Red Sweet & Proud: Ready-To-Drink Sangria Emerges As Dynamic Wine Category

Posted on | March 1, 2011   Bookmark and Share
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Some credit mixologists with kick starting the pre-made sangria growth trend by igniting an interest on-premise that then moved to retail. Others cite the swell of at-home entertaining or the proliferation of Spanish tapas bars. Yet perhaps the most convincing explanation for sangria’s recent explosion—with its growth rate of 14%, it is among the fastest-growing wine categories in the U.S.—is the largely unmet demand for red wines that are sweet and packed with flavor. And sangria is just the beverage to fit the bill.

Joe Janish, marketing communications manager at Opici Wine Company, has seen sangria take off first-hand. Opici’s wholesale operation sells -Ed Hardy Sangria, and Janish reports: “We couldn’t keep it in stock. It became a massive brand overnight and it was flying out of our warehouse.” In order to keep up with feverish demand, Opici’s import side of the business created Opici Sangria in a 3L box in October.

Ed Hardy and Opici are part of a recent wave of category entrants, yet growth is occurring for brands old and new. Arbor Mist launched its Zinfandel Sangria in 1999, well before sangria was posting double-digit increases, and today sangria is the brand’s fourth best-selling flavor, with annual volume of nearly 360K cases. Amy Martin, marketing director for Arbor Mist, believes the home-entertaining trend has fueled sangria’s growth and brought more men into the category as well. Franzia introduced its 5L bag-in-box sangria five years ago, and a 1.5L two years later, and both are quickly moving off shelves.

Gene Schaeffer, VP Nicolas Wines, is metaphorically knee-deep in sangria these days. Nicolas Wines makes and markets Ed Hardy wines and although sangria is one of the most recent line extensions, it quickly became the brand’s best-seller, hitting 12,000 cases a month soon after it was released. “We will likely do 150,000 cases this year,” he shares. The company also makes similar-tasting sangrias under private labels for Whole Foods and Cost Plus as well as the Jorge Posada Cinco Anillos Sangria (whose profits are donated to the Jorge Posada Foundation)—all of which are on fire right now and target very different consumer groups.

But, is there one group more responsible for sangria consumption than others? “Yes,” says Schaeffer. “It tends to be younger consumers new to wine. It’s a market that gravitates toward easy-to-drink beverages with a fruit profile. It’s the same type of consumer that was drinking wine coolers in the 1980s.”

Sangria also appeals because of its sweet nature. Brands vary in sugar content, but most veer far right on the sweet spectrum and that’s precisely why they are so popular right now, says Time Hanni, MW, an expert on flavor and sensory sciences. His research has proven that there is a certain group of consumers who will always prefer sweet wines because of the way their palates experience flavors. “Trying to move these consumers to dry wines on the theory that dry wines are inherently better or more appropriate with food will simply backfire,” he says. “You have to engage them and build up their confidence in wine preferences if you want to lure them away from cocktails and light beer and towards wine.”

Another sangria common denominator is low alcohol content, he adds: “A big part of our findings is that higher alcohol levels are much more likely to generate an unpleasant burn for the people naturally more attracted to sweet wines.”
Sweet whites have been growing for years, and Hanni sees a “confluence of factors” lining up to give sweet reds a serious advantage: “The image that red wine is more sophisticated, combined with health research that focuses more on benefits of red wines in general, and finally, there are higher-quality sweet red wines becoming available.”

Sangria is now reaping the benefits of this trend, reports Bill Berkoff, VP, BevMax in Stanford, CT. “The American wine drinker has always been ‘talk dry, drink sweet,’ and the category of sweet red wines has been exploding for the past two years—it’s grown more than almost any other category,” he says. Berkoff has observed that until recently, most sweet reds were light in color, which wasn’t what his consumers were looking for. Sangria boasts that dark red color, making it a wine many people want.

