Evading the broad structural decline in wine sales completely may not be possible for every brand all the time, but winemakers are finding incredible success in certain pockets of the wine industry writes Kathleen Willcox.
Notably, as seemingly unrelated as these pockets may be, they all share one thing in common: they reflect a changing marketplace, a transformation in the way we buy and consume things, and a growing desire for more environmentally responsible products.
Bring the Wine to the People
As prices of bottles and tasting fees rise across wine country—but especially in premium regions like Napa Valley—winemakers are finding ways to offset declining sales and visits by bringing their wares to their most likely customers.
SMS marketing tops the list of tactics, but is by no means the only one brand managers are deploying.
“We need to make winemakers where they are,” says Sandra DeMaria, director of sales and market at Ehlers Estate in St. Helena. “Our industry is way behind others when it comes to SMS marketing. No one opens emails anymore, and while it was very difficult to find a texting platform for highly regulated projects like wine, we were able to become one of RedChirp’s beta clients.”
The team conducted their first trial SMS blast in April, offering bottles of their US$160 1886 to the people on their email list who didn’t open their email. They rang up US$25,000 worth of sales that same day. That initial foray inspired several subsequent campaigns, including one that garnered US$150,000 over one week for sales of a US$375 “mystery case” of wine.
“We are also finding new ways to reach wine lovers where they are,” DeMaria explains. “Not everyone, especially younger people, can afford to come to Napa or have the time to. So we are going to them. We have launched a wine dinner program in key markets, and we have found incredible success, especially with Millennials and Gen Z.”
Ehlers on the road programs this year were hosted by DeMaria and winemaker Adam Casto. They targeted wine club members who were based in the area, and the members were encouraged to bring a guest.
The results surprised them, DeMaria admits: not only did they help grow sales for wine club members in that ultra-desirable younger market by 49% this year, but they often prompted cross-country visits to the winery following the dinner.
Napa’s Priest Ranch is also finding sell-out successes with SMS marketing, but CEO Judd Wallenbrock says they don’t want to overwhelm their list with too many offers.
“We do find that carefully targeted messages produce very positive results, but you can’t go to the well too often, because it will seem intrusive,” Wallenbrock says. “We supplement the targeted sales with events and sponsorships.”
Most recently, the winery sponsored a restaurant awards dinner with Austin Monthly and used the opportunity to do market work to boot.
“We ended up opening 13 additional restaurants while we were there, and did a series of consumer and trade events too,” Wallenbrock says.
So far this year Wallenbrock says the winery’s sales have grown in value by 17%.
The team at Napa’s Eleven Eleven Winery is also hitting the market with more intention and force.
“We find that the further you get from California, the better the sales get at events,” says consulting winemaker Kirk Venge.
Founding partner and CEO Ellie Anest concurs, adding that “you can’t wait for people to come to you. For the past few years, we have been focusing on events in the marketplace, and we find that we get our biggest ROI at private homes because you can really connect with people in a personal way.”
That personal touch is key to the sales success Eleven Eleven has enjoyed this year, especially at and directly following market activations.
“Everything helps,” Anest says. “We text, email and phone our wine club members to stay top of mind. There’s so much competition, doing things like calling wine club members on their birthday has become part of our daily routine.”
‘Chardcore’ Sales
White is the new red. After decades of domination, red wine is making way for lighter, brighter, and often lower-ABV whites, with recent numbers from market research firm NIQ showing that white wine now accounts for 48.5% of market share, compared to red’s 45.1%. (Rosé carries the balance).
Purveyors of both premium and value-priced Chardonnay and other whites say their sales reflect growing interest.
Collectable white Burgundies, which are primarily Chardonnay, have appreciated more than 4% since the end of September, says Dave Parker, CEO and owner of online fine wine retailer Benchmark Wine Group. Parker also owns the periodical, The Wine Market Journal, which tracks rare wine values closely.
“Those from the Chablis region have been especially strong,” he notes. “Benchmark’s sales of those have quadrupled over the last two years. And the California Chardonnays from Aubert are very much in demand among our top tier collectors and consumers since the owner and winemaker is Aubert de Villaine, the same owner of Domaine de la Romanee Conti.”
Howell Mountain’s Moone-Tsai wines, crafted by the Bordeaux-bred Philippe Melkin, saw a 38% increase in sales year over year for their Chardonnay.
“Our Chardonnays always eventually sell out, but it’s a matter of how fast we sell through them, and this year it was much faster,” co-founder Larry Tsai explains, adding that they produce between 600 and 900 cases of Chardonnay annually. “I’m finding that wine lovers, and even younger ones, are really connecting with our Burgundian style of Chardonnay, with a very light touch when it comes to oak and no ML.”
Windsor’s Sonoma-Cutrer, meanwhile, is also finding success, with a 6% increase in dollar sales in the U.S. overall, according to the latest numbers from Circana. The brand’s flagship, Sonoma Coast Chardonnay, leads the category as the #1 Chardonnay in U.S. retail; the wine is responsible for 79% of the brand’s overall sales, with a 9% increase in dollar sales overall this year.
Regions known for whites, like Rías Baixas in Spain are also reported record sales. Exports to the U.S. grew 17% by value and 11% by volume, according to the most recent numbers from the Consejo Regulador of D.O. Rías Baixas.
The DO’s director of marketing Eva Minguez credits the success to Albariño’s charm. The grape accounts for more than 95% of the plantings in the region, and the aromatic grape’s fresh, crisp acidity, versatility and authenticity make it appealing across generations.
