WINE VOLUME SLOWS IN CHILLY FEBRUARY
Wine industry growth slowed a bit in the four weeks to Feb. 25, 2007, up 8.5% from the previous year as compared to 10.4% growth in January 2007. Based on data provided by Information Resources (IRI), Christine Farkas of Merrill Lynch reports that table wine sales rose 8.9%, moderating from a 10.7% surge in Jan.
Domestic wines showed the most profit growth with revenues up 9.6%, driven by volume growth of 5.6% and price/mix growth of 3.7%. Import profits did not show a similar escalation. Although still a solid number, profits were up only 6.9% year on year, helped by 6.3% volume growth and <1% of favorable price/mix. New Zealand remains the fastest growing import by a long shot.
[Ed. note: Bulk prices remain a problem for imports, particularly in Australia where export volumes were up 11% and value up only 4% to Feb. 28. More than 80% of the volume growth in Australia's wine exports is in bulk rather than bottle form, with a whopping 74% of exports to the U.S. being priced at less than $5 a bottle, according to the Australian Wine and Brandy Corporation.]
Red wine revenue and volume trumped white wine in February, with Pinot Noir leading the pack as the fastest growing varietal.
As with sales growth, table wine volumes rose 5.7%, falling below Jan.'s growth of 7.3%. Nevertheless, all price categories above the $5.50 per bottle range experienced double digit volume gains. No surprise here, but the <$15 per bottle category experienced the most volume growth, up 18.7% in Feb., along with an 11% gain in the $12-$15, $9-$12 and the $5.50-$9 ranges, respectively. Volumes in the $3-$5.49 (up 2.7%) and <$3 (0.3%) segments showed considerably lower growth. Says Christine: “Pricing for wines <$5.50/btl rose modestly; mid-tier brand pricing slipped ~1% and super-premium pricing fell by 1.8%.”
The three major players remain below overall table wine sales growth of 8.9%, with Gallo up 4.6%, Constellation up 4.9% and The Wine Group up 7.3%. According to Christine, Gallo and Constellation enjoyed above average wine price/mix growth of 3.3% and 6.3% respectively, while the Wine Group saw its price/mix slip by 2%. Both Gallo and Constellation experienced volume share losses, while the Wine Group’s volume increased a bit. All three players suffered dollar share declines.
Domestic wines showed the most profit growth with revenues up 9.6%, driven by volume growth of 5.6% and price/mix growth of 3.7%. Import profits did not show a similar escalation. Although still a solid number, profits were up only 6.9% year on year, helped by 6.3% volume growth and <1% of favorable price/mix. New Zealand remains the fastest growing import by a long shot.
[Ed. note: Bulk prices remain a problem for imports, particularly in Australia where export volumes were up 11% and value up only 4% to Feb. 28. More than 80% of the volume growth in Australia's wine exports is in bulk rather than bottle form, with a whopping 74% of exports to the U.S. being priced at less than $5 a bottle, according to the Australian Wine and Brandy Corporation.]
Red wine revenue and volume trumped white wine in February, with Pinot Noir leading the pack as the fastest growing varietal.
As with sales growth, table wine volumes rose 5.7%, falling below Jan.'s growth of 7.3%. Nevertheless, all price categories above the $5.50 per bottle range experienced double digit volume gains. No surprise here, but the <$15 per bottle category experienced the most volume growth, up 18.7% in Feb., along with an 11% gain in the $12-$15, $9-$12 and the $5.50-$9 ranges, respectively. Volumes in the $3-$5.49 (up 2.7%) and <$3 (0.3%) segments showed considerably lower growth. Says Christine: “Pricing for wines <$5.50/btl rose modestly; mid-tier brand pricing slipped ~1% and super-premium pricing fell by 1.8%.”
The three major players remain below overall table wine sales growth of 8.9%, with Gallo up 4.6%, Constellation up 4.9% and The Wine Group up 7.3%. According to Christine, Gallo and Constellation enjoyed above average wine price/mix growth of 3.3% and 6.3% respectively, while the Wine Group saw its price/mix slip by 2%. Both Gallo and Constellation experienced volume share losses, while the Wine Group’s volume increased a bit. All three players suffered dollar share declines.
posted at 2:48 PM
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