The red-and-sweet phenomenon isn’t news to Wendy Nyberg, senior director of marketing, Sutter Home Winery/Trinchero Family Estates. The company launched Sutter Home Red—a sweet red meant to be consumed chilled—four years ago. “We watched all these regional brands have amazing success with sweet reds—New York’s Red Cat or North Carolina’s Duplin Winery, for example—yet there was no national brand of any significance,” she points out. Initially, Sutter Home Red didn’t list “sweet” on the label, but once it did, it started to fly. “Sweet is not an ugly world—it’s a word that sells. Suppliers are foolish not to give consumers what they want,” Nyberg continues.

Sangria’s advantage according to Nyberg? “Consumers assume it’s sweet—you don’t even need to list it on the label. Trinchero came out with a sangria under its Bandit tetra-pak brand about a year ago. We see big growth opportunities for Bandit Sangria particularly in supermarkets and places where outdoor activity is more prominent and tetra-pak packaging is advantageous.”

As the category grows, many predict we will start to see more sangria permutations. Real Sangria, the number one imported sangria from Spain, is leading the way with its white sangria, introduced last spring. “So many restaurants were introducing white sangrias, so we thought we should offer one, too,” says Ricky Febres, national marketing manager, Shaw-Ross Importers. Despite its higher price, Real Sangria has posted solid growth for the last decade, up 10% just last year. “When the wine market boomed in the 1970s and ‘80s, the market for sangria practically disappeared. Spain is so hot right now—tapas bars, Spanish wines and food—and the fact that so many restaurants are making sangrias helped bring it back,” Febres explains.

The category has had an undeniable boost from bartenders and the mixology culture. According to Mike Quigley, manager, Empire Wine & Liquor in Albany, he sells just as much pre-made sangria as he does sangria ingredients: “There has been a big increase in pre-made as well as people making their own. Customers come in looking for large-format Spanish wines and asking us about how to make it at home. The interest in at-home mixology is entirely due to the prevalence of today’s cocktail culture.”

One category newcomer which doesn’t fit the profile in terms of price point and sweetness level is Savida Sangria, founded in 2009 by former banker Jay Tramonte. He got the idea for Savida from bartenders having spent a lot of time in bars with his Agua Luca Cachaça brand (which he since sold to Heaven Hill). “There are sangrias on cocktail menus at every type of restaurant from hip urban bars to T.G.I. Friday’s and Olive Gardens,” he says. “The on-premise did the work in creating a market for premium sangria, but I didn’t believe there was a real option for replicating that experience at home.”

Savida is targeting a different consumer—the seasoned wine drinker who prefers a less sweet style. Made with mostly California Syrah, Savida’s red is infused with passionfruit, elderberry, lime and strawberry juices, and the white is made with white peach juice; both have no added sugar. At The Wine Cellars in Atlanta, Savida is the best-selling sangria, according to employee Pamella Robuck: “A lot of our consumers feel that most sangrias are too sweet. Savida might be a more serious sangria, but it is still a real crowd-pleaser—it is a perfect wine alternative. Most of our customers use it for entertaining.”

Real potential for the category lies in its ability to transcend seasons. “Everyone used to think of sangria as a summer wine, but it’s breaking out of that stigma now,” says Berkoff. Indeed, Schaeffer reports that in the month of January, Ed Hardy Sangria sells just as well in a chain of supermarkets in northern Michigan as it does in Miami. And if retailers work to market these wines year-round, they will simply sell more wine, says Hanni: “It’s a limited viewpoint that sangria is for warm weather only. Sweet wine drinkers want to drink wine in every season and occasion, and if you don’t offer it to them, they will choose an alternative instead.”

Elevating the Chains: Why You Should Pay Attention To Multi-Unit Beverage Programs

Posted on | March 1, 2011   Bookmark and Share
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The chain restaurant: it beckons to us from unfamiliar streets. Numerous restaurants thrive on surprise and intrigue, but the one that’s part of a branded chain attracts customers—perhaps not for cutting-edge preparations, but for welcoming familiarity and reliable quality. For this reason, a table tent bearing the image of a slushy cocktail reminiscent of spring break or encouraging the sale of generic house wine pours, has been a familiar sight. Not anymore.

