Our new report on Sparkling wine in the US -  part of the latest Wine Intelligence report series on Sparkling Wine across five markets (other reports available are Canada, Denmark, Japan, and UK) – show a market that has clearly become more frugal as a result of the financial meltdown of 2 years ago.

Champagne still leads the category on several key consumer measures. Awareness among US sparkling wine drinkers is near-universal; penetration (usage within the past 6 months) is over 75%.  Dom Perignon is the best-known Marque; LVMH stable-mate Moët & Chandon is the most-consumed brand.

Beyond Champagne, US consumers enjoy a mix of domestic and imported sparklers, with brands such as Korbel and Yellow Tail Sparkling prominent in most of the seven brand health measures. Freixenet leads the Cava charge. The most significant European sparkling brand remains Martini Asti – 3rd highest awareness, the most likely to be purchased by those aware of the brand, and, from this research, US sparkling wine consumers’ favourite sparkling wine brand.

Back to Cava and Prosecco, which are consumed by less than half of US sparkling consumers, many of whom recall drinking these categories only once or twice per year. Both appear to lack a clear positioning with consumers, though Prosecco’s reach has clearly grown in the past two years.

So, for the world’s sparkling wine regions and brands, is the US market opportunity a Champagne-flute half-full or half-empty? This study highlights some barriers to consider and, maybe, to overcome through closer study of consumer needs in this market. Sparkling brands need to push motivational purchase messages beyond the traditional celebration occasion; they need to create more reasons for retailers to broaden their sparkling range; and they need to clarify the distinctive features of each source country/region.

More involved American consumers have clearly demonstrated over the past few years their desire to broaden their knowledge and seek out distinctive tastes and styles that go beyond the established norms. We believe this will cause a significant expansion of the sparkling category in the US in the next few years, so long as producers play their cards right.

Learn more about the Wine Intelligence Sparkling Report Series here or contact Marie De Witte directly marie@wineintelligence.com

Brian Howard, Business Development Director

However it looks as if white wine tastes, already moving away from these heavier oaked styles in other consumption markets, have also fundamentally changed Down Under. For the first time, more Australians say they’re drinking Sauvignon Blanc (65% of all monthly wine drinkers) compared with Chardonnay (64%) (source: Wine Intelligence Vinitrac® Australia, July 2010). The statisticians among you will know that this is within the margin of error of our survey of 1,000 Australian monthly wine drinkers, so positions could reverse in the next Vinitrac Australia survey this coming October. Unfortunately for Chardonnay, this will probably prove to be a temporary relief, because this latest landmark is simply the culmination of a long term trend.

In 2007, 81% of Australians said they had consumed Chardonnay in the past 6 months. By the beginning of 2008 this had fallen to 76%, then to 69% in 2009, and now 64% (source: Wine Intelligence Vinitrac® Australia, 2007-10). In the same time period Sauvignon Blanc has seen marginal growth, from about 59% penetration in 2007 to today’s 65%. The other main beneficiaries from Chardonnay’s decline appear to be “niche” varietals such as Pinot Grigio (up from 18% to 24% penetration) and Viognier (up from 8% to 13%).

The news will come as little surprise to brand owners in the Australian market, where the growth in sales of Sauvignon Blanc, mostly imported from New Zealand, has been the most notable consumer trend of the past 2 years. The key insight from the data is that this growth is perhaps less to do with a sudden love for Sauv Blanc than a growing rejection of the classic oaky Chardonnay taste, and a general broadening of varietal repertoires among consumers in Australia.

Lulie Halstead, CEO

However over time we can see that wine drinking tastes are changing. In the UK and the USA, for which we have consistent tracking data going back to 2007, we can observe some of the behavior changes that have taken place over the past 3 years. The more ticklish – but interesting – questions are: what impact do these trends have on future consumption, and what are the implications for producers?

I win no prizes for pointing out the big growth in rosé as a wine style in the UK market over the past 3 years. Rosé, already a popular drink in 2007 with around 10 million drinkers (45% of the monthly wine drinking population at the time), has today grown its base in the UK to 16 million drinkers (source: Wine Intelligence Vinitrac® UK, 2007-10). While the majority of the growth in new rosé drinkers has come from younger adults, often entering the wine category for the first time, some of the significant volume growth has come from middle-aged drinkers who are switching to rosé from white wine.

