Rosé Shines Through Red Wines' Dominance

Sales for higher priced pink wines soar in April data

by Peter Mitham
wine sales rose by price
San Rafael, Calif.—Red wine varieties have been dominating domestic wine sales, which increased 4% in April 2017 compared to the same month a year earlier. But the growth fueled by Cabernet Sauvignon, Pinot Noir and myriad red blends pales next to double-digit growth in rosé wines.

A tiny category that accounts for just 2% of off-premise sales through the multiple-outlet and convenience stores tracked by Chicago, Ill.-based market-research firm IRI, rosé posted 26% growth overall in the 12 months ended April 16, 2017.

While synonymous for many people with the blush wines of yore—a point underscored by the fact boxed rosés priced less than $4.50 per 750 ml account for $55 million (28%) of annual sales—rosés priced $20-$24.99 per bottle gained 116%, followed by those priced $15-$19.99, which gained 89%. Premium box wines (those priced $4.50 and up per 750 ml) also enjoyed a taste of the action, with sales rising 93%.

While many of the gains are off a low base, making the actual increases seem more spectacular than in larger categories, they nevertheless point to shifting consumer interest.

“The numbers don’t lie. Rosé is hot! Consumers are gravitating towards rosé as an easy-to-enjoy, flavorful, food-friendly wine,” said Jan Barnes, vice president and group brand director for Ste. Michelle Wine Estates. "I’m sure the numbers will continue to show meteoric growth, based on the retail display activity you can find across the country.”

Meanwhile, reds haven’t lost their hold.

According to bw166, U.S. wine sales totaled $3.1 billion in April and nearly $40 billion in the most recent 12 months, up 3% from the previous year. Total wine sales including packaged imports also rose 3% to top $60 billion.

Sales through multiple-outlet and convenience stores totaled $665 million in April 2017, also up 3% from a year earlier, and $8.1 billion for the most recent 12 months, a 4% increase from the previous year.

Within the off-premise outlets IRI monitors, Cabernet Sauvignon accounts for 19% of annual sales, with Pinot Noir and red blends enjoying an 8% share each.

Drilling into DtC

The phenomenon is even more pronounced in direct-to-consumer (DtC) shipments, which totaled $227 million in April 2017, up 13% from a year earlier, according to Wines Vines Analytics/Ship Compliant data. Shipment volume totaled 491,291 cases (also up 13%).

Drilling into what was actually moving, Cabernet Sauvignon, Pinot Noir and red blends led the way in the 12 months ended April 2017, followed by Chardonnay and Zinfandel. With shipments worth $729 million, Cabernet Sauvignon claimed a 30% share. Pinot Noir edged out red blends for the second spot with $404 million versus $399 million; each variety claimed a 16% share.

Red wines were even stronger when it came to per-bottle pricing. The average DtC price for Cabernet Sauvignon was $70, while Pinot Noir commanded $45 per bottle, and red blends were slightly less at $42. Edging out Chardonnay and Zinfandel for the fourth and fifth spots were Cabernet Franc and Syrah, rich wines that commanded $40 and $33 per bottle, respectively.

A flash of red

A similar pattern was seen in flash offers, which declined 13% in April versus a year earlier (a shift partly due to Wines Vines Analytics no longer tracking offers by the website Lot 18). Still, the 12-month trend was clear: The leading variety both by number of offers and highest flash price was Cabernet Sauvignon, which attracted 1,651 offers during that period with an average price of $49 per bottle; the price was up 19% over the same period a year ago. Pinot Noir ranked second, with 1,275 offers; the average price was $26 a bottle, up 4%.

The average price for red blends, which accounted for the third-highest number of offers at 919, fell 2% to $37 per bottle. Notably, a price decline was also seen in DtC shipments of red blends, which posted a 5% drop from a year ago. With red blend case volumes up 20% during the period, the decline was consistent with reductions seen across DtC shipments in recent months as consumers have taken delivery of cheaper brands rather than just premium offerings.

Hiring categories equalize

Regardless of price, stronger sales and greater DtC activity has meant good times on the hiring front.

While hiring has softened for finance, administration and sales staff, helping pull the overall Winery Jobs Index provided by winejobs.com down 3% to 380 for April 2017, the big picture remained robust.

Demand for winemaking and direct-to-consumer (DtC) positions largely offset the losses, with gains in the most recent 12 months up 15% and 12%, respectively. This contributed to a 7% net gain in hiring activity across all categories compared to the previous year.

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