Some chains have had the foresight to swap mixes for fresh ingredients long before it became commonplace, or offer a well-rounded wine list. Yet barraged by a flood of exciting mixology and wine trends, the average chain customer is shifting priorities. They want to sample the flavors and styles they’re hearing so much buzz over, and neither a frozen daiquiri pumped out of a machine nor the same old bottle of Chardonnay will suffice. The best part? Chains are responding with ambitious beverage offerings. An empowered chain consumer, one who converts to a new drink in a comfortable setting they trust, means the next time they’re at your restaurant they’ll be primed to experiment and trade up.

“When you find a chain that is a good match for your brand it can be a fantastic opportunity to showcase inspiring cocktails that allow many consumers to try something new, connecting with the brand in a way they wouldn’t at home,” notes Joel Selesnick, Pernod Ricard USA’s national account manager, Northeast. Selesnick says PRUSA has had particularly good luck in the chain realm with its Absolut and Malibu brands, which, for example, are featured in the apple daiquiri at Legal Seafoods developed by Tad Carducci of Tippling Brothers. At Ocean Prime, a Cameron Mitchell restaurant, the “Oxygen,” another Carducci creation with Absolut Berry Açai, Plymouth gin, muddled white grapes, fresh basil and lemon is a success, presenting a modern alternative to the gin & tonic.

It’s a particularly good time in our industry to engage the chain demographic, Selesnick believes, because the role of the bar in these environments has been altered. “I think what has happened is that many chains now embrace the bar, and instead of looking at it as a place for guests to wait as their table becomes available, it is an important part of the overall experience. This change has allowed guests to feel more comfortable and at ease in trying new drink concepts or, more importantly, modern expressions of classic cocktail concepts.”

Tylor Field, VP of wine and spirits at Morton’s The Steakhouse, sees the clientele at his restaurants making exciting beverage choices with ease. “There’s a younger generation populating the bar,” he points out, “and they’re becoming more educated,” whether it’s not settling for anything less than a quality margarita or trying a caipirinha. To help meet this demand, each year Morton’s dreams up a new signature cocktail program, like the recent “Heavenly” series featuring custom foams.

At Hard Rock Café, worldwide beverage director, Cindy Busi, says the key to helping customers make more adventurous choices is providing “them with a drink selection they could not easily make at home. The average guest won’t necessarily go to the store and purchase basil, mint, raspberries and coconut to make just one drink.” However, when these guests are in the restaurant, “they expect a wide selection and want a memorable experience.”

A memorable experience has never been hard to find at T.G.I. Friday’s, known for its entertaining bartenders who have mastered tricks à la Tom Cruise in Cocktail. Yet George Barton, VP beverage and bar innovation concept team, Carlson Restaurants/T.G.I. Friday’s, hardly relies on flare skills to drive interest. “Our Ultimate cocktails, premium size with premium liquors, are definitely what guests look for on our menu—drinks like our Ultimate Long Island Iced Tea and Ultimate Margarita,” he notes. “In the last few years, tableside Shakers have become an important part of our menu. Our guests enjoy the tableside service of cocktails like the ‘Tropical Berry Mojito Shaker’ and ‘Patrón Cosmo ‘Rita Shaker.’ This T.G.I. Friday’s ‘theater’ so to speak is what makes us famous with our drink heritage in casual dining.” Fun new cocktails like “The Pink Punk Cosmo,” made with Smirnoff and a fluff of cotton candy and the “Diddy Up” with Cîroc and Red Bull have, according to Barton, exceeded sales expectations.

