Premium Wine Cask Sales Growing Despite Economy: Study

Even as overall U.S. wine growth rates show some signs of slowing down, three-liter premium wine casks are demonstrating double digit growth, according to The Nielsen Company, the Schaumburg, Ill.-based parent company of Progressive Grocer. Despite the economy’s plunge in the last 13 weeks of 2008, the segment grew at a rate of 32 percent.

Overall, table wine, the biggest wine segment, grew at 4.4 percent on a dollar basis in 2008, vs. the three-liter premium wine cask segment, which grew 31 percent. Table wine growth in the last 13 weeks of 2008 slowed somewhat to 2.8 percent. Total table wine sales represent $9.6 billion, while three-liter premium wine cask sales account for $110 million.

Premium wine casks offer shoppers considerable savings opportunities, the Nielsen study found. Equivalized to the average price of a 750-milliliter bottle, premium wine casks are about 40 percent less expensive than the average table wine price ($6.23 for table wine, vs. $3.78 for a three-liter premium wine cask).

While 38 percent of U.S. households buy wine during the year, less than 1 percent of households purchase three-liter premium wine casks, pointing to significant upward growth potential for wine manufacturers and retailers.

The three-liter premium wine cask segment is best developed among $70,000-plus income households, and is quite popular among male head of households.

The majority (80 percent) of three-liter premium wine casks are sold among the top four wine varietals: Chardonnay, Pinot Grigio, Cabernet and Merlot.

Grocery stores drive three-liter premium wine cask sales, but all other channels, including liquor, convenience, drug stores and mass merchandisers, are also experiencing double-digit growth in dollars and case volume in the segment.

“In today’s economy, consumers are seeking value without necessarily compromising quality, and this contributes to the premium wine cask success,” noted Danny Brager, VP, beverage alcohol, The Nielsen Company. “Consumers see premium wine casks as more value for their money, as [they hold] the equivalent of four standard wine bottles. In addition, the package stays fresher longer once opened, and offers added environmental benefits.”
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