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Wine - US - October 2011

Wine - US - October 2011

In 2011, the wine market exhibited small growth of 0.9%. The market has experienced a slowdown in growth since 2006, which could be attributed to the recession where wine has suffered in on-premise channels. In contrast, domestic wine has fared well as the “buy local” trend becomes more popular due to budget constraints, as well as low-carbon footprints of the product. This report provides an up-close look at these factors and other issues in the wine market, including:...

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In 2011, the wine market exhibited small growth of 0.9%. The market has experienced a slowdown in growth since 2006, which could be attributed to the recession where wine has suffered in on-premise channels. In contrast, domestic wine has fared well as the “buy local” trend becomes more popular due to budget constraints, as well as low-carbon footprints of the product. This report provides an up-close look at these factors and other issues in the wine market, including:

  • Wine consumption trends among adults
  • Domestic wine performance compared to imported wine performance
  • How age, gender, household income and ethnicity affect wine preferences, particularly among the key groups of Millennials, older adults and affluent households
  • Types of advertising and other promotional strategies, both traditional and online/mobile
  • Wine drinkers’ interest in different types of wine packaging
  • Wine drinkers’ attitudes toward wine attributes such as sophistication, quality, fun factor and value for money, from different countries
  • The most popular price segment for wine drinkers
  • The role of wine on-premise and in various retail channels, including the highly restrictive and limited ecommerce market
  • Consumers’ attitudes toward pricing and marketing

Scope and Themes


What you need to know


Definition


Data sources


Sales data

Consumer survey data

Advertising creative

Abbreviations and terms


Abbreviations

Terms

Executive Summary


Wine sales slow down due to the impact of the economy


Domestic wines grow at the expense of imported wines


Off-premise channels gain; on-premise sales remain challenged


E.&J. Gallo continues to be the topmost wine producer


The online market is limited


Wine consumption remains stable during 2006-11


Chardonnay is the most popular white wine; merlot tops in red wine


Wine drinkers show low interest in nontraditional packaging


Insights and Opportunities


Winning and losing with new selling formats


Supermarket wine kiosks

Hyatt’s better notion

Starbucks’ winners and losers

The Whole wine question

Inspire Insights


Inspire Trend: “Snack Society”


Inspire Trend: “Eco and Ego”


Market Size and Forecast


Key points


U.S. wine growth continues, albeit at a slower rate


Sales and forecast of wine


Figure 1: Total* U.S. dollar sales and forecast of wine**, at current prices, 2006-16

Figure 2: Total* U.S. dollar sales and forecast of wine**, at inflation-adjusted prices, 2006-16

Figure 3: Total U.S. volume* sales of wine, 2006-11

Fan chart forecast


Figure 4: Fan chart forecast of total U.S. retail sales of wine, at current prices, 2006-16

Market Drivers


Challenging economy beleaguers wine


Figure 5: Gross domestic product

(Un)employment


Figure 6: Percentages of unemployed adults aged 16+, 2001-11

Figure 7: Unemployment status (seasonally adjusted) among civilian non-institutional population, by age, gender, and race/Hispanic origin, September 2010-September 2011

Baby Boomers and Millennials embrace wine


Figure 8: U.S. population aged 21 or older, 2006-16

Ethnic wine drinkers


Figure 9: Incidence of drinking domestic wine among Hispanics, by languages spoken, February 2010-March 2011

Figure 10: Hispanics who drink imported wine, by languages spoken, February 2010-March 2011

Figure 11: Population aged 21 or older, by race and Hispanic origin, 2006-16

Control state stores and privatization


Figure 12: Control States

Competitive Context


Wine outpaces beer and sprits


Figure 13: Trends in table wine consumption versus other alcoholic beverages, January 2006-March 2011

Figure 14: wine consumption in the U.S.

