By Tripp Mickle
This week's New Year's libations will illustrate an increasingly
established truth in the sparkling-wine business: sales are
bubbling, but it's got little to do with Champagne.
Though shipments of French-made Champagne have been climbing in
the U.S. since 2009, the real pop in the sparkling-wine industry is
coming from Prosecco. Sales of the sweeter and less expensive
Italian-made cousin of Champagne rose 32% in the 12-month period
ended Dec. 6, five times the growth rate of sparkling wine overall,
according to Nielsen.
"Prosecco is by far the hottest segment in sparkling wine, and
you could make a case that Proseccos are one of the biggest factors
in the wine business's impressive growth," said Jon Fredrikson,
co-owner Gomberg, Fredrikson & Associates Wine Industry
Consultants.
This is a critical period for sparkling-wine producers. More
than 20% of their annual U.S. sales take place during the last
three weeks of the year, often making or breaking annual results
for brands like LVMH Moët Hennessy Louis Vuitton SA's Moët &
Chandon, Pernod Ricard SA's Perrier-Jouët, and Mionetto SpA's
top-selling Prosecco. Last year, the week of New Year's Eve by
itself represented a 10th of annual sales for sparkling wine,
according to Nielsen.
Sparkling-wine sales dipped almost 3% in the U.S. following the
recession but quickly recuperated in 2010 when sales increased 7%,
according to Nielsen. Sales have increased in the single-digits
since then and are expected to extend that streak this year.
"Sparkling-wine sales have been on fire for us and growing
throughout the year," said Melissa Devore, vice president of wine
buying at Total Wine & More, the Potomac, Md.-based alcohol
retailer with 113 stores in 16 states. She said that this week will
deliver 15% of annual sparkling-wine sales for the retailer.
Italian sparklers, in particular, are "the trendy thing right now,"
she said.
Champagne shipments to the U.S. from 2007 to 2009 plunged 42% to
12.5 million bottles, as the economic crash damped appetites for
pricey drinks. Shipments didn't return to prerecession levels until
2011, and last year's total of 17.8 million bottles fell far short
of the peak shipment total of 23.2 million bottles in 2006,
according to the Champagne Bureau, USA, a trade association that
represents winemakers from Champagne, France.
The U.S. Prosecco boom, which began almost five years ago, has
benefited companies like Zardetto Spumanti SRL, E. & J. Gallo
Winery, which makes La Marca, and Casa Vinicola Zonin SpA, which
makes Zonin Prosecco. Oenophiles don't all favor the drink, but it
managed to establish some cachet. Many drinkers preferred its
fruit-forward profile to Champagne's more complex mix of fruit and
bread flavors, and bartenders increasingly featured Prosecco in
craft cocktails.
Prosecco also offered a cheaper alternative to Champagne. The
average bottle of Prosecco costs nearly $12, putting it in the
sweet spot for sparkling-wine prices. Sales of bubbly priced at $10
to $15 a bottle jumped 10.5% in the 12 months ended Dec. 6, and now
account for a third of all sparkling-wine sales, according to
Nielsen.
Prosecco isn't the only Champagne challenger. But other trendy
sparkling wines have had less staying power. Sales of Spanish-made
cava increased 2.2% during the 12 months ended Dec. 6, while sales
of Moscato, which is made everywhere from Germany to California,
decreased 3.8% but remain above 2012 totals, according to
Nielsen.
U.S. bubblies have tried to grab a greater share of the market
for celebratory imbibing, sometimes defying France's efforts to
limit the "champagne" name to wines from the eponymous region in
the country's northeast. Privately owned Korbel, which claims a 17%
share of the U.S. market, began marketing its wine as California
Champagne in the early 1900s and continues to feature those words
on its labels despite pressure from French growers to drop it.
The tactic, which also is used by Constellation Brands Inc.'s
Cook's California Champagne, helped sales of U.S. bubbly increase
4.6% in the 12-month period ended Dec. 6. A Korbel spokeswoman said
the company expects New Year's sales to push annual, gross sales
past $100 million, with 15,000 more cases sold than a year ago.
Proper Champagne has stubbornly remained a premium product,
generally selling in the U.S. for a minimum of $50 a bottle. Still,
shipments are expected to rise this year after increasing 1% last
year, and Champagne Bureau Director Sam Heitner said the
competition is actually helping. "The more people drink sparkling
wine," he said, "the stronger the opportunity for champagne to take
people thinking about sparkling wine and move them into the
Champagne category."
The Week Ahead looks at coming corporate events.
Write to Tripp Mickle at Tripp.Mickle@wsj.com
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