Charles Steadman, a Palm Beach, FL-based bartender and consultant who developed forthcoming drinks for the Buffalo Wild Wings Grill & Bar chain, recently found himself in Chili’s. Taking a peek at the drink menu, he noticed a push for the “Fresh Margarita” with fresh lime juice. “In the past, cocktails have devolved from fresh, homemade components to bottled and canned juices. Nowadays, they are evolving again with more bartenders bringing back that fresh component to a cocktail,” he says.

The trend has crystallized. Fresh fruit is the cornerstone of Hard Rock Café’s cocktail program, and Busi says there is wide appeal for the tropical-inspired concoctions because they are made from scratch. “Visiting a Hard Rock is a little like taking a vacation and getting that permission slip to try something new,” she muses.

Last year, Barton notes that after T.G.I. Friday’s guests sought out fresh ingredients, the chain responded by updating its margarita mix. Like the sprig of basil in the “Triple Berri Passion” fresh herbs began to make an appearance to boot.

Morton’s had the prescience to get on board with fresh juices five years ago, and Field reiterates the importance of preparing a cocktail à la minute: “The rules have changed for the better. The standard was a chemical-tasting mix and soda gun, and now we’ve brought the kitchen to the bar.”

Mary Melton, P.F. Chang’s director of beverage, echoes Field, recalling how the conversion to fresh-squeezed juice was the first sign cocktail menus were changing in the right direction. Each of her bars squeezes fresh juice and uses the likes of pure cane sugar simple syrup. “Gone are the days of the mixer,” she assures.

Beyond the obvious, that both customers and bartenders have become savvier, Steadman says freshness has become a primary focus for additional reasons: “Liquor companies want to be on top of this wave and deliver a drink with their product(s) that has impact. And, recent economic events have shown that restaurants can focus on a beverage program while maintaining the brand integrity to generate higher revenues and have a better bottom line.”

Bethenny Frankel’s Skinnygirl Margarita made waves last year for the calorie-conscious set that likes to entertain at home. But chain bars are certainly capitalizing upon the interest. This month, The Cheesecake Factory will launch a menu of 150 calories-or-less “Skinny-style Cocktails” based on the chain’s five most popular libations. After conducting several tests last year, T.G.I. Friday’s decided to unveil a Skinny Margarita and Skinny Blackberry Margarita. This new approach to making cocktails is also popping up in the bars of hotel chains. Francesco Lafranconi, Southern Wine & Spirits of America’s national director of mixology, who has lent his expertise to Morton’s, recently created a range of cocktails for Westin Hotels and Resorts. Based on the SuperFoodsRX series of books, the drinks featured ingredients like blueberries, ginger, green tea and honey.

At Applebee’s guests embrace the low-cal trend by ordering a “Skinny Bee Margarita” made with Hornitos Reposado premium Tequila, or a “Skinny Mojito” with Cruzan Light Rum. “We have seen a spike in awareness in our brands that are carried and promoted at Applebee’s,” shares Kevin Ruff, VP, national accounts, on-premise at Beam Global Spirits & Wine. “A great example is the ‘Skinny Bee.’ This promotion has helped to expose Hornitos to thousands of new consumers.”

Busi says there’s now a focus on “better-for-me” options at Hard Rock Cafés, too: “Any drink we serve that is made with sweet & sour can now be lightened up for a lower-cal version. Additionally, we are using coconut water as an alternative to soda or juice.”

Bud, Miller and Coors will always pull their weight at the chain bar, but ignoring the popularity of craft brews would be a mistake. Busi sees them on the rise and this year is launching a locals menu where Hard Rock Cafés will have the opportunity to focus on brews made close to home. “We are seeing that like great wine, guests are now starting to experiment with all types of beer, and are more open to a wide variety of flavor profiles,” she says.

At Smashburger, beer sales are just another way for the chain to leverage its devotion to “creating more burger occasions in the marketplace,” says founder Tom Ryan. Instead of forcing guests to stand in line again if they crave a second frosted mug of beer, the pragmatic beer bucket, holding two to four beers that stay ice cold at the table, comes to the rescue. Along with the big national brands and a few imports, Smashburger also offers craft beers customized to each local market. “There’s not a market we go to where it’s difficult to find some great tasting local beers, which is important to Smashburger because our brand positioning is to become every city’s favorite place for a burger,” explains Ryan.

