Wine Drinkers Still Trading Up
Table wine dollar sales grew 5.7% and volume rose 1.5% in the four weeks to May 18, according to IRI scan data, with growth of domestic wines far outpacing imports. Value of domestic wines grew 7%, while volume was up 2.4%. Dollar sales of imports, meanwhile, rose 1.7%, while volumes declined -2.5%. It looks like the weak U.S. economy is taking its toll on imports as consumers opt for less expensive domestics.
Red and white wines remained relatively steady, with red wine value rising 6% and white wine value growing 6.3%. Volumes of red wine grew 2.6%, while white wines were up 2.5% in the four weeks.
VARIETALS. The same varietals that have shown growth in recent years continued to surge ahead, while Merlot and Syray/Shiraz remained weak. Dollar sales of Cabernet rose 7.7%, while volumes grew 5.9%, according to IRI. Chardonnay sales, meanwhile, rose 4.7% and volumes were up 3.2%. Sauvignon Blanc values jumped an impressive 13.4% and volumes climbed 6.6%. Not far behind, dollar sales of Pinot Grigio climbed 10.3% and volumes rose 7.1%. Once again, Pinot Noir demonstrated the highest rate of growth, with sales up 19% and volumes up 21%. Zinfandel grew 11.5% in value and 6.2% in volume.
Meanwhile, dollar sales of Merlot declined -0.2% and volume was down -0.1%. Merlot has lost 0.7% of dollar share in the four weeks and -0.2% of volume. Syrah/Shiraz saw value fall -5.1% and volume decline -4.2%, with share points down -0.4% and -0.2%, respectively.
REGIONS. California, Oregon and Washington all performed well in the month, displaying dollar sales growth of 6.5%, 20% and 12.1%, respectively. Volumes of California wines rose 2.2%, followed by Washington (8.5%) and Oregon (13.4%).
Out of the big three importers – Australia, France and Italy – only Italy showed growth in dollar sales. Value of Australian wines declined -1.9%, while volume was down -1.7%. French dollar sales declined -2.7% and volume was down -5%. Value of Italian wines, meanwhile, rose 2.2%, but volumes fell -4.9%.
German wines rose 2.5% in dollar sales and fell -7.2% in volumes. Portuguese wines grew 7.5% in value and 1.8% in volume, while Spanish wines climbed 4.6% and 1%, respectively.
Other than Australia and South Africa, dollar sales of new world wines performed well in the four week period. Argentina displayed the highest rate of growth (37.8% in value and 19.7% in volume), followed by New Zealand (25.2% in value and 13.2% in volume) and Chile (6.3% in value and -1.3% in volume). Dollar sales of South Africa declined -14.6% and volume fell
-16.8%.
PRICE SEGMENTS. Meanwhile, higher priced wines continued to show promising growth in the four week period, indicating that consumers are still trading up. Dollar sales of the $20+ wine category rose 14.2% and volume grew 10%. Dollar sales of wines in the $15.99-19.99 range grew 14.1% and 13.3% in volume. Wines in the $11-14.99 category saw values increase 12.9% and volumes climb 12.4%. Dollar sales of wine priced $8-10.99 grew 9% in value and 6.9% in volume. Dollar sales of wine priced $5-7.99 grew 1.6%, while volumes grew 1.2%.
The following price categories experienced growth in dollar sales but declines in volume. Wines in the $3-4.99 range grew 1% in value but declined -3% in volume. Lastly, wines priced below $3 grew 0.3% in dollar sales but were down -3% in volume.
FOSTER’S COULD JUST SELL U.S. WINE BIZ
The Wall Street Journal revisited the issue of Foster’s in an article today, mainly touching on the well documented fact that Foster’s overpaid for its wine business. News that Foster’s may split its wine and beer business has people in the industry speculating over a possible takeover.
Merrill Lynch analyst David Errington, who has been a critic of Foster’s for some time, said, in his opinion, the board will “entertain any bid for any asset or indeed any bid for the entire company.”
Foster’s stock has slipped in recent days and most analysts are not upbeat. Not only did Foster’s overpay for Beringer and Southcorp, but the company has undergone a grape glut followed by a drought in Australia, competition from other winemaking regions and a strong Aussie dollar.
According to WSJ: “Deutsche Bank analyst Kristan Walker estimates that the Beringer and Southcorp acquisitions have together destroyed about A$1.1 billion in shareholder value.”
Although Foster’s could unlock some value by demerging its beer and wine biz, who’s brave enough to acquire its wine? Analysts say Foster’s could just sell its U.S. wine operations, which could be more attractive to smaller buyers. SABMiller, InBev and Heineken have been named as possible contenders for its beer operations.
