Wine Business Insider - December 2005
Pricing and Value Drive Growth for Zin
In past years, sales of red Zinfandel have followed a steady growth pattern, up 12 percent in dollar sales in ACNielsen*-tracked food stores over the 12 months ending October 22, 2005. Since November 2002, Zinfandel has grown 6.4 percent in case volume. For those closely involved in the Zinfandel marketplace, the growth of the varietal is unsurprising. There are several reasons: Zinfandel consumers are traditionally loyal, are attracted to the "all-American" nature of the wine, and there is more Zinfandel available on supermarket shelves, most of which is placed at a very attractive price-to-quality ratio.
Zinfandel is the fifth-largest red varietal, firmly entrenched behind Merlot and Cabernet Sauvignon, and the very hot Pinot Noir and Syrah/Shiraz varietals. However, the pattern of Zinfandel growth does not mirror any of those ahead of them in sales, with neither an Old World connection nor an extremely hot sales spike to rely on.
"Our customers might not drink it every day—although we do wish they would—but we have a very loyal consumer base," said Jeff Lubin, marketing manager at Ravenswood Winery in Sonoma, California. "That's definitely the consistent growth from year to year, those loyal customers just buying more Zinfandel. But also, there have been a lot of new entries into the segment, a lot of new brands and new labels. There has also been a lot of growth in the premium to luxury tier."
Brian Sypher of the East Coast distributor Michael Skurnik Wines feels that Zinfandel's status as being produced almost exclusively in the United States is a popular selling point. Although Sypher acknowledges that the grape is produced under various names in Europe, such as "Crljenak" in Croatia, or "Primitivo" in Italy, "the fact is that nowhere else in the world is Zinfandel grown on the scale and with the quality that we do here in America," said Sypher. "As a result, there is a natural interest, and a consistent interest, in the one all-American wine."
For the consumer, the price-to-quality ratio is also an attractive aspect of Zinfandel. Producers often tout that a good quality Zinfandel does not necessarily mean a luxury price tag. While a top Cabernet Sauvignon can be $150 or more, the best Zinfandels are rarely more than $50. Zinfandel tends to have a much heavier crop load than other red varietals, so it costs less to grow and produce in comparison to those varieties.
Consumers are responding in the marketplace by trading up into higher-priced segments that offer more quality for their dollar. The combined under-$8.99 category is down 33 percent since November 2002, while wines over-$9 are up 23 percent in the same time period. The largest volume of Zinfandel sales occur in the under-$6 category, which is down 27.9 percent, and the $9 to $11.99 category, which is up 14.7 percent. The strongest growth is seen in the over-$15 category, which is up 69.3 percent on a much smaller base, followed by wines priced in the $12 to $14.99 category, which is up 39.3 percent.
According to Sypher, consumers are looking for balanced, Claret-style Zinfandels and are moving away from the "big, brawny, extracted wines" that were popular in the past. "Five years ago, many Zinfandel makers were pushing the limits, partly because that's what the wine writers and critics wanted. They were out of balance. In the past two years, though, a lot of producers have gotten sensitive to the criticism and they are making wines that are better balanced and are much better with food."
* Note that ACNielsen data is collected from in-store sales scanners in grocery, liquor and mass merchandise stores in 34 U.S. markets.