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How Sweet It Is

Posted on  | May 31, 2012   Bookmark and Share
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Americans’ Tendency to ‘Talk Dry but Drink Sweet’ Continues to Evolve, Making Sweet Reds the Hottest Category of the Moment.

Just a couple of years ago, sweet red wine inhabited the same place in the wine world that it had always inhabited—on the retailer’s bottom shelf, in the same purgatory with the big jugs and five-liter boxes.

So what happened in the past 18 months? Why is sweet red wine perhaps the hottest category in the wine business, with more oomph than even Moscato? Why are some of the biggest producers in the world investing in a category that was once, not all that long ago, mostly known for its Kosher wines?

No one really knows. As a category, sweet red is so new that most of the major sales tracking consultancies don’t know that they’re tracking all of it. The category is still such a puzzle that it includes wines that are labeled as sweet and wines that are labeled as red blends, as well as wines with residual sugar as high as 9% and as low as 1.5%. Hence, sales figures must be interpreted with those caveats.

The one thing that everyone does know? That sweet reds are selling, and in numbers that never seemed possible. Sales, says Nielsen, grew at triple-digit paces for a string of 13-week periods in the first quarter in 2012, outpacing Moscato during the same period. E.&J. Gallo’s Apothic (one of the smooth, juicy blends that is not technically sweet, nor is labeled as such) was one of the best-sellers in the U.S. in the $8-$13 category in 2011, while Beringer—which knows a thing or two about sweet wine—expects to sell one-half million cases of its Red Moscato this year.

Breaking the Rules

Sweet red has long been a pariah in the U.S. wine business. One respected winemaker, hardly a traditionalist himself, was asked about sweet red wine, and he just rolled his eyes. Even at the end of last year, when sweet red was recording serious sales numbers, one well-known wine critic dismissed the category because it wasn’t important enough to warrant his consideration.

That perspective is changing quickly. Nielsen data found that sweet red grew 172.5% in the 13 weeks ending Jan. 7th, and 148.3% in the 13 weeks ending March 3rd.

 

Christian Miller of Full Glass Research, whose company has started researching the trend, believes that there are a variety of reasons why this is happening now, including luck. “Wine is hip and red wine is popular,” he notes, “and these wines are hitting the market at the right time to take advantage of that.”

Dig deeper, say the experts, and sweet reds seem to benefit from:

  • Strong merchandising muscle that ensures wide distribution for near-sweet red brands that have been successful, like Ménage à Trois Red from Trinchero, Apothic Red from Gallo, and Cupcake Red Velvet from The Wine Group, says Miller. These wines are also priced in the very popular $8-$15 range, which doesn’t hurt either.
  • Long-term trending toward greater experimentalism by wine consumers, who are increasingly less afraid to try something different. “The stigma around sweet wine has been blown up,” says Bavaresco, who directs brand development for VinMotion Wines, the company that makes Pacific Rim Riesling and which will introduce the Sweet Bliss line, including a sweet red, later this year. “There isn’t a shroud of pretension over the category.”
  • Groundwork done by regional wine, which has been successfully selling sweet red for years, says wine blogger Jeff Lefevere, who has written extensively about the subject. “I think the big boys saw the success in regional wine, and also viewed it as a competitive threat,” he says. Regional producers like Oliver in Indiana, St. James in Missouri, St. Julian in Michigan, Hazlitt in New York, and Duplin in North Carolina have sold hundreds of thousands of cases of sweet red, and their products regularly show up in sales tracking data in their home states.
  • Greater flexibility for grape sourcing at a time when grape prices are increasing, and supply—especially in California—is falling behind demand. Sweet red wine is relatively easy to make and can be made with almost any red grapes (along with white grapes, for that matter). This is in contrast to a varietal wine like Moscato, which is in tightening supply. It’s also probably not a coincidence that the USDA reported that prices for California table grapes increased 26% in 2011; most California wine is sweetened with grape juice concentrate, since it’s illegal to use sugar.

