Moscato "Eating up the Category"


Dear Client:

Unless you are entirely new to the wine industry, then you are quite aware that Moscato is on fire. But those words don't really mean anything unless you dig deep into the trend and take a look at the numbers. You may think that Moscato is a small category but it's not. It is the fourth largest white wine varietal in terms of dollar sales in the 13-weeks ending February 4 behind Chardonnay ($539.2 million), Pinot Grigio ($212.8 million) and Sauvignon Blanc ($112.2 million), based on Nielsen scans. But it is nipping at Sauvignon Blanc's heels with over eight times the growth. Moscato is just slightly behind Sauvignon Blanc with net sales of $111.16 million, but sales climbed a whopping +54.6%, while Sauvignon Blanc grew only +6.7%. Moscato also far outgrew Chardonnay (+0.7%) and Pinot Grigio (+5.1%), but has a ways to go before catching up with those varietals.

In terms of volume, Moscato is the third largest category at over 1.5 million cases behind Chardonnay (6.9 million cases) and Pinot Grigio (2.65 million). Sauvignon Blanc comes in fourth at 1.1 million cases. As with dollar sales, Moscato's volumes are the fastest growing, up +53.7%. Chardonnay, meanwhile, declined -0.2%, while Pinot Grigio grew +8.2% and Sauvignon Blanc grew +3.9%.

"I think Moscato is absolutely eating up the category. It's destined right now to be the third largest white wine. At current trends it would overtake Sauvignon Blanc by value. It has already overtaken it by volume. So it has still a ways to go before it is the size of Pinot Grigio, but it is certainly growing way ahead of the category," Stephen Brauer, managing director of Beringer for Treasury Wine Estates, told WSD.

Moscato was the biggest share gainer by far among varietals, taking +1.4 dollar share points and +1.5 volume share points. That in turn is benefitting the total white wine category, which is taking share away from red wine despite the growing popularity of red blends. Case in point: white wine took +0.7 dollar share points in the 13-weeks, while red wine lost -0.1 share points and blush lost -0.6 points. In terms of volume, white wine gained even more share - +1.1 points.

With trends that big wineries are of course trying to get in on the action. Brands that have recently added a Moscato extension is too long to list in entirety, but Rex Goliath, Beringer, Lindeman's, Yellow Tail, Barefoot, Sutter Home, Menage a Trois, Robert Mondavi, Flip Flop, Cupcake, St. Supery and Woodbridge are just a few. Moscato alone has helped to turnaround a number of those brands, including Beringer, Yellow Tail and Lindeman's.

THE "WHY" FACTOR: So now you have the facts on just how big Moscato is, but why is it growing? The experts say that it's new drinkers - both millennials and older generations - coming into the category looking for easy-to-drink, sweeter wines. It also looks as though White Zinfandel and Riesling is losing consumers to Moscato. The White Zinfandel category has been suffering for several years now, and perhaps the emergence of Moscato has heightened its decline. White Zinfandel sales fell -9.9%, while volumes declined -8.2% in the 13-weeks.

But don't forget that there was a period in the not-so-distant past that Riesling was doing pretty well. However, that's not the case anymore. Dollar sales of Riesling declined -7.3% in the 13-weeks, losing -0.3 share points. Volumes fell -8.3%, losing -0.2 share points.

Besides Moscato's obvious popularity, pricing is likely a factor as well. Sauvignon Blanc raised average prices by +23 cents to $8.43 a bottle. Riesling is also more expensive, with average prices up +9 cents to $7.95. Moscato, meanwhile, tends to sell at a lower price, with average prices up +3 cents to $6.02.

Still, Moscato isn't posting this level of growth just because of pricing. "Riesling does seem to be softening, both in volume and value. It sort of makes sense because Moscato is chillable, it's sweet, it's delicious and it provides much of the same sensory satisfaction that, say, Riesling does for entry-level consumers," said Stephen. "But [Moscato] has got that hip factor. It's a cool varietal, and it's delicious.. It's just easy to drink, and I think that is exactly why consumers are buying more and more of it."

That's why we're seeing a mad rush by California growers to meet this huge demand. Moscato starting picking up about 3 years ago, and just look at how much it has grown in that short time. It "could be a leading indicator of what is to come," Jon Fredrikson's (of Gomgerg, Fredrikson & Associates) recently said. "There is a big portion of the population who doesn't like sour wines." So it will be interesting to see how Moscato changes the wine category in the next few years.


