Making American Wine Great Again

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As we head towards Valentine's Day, it's time to take a look at the performance of wine in bars and restaurants. Sparkling wines and rosé will be in high demand on the romanciest of romantic days, so operators will want to make sure they have plenty on hand. But a study released recently may motivate operators who aren't particularly focused on wine to rethink their menus.

The growth of wine produced in American rose steadily in 2016, with US wine shipments up 2.8% in volume last year, according to research released last week.

“The US wine market continues to expand,” Danny Brager, senior vice president of the beverage alcohol practice at Nielsen, told the Unified Wine and Grape Symposium, the largest wine industry trade show in North America. “It’s still the envy of the wine world,” he said.

Sparkling wine is especially hot, with growth led by Italian Prosecco, which comes in at 25% annually. The US accounts for about 43% of bubbly value, while Italy (including Prosecco) accounts for 31% and France coming in at 20 percent. Sales of Prosecco have been increasing more than 25 annually, Brager said. Prosecco now takes up about 17% of the value of the sparkling wine subcategory.

Brager reported that rosé continues to grow at nearly 50% annually, now representing about 1.5%  of the table wine market. French rosés still dominate with 62% share, with the US at 30 percent.

According to Brager, Chardonnay continues to dominate among varietal wines, but Cabernet Sauvignon’s growth trajectory is poised to pass Chardonnay in about two years.

The competition is increasing for California wineries. “I almost can’t think of any other consumer category where there is such a huge choice today. If [wine] consumers can’t get something, they will find something else,” he said.

Alternative packaging – including draft wine, single servings and cans – are making an impact as well.

Bars and restaurants continued to face challenges, said Brager. Through November 9, wine sales in those spaces slipped 1% by volume (although they fell far less by value), according to Nielsen / CGA figures. Brager said part of the problem might be the frequency of visits from Millennials, who as a whole have less income than other wine drinking age groups. Also impactful, alternative on-premise wine consumption options are growing, like nail salons and theaters. Also looming larger is the rise of food retailers with upscale in-store drinking and dining options. “As groceries try to become more of a community hub and try to offer more of a lifestyle experience, rather than just a boring, typical food store, it’s more about connecting with the consumer in a broader way,” Brager said.

California wines increased sales by almost 5% from a year ago, based on a Nielsen survey of major retail outlets. California vintners shipped more than 2.5 million additional cases of wine to US consumers in 2016, compared to the previous year — four times the amount of its nearest rival, Italy, Brager said. New Zealand, France and Spain followed much farther behind.
 

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