The wine industry delivered another year of volume and dollar growth in spite of supply constraints and a slow economy in 2012, and is on track for continued expansion in 2013. According to the just-released 2013 WineTAB report from Technomic, part of its Trends in Adult Beverage (TAB) series, wine volume grew 2.2 percent to end the year at 345.1 million 9-liter cases, and retail dollars reached $32.3 billion, a 3.6 percent increase. Wine’s share of total adult beverage volume increased slightly to 10.7 percent.

“Although the overall rate of growth in 2012 was slower than in 2011, wine is competing effectively with spirits and emerging categories such as craft beer, and keeping consumers engaged and increasingly interested,” says Eric Schmidt, director of research at Technomic. “New product introductions and evolving flavor profiles enhance wine’s relevance for both at-home consumption and occasions in bars and restaurants, particularly among young adult consumers.”

Domestic table wines were a major driver of the wine market, accounting for 67.9 percent of total wine volume and growing 2.1 percent. Two domestic table wines led the overall wine market. Franzia WineTaps, from The Wine Group, remained the largest wine brand, although its volume declined (-8.1 percent). The second-largest brand, Barefoot Cellars from E&J Gallo, grew 15.4 percent. In addition, each of the top five fastest-growing wine brands of 2012 was domestic table wine.

Fastest-Growing Wine Brands
(000s of 9-liter cases)
Brand	Segment	Origin	Supplier	2012 Volume	% Change
HandCraft	Table	USA	DFV Wines	100	4900.0%
Josh Cellars	Table	USA	Deutsch Family Wines & Spirits	130	550.0%
The Dreaming Tree	Table	USA	Constellation Wines	185	236.4%
Domino	Table	USA	DFV Wines	285	231.4%
Primal Roots	Table	USA	Constellation Wines	135	125.0%
Source: Technomic's 2013 WineTAB Report

 

“Domestic table wines offer something for every taste preference, lifestyle and budget,” says Donna Hood Crecca, senior director at Technomic. “Today’s consumer understands that American wine producers offer everything from eclectic high-end selections to premium boxed wines to fun, flavored specialty wines.”

Suppliers were active with new product innovation, particularly domestic table winemakers. More than half of the nearly 240 new table wines to hit the market in 2012 were domestic, and many were new varietal or style additions to existing portfolios, often with sweeter flavor profiles and sometimes without varietal or appellation information on the label. Constellation introduced 33 new wines. “Wine consumers, especially Millennials, gravitated toward more approachable and drinkable wines suitable for a range of dining and social occasions,” observes Crecca. “Specialty wines such as sangrias and chocolate wines really took off. Wine is now part of a casual lifestyle, and domestic wine marketers are looking to satisfy that growing demand with intriguing products.”

Supply constraints presented challenges for many domestic wine marketers in that quest. Domestic grape and wine production has not kept pace with growing consumer demand in recent years, causing many wine suppliers to turn to international sources. However, several increased their plantings or acquired additional vineyards and wineries in 2012.

While domestic wine was a primary driver of the industry, imported table wine grew 1.6 percent and accounted for slightly more than one-fifth of total wine volume.

Millennials, especially Millennial women, were a primary focus for wine marketers, and wine marketing highlighted lifestyle and flavor attributes. Advertising expenditures for wine rose 10.8 percent.

E&J Gallo, The Wine Group, and Constellation remained the top three wine supplier companies. Total portfolio volume growth was achieved by E&J Gallo and Constellation, while The Wine Group’s volume declined. The largest increase was realized by DFV Wines (28.3 percent), driven by the growth of its Bota Box line of premium boxed wines, pointing to consumers’ growing acceptance of premium wines in alternative packaging.

Retail stores accounted for the majority of wine volume (79.9 percent), and increased 2.6 percent. Wine in bars, restaurants, and other on-premise locations grew 0.7 percent. As bar and restaurant sales and traffic continue to improve post-recession, the on-premise channel was again an important one for launching new wine products and continually engaging consumers with existing brands. Consumer insights included in the 2013 WineTAB report reveal that two-fifths of consumers who try a new wine in a bar or restaurants are likely to buy it for at-home consumption.