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Imported Wine Volume Declines Slightly, But Value Picture More Encouraging

May 8, 2014

In stark contrast to the continuing strength of domestic wine in the U.S., imported table wine lost ground in 2013, with category depletions down 0.5% to 70 million nine-liter cases, according to Impact Databank. This marks a significant slowdown from last year’s 3% rise, and uncertainty abounds in the import segment, as the U.S. on-premise struggles to make a full post-recession rebound. Off-premise, the category’s prospects are also shaky, due in part to domestic wine’s dominance. According to IRI data for 2013, domestic table wines, up 3.4% by volume and 7.2% by value, far outperformed imports, which slipped 2.3% by volume and grew just 1.2% by value across food, drug and convenience store channels.

The picture has been decidedly mixed for the import segment’s top sellers. Six of the top 10 brands were on the rise last year, but only half of those advanced by more than 2%: Gallo’s Alamos (+13.5%), The Wine Group’s Fish Eye (+7.2%) and Prestige Wine Imports’ MezzaCorona (+8.8%). Meanwhile, four top 10 entries lost ground, leading to an aggregate loss of 0.8% for imported wine’s 10 biggest brands.

Still, there are signs the segment’s health is improving. While shipments of imported bulk wines were up dramatically in 2011 and 2012, they were on the decline in 2013, dropping more than 30% to 28.3 million nine-liter cases. As a result, prospects look slightly brighter for markets such as Australia, Argentina and Chile—all of which had seen bulk exports to the U.S. rise sharply in 2012, bolstering volumes but hurting per-liter value.

Australian wine, in particular, is primed for value growth, following several years of challenging conditions. Last year, Australian wine import volumes fell by 11% to 174 million liters, and total value was down 2.4% to A$440 million ($393.4m). But for the first time since 2007, the average per-liter import price of Australian wine showed an increase, up 9% to A$2.53 ($2.26), according to trade group Wine Australia. Consequently, trading-up trends may finally be creating upside for Australia, which remains the U.S. market’s second-biggest bottled import category behind Italy at 19.6 million nine-liter cases.

“Declines are consistently at the lower price points, (but) we’re developing the idea of premium regional discovery. We’re seeing growth in regional labels, and those usually retail at $15 and above,” Angela Slade, North American regional director at Wine Australia, recently told SND. For the full report on the U.S. imported wine market, see Impact’s May 1 issue.

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