In the US, the rosé story is also one of growth, but notably different: here rosé (or “blush”) wines have been a mainstream product, albeit a sweeter, more downmarket one, for decades, and this segment of the market has been in decline for the past 10 years. Replacing it, slowly, are drier rosé styles, which are creeping into the drinking portfolios of more sophisticated consumers, but not yet in any meaningful volume. Thus, in the US, you have a rosé drinking population that has grown from around 15 million Americans in 2007 to 28 million today, but rosé volumes continue to decline (sources: Wine Intelligence Vinitrac® USA, 2007-10; Impact Databank).

Sparkling wine is another category that has seen some interesting   shifts in consumer behaviour. More people on both sides of the Atlantic say they drink sparkling wine today than three years ago; the main beneficiaries of this growth have been Prosecco, and to a lesser extent Cava. Prosecco in particular has posted some impressive gains: it has doubled its base of drinkers in both the UK and the USA over the past 3 years, and around 3.6 million Brits and 5 million Americans say they’ve drunk it in the past 6 months (sources: Wine Intelligence Vinitrac® UK & Vinitrac® USA, 2007-10).

What are the implications of this shift in the geology of the world’s two most important imported wine markets? Our view is that growing your base of consumers is a leading indicator of volume change: ergo, the expansion of the Prosecco audience will lead, over the next few years, to a ramping up of volumes as retailers grow their Prosecco ranges in response to demand, and consumers devote more of their spend to Prosecco. This feedback loop has already taken place in the UK rosé market, where the growth in the base has been followed by a significant increase in volumes in recent years; our view is that it will do so in the US as well, though the decline of old-style blush wines will continue to mask this in the short term.

By Richard Halstead, COO

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The sale of alcohol in Sweden is controlled by the government, a system known as the Systembolaget. This organisation decides which wines are on the shelves, ensures that wines sold are only ever of a high quality, and controls the advertising and promotions surrounding the sale of alcohol all over Sweden. When I walked into the Systembolaget shop for the first time, yesterday, my initial impression was how impeccably bright, clean and orderly it was – feeling like I had walked into some kind of futuristic movie set. However the real shock to any veteran of the UK supermarket wine aisles was the lack of any promotional offers.

Absent the blaring “2 for.. . .” signs, the wines on sale were arranged neatly and categorised by style e.g. red, white or rosé, format e.g. bottle, 250ml bottle, bag-in-box, tetra pack … (the list continues), and then within these categories by price and country. Very in keeping with the observable culture, which most obviously manifests itself as, among other things, unnaturally clean streets and ingenious methods of changing bedlinen in a way that avoids the traditional struggle of getting the corners neat. What I found even more astonishing, and slightly unnerving, was that the in-store wine catalogue (which was quite lengthy) followed exactly the same order and design of the store. All of the Systembolaget stores have information points, where the staff can offer words of wisdom to customers, a schedule of in-store wine tastings for the next 4 months, as well as books with information about food and wine matches. The Systembolaget even publishes a free in-store lifestyle magazine.

A question I asked myself a couple of months ago – what could supermarkets in the UK do to improve – well…I had found my , er, “Ulrika” moment. While my descriptions of the Systembolaget may seem slightly overwhelming, and I’m not for one moment suggesting the UK should take on the full Systembolaget approach, but we could definitely learn a thing or two. This system provides a very practical and user friendly approach to wine buying, making it incredibly easy for the consumer to purchase wine. The stores also provide a wealth of information and advice for both sophisticated consumers as well as consumers wanting to learn more. Quite simply, these two things could revolutionise the way wines are sold in the UK, and increase the level of wine interest currently lacking in our UK consumers.

Nicola Spitzer, Project Executive

Erika Neudorf, Senior Project Executive

Whilst navigating my way around Tokyo and its wine stores last week, I was consistently struck by the friendly and gracious nature of the Japanese people. As always when travelling to conduct qualitative research on behalf of Wine Intelligence, I visited many different types of wine stores, with the aim of reminding myself how consumers here are confronted with a wine offer – what do they get to choose from? My reflection: wine advice is sought and given almost as freely and graciously as directions to lost tourists.

The layout of the wine aisles was noteworthy: one store for example was easily navigated by source country, whilst in another in complete contrast was organised primarily by price. With this focus in mind, I wanted to know how Japanese consumers would make their wine choice once their budget is set.

I chose my target: a friendly looking young man standing in the wine section around the 1000 ¥ point (approx £7.50). He selected a Chilean wine he was going to purchase and explained that it had been recommended by store staff. Noting a long queue of people waiting for advice on their wine purchases, it reminded me that recommendations are of greatest importance to Japanese wine consumers.  As in most markets, Japanese wine consumers are often overwhelmed when selecting wine.

