US Â– Are bottles pricing themselves out of the

US – Are bottles pricing themselves out of the on-trade market?

LAJOURNEEVINICOLE.COM | 01/02/2013 | EDITION N°337

Politicians may keep telling us the economic downturn is over and western economies are on the road to recovery, some market data actually tell us otherwise. A case in point is the latest market research by GuestMetrics in the United States. Based on its proprietary database of POS transactions of over $8 billion dollars in transactions and over 250 million bills from restaurants and bars across the United States over the past two years, it shows that on-trade consumers in the US traded down from bottles to glasses in 2012.

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In fact, the shift was significant with the number of bottles ordered in restaurants and bars declining by 13 percent, while the number of wine glasses increased by 4 percent. “Given the large difference between the price, with the average bottle costing over $43 and the average glass costing $9.60, we believe this shift was driven by a consumer base that is still feeling pressure from a sluggish economic recovery, not to mention the unusually high level of uncertainty towards the end of the year with the spectre of the fiscal cliff,” commented Bill Pecoriello, CEO of GuestMetrics LLC.

In total for 2012, wine by the bottle represented 13 percent of wine items ordered (vs. wine by the glass which represented 87 percent of wine orders), but given the significant difference in pricing, wine by the bottle accounted for 41 percent of total wine sales (vs. 59 percent for wine by the glass). “Looking at the drivers of sales in more detail, we see that the price of the average bottle of wine sold increased by 9 percent versus the more modest price increase of 3 percent for wine by the glass, which may have been part of the exodus from wine by the bottle during 2012,” said Peter Reidhead, VP of Strategy and Insights at GuestMetrics.

In terms of varietals, there were also some noteworthy shifts in the wine category in 2012. “The varietals that gained the most share of the wine category were Sauvignon Blanc, Pinot Noir, and Malbec, while at the other end of the spectrum, the varietals that lost the greatest share of the category relative to 2011 were Chardonnay, Cabernet Sauvignon, Merlot, and Pinot Grigio,” said Brian Barrett, President of GuestMetrics. “Despite the loss in share for those varietals they still held the top spots for 2012. The top 5 varietals for 2012 were Cabernet Sauvignon, Chardonnay, Pinot Grigio, Merlot and Sauvignon Blanc”.