ALCOHOL FATALITY STATS “GROSSLY EXAGGERATED”
As a guest columnist in the Seattle Post-Intelligencer, Sarah Longwell (managing director of American Beverage Institute) wrote an interesting article on what she dubbed “grossly exaggerated” drunk driving fatality statistics, lambasting some anti-alcohol lobbyists’ agendas. She points out that federal statisticians classified almost 18,000 deaths as "alcohol-related" last year, which does not mean alcohol-caused.
“In fact, that figure includes anyone killed in a crash in which at least one person (driver, pedestrian, cyclist, etc.) was estimated to have any alcohol. (If a sober driver recklessly crashes into and kills a family whose driver had enjoyed one drink, statistics reflect all their deaths as "alcohol-related."),” she writes.
She said that actual innocent victims make up only 12% of the widely reported statistic.
“Those [anti-alcohol] groups have used ‘crude’ statistics before, such as convincing the public that reducing the legal BAC limit to 0.08 percent would save 600-800 lives annually. Today, research proves it didn't work.”
She also said roving police patrols are more effective in catching drunk drivers than sobriety checkpoints.
WSD BRIEFS:
PIER 1 SAYS IT HAS ABANDONED PLANS TO TAKE OVER COST PLUS, saying it would be too expensive. The company said it still believes a merger could create “significant value for the stakeholders of both companies,” however. The Cost Plus board rejected the offer, calling it “distracting and ill-timed” during tough market conditions.
WALMART HAS LAUNCHED ITS NEW WEBSITE FOR MARKETSIDE, a new retail concept meant to compete with Tesco’s Fresh & Easy. The stores will open in Gilbert, Mesa, Chandler and Tempe, AZ. The concept focuses on prepared meals, fresh ingredients and emphasizes is smaller size. Check it out at www.marketside.com
Until tomorrow, Megan
“An intellectual is a person who has discovered something more interesting than sex.”
Aldous Huxley
--------- Sell Day Calendar ----------
Today's Sell Day: 18
Sell days this month: 21
Sell days this month last year: 21
This month ends on a: Mon.
This month last year ended on a: Fri.
YTD sell days Over/Under: 0
WINE & SPIRITS DAILY
Subscribe or check back issues at: www.winespiritsdaily.com
Send news and comments in confidence to: megan@winespiritsdaily.com
© 2008 Wine & Spirits Daily, all rights reserved. May quote with attribution.
Red and white wines remained relatively steady, with red wine value rising 6% and white wine value growing 6.3%. Volumes of red wine grew 2.6%, while white wines were up 2.5% in the four weeks.
VARIETALS. The same varietals that have shown growth in recent years continued to surge ahead, while Merlot and Syray/Shiraz remained weak. Dollar sales of Cabernet rose 7.7%, while volumes grew 5.9%, according to IRI. Chardonnay sales, meanwhile, rose 4.7% and volumes were up 3.2%. Sauvignon Blanc values jumped an impressive 13.4% and volumes climbed 6.6%. Not far behind, dollar sales of Pinot Grigio climbed 10.3% and volumes rose 7.1%. Once again, Pinot Noir demonstrated the highest rate of growth, with sales up 19% and volumes up 21%. Zinfandel grew 11.5% in value and 6.2% in volume.
Meanwhile, dollar sales of Merlot declined -0.2% and volume was down -0.1%. Merlot has lost 0.7% of dollar share in the four weeks and -0.2% of volume. Syrah/Shiraz saw value fall -5.1% and volume decline -4.2%, with share points down -0.4% and -0.2%, respectively.
REGIONS. California, Oregon and Washington all performed well in the month, displaying dollar sales growth of 6.5%, 20% and 12.1%, respectively. Volumes of California wines rose 2.2%, followed by Washington (8.5%) and Oregon (13.4%).
Out of the big three importers – Australia, France and Italy – only Italy showed growth in dollar sales. Value of Australian wines declined -1.9%, while volume was down -1.7%. French dollar sales declined -2.7% and volume was down -5%. Value of Italian wines, meanwhile, rose 2.2%, but volumes fell -4.9%.
German wines rose 2.5% in dollar sales and fell -7.2% in volumes. Portuguese wines grew 7.5% in value and 1.8% in volume, while Spanish wines climbed 4.6% and 1%, respectively.
Other than Australia and South Africa, dollar sales of new world wines performed well in the four week period. Argentina displayed the highest rate of growth (37.8% in value and 19.7% in volume), followed by New Zealand (25.2% in value and 13.2% in volume) and Chile (6.3% in value and -1.3% in volume). Dollar sales of South Africa declined -14.6% and volume fell
-16.8%.
