Wine’s Premium-Plus Tier On The Rise As Total Market Slips
January 18, 2022After 10% and 14% gains in IRI channels by volume and dollars, respectively, in 2020, retail sales of wine slumped last year due to tough comparisons against a pandemic-driven boom in the off-premise. Slowed by stiff competition from other drinks categories and the ongoing effects of the pandemic, the overall U.S. wine market is estimated to have fallen 0.5% in 2021—its first annual decline since 1993—according to Impact Databank. Industry dollars also fell last year, and the continuing softness of the on-premise is expected to lead to losses for the overall wine market in volume and dollar terms until at least 2025.
While volumes are expected to slip again this year, premiumization remains a key driver of value for the industry, with higher-priced segments significantly outperforming less expensive categories. Table wines retailing at $15 a 750-ml. and higher in IRI channels recorded solid growth in 2021, combining for a 5% volume increase.
Premium-plus brands accounted for fully half of the total table wine market in dollar terms last year—according to Impact Databank—compared to less than 10% share at the beginning of the millennium. Italy’s Stella Rosa is now the U.S. market’s largest-selling above-$10 wine by retail value—and the number-one import—while Josh Cellars leads all American wines in dollar terms.
After steadily increasing from 1994 to 2011, per-capita wine consumption is estimated to have declined in 2021 for the ninth time in the past 10 years. From a broader perspective, however, industry volumes have more than doubled over the past four decades—according to Impact Databank—while the wine market’s total dollar value has nearly quadrupled in the past 30 years.
Imports fueled the sparkling category’s growth for the better part of the last decade, driven by solid advances from Prosecco and Champagne. Last year, imported sparkling wine depletions decelerated but are still at more than triple their volumes of 20 years prior. La Marca Prosecco is the market’s largest-selling sparkling brand, nearly triple the volume of the next biggest import, according to Impact Databank. Meanwhile, among all wines priced above $25 a 750-ml. bottle, Champagne’s Veuve Clicquot and Moet Chandon lead all brands in terms of retail dollars.
Various segments of the market had kept the industry in growth mode in recent years, such as New Zealand Sauvignon Blanc, rosé from France and other origins, California red blends, Prosecco, Champagne, canned wines and wine-based cocktails/RTDs. It’s also important to note that overall wine consumption levels in 2021 are still higher than they were in 2019, pre-pandemic.
| Table Wine Volume in IRI Channels by Segment/Type (52 weeks ending 12/26/21) |
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| Type/Segment | Average Equivalent 750-ml. Price |
Millions of 9-Liter Cases |
Percent Change |
||
|---|---|---|---|---|---|
| Bottled Wine1 | $9.60 | 99.94 | -11.4% | ||
| $0-$3.99 | $3.43 | 12.41 | -21.0% | ||
| $4-$7.99 | $5.73 | 36.13 | -15.0% | ||
| $8-$10.99 | $9.73 | 24.32 | -11.3% | ||
| $11-$14.99 | $12.75 | 17.53 | -3.2% | ||
| $15-$19.99 | $16.37 | 6.90 | 2.8% | ||
| $20-$24.99 | $21.75 | 1.64 | 12.1% | ||
| $25 & Over | $36.89 | 1.00 | 10.9% | ||
| Boxed Wine | $4.04 | 31.04 | -9.9% | ||
| $0-$4.49 | $2.51 | 16.72 | -13.0% | ||
| $4.50 & Over | $5.08 | 14.32 | -6.1% | ||
| Total Table Wine | $7.71 | 130.98 | -11.1% | ||
| 1 Addition of columns may not agree due to rounding. Source: IRI and IMPACT DATABANK © 2022 |
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Tagged : Impact Databank, wine
