Memorial Day Is a Wine Event

Holiday period sales up 8.6% as overall domestic sales grew 6.2%

by Jim Gordon
Memorial Day Wine Sales
San Rafael, Calif. -- The Memorial Day image of thick steaks charring on the grill while guests pop open frosty cans of domestic lager is giving way to one of fresh halibut marinating in ginger and lime juice while the hostess pours a chilled California Sauvignon Blanc, if the latest off-premise sales figures from the Symphony IRI Group are any indication.

The market research firm took a close look at Memorial Day holiday period wine sales for Wines & Vines, and found -- over three years -- a dramatic, and still building trend toward more wine purchases to celebrate the first of the summer holidays. The two-week period ending June 6 saw overall table wine sales up 8.6% over the similar period last year. In 2009 the growth was 5.3%, and in 2008 just 3.6%.

Only one out of nine price/size categories did not grow for the 2010 holiday, and five of nine categories experienced double-digit growth. Continuing a trend in recent months, the more expensive wines did especially well. Those priced at $20-plus shot up 29.4% from the 2009 holiday period, followed in order by those costing $15-$19.99, $11-$14.99 and $8-$10.99. The higher-priced wines did well enough to pull up the so-so growth of the biggest price category in dollars, wines at $5-$7.99.

Among box wines, the less expensive boxes at less than $2 per 750ml equivalent barely grew at 3.8%, while the premium-priced boxes at more than $2 per 750ml (at least $8 for a typical 3L bag-in-box) were the second fastest growing type of all, rising 23.5% from a small base.

Memorial Day wine Category
Nationwide trend
"This is telling me that Memorial Day, which was historically a beer-drinking holiday, is becoming a big wine-drinking holiday," said Doug Goodwin, VP of client insights for beer, wine and spirits at the SymphonyIRI Group (SIRI). The company measures sales with checkstand scan data from major food, drug and liquor stores across the United States.

"Not one area of the country went down in wine consumption on Memorial Day," Goodwin continued. "The greatest category volume growth occurred in three of the most populous states: Texas, Florida and California. Each had double-digit volume growth, but sales were also noticeably strong in Washington, Oregon, Virginia, Illinois, Georgia and Ohio."

So what brands were Americans buying? Barefoot California table wines in the $5-$7.99 category led all others, domestic and imported, in volume growth, at 11.1% and more than $9 million in sales for the two-week period. Franzia boxes, Woodbridge by Robert Mondavi, Sutter Home and Gallo Family Vineyards filled out the top five in volume growth. Interestingly, none of those had significant distribution growth, so the same population apparently was buying more wine.

Among brands that led Memorial Day sales growth in the very competitive $11-$14.99 tier were Kendall-Jackson Vintners Reserve, Clos du Bois, Toasted Head and Rodney Strong.

Goodwin observed an overall increase in merchandising, feature and/or display, among many of the top 25 gaining brands, and called this most likely one of the key factors driving category volume sales growth.

off-premise wine sales
The four-week results
Overall sales of domestic table wine, which Wines & Vines has been tracking closely during recent months with SIRI's help, didn't grow as fast during the four-week period ending June 13 as did the holiday sales subset. Still, it marked the sixth month in a row that 2010 dollar sales outpaced 2009 sales. The four-week number compared to the same four weeks last year was up 6.2%, to $321 million.

California wines underperformed the 6.2% domestic average slightly in dollar growth, but Washington wines beat it by a sliver at 7.1%, and Oregon had a very hot month, gaining 20.2% more dollars than last year.

Imports for the same period went down 0.8% overall. Argentina continued to be a star import performer, however, with an almost incredible 35.8% sales growth, and New Zealand shot up 19.5%.

Looking at the varietal/type numbers including both domestic and imported wines shows that the biggest table wine category in dollar sales, Chardonnay at $5-$7.99, totaled nearly $27 million in sales, but dropped 5.6% over the four weeks vs. a year ago. Consumers may have upgraded within Chardonnay, because the second-biggest category, Chardonnay at $11-$14.99 and totaling nearly $23 million, grew by a healthy 8.2%.

Cabernet Sauvignon at the same price did even better, increasing by 12.6% to more than $12 million. Consumers apparently stocked up on Cabernet's white parent varietal, Sauvignon Blanc, too, as all four price categories from $8 up grew by healthy percentages.

Resurgence of Meritage
Last month's report mentioned the apparent resurgence of Red Blends/Meritage wines, and the June 13 results seem to confirm their sales strength. All three of the highest price-points grew at 30% or more from a year ago. The longer view looked almost as good as the shorter view.

The latest sales period helped boost the Red Blends/Meritage category overall to more than $209 million sales for the current 52 weeks, and a 52-week growth rate of 10.6% over the previous period.

High priced Zinfandel and Pinot Noir also grew dramatically. Syrah, however, cooled abruptly compared to a year ago, as sales fell in five out of seven price categories.

Looking at the sales of domestic wines purely by overall price segments, the highest priced wines at $20-plus averaged the highest growth rate of 20.3% in the recent four weeks. That same number was 24.4% for the most recent 12 weeks, 22.2% for 26 weeks and 22.5% for 52 weeks. It adds up to a very robust recovery for special- occasion wines.

The next fastest growing overall price segment was the much bigger ($56.8 million four-week sales) $11-$14.99 tier, which grew at 10.4%. 

Top brands
The battle of the brands is fought largely at lower price-points. Of the top 20 overall domestic and international table wine brands, 12 grew in the recent four-week period and eight shrank. The Barefoot brand of E & J Gallo led in dollar sales at $17.5 million and posted a 31.9% increase over last year at this time, making it not only the biggest selling brand, but the hottest.

Next in order, rather closely grouped in overall sales, were Sutter Home, Franzia box wines, Yellow Tail from Australia and Woodbridge by Robert Mondavi. The top five have finished in the same order for at least the past 52 weeks.

Figures quoted in this article come from the Chicago-based SymphonyIRI Group, which uses scan data to provide market information and services to industries including consumer packaged goods, retail and health care. Wines & Vines provides further analysis and reporting on the results.

Correction on Washington Wine Sales

The article and accompanying chart on the Top 20 Washington Wine Brands on page 14 of the July print issue of Wines & Vines was in error regarding the period of time over which the sales of the top 20 brands were measured by Symphony IRI. The sales data actually represent performance over a 52-week period ending May 16, 2010, not the most recent four-week period as stated. The chart and the article have been corrected on the magazine's website, here.
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