Down Under, overproduced


Segment Performance


Total volume sales of wine, by segment


Figure 15: U.S. volume sales of wine, by segment, 2006-11

Figure 16: U.S. volume sales of wine, by segment, 2009 and 2011

Segment Performance—Domestic Wine


Key points


Chardonnay leads table wine


Figure 17: U.S. volume sales of domestic wine, 2006-11

Figure 18: U.S. volume sales of domestic table wine, 2006-11

Sparkling for every day


Figure 19: U.S. volume sales of domestic sparkling wine, 2006-11

Dessert and fortified wines decline


Figure 20: U.S. volume sales of domestic dessert and fortified wine, 2006-11

Vermouth is flat


Figure 21: U.S. volume sales of domestic vermouth/aperitif, 2006-11

Segment Performance—Imported Wine


Key points


Import performance is mixed


Figure 22: U.S. volume sales of imported wine, 2006-11

Figure 23: U.S. volume sales of imported table wine, 2006-11

Champagne and sparkling wine


Figure 24: U.S. volume sales of imported Champagne and sparkling wine, 2006-11

Saké buoys imported dessert, fortified wines


Figure 25: U.S. volume sales of imported dessert and fortified wine, 2006-11

Vermouths, aperitifs down


Figure 26: U.S. volume sales of imported vermouth/aperitif, 2006-11

Retail Channels—On-premise


Key points


Off-premise trumps on-premise


Figure 27: Total U.S. on-premise* dollar sales and forecast of wine, at current prices, 2006-16

Figure 28: Total U.S. off-premise dollar sales and forecast of wine, at current prices, 2006-16

Wine, the priciest option


Inventory management

Figure 29: Alcoholic beverage consumption, by beverage type and channel, December 2010

Types of wine consumed


Figure 30: Top 10 alcoholic beverages, by incidence, Q4 2007-Q4 2010

Local wines

Fine dining fights back


Casual restaurants


Retail Channels–Off-premise


Specialty stores


Figure 31: Retail channel choice to purchase wine, July 2011

Grocery stores


Figure 32: U.S. supermarket wine sales, 2006-11

Convenience stores


Drug stores


Figure 33: drug store wine sales, 2006-11

Warehouse clubs


The online market is limited


A boom for wineries

Companies and Brands


Key points


Figure 34: Wine sales of leading companies, by volume, 2009 and 2010

Brand Share—Domestic Table Wine


Key points


Value versus high end


California wines dominate

Domestic table wine brand performance


Shoes off to E.&J. Gallo

The Wine Group’s Fish Eye and Cupcake are top performers

Bronco’s Two Buck Chuck declines

Constellation Brands improves financial position

Trinchero brands grow

Treasury’s first-year challenges

Figure 35: U.S. domestic table wine brand sales by volume, 2009 and 2010

Domestic sparkling wine


Figure 36: U.S. domestic sparkling wine brand sales by volume, 2009 and 2010

Dessert and fortified wines decline


Figure 37: U.S. domestic dessert and fortified wine brand sales by volume, 2009 and 2010

Gallo vermouth dominates


Figure 38: U.S. domestic vermouth/aperitif brand sales by volume, 2009 and 2010

Brand Share—Imported Wine


Key points


Italy dominates imports


Imported table wine brand performance


Deutsch’s Yellow Tail isn’t wagging

Banfi Vintners’ sales are flat

Palm Bay’s Santa Rita grows

Treasury notes

Constellation’s ups and downs

Figure 39: U.S. imported table wine brand sales by volume, 2009 and 2010

Verdi Spumante dominates Champagne


Figure 40: U.S. imported Champagne and sparkling wine brand sales by volume, 2009 and 2010

More interest in Port, sherry, and saké


High-end sherry imports grow

Japanese drink less saké

Figure 41: U.S. imported dessert and fortified wine brand sales by volume, 2009 and 2010

Imported vermouth and aperitifs


Figure 42: U.S. imported vermouth/aperitif brand sales by volume, 2009 and 2010

Private Label Trends


On-premise house wines


No price competition

Figure 43: Hyatt private label

Off-premise private labels


Supermarkets

Convenience stores

Other channels

Innovations and Innovators


Product claims decline in 2010


Consumers rebuff convenient packaging

Figure 44: Top 10 claims in new wine products, 2010* and 2011*

Emphasis on country of origin


Wine with a hint of fruity, floral notes


Limited edition


Organic maintains momentum


Wines with a good cause


Wine blends


Marketing Strategies


Figure 45: wine ad spending by media, 2009-10

Wine as a “group thing”


Television


Figure 46: top 10 broadcast TV advertisers

“Millennial” brands on TV

Figure 47: Cupcake, TV ad, 2010

Figure 48: Freixenet, TV ad, 2010

Figure 49: Simply Naked, TV ad, 2010

“Traditional” brands

Figure 50: Jacob’s Creek, TV ad, 2011

Figure 51: San Giuseppe Wines, TV ad, 2011

Billboards


Figure 52: Barefoot cellars’ trash ad

Online promotions


Social media and Millennials

Does social media drive sales?

