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Premium-Plus Wines Drive Category Growth

August 14, 2017

Amid new evidence that wine is taking share from beer within the coveted millennial demographic, premium-and-above wine brands continue to thrive in the U.S. market, accounting for an outsized share of overall category growth.

The premium-plus wine sector, including wines with an average price tag of at least $10 a 750-ml. bottle, advanced 4.9% to 72 million nine-liter cases in 2016, according to Impact Databank. That growth builds on the 5.7% increase the segment enjoyed in 2015. Overall, the premium-plus share of the total table wine market in volume terms has grown from 17% in 2006 to nearly 25% today. In value terms, premium-plus wines now account for 44% of the market, up from 37.7% a decade ago.

The top 10 wine brands in the U.S. retailing at between $10 and $14 a 750-ml. combined for an 8.9% increase to 24 million cases last year. Meanwhile, the top five brands priced at above $14 a 750-ml. grew by 12.1% in 2016, and have collectively doubled in size since 2010 to six million cases. That above-$14 group includes California labels J. Lohr, La Crema, Meiomi and the Francis Ford Coppola Diamond Collection, along with New Zealand import Kim Crawford.

David Bowman, executive vice president of marketing for Jackson Family Wines, says his company is intent on pushing its pricing upward, convinced that consumer demand will continue to migrate toward the higher tiers. “We’ve pretty much decided that we’re moving north of $20 as fast as we can,” Bowman says. “We’ll see if people want to chase us.”

Constellation Brands also looms large within the market’s super-premium and deluxe tiers, counting a variety of fast-growing brands within its portfolio, including Kim Crawford, Meiomi and Clos du Bois. Kim Crawford is the third-largest above-$14 brand in the U.S., and it continues to climb, illustrating U.S. consumers’ ongoing fascination with New Zealand Sauvignon Blanc. Kim Crawford shot past the 1-million-case mark last year on 20% growth.

Other double-digit gainers in the $10-and-above wine segment include E.&J. Gallo’s Apothic, Deutsch Family’s Josh Cellars and Riboli Family Estates’ Stella Rosa. Apothic surpassed 3 million cases last year, while Josh Cellars jumped by 50% to 1.5 million cases and Stella Rosa leapt 30% to 1.3 million cases. All three are Impact “Hot Brand” honorees.

For a full report on the premium-plus wine category, see Impact’s August 1&15 issue.

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