Wine Industry Report

The Nielsen Company finds that red wine aales grew 40% faster than total table wine sales between November 2006 and March 2007

Sales growth of red wine outpaced sales growth of the total category by 40% in the 20 weeks ending March 10, according to figures just released by The Nielsen Company. The positive numbers, showing red wine dollar sales up 8.5% versus total wine sales up by 6.0%, reflect increased attention to the potential health benefits of red wine after two prominent medical organizations released favorable reports in early November.

“The November studies from the Harvard Medical School and the National
Institute on Aging garnered significant positive attention for red wine,”
said Danny Brager, vice president, client service, Nielsen Beverage
Alcohol. “Our latest figures show that the extensive coverage, including
the February 2006 cover of Fortune Magazine, which proclaimed ‘Drink Wine
and Live Longer’, may be impacting consumer choice within the wine
category. As consumers search for products that promise better health and
guard against aging, it would be reasonable to assume that recent favorable
press has tipped some decisions towards red wine.”
In the 20-week period ending March 10, red wines accounted for 52.9% of
table wine dollars, up from 51.5% in the comparable period last year.
In early November, newspapers and media outlets nationwide covered
medical studies finding that daily doses of resveratrol, a substance in red
wine, may slow the aging process. The most recent Nielsen figures are in
sharp contrast to the full-year results ending in October 2006, just before
the studies were released. Until then, white wine growth at 9.3% was
outpacing red wine increases of 8.4%. Since then, red wine dollar gains of
8.5% are in significant contrast to white wine increases of 4.8%. In even
sharper contrast, blush wines sales dollars shrunk by -2.8% in the 20 weeks
through mid-March versus the same period a year ago.
The top two red wine varietals — Cabernet Sauvignon and Merlot –
experienced surges in volume growth for the 20 weeks ending March 10, up
12.9% and 5.3% respectively, while Pinot Noir’s +24.0% volume growth leads
all others in percentage gains, as the halo effect from the popular 2004
movie “Sideways” continues.
“The bump in sales from the recent health-related press only adds to
the overall strength of the wine category,” Brager said. “Both ends of the
age spectrum have been drawn to wine in recent years. The younger,
millennial generation, once a surer bet for domestic beers, are
increasingly turning to wine and other adult beverages, while boomers and
seniors, who often have significant discretionary incomes, may be
especially interested in the health effects of red wine.”
Brager also noted that the wine industry has been very successful at
making their products accessible to wider groups of consumers, broadening
sales in grocery, convenience stores and other channels, benefiting from
regulatory changes that allow direct shipping, while also capitalizing on
new and more convenient packaging innovations, such as screw tops and
premium boxed wines.
“At the same time, we’re seeing many consumers ‘drinking better,’
trading up to more expensive, premium brands,” Brager said. “Based on our
comprehensive review of the numbers through mid-March of this year, we are
seeing continued favorable trends for wine in general, and particularly for
red wines. The health benefits — real or perceived — will continue to
favorably impact red wine consumption.”
The results are from The Nielsen Company’s 2006 Beverage Alcohol Annual
Review, an annual, in depth performance study for the Wine, Beer, Flavored
Malt Beverage and Spirit categories across all retail channels tracked by
Nielsen.

About The Nielsen Company
The Nielsen Company is a global information and media company with
leading market positions and recognized brands in marketing information
(ACNielsen), media information (Nielsen Media Research), business
publications (Billboard, The Hollywood Reporter, Adweek), trade shows and
the newspaper sector (Scarborough Research). The privately held company has
more than 42,000 employees and is active in more than 100 countries, with
headquarters in Haarlem, the Netherlands, and New York, USA. For more
information, please visit, http://www.nielsen.com.

[SOURCE The Nielsen Company]

Press Releases, Statistics and Markets