PRICE SEGMENTS. Meanwhile, higher priced wines continued to show promising growth in the four week period, indicating that consumers are still trading up. Dollar sales of the $20+ wine category rose 14.2% and volume grew 10%. Dollar sales of wines in the $15.99-19.99 range grew 14.1% and 13.3% in volume. Wines in the $11-14.99 category saw values increase 12.9% and volumes climb 12.4%. Dollar sales of wine priced $8-10.99 grew 9% in value and 6.9% in volume. Dollar sales of wine priced $5-7.99 grew 1.6%, while volumes grew 1.2%.
The following price categories experienced growth in dollar sales but declines in volume. Wines in the $3-4.99 range grew 1% in value but declined -3% in volume. Lastly, wines priced below $3 grew 0.3% in dollar sales but were down -3% in volume.
FOSTER’S COULD JUST SELL U.S. WINE BIZ
The Wall Street Journal revisited the issue of Foster’s in an article today, mainly touching on the well documented fact that Foster’s overpaid for its wine business. News that Foster’s may split its wine and beer business has people in the industry speculating over a possible takeover.
Merrill Lynch analyst David Errington, who has been a critic of Foster’s for some time, said, in his opinion, the board will “entertain any bid for any asset or indeed any bid for the entire company.”
Foster’s stock has slipped in recent days and most analysts are not upbeat. Not only did Foster’s overpay for Beringer and Southcorp, but the company has undergone a grape glut followed by a drought in Australia, competition from other winemaking regions and a strong Aussie dollar.
According to WSJ: “Deutsche Bank analyst Kristan Walker estimates that the Beringer and Southcorp acquisitions have together destroyed about A$1.1 billion in shareholder value.”
Although Foster’s could unlock some value by demerging its beer and wine biz, who’s brave enough to acquire its wine? Analysts say Foster’s could just sell its U.S. wine operations, which could be more attractive to smaller buyers. SABMiller, InBev and Heineken have been named as possible contenders for its beer operations.
ALCOHOL FATALITY STATS “GROSSLY EXAGGERATED”
As a guest columnist in the Seattle Post-Intelligencer, Sarah Longwell (managing director of American Beverage Institute) wrote an interesting article on what she dubbed “grossly exaggerated” drunk driving fatality statistics, lambasting some anti-alcohol lobbyists’ agendas. She points out that federal statisticians classified almost 18,000 deaths as "alcohol-related" last year, which does not mean alcohol-caused.
“In fact, that figure includes anyone killed in a crash in which at least one person (driver, pedestrian, cyclist, etc.) was estimated to have any alcohol. (If a sober driver recklessly crashes into and kills a family whose driver had enjoyed one drink, statistics reflect all their deaths as "alcohol-related."),” she writes.
She said that actual innocent victims make up only 12% of the widely reported statistic.
“Those [anti-alcohol] groups have used ‘crude’ statistics before, such as convincing the public that reducing the legal BAC limit to 0.08 percent would save 600-800 lives annually. Today, research proves it didn't work.”
She also said roving police patrols are more effective in catching drunk drivers than sobriety checkpoints.
WSD BRIEFS:
PIER 1 SAYS IT HAS ABANDONED PLANS TO TAKE OVER COST PLUS, saying it would be too expensive. The company said it still believes a merger could create “significant value for the stakeholders of both companies,” however. The Cost Plus board rejected the offer, calling it “distracting and ill-timed” during tough market conditions.
WALMART HAS LAUNCHED ITS NEW WEBSITE FOR MARKETSIDE, a new retail concept meant to compete with Tesco’s Fresh & Easy. The stores will open in Gilbert, Mesa, Chandler and Tempe, AZ. The concept focuses on prepared meals, fresh ingredients and emphasizes is smaller size. Check it out at www.marketside.com
Until tomorrow, Megan
“An intellectual is a person who has discovered something more interesting than sex.”
Aldous Huxley
--------- Sell Day Calendar ----------
Today's Sell Day: 18
Sell days this month: 21
Sell days this month last year: 21
This month ends on a: Mon.
This month last year ended on a: Fri.
YTD sell days Over/Under: 0
WINE & SPIRITS DAILY
Subscribe or check back issues at: www.winespiritsdaily.com
Send news and comments in confidence to: megan@winespiritsdaily.com
© 2008 Wine & Spirits Daily, all rights reserved. May quote with attribution.
posted at 1:53 PM
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