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Next Red Wave

Posted on  | April 1, 2014   Bookmark and Share
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Easy-drinking, fruity Sangria is bidding to capture America’s casual wine drinkers

Cross-pollinating trends can spark renewed interest, activity and growth in an established market category. Take sangria, that venerable blend of wine and fresh fruit juices of Iberian origin. Given a few trendy lifestyle boosts, it has taken off, with some products launched into premium territory ($10+ SRP/750ml). Consumer focus on healthy foods, increased demand for organic produce and popular acceptance of red wine as agent of long life have contributed to upward sales of existing ready-to-drink brands as well as a raft of new products claiming shelf space. The designer cocktail movement, too, has fueled the sangria craze—including on-premise, from cheap-and-cheerful to higher-end.

Opici Family Distributing had years of steady sales with the established Ed Hardy and Yago brands. “And then just before the category really blew up, partly because of what our distributors saw in the marketplace, we decided to produce our own,” say Claudia Centola, marketing manager at Opici Wines, a sister company. A red-wine Opici Sangria (3L bag-in-box) debuted in September 2010 followed by a white-wine version in May 2013, both Spanish imports. (At that time, the two sangrias both became available in 3L box and 1.5L bottles.) “To date we have sold 75,000 cases, with 40% growth each year.” They have introduced a few marketing tools—branded pitchers and umbrellas popular with waterfront restaurants such as Boatyard Waterfront Bar & Grill in Sarasota, FL and Cole’s Dockside in Staten Island, NY. “And we hear from consumers that the boxes are great to take on boats in the summer.”

Biagio Cru & Estate Wines jumped on board early, sensing an opportunity to launch Lolailo Sangria in 2003. “I think there might have been only two sangrias in the market then,” says Darren Restivo, a company principal and marketing director. “We tend to listen to our distributors, and they noticed lighter, sweeter styles and ready-to-drink as trends.” Biagio Cru located a family producer in Spain. “Quality and tradition has become a big differentiation point [as brand choices increase].” They have also targeted the health-conscious, “including the older generation, learning about the glass-a-day health benefits of wine,” with a Nutrition Facts box on the back label.

Sales have zoomed: from 2009 to 2010, up 37%; 2011, up 33%; 2012, up 68%; 2013, with 462,000 cases imported, up 38%. Research firm Technomic, Inc. recognized Lolailo among 2013’s Fast 50 Wine Brands (ranked by 2012 growth rate among domestic and imported brands).   

Later entrants boast similar numbers and acceptance, including Slices, with five styles (including two sparklers) in sleek clear bottles, which Offbeat Brands started importing from Spain in mid-2012. “Sales will double this year,” says Offbeat founder and CEO, Mike Kenton, “both on-premise and off.”

Room for Everybody

But the new kids have not necessarily taken over the playground (or beach and poolside bars). Cruz Garcia Reál Sangria, distinguished by its triangular 750ml bottles, according to brand manager Ricky Febres of Shaw-Ross International Importers, has been distributed in the U.S. for over 25 years. “And with steady growth,” he says. “Just over 550,000 cases sold in 2013, and we project 3-5% growth in 2014.” New wine drinkers stoke the hotness factor. “Wine overall has grown exponentially. And this is an entry-level product. So there is room for everybody, although some target different consumers.”

Envisioning premium category growth and niche-appeal, Deutsch Family Wine & Spirits double-dipped last year, acquiring Eppa SuperFruit Sangria in April then launching Yellow Tail Sangria in September. “We believe that premium sangria is the next big thing in wine. Sweet wine brands are nearing the saturation point, but consumers are obsessed with experimenting around new wine styles,” says Peter Deutsch, company CEO. “So we are making a big bet on the category and, as it goes premium, we want to dominate the segment. To do that we have two sangrias that are totally different. Eppa is the only organic sangria made with superfruit juices. It appeals to the wellness-oriented female consumer.” (Superfruit, a food industry term with no official government or scientific definition, implies health benefits from superior nutritional content, antioxidant value, etc.)

Aveníu Brands had a similar view. Joe Cannavo, marketing director, says, “We did research to find what could get us into spaces where consumers are going. We heard loudly ‘sangria is off the charts. Pomegranate is good.’” And so red wine plus orange wine plus pomegranate juice added up to Pomagria, introduced in July 2012, with 13% alcohol, while most others hover between 6-8.5%.        
 
Peter Deutsch, among some, believes that origin does not matters. “People care more about the taste experience and quality.” Eppa is based on California red wine; Yellow Tail is made in Australia. Others disagree, including the European Parliament; with recent legislation, only products from Spain and Portugal may bear a sangria label in the EU. But that does not—and will not—govern sangrias made outside Europe, including E. & J. Gallo’s Madria and its sub-premium Carlo Rossi brand from California, which together top the million bottle mark, and Sevillana from Venezuela.

Bottled & Batched

Nor will it stop others from latching onto sangria success. The makers of Pavan, a new Muscat-based liqueur developed in the sunny South of France, promoted it with a sangria contest among U.S. bartenders. “Because Pavan is made from grapes, the way to drink it is sangria-style—creative mixtures, casually, with friends, at brunches. And usually outdoors,” says Arnaud Brachet, U.S. representative for Pavan. However, the contest winner, announced on a snowy day in New York, was a hot punch by Jared Anderson, containing rum, Chardonnay, spiced apple butter and apple juice. Anderson mixes this Pavan sangria on request at 15 Romolo in San Francisco.

No longer a bartender’s remedy for pouring off leftover bottles, sangria stars year-round at places such as Estadio, a drink lovers’ Washington, DC, destination, where bar director Adam Bernbach says, “Sangria is our number-one cocktail almost every week.” He mixes several versions, with housemade juices from seasonal produce and complementary spirits, in multi-liter batches nightly. “And I only use wines I would drink on their own.” Pizzerias and casual chains increasingly pour the rtd versions, with the convenience of large glass and bag/box containers designed to hold freshness down to 4-ounce single serves (eg, Riondo USA Oneglass).

When thinking of category expansion, think inside the box (and bag and bottle). If sangria is in there, it’s hot.


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