Sizing Up the Sweet Red Customer

Another area of confusion? No one is quite sure who is drinking sweet reds. Some sales data suggests that sweet red consumers are women, beginning wine drinkers and Millennials. “Why is everyone so surprised that Millennials, who drink Coke for breakfast, would want to drink sweet wine?” says Barry Sheridan, vice president of marketing for Treasury Wine Estates, which  owns Beringer.

Fred Franzia, owner of Bronco Wine Co., agrees that the new generation of wine drinkers is content to view wine as an extension of Pepsi or Coke; in fact, he believes, many welcome the carbonation in their wine. Similarly, those who prefer table wines are turned off by sourness and tannins typically associated with red wine; they are looking for a soft texture in reds.

Facebook information from Pacific Rim, says Bavaresco, identifies its sweet wine drinkers as overwhelmingly women but not necessarily as Millennials. The people who are fans of Pacific Rim seem be evenly split between the three age groups between 25 and 54.

Confusing the issue even more is that Nielsen figures point to a sweet red drinker who is 45-54 and not only more Hispanic than the typical wine drinker, but more Hispanic than the general U.S. population.

Also unclear, says Full Glass Research’s Miller, is why consumers are buying sweet red wines. The assumption is that sweet wines match the U.S. consumer palate, which has traditionally been about talking dry and drinking sweet. So it’s not surprising that Bavaresco says Pacific Rim’s sweetest Riesling accounted for 70% of its Riesling sales over the last two vintages.

But if that’s the case, why the success of near-sweet brands like Ménage à Trois Red and Apothic Red—neither of which say anywhere on the label that they’re sweet, but which have about 1.5% residual sugar?  This is in contrast to other successful brands, including those from Sutter Home, Barefoot and Smoking Loon, which declare themselves as Sweet Red on the label.

That’s because there still seems to be uncertainty about how consumers are approaching sweet reds, says Miller, and wineries are treading carefully. They may not want to alienate consumers or even retailers, who may not be quite sure what do with a red table wine labeled sweet.

 

“Some of the people who buy these wines may be deliberately seeking sweet,” he notes, “but some may just think they like the style and not think of them as sweet wines. Some might even think they don’t like sweet wines but like Brand X, which may have some RS [residual sugar] but is not labeled as sweet.”

On the other hand, Ruinite, which once positioned its red as “soft,” purposely avoiding the term sweet, now puts “Sweet Red” front and center on the label. House Jam leaves little room for a shelf-brower’s doubt, labeling itself a “Sweet Smooth Red.” Bronco, which now has six entries in the category, uses “Sweet Red” on all of them, in keeping with Fred Franzia’s belief that “if they want to taste it, they want to read it.”

Not to be underestimated as we watch this nascent category develop: Sweet reds are being launched by the industry’s biggest players, and many have multiple labels. Bronco, as mentioned, has six different sweet reds. Constellation has Black Box and Woodbridge. Treasury has Beringer and Lindeman’s. Trinchero has a Sutter Home sweet red and Bandit Sangria. E.&J. Gallo has Gallo Family Vineyards and Barefoot on shelves nationwide, while test-marketing Turning Leaf “Refresh” Red Moscato.

Palm Bay now has two sweet reds: Blue Fish “Reel Red” from Germany and a fizzy red, Roscato, made in Italy by Cavit. Roscato actually launched at Olive Garden, recommended both as an aperitif and for pairing with Italian cuisine and spicier dishes; now it’s heading to off-premise as well.

Perhaps as a sign that the conscious marketing of sweet reds will soon ramp up, Yellow Tail came up with the name Sweet Red Roo via a Facebook competition. And, aiming to help the new “Roo” jump off the shelf, so to speak, the bottle sports a prismatic label—which importer Deutsch Family Wine & Spirits claims is the first of its kind.