Morton’s moves a lot of wine. Its core program features 225 selections; the manager at each unit has the opportunity to tweak it based on local market preferences. “In Miami, you’ll see a lot more Spanish and Argentine wines,” Field points out. “In the Northwest, more Oregon Pinot Noir.”

Melton is gearing up to introduce a new wine list at P.F. Chang’s locations in April. While she likes to feature favorites including Kendall Jackson and Beringer, she also incorporates up-and-coming varietals such as Albarino and Grenache. “Sales numbers show that customers see these as fun additions,” she points out.

The chain customer demographic is a coveted one. “Chains have the power to introduce customers to new experiences. They have a larger audience, bigger advertising and a stronger presence in the market,” notes Steadman.
“Brands are built on-premise, and national account restaurants, are very important ‘display windows’,” adds Southern’s Lafranconi.

Beam’s Ruff agrees: “Today’s chain consumers are desirable because they are socially active, travel and entertain frequently. They will ask for our brands on many occasions and share their drink experiences with friends and family.”

Bold changes aside, the chain can never forget its value-driven audience. T.G.I. Friday’s reinforces this with its $3 beer, $4 wine, $5 drink and $6 premium initiative, highlighting monthly selections. “This program has allowed us to offer great products at a real value price and gauges our guests’ interests to help determine what we will offer next,” shares Barton.

In addition to the standard wine list, P.F. Chang’s became the first national chain to create a wine bag-in-box when it rolled out Vineyard 518 Sauvignon Blanc and a Syrah blend last May. Unlike a typical private label, P.F. Chang’s has control over the winemaking process. And by saving money on bottling costs with its eco-friendly packaging, Melton says they are able to pass down the value to guests.

Morton’s draws in bar crowds with its more casual 12-21 lounge experience. “To make a bar relevant you have to make it a little different conceptually,” Field notes.

Creativity, variety and value among chains will continue to encourage customers to confidently endorse and promote new drinking experiences once they’re through with dinner. But the real success of a chain beverage program circles back to the main reason they hold such appeal nationwide: consistency.

Austria on the Cusp: Led by Sommelier Fave Grape Varietal, Grüner Veltliner, Austrian Wine Makes Retail Progress

Posted on | March 1, 2011   Bookmark and Share
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Will 2011 be Austria’s year in the U.S.? Once a rare sight at retail stores, bottles of Grüner Veltliner, the wine universally associated with Austria, have started showing up on more and more shelves, helped along by the expanding American wine palate, and the wine’s reputation as a zesty and food-friendly alternative to insipid, high-alcohol or overly oaked whites.

But there’s an odd twist to the growing interest: Grüner, for years the most obscure of the wine-geeky wines, developed its reputation based on the affection of many sommeliers who’d grab what little they could of the allocated wines, hard to source since the Austrians drink about 80% of what they produce. Places like Aureole in Las Vegas stocked well over 100 labels, and Grüners became the best wines nobody could find.

But lately, retailers are finding success via a modest packaging innovation. Crown-capped liter bottles of Grüner and other varietals offered by such major producers as Burger, priced below $15, may be opening the door for the higher-priced versions.

The Hand Sell
Grüner accounts for the vast majority of exports to the U.S., but increasingly Riesling, and the red varietals Zweigelt, Blaufränkisch and Blauer Burgunder have started to move beyond their niche as the sommelier’s favorite to become more widely accepted wines, especially at retail.

Importers like Terry Theise, whose portfolio is widely credited with establishing the country’s reputation in the U.S., have worked hard to build the quality image of the wines.
But lately, the wave of less expensive bottles has brought a new story from Austria: that of value and convenience.

