Posted on | December 7, 2011
Written by | BevNetwork
It happens every year. Despite heroic efforts by sparkling wine marketers to promote their bubbly wares as year ‘round beverages, it is the jingle of sleigh bells that get Americans to pay attention, and far be it from the industry to ignore this habitual seasonal demand. Indeed, the holidays bring out the bubblies in force—at various price points from multiple regions of origin. This year we take a close-up look at three sparkling staples: Champagne, Cava and Prosecco. Each has secured a foothold; each offers distinctive appeals for distinct customers.
Italian Baubles: Prosecco’s Meteoric Popularity in America Brings Opportunity, Confusion
By Robert Haynes-Peterson
Fifteen years ago, if you’d ordered Prosecco at a top-tier restaurant, there was a good chance you’d be met with derision from the sommelier or a blank stare from the waitstaff. What was once a regional treat “discovered” by visitors to Italy has witnessed a significant popularity surge in the U.S.
“In 2009, we saw our business grow 44 percent,” says Enore Ceola, managing director at Mionetta USA, an early pioneer in bringing Prosecco into the country. “This year we’re growing about 33 percent.” For fiscal 2011, Ceola says, that means about 300,000 cases sold here.
Ceola’s estimates reflect the category overall, which reported a 44% increase in 2010 sales over 2009, based on Nielsen data. Information from the Italian DOCG region of Conegliano-Valdobbiadene indicates that U.S. exports of its spumante (sparkling) Prosecco alone experienced an average increase of 66.8% each year from 2003 through 2010, with exports up 82% from 2009 to 2010. “It’s a significant part of everyone’s sparkling wine business, who is actually in the wine business,” asserts Kevin Roche of New Jersey-based WineMasters.
Real Prosecco comes from a delineated zone in the northeastern corner of Italy, in the Friuli-Venezia Giulia region. Two DOCGs—Conegliano-Valdobbiadene and Colli Asolani—were designated in 2009, while nine provinces that had been classified at the IGT level were upgraded to DOC status. Anything made outside these regions is not supposed to be called Prosecco. Because Italy also officially changed the name of the Prosecco grape to “Glera” in 2009, non-DOC wines shouldn’t have the term “Prosecco” anywhere on the bottle. Within the DOCGs, Prosecco must be made from at least 85% Glera, but can also include small amounts of the regional varieties Verdiso, Perera and Bianchetta. For sparklers, the international varieties Pinot and Chardonnay can be used in small percentages.
All this legal mumbo-jumbo is intended to enforce stringent production methods (defined geographic area, lower yields) and protect the status of the region as the original producer of Prosecco. Unlike Champagne or Cava, Prosecco can be created in a variety of styles: Still, frizzante (lightly sparkling) and spumante, (full sparkling wine), with frizzante being by far the most popular in the States. Sparkling Proseccos—made by the Charmat method (secondary fermentation takes place in glass or steel tanks)—range from Brut (dry) to Dry (ironically containing the most residual sugar).
In the United States, what might be most intriguing is the apparently organic evolution of the wine’s popularity: No single factor seems to have pushed Prosecco to the fore the way, say, Cosmopolitan cocktails received a boost from Sex and the City and Pinot Noir from Sideways.
“Usually it seems we see a spike in requests after a musician mentions something, or it gets great press,” says John Wood, restaurant and wine manager at Shore Lodge in McCall, Idaho. “Prosecco seems to be a legitimate trend all on its own.”
Versatility and Value
Certainly Prosecco’s lower price point (about $10 to $19 SRP), compared with $30 and up for Champagne, makes it attractive in the current economy. “It’s not cheap, it’s well priced,” insists Leonardo LoCascio of Winebow, which represents Zardetto, a brand that’s been in the U.S. since the early 1980s. Timing is also important, according to Roche: “After 9/11, there was a something of a revolt around French products, and Prosecco benefitted greatly from that.”
The burgeoning Cocktail Culture of the past few years can take some credit, according to Ceola: “Prosecco is very versatile in cocktails. The fruit-flavored profile contributes more to the cocktail than simply bubbles, and pairs well with fresh fruits and purées.”
