Korbel Rides Sparkling Wine Wave To New HeightsJuly 6, 2016
Long the dominant player in California’s Methode Champenoise sparkling segment, Korbel has gained momentum amid the U.S. market’s sparkling wine boom.
Korbel advanced by nearly 8% to 1.43 million cases in 2015, according to Impact Databank, and is on track for similar growth this year.
“Our growth has accelerated as sales have shifted markedly from special occasions and events to more of an everyday appeal,” says Korbel president and owner Gary Heck. “Our promotions, advertising and digital activities reinforce the brand’s ‘celebrate everyday’ message, which really resonates with Millennials and our core consumers.”
With sparkling wine consumption becoming much more of a year-round proposition, Korbel has increased its use of limited-release packages in what used to be down periods for the category. Korbel, which is distributed in the U.S. by Brown-Forman, recently launched the “Summer Sparkle” wrap on its Extra Dry offering, which is the brand’s second-most popular label behind the flagship Brut.
Korbel far outsells any other $10-plus sparkling wine in the U.S. market. And, in terms of the sales value it generates, no other domestic sparkler comes close. Retailing at around $14 a 750-ml., Korbel generated retail sales of approximately $236 million in 2015, according to Impact Databank. That figure was nearly 50% higher than the nearest competitor. Among all sparklers, Korbel ranks third in retail sales, behind Veuve Clicquot and Moët & Chandon.
Heck cites Korbel’s positioning in the “sweet spot” of the pricing spectrum as integral to its success, and says he isn’t planning any across-the-board increases, although local market pricing occasionally is adjusted.
While Korbel’s volume has grown by more than 10% over the past two years, Heck is confident that the brand—and the sparkling wine category—still has plenty of upside. “We see growth in many areas, including expanded occasions, a greater variety of drinks offerings—particularly with cocktails—and a broader appeal across demographic groups, such as Millennials,” says Heck. “This is true for Korbel and the category as a whole, and it indicates that the growth is especially healthy and will continue for many years to come.” —Peter ZwiebachSubscribe to Shanken News Daily’s Email Newsletter, delivered to your inbox each morning.