For more information about Wine Intelligence work in Japan, please contact erika.n@wineintelligence.com

Maarten Claessen, Research Analyst

Before we can both size and report on wine markets in Asia, we must take a step back and consider how we define wine itself. In established and Western markets, ‘wine’ would widely be considered to be fermented grape juice. In France, the UK, and Australia for example, grape-based wine accounts for almost 100% of all wine consumed. This is not the case for emerging East-Asian wine markets: in South Korea, China and Japan, rice wine (e.g. Sake) and other wine beverages (fruit wine, etc.) make up the bulk (75-90%) of wine consumed. The result is that East-Asian still light wine drinkers need to be reached in different ways to those in established markets.

At Wine Intelligence, in order to understand consumers of grape-based wine, we need to first of all know who they are. We do this by running calibration studies in each market, enabling us to define how many adults are drinking grape-based wine and who these people are. In China for example, we scaled down a population of 1.3 billion people to the upper-middle class of adults in urban areas, focusing on those people who can afford to buy imported wine. Last year, 68% of this upper-middle class adult population (more than 14 million people) qualified as imported grape-based wine drinkers, consuming an average of 5 litres of imported wine per head in 2009.

In South Korea and Japan, markets that are more familiar with grape-based wine, between 40-50% of the adult population drinks imported grape-based wine (at around 3 litres per head per year). That is over 50 million people in Japan – over half of which (around 30 million) drink wine at least once a month, making the Japanese population of regular wine drinkers equal to the number of regular wine drinkers in the UK.

The South Korean wine market shows another interesting perspective on imported wines: Where French wines generally dominate imports in these East-Asian markets, the 12+ million Koreans that drink imported wines have welcomed Chilean wine as their number 1 imported grape-based wine.

To learn more about the way Wine Intelligence calibrates wine markets or if you would like to ask some questions of your own in our East-Asia upcoming Vinitrac® Global surveys, please contact maarten@wineintelligence.com

Maarten Claessen, Research Analyst

Jenny Li, Research Analyst at Wine Intelligence

My mum, who lives in central china and rarely indulged in an alcoholic drink, has recently developed a daily drinking habit: a glass of red wine every evening before bed. Rest assured, she is not a budding alcoholic, but a new recruit of the growing Chinese trend of women wine drinkers.

She along with a growing board of Chinese women preaches that a red wine night-cap not only aids a sound night’s sleep, but is good for general health and has the additional benefit of being great for your skin. She has attempted to convert me too! Despite the lack of scientific evidence to support this widely held view on benefits of wine, they are rapidly becoming universally accepted truths by women wine consumers in China.

As the wine market in China continues to enjoy phenomenal growth, understanding the Chinese wine consumer is essential for any global wine supplier. What I know from first hand experience and our extensive research at  Wine Intelligence is that Chinese women have a buying power equal to that of men and have no inhibitions about drinking alcohol.

My family experiences are supported by Wine Intelligence data, 93% of female, Chinese, middle-upper class wine drinkers believe drinking wine is good for your health (source: Wine Intelligence Vinitrac® China research, July 2010). The survey also revealed that wine drinking is rarely seen as incompatible with a balanced diet.

Wine not only provides women with perceived health and beauty benefits, but plays an essential role in substituting for other traditional alcoholic beverages in China: beer is too gassy, while spirits are too strong particularly traditional, domestic liquor. When an occasion requires drinking, women are naturally switching to wine, which our research shows is seen as being elegant, relaxed, intimate and… healthy.

In addition, there is a more subtle reason why Chinese women enjoy wine. Wine drinking for them is a reflection of an aspirational lifestyle. Furthermore, imported wine, as a Western symbol, carries a more sophisticated cultural meaning. This goes some way in explaining the tendency for a preference for wine from countries such as France and Italy which for Chinese women tend to be associated with romance and historical cultures.

In a less mature market like China, appreciation of wine requires time to evolve, but the aspiration to consume is unstoppable. Drivers of this type of growth are different from those we see in more established wine markets. Thus, understanding consumer’s beliefs, needs and behaviours is essential for those who want to successfully penetrate the market and target consumers at this early stage.

Jenny Li, China national and Research Analyst at Wine Intelligence

To find out more about the work Wine Intelligence does in China including the China Landscape report and Doing business in China report, please contact jean-philippe@wineintelligence.com