Perhaps the primary reason for its success is Prosecco’s ability to stand on its own as a distinctive wine. Women and Millennials, in particular, have embraced Prosecco’s light, fruit-driven flavor profile that can lean either toward apple or citrus. “Everyone’s looking for more fruit-foward wines right now, and it fits in nicely with that,” says WineMasters partner Jim Treanor.
In a May 2011 GQ.com article, food writer Alan Richman asserts “the Italians, because they’re Italian, have made Prosecco more complicated than it need be.” He may be right: According to Roche, “Renaming the grape Glera absolutely throws a monkey wrench in things.” As it stands now, he notes, many Americans “don’t know whether Prosecco is a town, a region or a grape.”
Is all the production flexibility in a wine with very little brand identity among American consumers a roadblock or an opportunity for the category? The recent entry of several large players—Ruffino, Santa Margherita, Freixenet (Voveti) and Martini & Rossi—into the category suggests opportunity. “I think the consumer is realizing the versatility of Prosecco,” says Anthony Pujala of Martini & Rossi, best known for its Asti Spumanti, but which has seen rapid success with its Prosecco label. “For us, that gives us an opportunity to go into the next segment of Prosecco, which is pairing it with meals.”
Another sign of continued growth is the emergence of more upscale versions. “We’re in a great position, because we have a portfolio with three levels of Prosecco,” says Mionetto’s Ceola. “We just introduced an ultra-premium Prosecco, and you see there are restaurants looking for something better; They’re offering a Prosecco for $8 to $10 a glass, and are now looking for one they can sell at the $12 to $14 level.”
And those turned-up noses you used to encounter when ordering Prosecco? Pretty much gone. Even Aldo Sohm, sommelier at Manhattan’s Parisian-themed, recently renovated Le Bernardin publicly professes his love for the modest Italian bubbly.
Hints and Tips for Selling Prosecco
The most popular Prosecco category in the U.S. is frizzante or semi-sparkling, trending on the dry side. That positions the product equally as an alternative to other sparkling wines or to still whites.
Unlike Champagne, Prosecco must be drunk young. According to information from Conegliano-Valdobbiadene, “This wine gives its best the year after harvest, and maintains its profile for at least a year after bottling.” For DOCG Proseccos, a code on the label identifies when and where it was bottled (since most are non-vintage).
Consider it as a food pairing wine. “The big difference in Italy is that Prosecco’s actually considered a food wine,” says WineMaster’s Roche. Sushi, firm white fish and Italian dishes are givens, but it works surprisingly well with grilled and barbecued meats.
Bubbly Rebound: Champagne Aims to Reclaim Sales Potency to Match Its Prestige
By Roger C. Bohmrich MW
The U.S. Champagne market, like the famed beverage’s signature bubbles, is on a upward trajectory. This, no doubt, is welcome imagery for the Champenois after the region’s namesake bubbly plummeted in 2009 to its lowest level since the mid 1990s. Total shipments dropped to a mere 12.6 million bottles in 2009, a decline of 26.7% after falling by 20.8% in 2008 in the doldrums of the worldwide financial crisis.
The low volume of imports in 2008-’09 contrasts dramatically with an average of nearly 20 million bottles for the preceding nine years. Prominent New York retailers are cautiously optimistic in their expectations for sales during the critical 2011 holiday season.
The poor performance of the U.S. market in 2008-’09 echoed that of Champagne exports generally, which sagged in this two-year period. However, the drop in the U.S was more dramatic, as was the surge in 2010, when shipments to the U.S. rebounded by 35% to 16.9 million bottles. Growth continues in 2011, with a further increase of 17.5% through May. If this trend holds, the U.S. may again reach the 20-million bottle mark by year end. The quick recovery is having unexpected consequences: Some houses are experiencing stock shortages. Insufficient supply could threaten the robust growth trend in 2012 and beyond.
New York-based retailers express mixed though largely positive expectations about holiday sales. Evelyn Wing of 67 Wine & Spirits reports that demand for Champagne is “better than ever” and foresees a strong finish to the year. JR Battipaglia of Garnet Wines & Liquors says the market is “OK, but not great,” and Peter Morrell of Morrell Wine indicates that it has “recovered from the depths, but is not back to what it was.” They both anticipate that 2011 will edge ahead of last year. Jeremy Noye of Zachys recalls the robust 2010 holiday buying and indicates that this year could be “flat or slightly behind.” Shelf prices, they agree, will generally remain where they have been, despite some increases from suppliers, and $29.99 is likely to be the lowest retail price point for a well-known non-vintage brut.
