Posted on | December 1, 2013
Written by | Jeff Siegel
“I taste all the wines we sell myself,” says Johnson, who has owned The Wine Rack, a fine wine and spirits shop in Louisville, KY, for 10 years. “And I could see they offered a high quality to price ratio. But I wasn’t sure what would happen when the customers did it. But when they did, you could see they saw the same thing, that high quality-to-price ratio.”
What happened to Johnson has been happening all over the country, and for both retailers and restaurateurs. The sparkling wine category, for decades made up almost exclusively of Champagne, a couple of California méthode champenoise labels and inexpensive, charmat-style American bubbly, has been transformed over the past couple of years. It’s not so much that Champagne fell out of favor; rather, consumers discovered sparklers like the Spanish-made Cava, the Italian Prosecco and even fizzy Moscato and flocked to them.
By one count, all bubbly consumption increased by 14% from 2007 to 2012, and the growth is even more impressive in non-Champagne categories. Technomics, the Chicago-based consultancy, reports that sales of imported sparklers rose 6.4% by volume in 2012, almost twice that of their domestic counterparts. Italian labels accounted for almost two-thirds of all imported sparkling wine volume in 2012, up 59.8% from 2011, led by Mionetto, Bartenura and La Marca. Other Prosecco brands enjoying significant gains: Nino Franco “Rustico,” Tavernella, Lunetta and Valdo, the top-selling brand in Italy. Recent new brands of note include Cupcake Vineyards and Caposaldo. Spanish sparkling, meanwhile, rose 4.8% in 2012, led by Segura Viudas and Opera Prima, while Freixenet’s Cordon Negro remains a go-to staple, especially for parties.
“In a nutshell, the sparkling wine category is very different than it used to be,” says Donna Hood Crecca, the senior director for the adult beverage resource group at Technomics. “There are more attractive price points and more accessible taste profiles.”
The reasons for this are many, including the increasing influence of younger wine drinkers and their quest for something different; the much lower prices for non-traditional sparkling compared to Champagne; and the vast improvement in quality in Cava, Prosecco and the like over the past several years.
Perhaps the most vital reason of all? Quality, says everyone interviewed for this story, has improved dramatically. It started with Cava three or four years ago and moved on to the Italian wines. They’re cleaner, more consistent, and taste better, with fewer off notes. Pricing is also better, because producers are looking to grab market share and boost exports given the flat European market since the Euro crisis began.
The challenge for operators, both on- and off-premise: to leverage these trends in their favor, since it looks like the category is going to continue to head in this direction for the foreseeable future. It’s likely not enough anymore to focus on the same two or three Champagnes and less expensive domestic sparkling, and these six tips are a good start to changing that approach:
1 FRESHEN UP YOUR WINE LIST OR INVENTORY
You know those same three sparkling wines that have been on the list for the past 18 months? Or the same bubbly assortment that has been on the store shelf for as long as you can remember? They aren’t enough any more.
“People are definitely drinking more and different kinds of sparkling wine,” says Kathy Morgan, a master sommelier and wine educator in Washington, DC. “It isn’t just for toasts and special occasions anymore. People are more open to trying sparkling wine than ever before.”
Consumers want choice, and they’re willing to try wines they never would have considered before—or heard of. In 2012, says Technomics, French sparkling wine accounted for just 16% of the category’s sales by volume, just a quarter of the Italian share and a couple of points of less than Spain. German sparklers, hardly a sales leader, saw a 35% bump in the first six months of 2013.
“They really don’t care where it’s coming from, as long as it’s different,” says John Hogan, the owner of I.M. Gan Discount Liquor in Warwick, RI. “They aren’t the same old, same old California sparkling wines or the same Champagne. They’re not the same wines that have been around now and forever. ”
This search for something different has even come to Grace, an upscale New American restaurant in Fort Worth, TX, says sommelier Jenny Kornblum. Grace has never done much sparkling business, even with Champagne, but over the past year or so, customers have been experimenting not only with Cava (Naveran, $9 a glass, $35 a bottle) and Prosecco (Frattina, $8/$31), but also with Franciacorta ($19/$75), the Italian wine made in the méthode champenoise style, and grower Champagnes. A grower Champagne dinner in the spring sold out almost as soon as it was announced, says Kornblum: “We didn’t even have to tell people about it. They saw the notice in the front of the restaurant and signed up. That was very surprising.”
