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Cava Looks To Capitalize On Sparkling Wine’s Upswing

July 23, 2018

While Prosecco and Champagne have benefited the most from sparkling wine’s recent growth in the U.S. market, Cava is also seeing opportunity for expansion. Cava shipments to the U.S. grew by 24% from 2012-2016, though volumes slipped slightly last year to 1.75 million cases. In IRI channels, total Cava volume rose by 4% in the year-to-date ending June 17.

After strong showings in recent years, the two top Cava brands in the U.S. market remained flat in 2017. Freixenet USA’s namesake label held steady at 590,000 cases in 2017, as did its Segura Viudas brand at 270,000 cases. In the prior three years, however, those two brands added nearly 100,000 cases in total.

Earlier this year, Freixenet agreed to sell a controlling stake to Germany’s Henkell—owner of Mionetto, Alfred Gratien, and other sparkling wine brands—following lengthy negotiations. Under the deal, Henkell agreed to acquire 50.67% of Freixenet’s shares and enter into an international cooperation agreement with remaining shareholders Jose Ferrer Sala and Jose Luis Bonet Ferrer. The price wasn’t disclosed, but reports from Spain said the acquisition was worth $270 million. In a joint statement, Henkell and Freixenet said the strategic partnership will allow them to “open up new markets and distribution channels for both companies.”

In recent weeks, the Carlyle Group, one of the world’s biggest private equity firms, agreed to purchase a majority stake in family-owned Cava producer Codorníu Raventós Group. The deal values Codorníu Raventós at €390 million ($454m). The Spanish company’s holdings include 10 wineries across Spain, Argentina, and California—including its flagship Codorníu Cava estate—and more than 3,000 hectares of vineyards. Codorníu reported €236 million ($292m) in revenue for the year ending last June, and has a wholly owned U.S. subsidiary, Aveníu Brands. In the U.S., the company has been focusing on its Anna de Codorníu brand, which plays in the $10-$15 segment.

While Cava traditionally has been associated with lower price points, some producers are making a push at the premium tier. Among them is Juve & Camps, imported by The Winebow Group. Juve & Camps produces about 3 million bottles annually, and has been increasing its U.S. presence lately, averaging around $16 a 750-ml. at retail. The portfolio includes Blanc de Noirs Brut Reserva, La Capella Brut Nature, Brut Rosé, and Reserva de la Familia, among other offerings.

On the new product front, California-based Guarachi Wine Partners recently linked with Araex Grands Spanish Fine Wines to launch the Gran Sello brand ($10) in the U.S., including Brut and Brut Rosé sparklers. Also, the Pata Negra brand, part of the CIV USA portfolio, is introducing several new offerings. Produced in Barcelona via the Champagne method and line-priced at $15, Pata Negra’s new labels include a Brut Reserva, Brut Rosé, Organic Brut and Organic Brut Rosé. CIV USA also markets the Jaume Serra Cristalino Cava brand.

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