Elegant, full bodied, floral & oaky are just a few of the terms utilized to describe the fermented fruit commonly known as wine. According to Jon Fredrikson of Gomberg, Fredrikson & Associates, wine is a $34B industry and steadily growing. The 2013 Demeter Group states that wine has grown at a 3.4% CAGR (Compound Annual Growth Rate). Year to year, wine steadily chips away at the total alcohol beverage share at approximately 17-18%. The rising demand and short supply have created the perfect storm from a branding and revenue perspective.

Cakebread cellars was my first experience with this segment when I was lucky enough to meet the legend and founder himself – Jack Cakebread. There is no shortage of charisma from vintners like Cakebread or Bill Foley II from the Chalk Hill Estate. Even the names of the regions that produce this liquid gold can make anyone feel chic – Napa, Russian River and Sonoma. That said, the wine industry is poised for a metamorphosis of sorts led by brands like Barefoot and Cupcake. These two brands did over $100M plus in sales in 2013 and are growing faster than the vines that bear their fruit.

What is driving this trend?

1) “The Democratization of Wine”

This charge is being led by big box retailers, like America’s biggest wine retailer, Costco. Also, brands like Yellow Tail have achieved cult-like status probably largely due to the use of their country’s national symbol – the kangaroo.

2) Self Service Wine

There is no shortage of proprietors looking to profit off of this brilliant marketing technique that brings out the inner sommelier in all of us (wink). The 1, 3 or 5 oz pours allow the customer to decide very quickly their taste profile. Even the cruise industry has taken note with the Celebrity Cruises brand starting the trend and Norwegians following suit.

3) Unapologetic Wine Bloggers

The Reverse Wine Snob, also known as Jon Thorsen, has made it his business to deconstruct wine snobbery by pushing his $20 or less mantra. The Frugal Wine Snob promises: “Wines that taste like a million bucks, but cost a whole lot less.” These bloggers will only grow in numbers and rightly so as wine is primarily a subjective assessment based on a multitude of different factors.

Any hotelier, restaurateur or wine economist can tell you that the “grand cru” or great growth will come from this segment moving forward as the millennials begin to lead.

Cheers!

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