CHICAGO, Oct. 25, 2007 – It’s no secret that the wine industry is a booming business. In fact, many die-hard beer and spirits drinkers are becoming connoisseurs of the latest cabernets and chardonnays. This popularity has led to an overwhelming number of new items being introduced in the wine market over the past years, creating challenges for manufacturers and retailers to get a firm handle on which new items are successful and what characteristics are actually driving sales. A just released analysis from Information Resources, Inc. (IRI) uncovers these important trends, so that manufacturers can benefit from new product insights that will help them champion new items and partner with retailers to identify new items and segments that keep their assortments in line with market trends.
“Selecting new items is a daunting task for retailers and identifying consumer trends is difficult for manufacturers because of the high number of new items and the highly fragmented wine category,” says Bump Williams, general manager of the IRI Beer, Wine and Spirits Practice. “Both parties require insightful and predictive insights to drive their business forward. The IRI survey fills this need, because it reveals new information on both brands and line extensions to show how each fuel the growth of new wine items. This level of analysis makes it easy for retailers and manufacturers to understand and capitalize on the most valuable characteristics of successful new items.”
Key New Wine Trends
Newly introduced wines, which include new brands as well as line extensions, captured a 10 percent share of the $500 million in growth from wine sales in U.S. grocery and drug stores for the year ending in mid-summer 2007. The IRI analysis shows the following trends:
- E. & J. Gallo dominates the new items category, particularly with the low-priced Mattie’s Perch from Australia, Sebeka from South Africa and Red Bicyclette from France. The success of Mattie's Perch comes from finding an untapped segment. The brand is value priced at $4.99, significantly below most of the popular Australian brands whose average prices are about $6.50 for a 750ml bottle.
- California and Australia lead the pack of new lines and brands, accounting for 70 percent of revenues of new items. Imports and domestics have taken turns in dominating new introductions during the last three years, with imports during the last summer-to-summer period posting a greater share of the total revenues from new products at 58 percent versus 42 percent for domestic companies. In the previous year, domestics accounted for 63 percent versus 37 percent for imports.
- Volume of new brands and extensions is spreading through the price tiers. In 2005, 48 percent of new items were priced in the popular range and 25 percent were in premium. This year, there are five price categories, each with at least a 10 percent market share.
- Five “flavor types” captured 63 percent of total dollars spent, with pinot noir leading the bunch followed by chardonnay, red blends, syrah and then riesling. Cabernet sauvignon was listed sixth and merlot seventh. It's no secret that pinot noir has been a great success for California wineries, with an average of 40 percent sales increases during the past three years. The success with the flavor this year, however, originates outside the United States. Australian pinot noir increased by 76 percent, well above the 12 percent average in the previous two years, helped in no small way by Yellow Tail, whose new pinot noir item is the overall top-selling new item. French pinot noir grew 352 percent driven by a new item from the Red Bicyclette brand, which quickly became the best seller in the segment and the second best-selling new item overall.
“Retailers should make sure they are carrying this year’s top performers,” adds Williams. “Each price segment contains an overflow of new items, so picking the right items is essential given that 85 percent of all new item sales are generated by only 20 percent of the new items.”
For additional information about the new item wine analysis from IRI, the world’s leading global provider of consumer, shopper, and retail market intelligence and insights for the consumer packaged goods (CPG), healthcare and retail industries, please contact Dan Wandel at daniel.wandel@infores.com.
IRI Beer, Wine and Spirits Practice
The IRI Beer, Wine and Spirits industry vertical provides manufacturers, distributors and retailers with market and store-level insights specific to the beverage alcohol marketplace. The practice was formed in response to the needs of manufacturers, distributors, and retailers in this segment to better understand consumer decisions related to beverage alcohol purchasing behaviors, attitudes, and preferences. The IRI Beer, Wine and Spirits industry vertical offers a complete suite of solutions, including account- and store-level tracking that help its clients monitor, comprehend, compete, and act upon within the rapidly evolving beverage alcohol market.
About Information Resources, Inc.
IRI is the world’s leading provider of consumer, shopper, and retail market intelligence and insights supporting 95 percent of the FORTUNE Global 500 consumer packaged goods (CPG), retail and healthcare companies. Only IRI offers the unique combination of integrated market information, automated and predictive analytics, innovative enabling technologies, and domain expertise. With IRI, leading retailers and manufacturers are able to quickly discover breakthrough insights driving smarter decisions and actions across the enterprise for breakthrough results. Companies around the world depend on IRI for improved productivity, stronger brands, and dramatic revenue growth. For more information, visit http://us.infores.com.
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IRI CONTACTS:
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Shelley Hughes
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