There’s also the change many wine shops have undertaken as big box retailers expand into more markets. “The successful independent retailers have had to seek out categories and wines like these that require a passionate hand sell and evangelist approach to bring value to their customers, since they can’t go toe to toe with the big guys on price or in buying volume,” says Erin Grace, brand manager, Austria, at Emerald Wines—a division of wine and spirits importer and distributor, Winebow. The value is not only price-based but also quality, she says. With most Austrian wines being sold by fine wine houses, retailers who focus on less common wines are getting interested.

Eye on Austria
The U.S. is now Austria’s third largest export market, making up only about a tenth of what’s sold in Germany and Switzerland. But the numbers were up more than five percent in volume during the first half of 2010, according to figures from the Austrian Trade Commission in New York, after years of growth slowed in 2009.

Impressively, all this happened with very little organized commercial or marketing support by producers or the country as a whole. Stephanie Artner, project manager for Austrian wine at the Austrian Trade Commission, says the increase in U.S. activities, while small, has been significant. In 2010, more than 100 wineries participated in the first trade and consumer tastings, “Austria Uncorked,” in New York and San Francisco, and current plans call for a repeat in New York and Los Angeles in May of this year, as well as more focus on reds and Rieslings.

Recent promotional efforts have included large consumer and trade tastings, which will expand next year, and a broad effort to engage social media, sommeliers and wine bloggers to elevate the awareness of the wines, says Constance Chamberlain, public relations manager, wines, for the agency Brand Action Team: “Austrian wine is still a growing entity that is not held back by funding and, instead, is working to optimize the money they do have, hence the focus on social media marketing. The category has the potential to reach a large scope of people, faster and more personally.”

Follow the Sommelier’s Lead
As noted, sommeliers have always been big boosters of the wines. Sommelier Alan Murray at Masa in San Francisco carries many labels. Why? “These are quality wines, some of the purest in the world. Their elegant and fine qualities make them world class, and they are simply delicious,” he points out.

Murray says the general characteristics of Austrian wines make them a perfect fit for fine dining, and according to importers and marketers, have helped make San Francisco a major market for Austrian wines in the past few years.

Jamie Koren, European wine buyer for the Wine House in West Los Angeles, says that even though selling whites other than Chardonnay is still a challenge for wine shops in his part of the country, liters of Grüner have been a success. While the Wine House stocks many wines from Brundlemyer, Prager, Pichler and other well-known producers, they still require a hand sell while hundreds of cases of Burger and Hofer in liters move through the store.

Retail sales have surged compared to on-premise, says Grace. Although in New York City, long a stronghold for the country’s wines, Grüner is still primarily a fine dining event. In these markets, a wider variety of Austrian labels at higher prices can be featured, and even more than a smattering of by-the-glass offerings.

Retail Direction
Whatever the growth, there are still numerous issues with getting Austrian wine up to speed, says Monika Caha of Monika Caha Selections: “Austrians are not big marketers, period. They’re not into spending big bucks on marketing no matter what the type of product.” With most of the quality wines coming from small family-owned wineries and few of the larger producers interested in promotion, little is expected to change in
this regard.

Austrian reds tend to appeal to insiders, she says, but the country’s Grüners, Rieslings and Pinot Blancs are easy to understand once consumers realize they are not German. Retailers who bring the wines off the bottom shelf and provide some strategic signage have been, anecdotally at least, having better results, Caha says. In fact, with Austria closer to Burgundy in climate than Germany, getting retailers to move the wine away from the many German powerhouses in the store, and closer to Northern Italian whites or other wines where sweetness isn’t an issue has been a triumph.

But for now, even in stores where Austrian wines have made an impact, it’s still a hand-selling story. With major importers more interested in large volume countries, many wineries are hard-pressed to find a portfolio home. And this year will provide a major challenge, with price pressure on producers to balance the very small 2010 harvest of Grüner. But as long as the wines continue to range beyond the sommelier’s pet, a good harvest in 2011 may set that right.

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