Dear Client:
“Retailers are looking very closely at how their space is being used,” said Danny Brager, vp of beverage alcohol at Nielsen, and more of that space is being used for beer. The number of items handled for wine and spirits was flat in 2009 versus the past couple of years, while the average retailer added 11 beer items last year, mainly crafts and domestic super-premiums. When looking just at the wine and spirits categories, more space was given to vodka and table wines priced in the sweet spot of $9-$15.
Wine and spirits pricing has gone down, while beer in general continues to lead pricing. Price change versus a year ago for beer grew 0.9%, while wine pricing declined -1.4% and spirits pricing grew 0.4% at a much smaller rate than a year ago. Coupon usage is steadily growing, especially for beer. Coupon distribution grew 37% for beer, which are also redeemed at a faster rate.
Meanwhile, growth of wine and spirits store brands are outperforming branded products. On a small base, private/exclusive wine and spirits labels are growing well ahead of the category “as consumers are looking for brands that provide them with value, meaning good product for a fair price,” said Nick Lake, vp of beverage alcohol for Nielsen. Keep in mind, though that private label wines have 3.3% category volume share and private label spirits have 4.6%.
Promotional levels increased 2 points for spirits in the 13 weeks to Jan 9, while wine grew 2.8 points. Nielsen said that consumers went from trading down to trading up in the 52 weeks leading up to the holidays, where the higher end of segment of beer, wine and spirits started seeing more growth.
Some of that higher-end beer, though, is taking share from wine and spirits. Craft beers have experienced very impressive growth in the recession, taking consumption from imported beers, super-premium wines and ultra-premium spirits.
In the 52 weeks to January 9, dollar value growth for beer grew 1.7%, wine gained 2.9% and spirits grew 1%. Volume growth for beer declined -0.7%, wine grew 1.4% and spirits gained 0.9%.
In the 4 weeks to Jan 9, beer was flat in dollar sales, wine grew 6.6% and spirits gained 0.1%. Volumes for beer declined -1.5%, wine grew 5.4% and spirits increase 0.8%.
SPIRITS grew 1% in dollar sales in the 52 weeks to Jan 9, with food stores and convenience stores leading growth. Vodka continued to grow, driven by flavors and mid-priced brands. Rum and tequila experienced gains from value brands, while rum also benefited from ultra-premium brands. Irish whiskey was a “bright spot” for spirits last year, posting 14% growth in dollar sales.
Overall, the value segment grew 3% in dollar sales, while premium and ultra premium saw declines. Share hasn’t changed dramatically among price segments, just growth rates.
Small and large package sizes were most popular in all alcohol categories. Spirits saw the most growth from 1.75 liter packages and 50ml.
WINE experienced solid growth, up 2.5% in value and 1.5% in volume in the 13 weeks to Jan 9. Grocery, drug and c-stores led growth, followed by clubs and other discounters. The strongest price segments were $3-$6 and $9-$15. Danny noted that the $15-$20 table wines are improving thanks to trading down and increased promotional dollars. The most popular package sizes were the 3L box, 187 ml bottle and tetra packages.
Domestic wines far outpaced imports, with California and Washington performing the best. Oregon and Texas were also in positive territory. The top three importers – Australia, Italy and France, did not perform well, while New Zealand and Argentina were “head and shoulders” above the rest.
Riesling was the fastest growing varietal, followed by pinot noir and sauvignon blanc. Cabernet also performed well. Meanwhile, Malbec and Moscato each gained a share point in 2009.
In a Wine Market Council wine consumer survey taken in October 2009, 69% of respondents said “I am finding good quality wines available at lower prices.”
AUSTRALIANS MAY CUT PRODUCTION BY 25%
Major trade and statutory groups from Australia’s wine industry are negotiating a plan that could cut up to 25% of the nation’s vines, reports Drinks International. There is an excess of about 500,000 tons of Australian wine produced each year that no one wants. The proposal is expected to be released next week and will likely ask wine producers to submit their production figures and business plans for review. If their business is considered unprofitable, the government will offer them money to cutback or stop growing winegrapes. Stay tuned…
ABI TARGETS MADD IN NEW EDITORIAL
Sarah Longwell, managing director of the American Beverage Institute, wrote an editorial in today’s issue of the Albuquerque Journal, where she accuses MADD of using faulty and exaggerated statistics from New Mexico about ignition interlocks. Recall that New Mexico was the first state to require ignition interlocks for anyone convicted of drunken driving. Why is this important? Because MADD uses those same statistics in attempts to expand interlock laws throughout the US, including a new federal interlock bill in the Senate. To read the article, click here.
WSD BRIEFS:
TECHNOMIC revised its 2010 U.S. foodservice industry sales forecast from -0.8% to -1.6%, citing continued concern over job losses, underemployment and consumer frugality.
NEW JERSEY BILL based on the model direct-to-consumer wine shipping bill passed a Senate committee yesterday.
GLAZER’S DISTRIBUTORS has appointed Alan Greenspan to a new role on the corporate team as evp and general counsel, effective March 1.
THE PLATINUM SPIRITS CO officially launched Platinum Liqueur in the Austin and Dallas, Texas markets. Platinum Liqueur is a line of ultra premium 80 proof clear liqueurs that includes Citrus Mint, Mandarin and Black Cherry flavors.
Until Monday, Megan
“All that counts in life is intention.”
Andrea Bocelli
——— Sell Day Calendar ———-
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