Cupcake, Barefoot and Apothic Lead as Top Growing Wines in 2011

FILED MARCH 12, 2012

Dear Client:

Cupcake Vineyards (owned by The Wine Group) again topped the list of the Top 30 Momentum Table Wine Brands in food and drug stores in 2011. It's a list compiled every year by SymphonyIRI and based on dollar sales, volumes and price. The brands must have sold at least 100,000 cases last year to qualify.

These top 30 brands accounted for 32% of total table wine dollar sales and 33% of volume sales in food and drug stores last year. They also represented 45% of net category dollar growth and 52% of net volume growth at the brand level. In other words - they're a big deal.

Here are some key trends to pay attention to:

- Most of the brands (24) are from California.

- 7 of the brands are owned by E&J Gallo.

- 3 are owned by Constellation.

- 3 are owned by The Wine Group.

- Exactly half (15) of the momentum brands are from the $8+ price segment.

- The other half (15) fall in the less than $8 and box price segments.

- The largest number of momentum brands (10) came from the $8-$10.99 segment.

- Most of these momentum brands experienced strong incremental sales growth driven by increased distribution and weeks of feature and/or display activity.

- Average pricing for the majority of the top 30 brands was generally lower in 2011 compared to 2010.

- Newcomers to the 2011 list include Apothic, 14 Hands, Fish Eye, and The Naked Grape.

THE FASTEST GROWING NEW WINE BRANDS. Below is a list of the top selling new wine brands introduced last year. Six of those brands sold at an average price point of less than $8 per 750ml bottle, which speaks to the power of lower-tier wines. Also not surprising, The Wine Group (TWG) launched 4 of those brands, followed by Constellation with 3 brands.

But the most interesting takeaway is this: nine of the top ten brands originated from California in 2011, whereas the majority of the top new wine brands in 2010 were imports. My how things have changed in just a short time.

(1) At 51 weeks sold, Flipflop (owned by The Wine Group) topped the list with an average price of $5.58 per 750ml bottle. It brought in $13.2 million in net dollar sales.

(2) It was followed by Entwine (owned by Wente Vineyards) with only 24 weeks of sales at an average price point of $7.75. It generated $4.73 million in net sales.

(3) Simply Naked (owned by Constellation) brought in $4.68 million sales in 48 weeks, priced at $8.54.

(4) Chill Out (TWG) generated $2.63 million sales in 51 weeks. It's priced at $5.03 a bottle on average.

(5) Colby Red (Treasury Wine Estates) brought in $1.59 million in 50 weeks, priced at $9.70 a bottle.

(6) Cutler Creek Vineyards (TWG) sold $1.56 million in just 36 weeks, priced at $3.11 per 750ml bottle.

(7) Triada (owned by Evaki, an Argentinean wine company and the only non-California wine on the list) sold $1.48 in net sales, priced at $5.31 a bottle on average. It was in the market for 46 weeks.

(8) Primal Roots (Constellation) brought in $1.21 million in sales in 25 weeks, priced at $9.45 on average.

(9) The Dreaming Tree (Constellation's collaboration with the Dave Matthews Band) sold $1.01 million worth of bottles priced at $13.48 in 19 weeks.

(10) Cul De Sac (TWG) generated $994,520 in sales in 34 weeks, priced at $3.27 a bottle on average.

Note that Entwine and The Dreaming Tree spent the least amount of time on shelves last year - 24 weeks and 19 weeks, respectively.

So these are the brands to take notice of if you haven't already. The way that most of these big wine companies are growing sales nowadays is to launch wines in the fast growing categories, including red/white blends, moscato (including red, white and pink), prosecco, malbec, and even chocolate wines. Sauvignon blanc and pinot grigio are also doing really well. Stay tuned for more insights tomorrow....


The gem in Campari America's portfolio remained Wild Turkey American Honey in the fiscal year ending December. Helped by the rise in demand for American whiskey, particularly flavored whiskey, Honey's sales grew by +33.5% in the US and Australia. It was also helped by strong A&P investments and strengthened route-to-market, said the company. Meanwhile, the flagship Wild Turkey brand grew by +7% globally, with positive results in the US, Australia and Japan. It was boosted by the "successful" launch of a new marketing campaign in the US and Australia.

Skyy Vodka remained flat due to "a still highly competitive US market," which the company said reflects its "commitment to maintain prices to the benefit of the long term brand's strength." But Skyy Infusions is "outperforming" the flavored vodka segment, bolstered by the "successful" launch of Blood Orange and Dragon Fruit Infusions.

In all, sales in the US market climbed +3.3% on an organic basis thanks largely to the Wild Turkey franchise and Skyy Infusions. Reported sales fell -2.8% due to a negative exchange rate and the termination of Tullamore Dew and Cutty Sark.

The Campari brand franchise experienced "good progression" in the US, where consumers are increasingly "embracing bitter flavors." The company is also seeing a resurgence of the Negroni cocktail in the US.

Espolon Tequila is outperforming the tequila category in the US, but was partly offset by Cabo Wabo's declining shipments as it has shifted to more selective off-premise distribution.

And finally, the Frangelico, Carolans and Irish Mist business experienced a "solid performance" in the US. Frangelico in particular saw US NABCA depletions grow +6.4% through December.


THE HENRY WINE GROUP ANNOUNCES NEW PRESIDENT. The Henry Wine Group's Board of Directors have appointed Edward Hogan as president following the resignation of Peter Baedeker, the company said. "Peter guided the company through a challenging economic cycle and successfully reestablished The Henry Wine Group as a premier wholesale wine distributor in California. Our Board and I personally thank Peter for his considerable contributions to The Henry Wine Group. We wish him every success in the future," stated founder and chairman Warner Henry.

BEAM INC CHIEF MATT SHATTOCK was paid nearly $12 million in 2011, based on recent SEC filings and reported by Dow Jones. Meanwhile, cfo Bob Probst's pay totaled $3.8 million last year, and North America president Bill Newlands was paid $4.3 million. Each man earned a base salary under $1 million, with the bulk of their pay coming from stock and option awards. Bruce Carbonari, the former ceo of Fortune Brands before it was split, received total compensation of $23.3 million last year. Former cfo Craig Omtvedt's pay increased 32% to $5.6 million.

PALM BAY RELEASES LUNETTA ROSE. Palm Bay International has launched a new rose sparkling wine, Lunetta Rose, which is produced by Italy-based Cavit. It is Chardonnay blended with Trentino red grape varieties, Lagrein, Teroldego and Pinot Noir. It will be available nationwide on April 1st and it will retail for approximately $11.99.

Until tomorrow, Megan

"Spring is when you feel like whistling even with a shoe full of slush."
Doug Larson

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