Meiomi, Santa Margherita and The Prisoner Lead Super-Premium Growth

FILED JUNE 28, 2013

Dear Client:

In the industry of late, we've heard a lot about wines in the $8-$12 sweet spot. But premiumization is alive and well as wines price above $15 have posted higher percentage growth, although keep in mind that they are coming off a smaller base than lower-price segments. Wines price between $15-$20, for example, delivered sales growth of 8.7% and volume growth of 8.2% in all IRI channels, year-to-date ending June 16. Moving up the pricing scale, wines above $20 jumped 16.2% year-to-date with volumes up 18.2%.

So what brands are driving this overall growth? With the help of IRI, we compiled a list of the Top 25 wines over $15. They are ranked by net dollar sales growth for the 52 weeks ending May 19 to weed out the really small guys and give you a more realistic picture of the brands making waves.

TOP 25 WINES OVER $15

1. Belle Glos Meiomi pinot noir: price $20.50 / up $6.7 million* (219.5%)
2. Santa Margherita pinot grigio: price $20.52 / up $2.8 m (9.7%)
3. Orin Swift The Prisoner red blend: price $31.97 / up $2.1 m (83.6%)
4. Decoy cabernet sauvignon: price at $20.84 / up $1.7 m (55%)
5. Erath pinot noir: price at $16.77 / up $1.69 m (26.5%)
6. Simi cabernet sauvignon: price at $18.90 / up $1.56 m (20.7%)
7. Sonoma-Cutrer chardonnay: price at $22.45 / up $1.5 m (11.5%)
8. Justin, cabernet sauvignon: price at $21.84 / up $1.3 m (68.8%)
9 Decoy, pinot noir: price at $20.05 / up $1.26 m (88.1%)
10. Ghost Pines, red blend: price at $17.47 / up $1.09 m (927%)
11. MacMurray Ranch, pinot noir: price at $17.22 / up $1 m (25.2%)
12. Ghost Pines, cabernet sauvignon: price at $17.41 / up $1 m (20.9%)
13. Educated Guess, cabernet sauvignon: price at $17.44 / up $1 m (61.5%)
14. Clos du Val, cabernet sauvignon: price at $25.36 / up $948,800 (43.4%)
15. Cameron Hughes, cabernet sauvignon: price at $17.38 / up $844,00 (1350%)
16. Frei Brothers, cabernet sauvignon: price at $19.20 / up $782,600 (16.5%)
17. Kendall Jackson Grand Reserve, chardonnay: price at $15.74 / up
$773,000 (8.4%)
18. Wild Horse, chardonnay: price at $15.69 / up $750,000 (16.4%)
19. Caymus Vineyards, cabernet sauvignon: price at $74.25 / up
$739,000 (17%)
20. Edna Valley Vineyard, pinot noir: price at $15.19 / up $720,000 (75.7%)
21. Mer Soliel Silver, chardonnay: price $22.05 / up $712,000 (90.6%)
22. Whitehaven, sauvignon blanc: price $16.60 / up $710,500 (29%)
23. St. Supery, cabernet sauvignon: price at $22.36 / up $680,700 (41.4%)
24. Conundrum, white blend: price at $19.47 / up $641,000 (16%)
25. William Hill Estate, chardonnay: price at $19.84 / up $598,000 (48.6%)

* [Ed note: m represents sales growth in the millions]

INDEPENDENTS THRIVE ABOVE $20: Unlike IRI's Top 20 Momentum Brands list we published in April (see WSD 04-09-2013), a much larger portion of this list is represented by independent wine companies. Independent wineries represented only 10% of the Momentum Brands list, but on this list there are 8 independent wineries (32%) representing 9 independent wines. E & J Gallo does own the most number of brands on the list 1) Ghost Pines, 2) Whitehaven, 3) Edna Valley Vineyards, 4) William Hill Estates, 5) MacMurray Ranch, 6) Frei Brothers.

But you'll notice the winery with the second most brands on the list is independent winemakers Wagner Family of Wines, which has long been a staple of the premium wine category. They represent 1) Conundrum, 2) Mer Soliel Silver, 3) Caymus Vineyards and 4) Belle Glos, which is actually the Meiomi brand.

PREMIUM WINES STILL NOT TAKING PRICE: Less than half of the best-selling wine brands over $20 have increased average price in the last year. The list includes 1) Cameron Hughes, 2) Ghost Pines, 3) Mer Soliel, 4) Justin, 5) St. Supery, 6) MacMurray Ranch, 7) Caymus, 8) Sonoma-Cutrer and 9) Kendall Jackson. The increases range from $4.62 for Caymus to 4 cents for Kendall Jackson. Most other brands that raised price stayed under a 50-cent price increase. All other brands (hint: that leaves 14) decreased in price. The largest decrease was $3.42 from Orin Swift, while the smallest decrease was 8 cents by Mer Soleil Silver.

BROWN-FORMAN EXPANDING WOODFORD RESERVE CAPACITY

As double digit growth on its super premium brands continues, Brown-Forman is going to double production capacity at the Woodford Reserve Distillery. The expansion will include three new copper pot stills, doubling the bottling line and adding three new barrel warehouses that can hold 55,000 barrels each. The project is expected to take three years and cost around $36 million, reports the Herald-Leader. Recall Woodford will also get its first TV advertisement this year.

Woodford Reserve set a volume record in fiscal 2013 of 250,000 cases globally. It delivered sales growth of 28% with the US representing 86% of the brand's business. "We believe strong consumer interest in bourbon will continue and we're expanding our production capacity in an effort to meet this demand," says Chris Morris, master distiller at Woodford Reserve.

WSD BRIEFS:

ANCHOR DISTILLING COMPANY HAS SIGNED A LONG TERM distribution deal with Karlsson's Gold Vodka. Karlsson's is the second addition to Anchor's vodka portfolio after the introduction of Hophead earlier this year. In addition to the flagship Karlsson's Gold, Karlsson's offers several single-vintage, single-varietal, single-farm batch vodkas. Karlsson's Gold retails for $30 a 750 ml and will be available nationally through Anchor in August.

HOGUE CELLARS' WINEMAKER CO DINN IS LEAVING THE COMPANY in order to set up his own consulting and custom-winemaking business. "There's going to be a growing need for smaller custom winemaking in the Yakima Valley," says Co. He has been with Hogue since 1996 when he started as Hogue's white winemaker. During his time at Hogue the winery became one of the nation's first large wineries to begin using screw caps, reports Great Northwest Wine. Hogue has not announced his replacement.

CERBERUS CAPITAL MANAGEMENT HAS MADE A BID FOR Southeast regional grocery chain Harris Teeter Supermarkets, reports Progressive Grocer. Harris Teeter has been looking to sell for months and Cerberus has been looking to further expand its grocery business after the recent acquisitions of several Supervalu chains (see WSD 01-10-2013). Sources say Cerberus is looking into possibly merging Harris Teeter with the Supervalu business.

Until Monday, Emily

"Integrity is the essence of everything successful."
-- Buckminster Fuller

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