Specialty retailers


Wine suppliers


Mobile marketing


On-premise iPad wine lists

The Consumer—Usage, Frequency of Use


Key points


Wine versus other alcoholic beverages


Figure 53: Table wine consumption versus other alcoholic beverages, by gender, February 2010-March 2011

Figure 54: Table wine consumption versus other alcoholic beverages, by age, February 2010-March 2011

Trends in wine consumption


Figure 55: Trends in table, sparkling, dessert wine consumption, January 2006-March 2011

More women than men consume wine


Figure 56: Personal consumption of wine, by gender, February 2010-March 2011

Figure 57: Consumption of domestic wine by type, by gender, February 2010-March 2011

Figure 58: Average volume consumption of different types of wine, by gender, February 2010-March 2011

Wine Purchase Behavior: Type and Varietal


Key points


Favorite white wines


Figure 59: Wine purchase behavior for white wine varietals, July 2011

Favorite red wines


Figure 60: Wine purchase behavior for red wine varietals, July 2011

Wines Consumed by Brand, Country


Key points


Value brands dominate domestics and imports


Favorite domestic wine brands


Figure 61: Consumption of domestic wine by brands with at least 7% penetration, by gender, February 2010-March 2011

Wine consumption by country of origin


Figure 62: Consumption of imported wine by country of origin, by gender, February 2010-March 2011

Favorite imported brands


Figure 63: Consumption of imported wine by at least 7% brand penetration, by gender, February 2010-March 2011

Favorite brands of sparkling and other wines


Figure 64: Consumption of Champagne and sparkling wine by at least 9% brand penetration (domestic and imported), by gender, February 2010-March 2011

Figure 65: Consumption of Port, sherry, and dessert wine (domestic and imported) by at least 7% brand penetration, by gender, February 2010-March 2011

Impact of Age on Wine Consumption


Key points


Older adults and Millennials


Figure 66: Personal consumption of wine, by age, February 2010-March 2011

Frequency and amount consumed


Figure 67: Average volume consumption of different types of wine, by age, February 2010-March 2011

Types of wine, by age


Figure 68: Consumption of domestic wine by type, by age, February 2010-March 2011

Lower-priced wines dominate


Convenience store wines


Figure 69: Consumption of domestic wine by top brands, by age, February 2010-March 2011

Country versus brand


Millennials drink French wine


Figure 70: Consumption of imported wine by country of origin, by age, February 2010-March 2011

Figure 71: Consumption of imported wine by at least 7% brand penetration, by age, February 2010-March 2011

Impact of Household Income


Key points


Nuances of wine and income


Restaurants

Figure 72: Personal consumption of wine, by household income, February 2010-March 2011

Figure 73: Average volume consumption of different types of wine, by household income, February 2010-March 2011

Domestic wine types and brands


Figure 74: Consumption of domestic wine by type, by household income, February 2010-March 2011

Figure 75: Consumption of domestic wine brand, by at least 7% usage, by household income, February 2010-March 2011

Imported wines and brands


Figure 76: Consumption of imported wine by country of origin, by household income, February 2010-March 2011

Figure 77: Consumption of imported wine by at least 7% brand penetration, by household income, February 2010-March 2011

Impact of Region on Wine Consumption


Key points


The Grapey Northeast


Exceptions on the income front

Top metro areas

Other variables

Figure 78: Personal consumption of wine, by region, February 2010-March 2011

Figure 79: Average volume consumption of different types of wine, by region, February 2010-March 2011

Wine—Important Influences and Attitudes


Key points


Influencing decisions


Organic/trade certified

Figure 80: Importance of various attributes when buying wine, by gender, July 2011

Figure 81: Importance of various attributes when buying wine, by age, July 2011

Confidence versus income


Figure 82: Importance of various attributes when buying wine, by household income, July 2011

Attitudes regarding price and value


Affluent wine drinkers

Figure 83: Attitudes toward price, quality, packaging, and domestic vs. imported, by age, July 2011

Figure 84: Attitudes toward price, quality, packaging, and domestic vs. imported, by household income, July 2011

Low interest in alternative packaging


Figure 85: Wine purchase by packaging type, by age, July 2011

Figure 86: Wine purchase by packaging type, by household income, July 2011

Quality and value of country of origin


Figure 87: Opinion about quality, sophistication, fun, and value of wine from different countries, by July 2011

Impact of Race and Hispanic Origin


Key points


Consumption patterns


Overlooked ethnic groups

Figure 88: Table wine consumption versus other alcoholic beverages, by race/Hispanic origin, February 2010- March 2011