Slicing the Champagne Pie
The U.S. Champagne market is still dominated by a handful of brand names despite the proliferation of “grower” Champagnes in recent years. The share of these récoltant-manipulant offerings is around 3% of the total, with the major houses accounting for 93% and cooperatives for the balance. At Garnet, the estate-grown bottlings are a “minute” portion of overall Champagne activity, and Morrell attests that they are hand-sell products that “appeal to core wine drinkers.” The sales of small-house and grower Champagnes account for a much larger share at Zachys, according to Noye, who singles out highly-regarded names such as Pierre Peters and Vilmart.
Interestingly, declared vintage Champagnes have declined steadily from about 18% to 10% of total shipments to the U.S. over the last 15 years. Rosé, on the other hand, has been on the rise and now accounts for one out of ten bottles of Champagne. Wing at 67 Wine confirms this trend, reporting that rosé is “moving fast” and appeals to both sexes. Noye says that rosé has “leveled off” to a steady share, although Zachys anticipates increased interest in rosé and all vintage-dated Champagne due to the highly-touted 2002 vintage. The other merchants see Champagne purchases driven mainly by brand reputation rather than vintage.
Image is certainly a potent force shaping consumer attitudes in all segments, especially the high end. Dom Pérignon, virtually unrivaled in terms of prestige, “is still very strong,” says Morrell, a consensus view. Roederer, Cristal, Krug, Veuve Clicquot La Grande Dame and Bollinger Grande Année are also mentioned. It might seem counterintuitive given the glamour of these names, but the average annual sales of luxury cuvées in the U.S. were higher in the 1990s, and the share of this segment has been cut nearly in half to about 7%. Whatever their reason for buying Champagne—gift giving, celebration or discovery—most consumers are satisfied with a standard NV at a fraction of the price of a luxury bottling.
Riper Grapes Bring Lower Dosage
Another development of note is the reduction in dosage. Earlier harvests and riper grapes have reduced the sugar addition needed to produce well-balanced Champagne. Dosage requirements for Brut have been lowered to a maximum of 12 grams per liter (g/l) from 15 and to 12-17 g/l for Extra Dry. Higher maturity indices have also engendered cuvées with little or no dosage labeled Extra Brut and and Brut Nature or Zero. Morrell is “not a fan” of these styles, which Battipaglia claims are “for aficionados.”
Some palates may find the less successful ones meager and severe. Nonetheless, there are excellent examples from Pol Roger, Tarlant, Pierre Gimonnet and René Geoffroy that have garnered critical acclaim. Even Dom Pérignon and Cristal could be considered low-dosage cuvées. The niche is likely to grow when, as expected, a major house such as Roederer enter the bone-dry competition. How consumers respond to this phenomenon will make for an interesting study in the coming years.
Spanish Bubbles Boom: Known for Value, Cava Promotes its Premium Side
By Kristen Bieler
While most eyes have been on Prosecco and Champagne sales, charting the dramatic ups and downs over the last five years, Cava has been quietly chugging along at a steady climb. In 2010, Cava sales officially surpassed Champagne in the U.S., and the Spanish sparkler shows no sign of slowing down.
Compared with Champagne’s ancient origins, Cava is a relative newcomer. Codorníu founder Josep Raventós created the process in the 1870s in the Penedès region after spending time in Champagne learning the traditional method. This is still what makes Cava stand out amongst all other inexpensive sparkling wines: By law, Cavas must be produced in the far more expensive and time-consuming traditional method—or méthode Champenoise—whereby the secondary fermentation takes place in the bottle.
Which is not to say Cava tastes like Champagne. A big reason is the grapes. Though some Pinot Noir and Chardonnay is now planted, Catalan producers primarily use the indigenous Spanish varieties native to the Catalonia region; Macabeo, Xarel-lo and Parellada impart pronounced fresh green apple and mineral flavors, with less sharp acidity. It actually wasn’t until the 1980s, however, that Cava became a protected name and labeling became more strictly defined (basic Cavas must be aged for 9 months, Reserva Cavas aged 15 months and Gran Reservas 30 months).