Gateway Wines?

In all of this, the underlying question is whether sweet red is a fad that will go away, or a trend that is here to stay. Are sweet red drinkers shifting from other categories, like White Zinfandel (which has seen sales consistently decline over the last several years) and the fruity California red blends and varietals—the so-called critter wines—that often have grape juice added back after fermentation to give the impression of sweetness? Or will the sweet red impact be as significant as White Zin was in the 1990s, bringing new drinkers to wine? Many producers and analysts think that could well happen.

 

“The difference is between making a red wine that happens to be sweet, and making a sweet wine that is red,” says Bavaresco. “It’s about making a well-crafted, thoughtful sweet wine. That’s what will make this a gateway wine for women, young people and Millennials.”

And there does seem to be evidence that is happening—though perhaps not in the way many think. The Nielsen data, though far from complete, suggests that sweet red drinkers have lower-incomes (which makes some sense given the wines’ lower prices and the Hispanic demographic). However, the low-income effect is much more extreme than with other categories, including Moscato. Given that lower-income consumers are usually not wine drinkers, we can theorize that sweet red wines could be bringing new drinkers to the category.

Only time will tell. But it would be good news for a wine business still sorting its way out of the recession.

Many Wines, Several Names

Sorting out the wave of sweet reds is complicated. Residual sugar and alcohol vary significantly. Labeling is rather freestyle, ranging from no references at all to sweetness to a creative embrace (e.g., Opici’s “Sugar and Spice and Everything Nice” on their Rose’s package). Most important of all, taste perception of sweetness is very personal; many consumers who enjoy truly sweet reds may also enjoy the blends which are not technically sweet.

The variety of sweet and near-sweet red wines entering the market (and no one seems to know exactly how many there are) fit into three broad categories:

  • Sweet(ish) wines labeled as red blends. Typical of these are Apothic, Red Velvet, Gnarly Head Authentic Red and Ménage à Trois, which deliver more jamminess than outright sweetness (as befitting residual sugar [RS] levels topping out around 1.5%, or 15 grams/liter [g/L]). Consumers drinking these wines taste lots of sweet fruit, but also sometimes tannins (though lighter than in dry wines) and other red wine characteristics. Brand new entrants of note in this category: Scoops, marketed by Carriage House; Epica, made in Chile by San Pedro; DFV’s new RedVolution Bota Box; Diageo’s Ensemble; and Beringer Founders’ Estate Smooth Red. Wente’s success with the “Double Decker” blend under the Iván Tamás label recently led them to rebrand the wine simply as Double Decker Red.
  • Sweet wines labeled as sweet. This is a much more confusing label than it would seem, since it includes red blends, traditional varietals and sweet varietally labeled wines like Red Moscato (which in actuality is a blend as well). Sutter Home’s Sweet Red is a good example of the first, while the Jam Jar “Sweet Shiraz” was a pioneer in the traditional varietal area. The Red Moscatos, often blended with Zinfandel and Petite Sirah to gain color, include the Beringer, which has a surprisingly bracing acidity to balance the sweetness.
  • Traditional sweet wines re-branded. The Italian Montefiore, Sweet Red, made of 100% Brachetto has a bit of fizz to go with the sweetness.

 

Moving forward, it will be interesting to see how the sweet red trend parallels the recent revival of sangria, which is known to even the most casual wine consumer as being sweet but is rarely labeled as such. Established brands like Reál and Yago have been joined by a number of new labels—Ed Hardy, Opici, Bandit, Igardi, Plaza Real, Olé—sporting chillable, fruit-enhanced character, low alcohol and modest pricing.


Comments

  1. How Sweet It Is Beverage Media Group | Which Wine Is Sweet
    May 24th, 2012 @ 12:00 pm

    [...] the article here: How Sweet It Is Beverage Media Group ← The Cheese Course With Wine Pairings | Blogs, Holidays, Holidays [...]

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