wine sales

Fine Wine Sales Surge 20% In 2010

by Tim Elliott on January 18, 2011

People enjoying wine at a restaurant

Photo by ZagatBuzz via Flickr

I was pleased to see coverage from both wine industry and mainstream sources today that confirmed that U.S. wine sales in 2010 grew 6% in dollars over 2009. What’s even better is the fine wine segment of $20 and up grew a robust 20%. Sounds like a prediction someone made a year ago.

Money quote from Rob McMillan at Silicon Valley Bank who told the San Francisco Chronicle, “When you look at businesses like Saks and Nordstrom – the luxury retailers – they had a good year. Fine wine falls into that category.”

Let’s hope this encouraging trend continues to build this year.

via Wines & Vines and San Francisco Chronicle

Consumers Buying More Lower Priced Wines

by Tim Elliott on January 2, 2009

Photo by sparktography on Flickr

Perhaps I should have read the New York Times before making my prediction yesterday that wine consumption would decrease as consumers gravitate to lower priced wines. As they published Wednesday, consumers are indeed selecting lower cost bottles but are purchasing more for about the same total dollar amount as a year ago. This bodes well for wine merchants and producers of lower priced “value wines” in the $10-15 price range. It seems consumers are more comfortable with three $15 bottles than one $50 bottle.

The piece speculates on the reasons for this but I think it’s likely that people have stopped going to restaurants and are cooking more of their meals at home. It’s good to see wine being thought of as an affordable luxury even if consumers are trading down in price.

So I could be half-wrong about that last prediction; I really hope I am.

Photo by sparktography on Flickr

My Wine Predictions for 2009

by Tim Elliott on January 1, 2009

Photo by Charyn Pfeuffer

Photo by Charyn Pfeuffer

A couple years ago I made 8 bold predictions for 2007. I decided to sit last year out after only the most obvious of the eight actually came to pass (increasing direct to consumer wine sales). But some progress was made on the list in 2008 with Tyler Colman, a.k.a Dr. Vino truly “going pro” with the publication of not one, but 2 wine books. Not to mention the entire Gary Vaynerchuk story which played out in a big way since I made that prediction. Some of my other predictions also made some progress toward fulfillment so I’m going to add six more for 2009 today.

The Year of Value – This prediction is really not that much of a stretch since the world economic downturn has made it a lot more challenging for wine producers to sell higher priced wines. Anything above $25 a bottle will be a tough sell in this environment with a lot of competition for consumers in the $10-15 price category. Look for some producers to just lower their pricing while others, such as Cameron Hughes, Mark West and Castle Rock, will be perfectly positioned to gain market share. 2009 is the year of extreme value that might also spark more interest in wine auctions as consumers look to maximize their purchasing power.

Wineries Really Go Direct – More wineries are exploiting direct to consumer sales and I expect to see a lot more growth in this area particularly for higher priced brands. The economics of direct sales and shipping will be a major advantage for wineries who can create enough pull with consumers. With wine tourism down due to the recession, I see the winners being those who create this pull online via ecommerce and, increasingly, a social media presence.

Yellow + Blue MalbecAlternative Packaging – As wine lovers become more concerned about the carbon footprint of their favorite beverage, more will look for wine packaged in bag-in-box or TetraPaks. As I’ve blogged here in the past, I hope to see better quality wines in these packages particularly those wines intended for immediate consumption.

Wine 2.0 Will Produce A Star – I’ve written about the intersection of Web 2.0 and wine for some time now but there has not been a breakout success story yet. This year will produce at least one star who will finally validate this space. My money is on Snooth right now but this could change as the year progresses. Stay tuned for a lot more on this subject here soon.

Wine Media Goes Digital -The traditional glossy wine magazines such as Wine Spectator and Wine Enthusiast will be forced to rethink their print business model this year and go more digital. I still think there will be the same amount of wine publications produced but the ones that are left will have figured out how to make money from their online presence and not just by print advertising sales. Of all of these magazines, Wine Spectator is the best positioned to flip the switch, open up their subscription site and become supported by their online advertising inventory. But I don’t expect to see them do this because they will see too much short-term risk in their current, but doomed, business model. 2009 will be a great year for new entrants trying to figure out this territory like Mutineer.

Americans Drink Less Wine At Lower Price Points – This prediction is linked with my first one but I think it’s important to note that the wine market in the U.S. will not grow as it has in the past. Not only will consumers drink less wine they will trade down to lower priced selections. With the U.S. dollar increasing in value, this will make imports more attractive especially from the Old World where vineyard land is a long sunk cost.

So there you have it; six bold predictions for 2009. I’ll revisit these in June and again in December to see what really happened.

Which ones do you think are right, dead wrong or what did I miss?

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