Despite the economic downturn, sales of California wines to U.S. markets edged up 2 percent in volume in 2008 compared with 2007.
Wineries shipped 467 million gallons—the equivalent of 196.3 million 9-liter cases—last year, according to Woodside, Calif.-based Gomberg-Frederikson & Associates. The estimated retail value for those shipments was about $18.5 billion, down slightly from 2007.
Total California winery shipments to both the U.S. and export markets increased 3 percent in volume to 570 million gallons—or 239.8 million 9-liter cases—in 2008, according to the San Francisco-based Wine Institute.
“Wine continues to move further into mainstream American adult lifestyles, with sales expanding incrementally based on cautious consumer spending,” says consultant Jon Fredrikson of Gomberg-Fredrikson & Associates. “Consumers are changing their buying patterns by ratcheting down their everyday wine purchases to lower price points, but splurge on higher-priced wines at times because they view wine as an affordable luxury.”
The impact of the recession on wine sales varied widely nationwide and created complex market conditions, Fredrikson said in a Wine Institute news release.
Restaurant volume declined an estimated 10 percent as consumers dined out less and purchased lower-priced bottles and wines-by-the glass.
Businesses scaled back on travel and entertainment budgets.
Restaurants adjusted by carrying less inventory and ordering more frequently—often purchasing less expensive brands.
Some distributors also reduced inventory levels to keep investment to a bare minimum. As sales to the trade channels declined, small- and mid-sized wineries placed more focus on direct-to-consumer and tasting room sales.
These channels slowed down as well as consumers conserved cash and reduced travel.
As consumers saved funds by drinking wines at home, U.S. food store wine volume increased by nearly 1.2 million cases, up 1.6 percent in 2008, according to The Nielsen Co., which tracks product sales based on information gathered at the retail point-of-sale.
These grocery stores account for close to 45 percent of off-premise volume in the United States.
Dollar sales rose by 4.7 percent.
The top varietal wines by market share in U.S. food store volume were: chardonnay, cabernet sauvignon, merlot and white zinfandel, accounting for more than half of the sales.