A Boost from the Economy
Cava has morphed into an 18 million case category and one of the Spanish wine industry’s most important calling cards internationally (only 7 million of those cases are consumed domestically). Longtime category leader Freixenet USA owns two of the top three brands in the U.S.—Freixenet and Segura Viudas—and is responsible for most of the 1.3 million cases of Cava that Americans now consume annually. The company’s largest brand, Cordon Negro in the widely recognized satin black bottle, sells 550,000 cases a year in the U.S.—but that represents less than 10% of its volume production.
According to Freixenet USA President Tom Burnet, the category’s “very nice” growth over the last three years has coincided with the economic downturn, but he is uncertain how closely the two trends are linked.
Vince Friend, president of CIV USA, which imports Cristalino, the number-two Cava brand in the U.S. and the fastest-growing, believes the economy has been an undeniable boon for the category and predicts that Cava will become a 2 million case brand in the U.S. within the next three years.
Melanie Pyne, Spanish Brand Director for Aveníu Brands, importer of Anna de Codorníu, agrees: “Outside of the high-end French Champagnes and lower-end super-value brands, sparkling wine has seen fantastic growth, specifically Spanish sparkling wines. According to Nielsen, the last 52 weeks, Spanish sparkling wine in the $11-$15 price segment (where our brand is positioned) has grown 34% in volume and 36% in price with no discounting required.”
Value Reputation—a Blessing and a Curse
“I can’t think of any other category that delivers on its price-quality ratio as much as Cava does,” says Burnet. “The good news is that consumers view the category as offering superb taste for the price.” The bad news? “There is an expectation in consumers’ minds that Cava remain inexpensive.” (Freixenet hit the U.S. market in the 1980s around $5 or $6 a bottle, and it’s risen with inflation to approach $10 today.)
Cava sales are indeed squeezed into a narrow price window—between about $6 and $10 “is where the category lives,” Burnet believes. Freixenet does have higher-priced bottlings—Segura Viudas’s top offering, the Reserva Heredad, is around $20 and the company’s recently launched Elyssia brand is positioned in the mid-teens—but volumes are very small.
Cava at higher price points still delivers great value, believes Pyne. Codorníu launched its Anna de Codorníu brand—around $15 a bottle—in the U.S. two years ago and it’s been showing strong sales ever since. “In lieu of on-premise occasions, consumers are trading up to higher-priced segments—a sweet spot for Anna de Codorníu,” says Pyne. (Ironically, although Codorníu is credited with inventing Cava, it is one of the least traditional when it comes to grape varieties today; the winery was the first to include Chardonnay in the blend and in 2004, it released the first ever 100% Pinot Noir Rosé Cava.)
Cava as Fine Wine?
There are a small but growing number of boutique producers entering the category. One of the most celebrated is Raventós i Blanc, founded by descendents of Codorníu creator Josep Raventós. Big believers in terroir and local grape varieties, Raventós has been producing since 1986 from estate-owned land divided into 46 individual plots with unique soil types. The estate is in the process of organic certification.
“Cava is becoming a more known and high-quality alternative to Champagne, although most people still think of Cava as a value-only proposition,” says Francesc Escala, export director for Raventós i Blanc. “When it comes to spending over $12, sales are very limited to the more sophisticated markets where distributors really understand the brands and know how to position them—New York, Chicago and San Francisco.”
Another challenge for Cava: Sparkling wines are still highly seasonal products and people don’t buy them every week. “Anything with bubbles has December has written all over it,” says Burnet. “Half of our annual depletions ship out in the last three months of the year. If you don’t have a good OND, it was not a good year,” he concludes.
Several of the larger producers have launched direct-to-consumer promotions that position Cava as an accessible, everyday wine for a younger demographic. For example, Freixenet USA developed a Freixenet Tastings & Tapas Truck to promote Cava’s versatility.
“The imagery of tapas and home entertaining are very consistent with the Spanish lifestyle,” describes Burnet. “We are confident it’s a lifestyle that is very appealing and timely for the American consumer right now.”