“We predict the growth will continue,” Minguez says. “Though Rías Baixas wineries have a strong presence in markets like California, Florida, Texas, New York, Illinois and Washington D.C., there is great room for growth in other U.S. markets. Even through consolidation in the middle tier, many wineries are either expanding distribution or finding an importer for the first time.”
At Tablas Creek Vineyard in Paso Robles, partner and GM Jason Haas says overall sales are up 10% in volume. He’s especially excited to see the growth in interest in their white wines at the DTC level especially.
“If you look at the percentage of people who signed up for our White Wine Only option on our VINsider wine club, it has jumped dramatically,” Haas says.
In 2019, the split was about 69% Mixed case, 21% Red Only, and 10% White Only. This year, it’s 51% Mixed, 22% Red Only and 27% White Only.
In the wholesale market, the numbers are similar. Depletions of whites are up 35.3%, while depletions on red are only up 1.8%.
Sustainably Farmed Wine Sells
Wine enthusiasts are also eager to drink green wine. A recent survey from food and beverage research firm Tastewise shows that 74% of consumers are more likely to trust a brand that promotes its environmental impact. And that sustainability comes in many forms.
Ridgley Evers, AVIVO Wines founder and CEO, says he has grown the brand, which launched in 2021 as DTC only with a few thousand cases, to 60,000 this year on the strength of its CCOF Organic, Biodynamic and AGW Certified Regenerative cred.
“Initially, we focused on regeneratively farmed language, but starting with the 2024 vintage, we will add ‘Made With Organic Grapes’ on the front label,” Evers says. “We are still pursuing DTC, but we are also pursuing off-premise and on-premise channels that cater to the conscious consumer.”
At Benchmark, Parker notes that their customers are most interested in biodynamically farmed and sustainably produced wines as opposed to organic, “especially since there is a conflict in terms between U.S. and European producers in that regard.”
Planet-Friendly, Accessible Formats
There is nothing better than popping a cork to celebrate a major achievement or momentous occasion. But for younger drinkers who may only want one serving of alcohol, and are looking for something with a lighter carbon footprint than a big bottle, canned and bag-in-box wines are becoming go-tos.
Archer Roose Wines, which is made using sustainably grown grapes in different countries, has grown sales by 46% at retail over the past 52 weeks by offering an ecological option in a can, says Marian Leitner-Waldman, co-founder and CEO.
“Offering high-quality, conveniently canned wines in more places and on more occasions has delivered tremendous growth,” Leitner-Waldman says, adding that Archer Roose recently expanded distribution across Levy Hospitality-served stadiums, arenas and venues, Atrium Hospitality-managed hotels and more.
Next year, the brand will produce 275,000+ gallons of wine, or about 165,000 cases. In 2020, the production was around 35,000 cases.
“We’ve always believed in making wine more accessible, and that means offering it in places and formats that are unexpected in the wine industry,” Leitner-Waldman says, explaining that their market research shows that Archer Roose’s target consumer is the drink less but better Millennial female. “We researched where our consumer is spending her time, and it’s at music and sports venues, but also places like Dave & Buster’s. We’re committed to meeting them where they are with a luxurious and convenient wine.”
Leitner-Waldman sees the growth continuing.
“Less than 20% of American consumers have tried canned wine,” Leitner-Waldman notes “There is still a massive opportunity to reach consumers who may not even know the category exists.”
Sipwell Wine Co’s founder Hilary Cocalis says that their growth has been intense this year too, particularly at groceries, off-premise independent stores and on-premise channels like hotels, venues and recreation centers. The most recent numbers: Sipwell’s year-over-year revenue growth shows 39% growth in the third quarter.
Cocalis pegs Sipwell’s success to its strength in three areas that are showing promise in wine overall: alternative packaging, sparkling wine, and organic wine.
While Tablas Creek has seen intense growth in its white program, Haas adds that the winery’s status as the world’s first Regenerative Organic Certified vineyard, and its embrace of alternative formats has pushed the needle further, faster.
In 2022, Tablas Creek launched a $95 boxed wine, with Haas writing that following a carbon footprint self-assessment, he felt he couldn’t not do it when the wine bottle accounts for more than 50% of their footprint.
Plus, he notes now, boxed wine does a better job of preserving wine for weeks, which makes it a better option for the growing market of occasional drinkers.
Despite the fact that most boxed wines top off at around $30, Tablas’ boxed Patelin de Tablas Rosé, which contained the equivalent of four standard bottles sold so well, that they now have four boxed wines on the market. This year, Tablas launched the first estate boxed wine, the chillable Alouette Grenache, and increased the quantities they’ve made of their boxed wines overall.
“Looking at the boxed format, our DTC sales are up 74% over 2023, and we have sold more than 3,100 boxes direct this year, or the equivalent of over 1,000 cases,” Haas says.
While there are many doomsayers on growth, Wallenbrock isn’t one of them.
“Every generation people worry about younger people not drinking wine,” Wallenbrock says. “You know when it happens? When you have a serious job and a house. Wine is the ultimate RTD. You just have to uncork it. The Millennials took a little longer to settle down than previous generations, but now that they are, we are seeing them really engage with wine.”
Wallenbrock predicts that in five years, wine will be in much better shape—in part due to the Millennials uptake of wine, but also due to a much-needed correction in oversupply.
In the meantime, vintners who want to thrive can find avenues to sales success that will work for their brand and philosophy. Tsai agrees.
“There is such passion out there, especially among young people,” he says. “As an industry, we need to focus on what’s working, and double down on that.”
by Kathleen Willcox
Credits: The Drinks Business