As Prosecco Pushes Past 4-Million-Case Mark, Marketers Aim For Trade-Up

While sparkling wine is showing impressive growth across the board, Prosecco is the category’s star, having posted an expansion that’s been nothing short of phenomenal in recent years. In 2015, Prosecco reached new heights, surpassing the 4-million-case threshold on 22.6% growth, according to Impact Databank. In the past two years, Prosecco has advanced by nearly 1.5 million cases—meaning that its incremental gain has nearly matched overall Champagne volume in the U.S.

“What’s most exciting about Prosecco’s growth is its consistency,” says Marc Taub, president and CEO of Palm Bay International, which markets Lunetta, one of the category leaders. “We’re seeing a month-in, month-out amplification of the business.” Earlier this year, Palm Bay extended its fast-rising Roscato brand—like portfoliomate Lunetta, an Impact “Hot Brand”—with a Prosecco, as well as two other sparklers: a Moscato and a sweet red.

Less than a decade ago, Prosecco was essentially an afterthought in the U.S. market, selling less than 500,000 cases annually. Now, several of the category’s top players surpass the half-million-case mark on their own, including La Marca, Mionetto and Cupcake (whose sparkling range also includes a small percentage of non-Prosecco offerings). These brands—as well as other popular entries like Zonin, Lunetta and Ruffino—all enjoyed double-digit growth both in 2014 and 2015. And all are priced in the U.S. wine market’s “sweet spot” of $10-$15 a 750-ml.

For all of Prosecco’s remarkable success, marketers are still in the very early stages of trying to trade up U.S. consumers within the category. Prosecco is still widely viewed as an under-$15 proposition. While Prosecco is now at well more than double Champagne’s volume, Champagne still rings up more retail dollars than its Italian rival. Still, there’s evidence that premiumization is occurring in Prosecco. Though DOC Prosecco continues to dominate sales in the U.S., the more exclusive DOCG variety is making inroads, with its share on the rise.

Palm Bay is also looking upscale with its Trento DOC sparklers Ferrari and Altemasi, both priced in the $25-and-up tier. “Ferrari and Altemasi are seeding the market with an opportunity to trade up from Prosecco to metodo classico,” says Taub.

Barnes & Noble To Start Selling Wine, Beer At Several Stores

Bookstore giant Barnes & Noble is bringing beverage alcohol to several of its stores as part of a new concept aimed at reviving the company’s lackluster performance. In October, Barnes & Noble will begin offering wine, beer and an expanded food menu at its Eastchester, New York location. Later in the year, it will follow suit for stores in Edina, Minnesota; Folsom, California; and Loudon, Virginia. The company says its goal is to significantly increase food and beverage’s share of its overall business from its current figure of slightly less than 10%. Barnes & Noble’s total sales have been flat-to-down over the past few years.

News Briefs:

•California-based Hyde de Villaine (HdV) has purchased a 33.5-acre estate in Napa Valley that comprises 24 acres of vineyard, a 3,750-square-foot winery and residence. HdV has operated on the site since 2003, but the company says the purchase represents its commitment to the region. HdV will retrofit the existing crush pad and replant sections of the vineyard over the next several years, adding Cabernet Sauvignon, Syrah, Chardonnay and small amounts of Sauvignon Blanc while maintaining focus on Pinot Noir and Chardonnay. Hyde de Villaine is a partnership between Carneros-based Hyde Vineyard owners the Hyde family and the de Villaine family, owners of A&P de Villaine and co-director of Domain de la Romanée-Conti in Burgundy. HdV is handled by Napa Valley-based Wilson Daniels.

•Glazer’s, which recently gained full ownership of its brokerage operations in Alabama and Mississippi, plans to combine them with Southern Wine & Spirits' own brokerage operations in both markets once the Southern-Glazer’s merger is finalized in the coming weeks. The new entity will operate in Alabama and Mississippi as Southern Glazer’s Wine and Spirits of Gulf Coast, LLC, and will be the largest brokerage operation in both states, according to Glazer’s. Alabama and Mississippi will be part of the future Control States and Canada Region for Southern Glazer's, which will be led by Scott Oppenheimer.

•Vinexpo has updated the programming for its 2017 event in Bordeaux, set to be held June 18-21. The four-day event will feature a new “Hosted Buyers” program, in which Vinexpo will invite 200 new international buyers spanning a wide range of channels, including the e-commerce, travel retail, off-premise and on-premise sectors. These buyers, as well as all registered exhibitors, will be able to participate in the event’s “One to Wine Meetings,” which aim to connect exhibitors directly to pre-registered visitors. Additionally, Vinexpo will offer a new space dedicated solely to organic and natural wines, showcasing around 200 producers. The 2017 event, which is expected to draw 48,000 visitors, will mark the 19th edition of Vinexpo Bordeaux.

•Jägermeister has launched a new 20-ml. glass bottle format—dubbed the Mini Meister—in the U.S. Designed to be poured into a single beverage or consumed as a shot, the portable Mini Meister bottles are targeted toward travel, tailgating and summer party occasions. The Mini Meisters will be available in 10-count Prost Packs ($10 each) throughout select markets, including Colorado, Illinois and Massachusetts.

•Stella David, who spent 15 years as a Bacardi executive, has been appointed to the company’s board of directors. From 1994-2009, David held a variety of key positions with Bacardi, including CEO of the U.K., Irish, Dutch and African business; vice president, global operations; managing director, Asia Pacific; and global CMO. She left the company to head William Grant & Sons, where she was CEO from 2009 to February of this year. David is replacing Georgia Garinois-Melenikiotou on Bacardi’s board. Garinois-Melenikiotou, executive vp of corporate marketing at Estée Lauder, is retiring from Bacardi’s board after serving as a director of the family-owned company since 2012.

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