a Gallo product? Or, as the noted philosopher Mick Jagger has said more than once, “You can’t always get what you want/But if you try sometime you find/You get what you need.”

Less hope for wine lists? Is the end coming for the independent restaurant? That may be one of the conclusions from a recent study, which found that the number of independents fell by two percent in the U.S. in 2014, and that the number of full-service independents dropped three percent. Chains, meanwhile, continued to grow in the low single digits. Why does this matter to wine drinkers? Because those independents, and especially the full-serves, are the last best hope for improved restaurant wine lists. Chains usually don’t care about wine and make decisions in a corporate office based on price, which means they have the crummiest and most overpriced wine lists. Independents, for all their problems with wine, generally do a better job than chains. So any drop in the number of chains should be worrisome for wine drinkers who want choices that aren’t from Big Wine.

Beer, wine, or spirits? This chart, from Ghost in the Data, should answer all questions about whether the U.S. (or any other country in the world) is a wine drinking country. We’re not — it’s still beer. In fact, save for part of western Europe, the world is mostly indifferent to wine. This is something my colleagues in the Winestream Media should pay more attention to, instead of patting themselves on the back because we drink more wine than any other country in because we have more people than France and Italy.

Winebits 375: Grocery store wine edition


grocery store wineThis week, how grocery stores are changing the wine business:

Suing the state: Texas doesn’t allow non-residents to own more than five liquor stores, unless the owners are related to each other. This “just us kinfolk” exception (as a lawyer friend of mine calls it) has allowed Texas-owned chains like Spec’s and Twin Liquors to put together hundreds-store operations. It’s also why Walmart is suing the state to overturn the kinfolk law and why it and Kroger are pushing two bills in the state legislature to eliminate the exception. Neither are likely to go anywhere — courts have traditionally ruled in favor of these kinds of laws, citing three-tier and its constitutional protections, and the legislature almost always avoids offending the big Texas liquor chains. Still, that Walmart and Kroger are willing to spend the money on a seemingly hopeless cause speaks volumes about how they think the world is changing. Starting now may give them a chance later to reform beer, wine, and spirits retail sales in Texas.

Stopping at the supermarket: Nielsen reports that U.S. grocery stores (including Walmart, Costco, and their ilk) sold $8.6 billion in wine in 2014, which accounted for about 42 percent of the country’s store-purchased wine. In other words, almost half of the wine sold in 2014 came from a grocer. Imagine what that number would be if Pennsylvania and New York allowed grocery store wine sales. We can write about Robert Parker all we want, but that’s not the news in the wine business. The real news, the development that wine writers should be paying attention to, is that most of our readers have no idea (and don’t care) who Parker is, and they want to know what wine to buy at their Walmart or Kroger. Which is why a grad student named Mark Thornton may be the next Parker.

One more time: Speaking of Pennsylvania, its state house has approved a bill to end the state’s liquor store monopoly. This is apparently as much a tradition in the Keystone State as Punxsutawney Phil, and makes as much difference in changing the law as groundhogs do in forecasting weather. Still, the debate is fun. Said one lawmaker: “The other side is talking about the No. 1 drug, alcohol, like it’s milk and bread. We’ve got to have more of it, more convenience, for the No. 1 drug in our communities.” The other side, that wants to reform the system, didn’t miss a beat, either: “Even Russia and China have given up on the idea of a state-run monopoly.” So you’re a commie if you oppose reform, and a crack dealer if you support it. Politics is a grand business, no?

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