Over the last year the volume of Cabernet Sauvignon sold off-premise grew 4.8% compared to a 0.7% growth for Chardonnay, which has been the biggest varietal wine for decades, but may now have a serious threat to its dominance.
“If Cabernet Sauvignon and Chardonnay continues to grow at the current rates, Cabernet will be the biggest variety in 3 years,” says Brian Lechner,Vice President – Group Client Director at Nielsen.
He attributes the advantage of Cabernet to a shift in generational behavior. Whereas Generation X wine drinkers tended to enter the category with white wines, Millennials are more likely to enter in the red wine category.
Consumers continue to spend more on wine and more per bottle. Nielsen’s off-premise report shows a 4.5% growth in dollars spend on wine over the last year compared to the year before, but the trend is even stronger over the last quarter, a 5.7% growth, and the last month, 6.5%.
While volumes have grown as well, 1.5% by year, 2% by quarter, and 2.2% by month, the numbers are trailing dollars spend indicating that consumers are trading up. The price segment performance tells the same story with wines $9 and up showing significant growth with the biggest margins in the $15 to $19.99 segment, which grew 15.3% year over year.
Another category seeing continued growth is blended red wine with a 9% annual dollar value growth and 4.1% volume growth. Lechner says that the category has been identified by many as a segment with growth opportunity, and a high number of new SKUs have entered the market adding to this segment’s proliferation.
Categories in Decline
The three biggest varietal losers in annual dollar value decline.
- Syrah -10.9%
- White Zinfandel -6.2%
- Merlot -3%
The decline of Australian wines in the U.S. Market is continuing, but may let up. While the category has dropped -5.5% in value year over year, the decline in the last quarter was only -2.7%, and a comparison between the drop in value and volume over the last month shows a steeper drop in volume -3.8% versus value -2.9%, which means that higher end brands are doing better than their lower end competitors.
By Kim Johannsen