Wine Market Up 3% in Volume, 4% in Value

Gomberg Fredrikson paints picture of growth in first six months of 2018

by Jim Gordon
This table shows the contrast between Nielsen data from major retailers and the "total market" as measured by Gomberg Fredrikson & Associates from multiple sources for sales of wine in the U.S. market.

San Rafael, Calif. -- The U.S. wine market grew at annual rate of nearly 3% in volume and as much as 4.4% in value during the first six months of 2018, according to Jon Moramarco, editor and partner of Gomberg Fredrikson & Associates (GFA).

GFA’s calculations from multiple data sources for the first six months of 2018 show that wine volume from all sources rose 2.9%, while domestic wines grew at about 2.5%. Moramarco presented the data during a Sept. 20 webinar.

Domestic wine volume has been seen as growing slowly in the off-premise channel. Market research firm IRI reported that volume growth was nearly flat for the 12 months through June in its multiple-outlet and convenience store channel, for example, and the well-documented premiumization trend has seemed to limit the good news mostly to measures of sales value, not volume.

More positive
The numbers are more positive than those from well-known syndicated source Nielsen, too. Nielsen reported the first-half of 2018 volume growth rate in off-premise locations as negative 0.7% for all table and sparkling wine in its food, drug and liquor store channel.

Nielsen’s number for value growth in its food, drug and liquor store channel was 1.4% or 3 points below GFA’s growth rate of 4.4% for the total wine market, based on U.S. Commerce Dept. figures and other sources, Moramarco said.

Winery and wine trade executives accustomed to viewing data from IRI and Nielsen as gauges of the health of the wine economy, should keep in mind what it is those two organizations and other data sources measure, he said.

Moramarco said he values Nielsen’s numbers, but pointed out that the channel covers only off-premise wine sales at mostly major companies’ stores. It’s a major channel, but Nielsen and IRI data do not include direct-to-consumer sales, on-premise sales and many independent wine retailers, for example.

GFA analyzes and reports on wine, spirits and beer performance based on multiple sources including Nielsen and IRI, U.S. government sources that include the Treasury Department’s TTB division, Customs, Commerce Department and Census Bureau, plus California’s Department of Tax and Fee Administration, public company reports and other industry sources.

GFA is co-owned by Moramarco and Wine Communications Group, which also owns Wines & Vines and Wines Vines Analytics.

Six-month winners
Moramarco highlighted some domestic wine companies with outstanding sales gains in the first half of 2018, led by Trinchero Wine Estates in sheer volume, adding 614,851 cases or 7.2% vs the same period last year. The Wine Group, DFV Wines and Vintage Wine Estates were the Nos. 2 through 4 leading volume gainers.

He also covered the performance of sparkling wines and looked at the import-export equation. The total sparkling wine market in the U.S. grew 5.9% in volume, Moramarco said, but that was driven by imports which grew by 8.8% in the six-month period while California sparkling wine volume shrank by 3.7%.

However, sparkling wine from Washington state and elsewhere grew well enough to boost the total domestic volume to the U.S. market by 2.1%.

GFA’s six-month results for imports showed bottled table wines down by 1% and bottled sparkling wines up by 10%, drive largely by the continuing prosecco boom that boosted Italian sparkling volume by 16%.

Exports of U.S. bottled wine dipped by 11% in the first half of this year, affected significantly by a 40% drop in exports to the European Economic Community and a 10% drop to Canada, the leading export market. Bulk wine exports grew by 16%.

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