Republic National Distributing Company made the following regional announcements today:

Tom White, the RNDC regional president of Florida, Maryland and Washington, DC, will now oversee Virginia and South Carolina as well. Tom has spent 31 years in the beverage alcohol business. He was named president of National Distributing - Maryland in 1999, and president of RNDC-Florida in 2004.

Jay Johnson, the regional president of RNDC Texas, Oklahoma and Louisiana will add Colorado and National Distributing Company-New Mexico to his roster. Jay has been in the wine and spirits business for more than 22 years. He began his career with E & J Gallo and joined RNDC in 1991.

They will both report to Bob Hendrickson, evp - sales and marketing.

RNDC has operations in Alabama, Colorado, District of Columbia, Florida, Indiana, Kentucky, Louisiana, Maryland, Mississippi, Nebraska, North Carolina, North Dakota, Ohio, Oklahoma, South Carolina, South Dakota, Texas, Virginia and West Virginia. It employs more than 7,000 individuals nationwide.


Connecticut governor Dannel Malloy has been singing the praises of an overhaul on the state's spirits laws for months now, but this week he is revising the radical plan in hopes of reaching a consensus with the alcohol industry. His revisions have not been announced yet, but according to the AP the governor is said to be revising the proposal on price posting, limits on package store permits, rules for minimum retail prices and quantity discounts for wholesalers, but retain the provision on allowing Sunday alcohol sales.

This afternoon DISCUS released a statement in support of Sunday sales in Connecticut because it "would provide great convenience for consumers and increase opportunities for businesses throughout the state," said vp Jay Hibbard. "This legislation represents a bold set of forward-thinking initiatives that will help make Connecticut competitive with its neighboring states," he continued. "It is projected that repealing the Sunday sales ban alone could generate over $8 million in new revenue without increasing fees or taxes. It is a long overdue change."


NH LOOKS INTO PRIVATIZATION. Last week the New Hampshire House commerce committee voted to amend and forward a bill in favor of ending the state's monopoly on spirits sales and call for further study on the matter. Beer and wine can already be sold privately in NH, but the state's liquor commission is opposed to allowing non-state sales of spirits, according to the Concord Monitor. The bill goes to the House next month where it will most likely get amended.

BARENJAGER HONEY EXTENDS TO BOURBON. Sidney Frank Import's Barenjager Honey Liqueur is launching its first line extension, Barenjager Honey & Bourbon. It joins the fast growing flavored whiskey category, which includes Jack Daniel's Honey, Wild Turkey American Honey, Red Stag Honey Tea and Evan Williams Honey Reserve. Its differentiation point, said the company, is that it is made with pure, natural honey and is hand-crafted by one of Germany's oldest family owned companies, Schwarze & Schlichte. It will hit shelves nationwide in April with a suggested retail price of $28.99 (750ml).

UTAH MOVES FORWARD WITH DABC RESTRUCTURING. After problems were uncovered at the Utah Department of Alcoholic Beverages last year, the Utah legislature has been moving forward with a plan to fix it. SB66 was submitted by Sen. John Valentine and proposes to replace the current five-member liquor commission with a seven member group where the governor will appoint the chairman and agency's executive director, reported Desert News. The bill also calls for an audit division within the agency.

THE NEW HAMPSHIRE LIQUOR COMMISSION has named Skinnygirl Margarita as Spirit of the Year, Sazerac Company, Inc. as Spirit Supplier of the Year and Jack Daniel Distillery as Distillery of the Year. "Our award winners effectively create brand advantage within our stores and their sales are a result of those efforts," said Joseph Mollica, New Hampshire Liquor Commission Chairman. "They understand where we need to be with various products and work with us to create aggressive price points which our consumers appreciate." To-date, Skinnygirl has sold over 2,600 cases and produced over $149,900 in sales at New Hampshire Liquor & Wine Outlets. NHLC chose Sazerac as Supplier of the Year because Taaka Vodka has become a top twenty-five selling product in the state, while Sazarec's antique bourbon collection regularly sells out every year. It has also found success with Firefly Sweet Tea Vodka. And finally, Jack Daniel's "innovative outlook has resulted in several new products that are very successful in our stores," Joseph continued.

AVENIU BRANDS PARTNERS WITH CLOS LACHANCE. Aveniu Brands, which is fully owned by Spain's Grupo Codorniu, has entered into a sales and marketing distribution agreement with Clos LaChance Wines of the Central Coast. This gives Aveniu "an opportunity to expand our California and domestic wine presence," said Aveniu president Andrew Mansinne.

Until tomorrow, Megan

"I told my psychiatrist that everyone hates me. He said I was being ridiculous - everyone hasn't met me yet."
Rodney Dangerfield

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