CGA’s research has previously highlighted how the On Premise has adapted to the challenges of COVID-19, and new analysis delves into how these changes have affected the wine category.
November 12th – Globally, wine is facing the challenge of meeting predicted increases in consumption over 2022 while dealing with production issues – including adverse weather, taxes and importation charges. Using CGA’s OPM service, this latest research examines the current state of wine in the US from a sales perspective and looks at how these challenges will filter into the On Premise.
CGA’s OPM service is the only fully projected, extensively validated, measure of beverage alcohol performance in the American On Premise. Used to track share and trends by all the leading beverage suppliers, OPM is the most robust view of sales performance for bars and restaurants ever produced in the US.
At a topline level, it’s no surprise that table wine holds the greatest share of the category (87.5%). However, sparkling wine is a growing segment that has been consistently popular among consumers recently and now holds a share of 10.7%. The sparkling segment has always been the go-to choice for wine drinkers during celebratory and treat occasions, and pent-up demand following lockdowns has only served to increase this segment’s growth.
In terms of the divide between white and red wine, there is a fairly even split with red holding a 47.5% share, white sitting at 45.5%, and the remainder made up of rosé and blends.
In terms of country of origin, US consumers tend to buy local, with domestic wines holding a share of 67%, while Italian (11.8%) and French wines (5.3%) are in second and third place respectively in terms of popularity. Due to the tax challenges and importation costs faced by many non-US based wine producers, there are even greater opportunities for domestic wines to increase their share in the US On Premise.
Analysis of the different varietals available in the US On Premise reveals that three hold a significant share of the market across each color. In red wine, Cabernet Sauvignon is the most popular, holding a 31.8% share, with Pinot Noir (19.3%) and Merlot (12.8%) in second and third place. For white wine, Chardonnay (34.6%) is the most popular, followed by Pinot Grigio (16%) and Sauvignon Blanc (10.9%).
When it comes to brands, wine is extremely competitive with the top ten brands making up just 17% of the category at large – in comparison to beer where the top brands hold a 58% share. This intensively disaggregated, competitive landscape has not eased since COVID-19, meaning that suppliers and distributors need to be on their game to drive consequential share gain. Strong tactics based on robust data has never been more important here.
Global wine consumption is also expected to increase over 2022 and CGA’s OPM service will continue to track and analyze this dynamic, supporting wine suppliers and distributors with robust market measurement combined with local narratives and fact-based sales stories.
Patrick Bannon, CGA Client Director, Americas, said: “Now that consumers have properly returned to the On Premise, it’s important to understand if the drinking choices they made at home will be reflected in their On Premise selections. For a category so tied to experimentation, some current operational challenges are a threat. Our latest Path to Purchase study showed that only 36% of guests read the full menu when that menu is delivered digitally. This is compared to 63% of consumers who consider the full offer when they have a physical menu in-hand. This is a challenge for all categories tied to experimentation and trade-up, but none more than wine.”
Overall, with a landscape of intense innovation and competition for share of throat from other categories, 2022 will be a hugely important year for cementing and growing brand engagement for the wine category. CGA will continue to offer unique proprietary data and global channel expertise to support clients through this time.
One way to keep in touch with On Premise consumers is via CGA’s On Premise Impact Report which tracks consumer sentiment every month around topical issues such as fresh concerns around pandemic variants, intentions for specific events and shifting patterns of category engagement. The latest On Premise Impact Report by CGA, along with other special reports issued over the past several weeks, can be found here: https://cgastrategy.com/on-premise-impact-us/
To learn more about the opportunities and challenges for wine, along with support in understanding trends at category, segment and brand level within the On Premise, contact Matthew Crompton at Matthew.Crompton@cgastrategy.com
