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Special Report: Premium-Plus California Wine Rising Sharply, As Cupcake Leads Charge

June 13, 2013

California’s premium-plus wine segment ($10-and-above) is thriving, despite a challenging on-premise environment. The top 10 premium-plus California wines grew by an aggregate 8.2% in 2012, according to Impact Databank, far outpacing wines priced below $10.

Eight of the top 10 brands in the $10-plus segment posted growth last year, and those eight brands now account for more than 40% of total volume at that pricing tier.

Growth in the $10-plus segment is being led by Cupcake ($11-$12), which jumped by 25% to 3 million cases last year. Cupcake, marketed by Underdog Wine Merchants (The Wine Group), has been on a tear over the past few years. After selling roughly 60,000 cases in its launch year of 2008, Cupcake leapt to 300,000 cases in 2009 and hit the 1-million-case mark the following year. The brand’s upswing continued in 2011, when it more than doubled sales to 2.4 million cases. This year, Cupcake is on pace to leapfrog Kendall-Jackson (which rose by 3.9% to nearly 3.1 million cases in 2012) as the U.S. market’s top-selling wine priced above $10.

While California’s $10-plus segment has been rising swiftly, wines priced above $20 are faring even better. According to SymphonyIRI, domestic table wines priced above $20 a bottle rose 17% by volume and 15% by value in the 52 weeks through April 21, with California accounting for 94% of the domestic category.

While the market is generally strong and enthusiasm abounds—especially about the highly anticipated 2012 vintage—leading players admit that work remains, particularly on-premise. “It’s been a bumpy ride on-premise, trending with consumer confidence, but that channel is in growth again and we’re focused on by-the-glass listings,” says Michelle Perry, marketing director for Constellation’s luxury wines.

For a comprehensive report on California’s premium-plus wine business, see Impact’s June 1&15 issue.

U.S. – Top 10 California Table Wine Brands Priced Above-Premium1
(thousands of nine-liter case depletions)
Rank Brand Company 2009 2010 2011 2012 Percent
Change
2011-2012
1 Kendall-Jackson Kendall-Jackson Wine Estates 2,780 2,875 2,970 3,085 3.9%
2 Cupcake2 Underdog Wine & Spirits 300 1,000 2,400 3,000 25.0%
3 Menage a Trois Trinchero Family Estates 1,375 1,785 2,010 2,145 6.7%
4 Bogle Bogle Vineyards 1,210 1,370 1,510 1,750 15.9%
5 Clos du Bois Constellation Brands 1,620 1,700 1,660 1,715 3.3%
6 Sterling Vineyards3 Diageo Chateau & Estate Wines 1,405 1,300 1,290 1,255 -2.7%
7 J Lohr Estates J Lohr Vineyards & Wines 885 975 1,085 1,220 12.4%
8 Mirassou E. & J. Gallo Winery 700 765 880 915 4.0%
9 Estancia Estates Constellation Brands 795 805 860 875 1.7%
10 La Crema Kendall-Jackson Wine Estates 655 740 870 850 -2.3%
Total Top 10 11,725 13,315 15,535 16,810 8.2%
1 at least $10 per 750ml
2 includes some imports and sparkling wine
3 includes Sterling Vintners Collection and Sterling Napa

Source: IMPACT DATABANK

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