U.S. WINE IN ALL ITS GLORY
The U.S. wine industry has made phenomenal headway in recent years, leading it to become the fastest growing sector in the alcohol beverage industry. By 2010, the U.S. is expected to become the world's largest wine consumer, overtaking Italy and France.
So, amid fear of bulk imports, falling grape prices, gluts and global warming, we think the U.S. wine industry has a very bright future indeed, and here’s why:
A GLASS OF WINE A DAY KEEPS THE DOCTOR AWAY. The health news just keeps piling up. It seems like almost every time I check my email there is a new report on the health benefits of red wine, which is nothing but good, no great, news for the industry. Instead of feeling guilty for indulging in a glass of red wine, consumers feel like they are doing something good for themselves – and as it turns out, they are.
According to one of the latest studies concerning mice and a substance that’s been in the news a lot lately (resveratrol), red wine just might be the fountain of youth. Scientists found that not only does resveratrol reverse the effects of obesity in mice and make them live longer, but it also increases their endurance as well. Red wine has also shown to reduce the risk of heart attack for individuals with hypertension.
But what about red wine's white-colored cousin that is so often left out where health is concerned? Some scientists are now saying they have found evidence that the pulp of grapes are just as heart-healthy in laboratory experiments as the skin, which means white wine may be just as healthy as red.
While it’s all great news, it is still “blatantly against the law for any alcoholic beverage producers to make any healthy claim regardless of the facts or the accuracy,” said Michael Mondavi to the New York Times in November. “We have to sit on our hands and wait for others to pick up the story.”
To avoid breeching any regulations, trade organizations within the industry advise their members to keep mum on the whole health factor, and to rely on “others” to get the message across. [Ed. Note: We hear you loud and clear.]
EYE-CATCHING LABELS ATTRACT NEW DRINKERS. Labels are now at the forefront of importance where a lot of wines are concerned, almost replacing what’s inside the bottle. As long as critter brands and the new adventure labels continue to make wine (gasp) interesting and accessible to consumers, wine will serve as an accessory that symbolizes consumers’ tastes, interests, social status and monetary means. This is good news.
But where there’s a trend, there’s a backlash of people looking to differentiate themselves. Not everyone wants to be associated with adventure labels, which is good for the rest of the industry. Those individuals who turn their noses up at the oh-so-loosely dubbed “critter label” group because, say, it’s a little too mainstream for their taste, will look perhaps to a less-known or more expensive brand they can impress their friends with. Case in point? Critters are good for the industry.
As long as we’re on the subject of consumers using wine as a status symbol, we have to mention the modern trend of trading-up. In the olden days, (as in a couple of years ago) most consumers bought a $10 bottle of wine when they were looking to impress. Now, $15 is the new $10 – and we can only expect it to go up. As a result, consumers are moving away from low-end wines, which can be bad for some companies like Constellation or E&J Gallo, but great for boutiques.
According to the latest data from ACNielsen, sales of wines priced $15 and above grew 41% between January 2004 and October 2006. Sales of wines priced between $10 and $14.99 have grown by 28%. In the $8-to-$9.99 category, sales have increased 18%.
At the same time, sales of wines priced below $6 are dropping. In particular, sales of wines priced under $3 fell 15% between January 2004 and October 2006.
TASTES ARE CHANGING. As much as some in the industry might hate in, pinot noir is in and merlot is out. Everyone wants to get a taste of the oh-so-delicious wine that Miles refers to over and over again in the 2004 hit Sideways. The result? Everyone’s making pinot, and selling it cheaply.
Younger drinkers in particular, craving intense, big-bodied wines, are a large part of the reason pinot sales have increased 120% in the last two years, according to ACNielsen. Some industry insiders openly lament the way that pinots are changing, but let’s face it – the average consumer loves it.
Not only is it widely popular in its own right, but we believe the pinot craze has had a hand in influencing consumers to try something new, such as rosé, reisling and zinfandel.
MILLENNIALS DRIVING CONSUMPTION. Young people love wine. This is great news for winemakers in a society obsessed with youth, where 20-somethings are often the trendsetters.
Keeping brands innovative is key to maintaining the interest of such an important group with such a short attention span. [Ed. Note: I can rightfully attest to this as I fit somewhere in the category]. Wine companies are realizing the importance of millennials more and more, leading some bigwigs to open a branch entirely designed to market to that group. Recently, The Wine Group has introduced Underdog Wine Merchants, and Kendall-Jackson has unveiled White Rocket.