Figure 89: Personal consumption of wine, by race/Hispanic origin, February 2010-March 2011

Figure 90: Average volume consumption of different types of wine, by race/Hispanic origin, February 2010-March 2011

Types of wine consumed


Figure 91: Consumption of domestic wine by type, by race/Hispanic origin, February 2010-March 2011

Favorite domestic and imported brands


Figure 92: Consumption of domestic wine by top brands, by race/Hispanic origin, February 2010-March 2011

Figure 93: Consumption of imported wine by at least 7% brand penetration, by race/Hispanic origin, February 2010-March 2011

Custom Consumer Groups


Key points


Wine purchasing by type and price range


Figure 94: Wine purchase by type and most often used price range, February 2010-March 2011

Experian Simmons consumer segmentation findings


Retail shopper segmentation


Figure 95: Personal consumption of wine, by retail shopping segment, February 2010-March 2011

Figure 96: Consumption of domestic wine by type, by retail shopping segment, February 2010-March 2011

Figure 97: Consumption of imported wine by country of origin, by retail shopping segment, February 2010-March 2011

Economic outlook segmentation


Figure 98: Personal consumption of wine, by economic outlook segment, February 2010-March 2011

Figure 99: Consumption of domestic wine by type, by economic outlook segment, February 2010-March 2011

Figure 100: Consumption of imported wine by country of origin, by economic outlook segment, February 2010-March 2011

Health and wellbeing segmentation


Figure 101: Personal consumption of wine, by health and wellbeing segment, February 2010-March 2011

Figure 102: Consumption of domestic wine by type, by health and wellbeing segment, February 2010-March 2011

Figure 103: Consumption of imported wine by country of origin, by health and wellbeing segment, February 2010-March 2011

Cluster Analysis


Persnickety Palates


Demographics

Characteristics

Opportunity

Apprentice Connoisseurs


Demographics

Characteristics

Opportunity

Bargain Shoppers


Demographics

Characteristics

Opportunity

Cluster characteristic tables


Figure 104: Wine consumer clusters, July 2011

Figure 105: Incidence of drinking different types of wine, by wine consumer clusters, July 2011

Figure 106: Attitude toward wine, by wine consumer clusters, July 2011

Figure 107: Importance of wine attributes in making purchase decision, by wine consumer clusters, July 2011

Figure 108: Wine purchase by packaging type, by wine consumer clusters, July 2011

Figure 109: Wine purchase by price range, by wine consumer clusters, July 2011

Cluster demographic tables


Figure 110: Wine consumer clusters, by gender, July 2011

Figure 111: Wine consumer clusters, by age, July 2011

Figure 112: Wine consumer clusters, by household income, July 2011

Figure 113: Wine consumer clusters, by race, July 2011

Figure 114: Wine consumer clusters, by Hispanic origin, July 2011

Figure 115: Wine consumer clusters, by education, July 2011

Figure 116: Wine consumer clusters, by employment, July 2011

Cluster methodology


Additional Tables


Wines consumed by brand, country


Figure 117: Consumption of Champagne and sparkling wine by at least 9% brand penetration, by age, February 2010-March 2011

Figure 118: Consumption of Port, sherry, and dessert wine by at least 7% brand penetration, by age, February 2010-March 2011

Figure 119: Consumption of Champagne and sparkling wine by at least 9% brand penetration, by household income, February 2010-March 2011

Figure 120: Consumption of Port, sherry, and dessert wine by at least 7% brand penetration, by household income, February 2010-March 2011

Wine consumed by region


Figure 121: Consumption of domestic wine by type, by region, February 2010-March 2011

Figure 122: Consumption of domestic wine by top brands, by region, February 2010-March 2011

Figure 123: Consumption of imported wine by country of origin, by region, February 2010-March 2011

Figure 124: Consumption of imported wine by at least 7% brand penetration, by region, February 2010-March 2011

Figure 125: Consumption of Champagne and sparkling wine by at least 9% brand penetration, by region, February 2010-March 2011

Figure 126: Consumption of Port, sherry, and dessert wine by at least 7% brand penetration, by region, February 2010-March 2011

Attributes and attitudes


Figure 127: Attitudes toward price, quality, packaging, and domestic vs. imported, by gender, July 2011

Figure 128: Wine purchase by packaging type, by gender, July 2011

Wine purchases by price range


Figure 129: Wine purchase, by price range, July 2011

Figure 130: Wine purchase by price range wine drinkers use most often, by gender, July 2011

