Comments on: Retail Wine Sales: Big versus Hot (Hot Hot)

By: Christian Miller

Christian Miller — Thu, 16 Dec 2010 04:41:07 +0000

Scan data is totally unrelated to Direct to Consumer sales, which depend largely on wine tourism, tasting room conversion and club sign up rates, and efficient web, email, phone or snail mail marketing. These in turn vary a great deal depending on the region and type of winery. I recommend consulting with some CPAs with large number of small winery clients, some of the fullfillment management companies like ShipCompliant, or one of the Tasting Room consultants like Craig Root.

By: DH

DH — Thu, 16 Dec 2010 01:05:28 +0000

I’m writing a business plan for a retail wine/tasting room. The financial institutions are asking for 2-yr projections on revenue, cash-flow, P & L. Year-1 was not too difficult with some info I gleened from similar businesses. However, I would venture to guess what kind of growth rate I could expect in year 2. Anyone have a basis point I should use that is acceptable to those evaluating the projections?

By: jim lapsley

jim lapsley — Sun, 05 Dec 2010 22:01:21 +0000

Daniel,
My point is that what you consider to be “food hostile” wines are enjoyed with food by other people and who has the right to judge the appropriateness of what other people enjoy eating and drinking and in what combinations? “Over-spiced” and “over-salted” are your own judgments that depend upon your own physiology (concentration of tastebuds)and psychology (personal experience). What may be overspice to you may be underspiced to someone else. What may be “balanced” to you may be unbalanced to another person. These are opinions or preferences, not absolutes and the arrogance lies in assuming that one’s own preferences are the “correct” view of reality.

By: Crocodile Chuck

Crocodile Chuck — Sun, 05 Dec 2010 06:50:23 +0000

ps this is an excellent analysis of the US wine market, thank you.

By: Crocodile Chuck

Crocodile Chuck — Sun, 05 Dec 2010 06:49:08 +0000

“Australia is overwhelmed by Yellow Tail, which accounts for about 1/3 of the total sales for the country.”

I haven’t the data to hand, but, as an Australian I cannot believe this statement. There has always been a plethora of brands, varieties and blends on offer, in tens of thousands of bottle shops. To think that [yellowtail] has captured 1/3 market share is inconceivable.

What I WOULD say we are overwhelmed by: the New Zealand ‘Savalanche’ (!)

By: Daniel

Daniel — Thu, 02 Dec 2010 17:26:31 +0000

Two things:
Australia is overwhelmed by Yellow Tail, which accounts for about 1/3 of the total sales for the country.

also, to take issue with Jim; there are wines that are the opposite of ‘food friendly’, I call them ‘food hostile’. They are, in some opinions, good or even great wines. But they are so over the top that they destroy the flavors of the foodyou are eating and dominate your palate. It’s not elitist B.S., it is the arrogance of winemakers/owners who feel that the only thing you should taste is their wine, no matter what the setting. I don’t drink wines like that because I like balance, I also try not to eat food that is over spiced, salted, flavored for the same reason.

By: PaulG

PaulG — Wed, 01 Dec 2010 18:24:41 +0000

Mike, I totally agree that all signs point to the rise in $20+ actually reflecting an ongoing decline in prices. That category may not represent a large fraction of total dollar sales, but it includes probably 99+ % of the high-rated (let’s say 93 and higher) wines in the world. So If your $325 cult cab is now being offered at the “bargain” price of $180, it may see a pop in sales. Or if your $80 single spur Pinot Noir is marked down to $40, you may move a few cases. But those wines are surely not holding their price points, nor would I expect to see them return to those price points in this lifetime – unless they convince the Chinese that they are collectible.

By: Christian Miller

Christian Miller — Wed, 01 Dec 2010 18:16:36 +0000

It’s hard to say exactly; since the demise of Wine Trends, there hasn’t been any hard 3rd party data on total CA shipments by varietal to all channels. But here’s an example: if you take estimates for CA shipments by variety from Gomberg-Fredrikson’s annual report for 2009 and divide grocery store 2009 scan data into it, 14-15% of CA Zinfandel goes through chain grocery whereas 25-30% of CA Merlot is sold through chain grocery.

By: Jim Lapsley

Jim Lapsley — Wed, 01 Dec 2010 16:37:42 +0000

Mike, one other thing. Can we (collectively) stop talking about “food wines”? Any wine that a consumer enjoys with food is a “food wine.” Some individuals may not enjoy the past trend to higher-alcohol, riper flavor, wines (and I am among them) but to castigate those wines as non “food wines” is, in my opinion, elitist B.S. Some groups of consumers partially define themselves as going against mainstream taste–and a movement away from higher alcohol wines may be part of that process. But this same group may have been the point-guard in the movement towards higher alcohol wines 15 years ago. My real point here is to suggest we drop subjective and value-laden terms such as “food wines” and instead simply refer to alcohol level, something that is measurable.

By: Jim Lapsley

Jim Lapsley — Wed, 01 Dec 2010 16:23:05 +0000

Great review of the current status of retail sales in locations reporting their scanning data. I echo Christian Miller’s caution that the scanned universe may not be representative of all market activity. A second point is that these figures are dollars, not volume. It would be great to have volume figures as well in order to see if prices are going up in the various categories. Finally, for the “hot” categories, we need to remember that these percent increases are off small bases. Collectively, they are still a small percent of the total market.