2 YOUR CUSTOMERS HAVE CHANGED
And just not because they may be younger, more female, or—gasp—millennial.
“As restaurant styles have changed, so have their customers,” says Morgan. “Restaurants are less formal, people don’t get dressed up, there are things like small plates, and people don’t go out to eat as much any more. Champagne goes with a more formal format, and it’s more expensive.”
This more informal atmosphere, she says, makes it easier to try something different. Fewer people feel obligated to drink Champagne, and they’re more willing to drink sparkling wine on more and different occasions. In all of this, “it’s about people being more interested in wine, and wanting to learn more, and about exploring wine and food,” says Morgan.
3 PRICING, PRICING, PRICING
Chicago’s Printer’s Row Wine Shop is a specialty retailer that doesn’t try to compete on price with the area’s chain stores, yet two of the best sell-selling sparklers are Hi! Prosecco ($14) and Gran Sarao Cava ($10).
“When they come into our shop, it’s a lot different than the grocery store,” says manager Marcus Zakrzewski. “But they still want something inexpensive, dry and good and delicious.”
In other words, $50 Champagne doesn’t cut it anymore, even for consumers who can afford to buy it. Andrew Howard, who manages a Spirits Unlimited location in Lakewood, NJ, says his older customers, who usually buy spirits and especially Scotch, have discovered Prosecco, and the store has significantly increased sales of Tosti ($10.99 a bottle). “It’s refreshing, it looked different, some they tried it, and they found out they liked it,” says Howard.
The key price points, says Hood Crecca are between $10 to $15, which includes most Cavas and many Italian sparklers. According to the Technomics study, sales of bubbly priced between $9 and $12 (11%) and $12 and up (34%) have almost caught up with the least expensive sparkling wine segment, less than $9. This includes grocery store staples like André/Wycliff and Cook’s which have dominated the category for years.
Hogan says his sparkling sales are splitting 45% California; 40% Italian, Spanish and the like; and 15% Champagne. That’s almost a complete reversal of what it was just a couple of years ago.
4 PROMOTE, PROMOTE, PROMOTE
“If I put it on sale, it’s a big seller for the month,” says I.M. Gan’s Hogan, who regularly features the new-style wines for as much as $5 off regular price. “If it’s between $10 and $15 in my store, that’s when it will take off. That and the label; if they like the label, they’ll buy the wine. Definitely quality has improved, and price has come down. You’re just not seeing the growth with the other ones that you see here.”
In this, hand-selling also matters, says Zakrzewski in Chicago. His customers may have heard about trends like Prosecco, but don’t necessarily want to buy what they see elsewhere. So “we have to help guide them,” he says. “We’re not going to push out tons of volume, but we are going to help them find something they will enjoy.”
Interestingly, shelf talkers remain important here, says Hogan, whose best sellers include the La Marca ($12) and Avissi Proseccos ($13). Consumers, in their search for something different, want more information about the newest wines and they can find reviews and tasting notes on the shelf talkers.
5 SWEET WINE AND COCKTAILS
More and more, says Technomic’s Hood Crecca, innovative on-premise operators are using non-traditional sparklers to bolster their cocktail menus. They can spruce up their offerings and participate in the cocktail craze with lower-cost Mimosas, Champagne cocktails, Bellinis, French 75s and more.
“These days, you need creativity behind the bar,” she says. “Plus, you’ve got these sparkling wines with heavy hands behind the brands. So there’s that relationship with restaurant operators as well.”
That ties into the sweeter flavor profile of many of the non-traditional brands, and even Lambrusco is making a comeback, says Morgan. Retailers like John Johnson in Louisville are learning that women, who don’t seem to willing to indulge their sweet tooth when they’re buying Pinot Grigio, are more than happy to buy the sweeter Italian sparkling wines and extra dry Cava.