Figure 131: Wine purchase by price range wine drinkers use most often, by age, July 2011

Figure 132: Wine purchase by price range wine drinkers use most often, by household income, July 2011

Attitudes, quality and value


Figure 133: Opinion about quality, sophistication, fun, and value of wine from France, by age, July 2011

Figure 134: Opinion about quality, sophistication, fun, and value of wine from Italy, by age, July 2011

Figure 135: Opinion about quality, sophistication, fun, and value of wine from Argentina, by age, July 2011

Figure 136: Opinion about quality, sophistication, fun, and value of wine from Chile, by age, July 2011

Figure 137: Opinion about quality, sophistication, fun, and value of wine from Australia, by age, July 2011

Figure 138: Opinion about quality, sophistication, fun, and value of wine from New Zealand, by age, July 2011

Figure 139: Opinion about quality, sophistication, fun, and value of wine from California, by age, July 2011

Impact of race/Hispanic origin


Figure 140: Consumption of imported wine by country of origin, by race/Hispanic origin, February 2010-March 2011

Figure 141: Attitudes toward price, quality, packaging, and domestic vs. imported, race/Hispanic origin, July 2011

Figure 142: Consumption of Champagne and sparkling wine by at least 9% brand penetration, by race/Hispanic origin, February 2010-March 2011

Figure 143: Consumption of Port, sherry, and dessert wine by at least 7% brand penetration, by race/Hispanic origin, February 2010-March 2011

Figure 144: Wine purchase by packaging type, by race/Hispanic origin, July 2011

Figure 145: Wine purchase by price range wine drinkers use most often, by race/Hispanic origin, July 2011

Appendix—Trade Associations


  • American Beverage Licensees
  • American Express Company (The)
  • Australian Bureau of Statistics
  • Bacardi U.S.A. Inc.
  • Banfi Vintners
  • Beam Global Spirits & Wine
  • Beringer Vineyards
  • Brinker International Inc.
  • Bronco Wine Co.
  • Brown-Forman
  • Buffalo Wild Wings Inc.
  • Bureau of Economic Analysis
  • Charles Jacquin et Cie Inc
  • Coca-Cola Company (The) (USA)
  • Constellation Brands, Inc.
  • Constellation Wines
  • Costco Wholesale Corporation
  • Darden Restaurants Inc.
  • Diageo North America
  • Distilled Spirits Council of the United States
  • E.&J. Gallo Winery
  • Facebook, Inc.
  • Forest Stewardship Council
  • Formula One Administration Ltd
  • Foster's Wine Estates Americas
  • Foursquare
  • Freixenet USA, Inc.
  • Fresh & Easy
  • Gallup Organization, The
  • General Mills Inc
  • Giant Eagle
  • Heaven Hill Distilleries Inc.
  • Hyatt Corporation
  • Kantar Media
  • Kendall-Jackson Wine Estates Ltd.
  • Kum & Go
  • Legal Sea Foods Inc.
  • Lehman Brothers Holdings Inc.
  • Lettuce Entertain You Enterprises Inc.
  • Moët Hennessy USA
  • Morton International Inc.
  • National Association of Beverage Retailers (NABR)
  • National Restaurant Association (NRA)
  • Noilly Prat
  • Organic Trade Association
  • P.F. Chang's China Bistro Inc.
  • Palm Bay Imports Inc.
  • Pepsi-Cola North America
  • Professional Golfers Association
  • Research In Motion (USA)
  • Robert Mondavi Corporation, The
  • Ruby Tuesday Inc.
  • SAM's Club
  • Starbucks Corporation
  • Supervalu Inc
  • Telemundo Communications Group, Inc.
  • The New York Times Company
  • The Wine Group, Inc.
  • Trader Joe's Company Inc
  • Treasury Wine Estates
  • Trinchero Family Estates
  • Twitter, Inc.
  • U.S. Bureau of Labor Statistics
  • U.S. Bureau of the Census
  • U.S. Department of Agriculture
  • United Supermarkets, Ltd
  • Univision Communications Inc.
  • US Department of Commerce
  • US Department of Labor
  • Veuve Clicquot
  • Walgreen Co
  • Walmart Stores (USA)
  • Wegmans Food Markets, Inc
  • Whole Foods Market Inc
  • William Grant and Sons Distillers Ltd
  • Wine America-The National Association of American Wineries
  • Wine and Spirits Wholesalers of America
  • Wine Institute (The)
  • Wine Market Council (The)
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