IT’S A WRAP. Of course these are just a few of the reasons wine is doing so well right now, but we consider them at the forefront. Any thoughts, comments or insights are greatly appreciated and can be sent to megan@beernet.com.
So, amid fear of bulk imports, falling grape prices, gluts and global warming, we think the U.S. wine industry has a very bright future indeed, and here’s why:
A GLASS OF WINE A DAY KEEPS THE DOCTOR AWAY. The health news just keeps piling up. It seems like almost every time I check my email there is a new report on the health benefits of red wine, which is nothing but good, no great, news for the industry. Instead of feeling guilty for indulging in a glass of red wine, consumers feel like they are doing something good for themselves – and as it turns out, they are.
According to one of the latest studies concerning mice and a substance that’s been in the news a lot lately (resveratrol), red wine just might be the fountain of youth. Scientists found that not only does resveratrol reverse the effects of obesity in mice and make them live longer, but it also increases their endurance as well. Red wine has also shown to reduce the risk of heart attack for individuals with hypertension.
But what about red wine's white-colored cousin that is so often left out where health is concerned? Some scientists are now saying they have found evidence that the pulp of grapes are just as heart-healthy in laboratory experiments as the skin, which means white wine may be just as healthy as red.
While it’s all great news, it is still “blatantly against the law for any alcoholic beverage producers to make any healthy claim regardless of the facts or the accuracy,” said Michael Mondavi to the New York Times in November. “We have to sit on our hands and wait for others to pick up the story.”
To avoid breeching any regulations, trade organizations within the industry advise their members to keep mum on the whole health factor, and to rely on “others” to get the message across. [Ed. Note: We hear you loud and clear.]
EYE-CATCHING LABELS ATTRACT NEW DRINKERS. Labels are now at the forefront of importance where a lot of wines are concerned, almost replacing what’s inside the bottle. As long as critter brands and the new adventure labels continue to make wine (gasp) interesting and accessible to consumers, wine will serve as an accessory that symbolizes consumers’ tastes, interests, social status and monetary means. This is good news.
But where there’s a trend, there’s a backlash of people looking to differentiate themselves. Not everyone wants to be associated with adventure labels, which is good for the rest of the industry. Those individuals who turn their noses up at the oh-so-loosely dubbed “critter label” group because, say, it’s a little too mainstream for their taste, will look perhaps to a less-known or more expensive brand they can impress their friends with. Case in point? Critters are good for the industry.
As long as we’re on the subject of consumers using wine as a status symbol, we have to mention the modern trend of trading-up. In the olden days, (as in a couple of years ago) most consumers bought a $10 bottle of wine when they were looking to impress. Now, $15 is the new $10 – and we can only expect it to go up. As a result, consumers are moving away from low-end wines, which can be bad for some companies like Constellation or E&J Gallo, but great for boutiques.
According to the latest data from ACNielsen, sales of wines priced $15 and above grew 41% between January 2004 and October 2006. Sales of wines priced between $10 and $14.99 have grown by 28%. In the $8-to-$9.99 category, sales have increased 18%.
At the same time, sales of wines priced below $6 are dropping. In particular, sales of wines priced under $3 fell 15% between January 2004 and October 2006.
TASTES ARE CHANGING. As much as some in the industry might hate in, pinot noir is in and merlot is out. Everyone wants to get a taste of the oh-so-delicious wine that Miles refers to over and over again in the 2004 hit Sideways. The result? Everyone’s making pinot, and selling it cheaply.
Younger drinkers in particular, craving intense, big-bodied wines, are a large part of the reason pinot sales have increased 120% in the last two years, according to ACNielsen. Some industry insiders openly lament the way that pinots are changing, but let’s face it – the average consumer loves it.
Not only is it widely popular in its own right, but we believe the pinot craze has had a hand in influencing consumers to try something new, such as rosé, reisling and zinfandel.
MILLENNIALS DRIVING CONSUMPTION. Young people love wine. This is great news for winemakers in a society obsessed with youth, where 20-somethings are often the trendsetters.
Keeping brands innovative is key to maintaining the interest of such an important group with such a short attention span. [Ed. Note: I can rightfully attest to this as I fit somewhere in the category]. Wine companies are realizing the importance of millennials more and more, leading some bigwigs to open a branch entirely designed to market to that group. Recently, The Wine Group has introduced Underdog Wine Merchants, and Kendall-Jackson has unveiled White Rocket.
IT’S A WRAP. Of course these are just a few of the reasons wine is doing so well right now, but we consider them at the forefront. Any thoughts, comments or insights are greatly appreciated and can be sent to megan@beernet.com.
posted at 11:59 AM
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