WINE SALES SLOW IN DECEMBER
December is a big month for the wine industry and 2006 was no exception. According to IRI supermarket scanner data interpreted by Merrill Lynch’s Christine Farkas, table wine dollar sales rose 8.9% in December, although down slightly from the 10% increase in November and YTD. Table wine volumes rose 5%, a little shy of November’s growth of 5.6% but much higher than the 1% increase in December 2005.
Christine describes 2006 as a year with “good table wine volume growth,” up 3.6%, with gains in all price categories over the $2.99per bottle category. In accordance, a favorable price/mix over 6% pushed dollar sales by 10%.
Although trading up among consumers continues, the industry did not benefit as much in 2006 as they had in the past. Category price/mix was up 3.8% in December to $5.65 per bottle, representing the slowest growth in 2006 mainly due to imports. (January 2006 saw the highest price/mix at 9.4 %.) California wine rose 4.4% in December 2006, while Oregon and Washington wine prices were flat and Australian prices slid 1.5%.
As we mentioned earlier, table wine dollar sales rose approximately 9% in December due to “strong high-end brand growth.” Low-end wine brands saw a little improvement, while mid-range brands moderated and super-premium pricing was mainly negative.
VOLUMES DOWN FOR THE BIG THREE. Volumes of wines priced above $15 a bottle rose by 19.5% in December, coupled with a 16.8% gain in the $12-$15 segment and a 9.4% rise in the $9-$12 range. Volumes in the $5.50-$9 segment grew by 9.2%, and volumes in the $3-$5.49 and <$3 segments rose by 1.6% and 1.9% respectively.
With high-end wines continuing to drive growth, the major players (Gallo, STZ and The Wine Group) have lost annual volume since 2002 after skewing to lower-priced wines.
Merrill Lynch reports that STZ (along with Vincor) has done the best of all the small and large players with a price/mix growth that has averaged 4.9% since 2002. UST’s volume growth has grown every year since 2002, and in 2006 reported 12% leap in volume that exceeded Yellow Tail's growth of 10.7%.
Christine describes 2006 as a year with “good table wine volume growth,” up 3.6%, with gains in all price categories over the $2.99per bottle category. In accordance, a favorable price/mix over 6% pushed dollar sales by 10%.
Although trading up among consumers continues, the industry did not benefit as much in 2006 as they had in the past. Category price/mix was up 3.8% in December to $5.65 per bottle, representing the slowest growth in 2006 mainly due to imports. (January 2006 saw the highest price/mix at 9.4 %.) California wine rose 4.4% in December 2006, while Oregon and Washington wine prices were flat and Australian prices slid 1.5%.
As we mentioned earlier, table wine dollar sales rose approximately 9% in December due to “strong high-end brand growth.” Low-end wine brands saw a little improvement, while mid-range brands moderated and super-premium pricing was mainly negative.
VOLUMES DOWN FOR THE BIG THREE. Volumes of wines priced above $15 a bottle rose by 19.5% in December, coupled with a 16.8% gain in the $12-$15 segment and a 9.4% rise in the $9-$12 range. Volumes in the $5.50-$9 segment grew by 9.2%, and volumes in the $3-$5.49 and <$3 segments rose by 1.6% and 1.9% respectively.
With high-end wines continuing to drive growth, the major players (Gallo, STZ and The Wine Group) have lost annual volume since 2002 after skewing to lower-priced wines.
Merrill Lynch reports that STZ (along with Vincor) has done the best of all the small and large players with a price/mix growth that has averaged 4.9% since 2002. UST’s volume growth has grown every year since 2002, and in 2006 reported 12% leap in volume that exceeded Yellow Tail's growth of 10.7%.
posted at 2:18 PM
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