November 5, 2018 § Leave a comment
In 2013, Constellation Brands (CBrands) had a commanding lead among suppliers on-premise, based on Winemetrics On-Premise Wine Distribution Reports with a 40% lead in combined By-the-Glass (BTG) and By-the-Bottle (BTB) listings over 2nd place E&J Gallo. By 2017, the same survey placed E&J Gallo (E&JG) in 1st place, with a 12% lead over now #2 CBrands. So what happened to CBrands in 4 short years to have them lose such a commanding lead in wine distribution?
- Most of CBrands top 15 brands lost distribution during the 2013-2017 period while a majority of E&JG’s brands gained share.
During this period, among the top 15 CBrands producers, 11 lost share while just 4 gained distribution share. In contrast, E&JG had 11 brands gain share with only 4 falling in distribution. If we remove the recent CBrands acquisitions (Meiomi, The Prisoner Wine Co.), the top 15 CBrands distribution, would have dropped by nearly 1/3.
- CBrands, with the exception of Pinot Noir, did not invest in varieties that produced significant growth during this period.
In 2013, CBrands had the number #1 Zinfandel brand, Ravenswood, which was the #2 brand in the CBrands portfolio. It fell to the 14th ranked the brand in the CBrands’ group, having fallen -85% over this period. Likewise, Blackstone, the 4th ranked brand in CBrands’ portfolio in 2013, and the leading Merlot brand at the time, lost -71% of distribution by 2017, and now ranks 12th.
Of E&JG’s 3 leading brands in 2013, Ecco Domani #1 brand,(Pinot Grigio) grew +7%, while 2013’s #2 (Mirassou) and #3 (Macmurray Ranch) both predominantly Pinot Noir producers, lost double digit share by 2017. E&JG was able to offset these losses with growth by La Marca (Prosecco), up +147% and Apothic (Red Blend) +465%.
It could be fortuitous that E&JG invested in varieties that experienced robust growth during this period and CBrands’ misfortune to be heavily invested in varieties (Zinfandel, Merlot) that experienced sharp declines during this period. However, Pinot Grigio, Prosecco and Red Blends, E&JG’s major source of growth, had been growing for a number of years. However, with 2 robust Pinot Noir brands in 2013 (Mirassou and MacMurray Ranch) it is curious how these brands could not take advantage of this variety’s growth during this period. It also seems inexplicable that a pre-eminent supplier like CBrands could not effectively promote a brand in these expanding Prosecco, Red Blend and Pinot Grigio segments. It is interesting to note that the 3 top brands of E&JG were ‘home-grown’ while nearly all of CBrands leading producers were purchased from existing suppliers.
- Winemetrics Data Tables
2013 2017 2107 Rank #BTG #BTB BTG+BTB % CHG Rank Constellation Brands 2416 3211 5627 -21% 1 Ruffino 198 283 481 -29% 4 2 Ravenswood 35 68 103 -85% 14 3 Mondavi Priv. Select. 176 179 355 -42% 6 4 Blackstone 84 89 173 -71% 12 5 Woodbridge 90 90 180 -69% 11 6 Clos du Bois 167 195 362 -35% 5 7 Estancia 120 181 301 -36% 8 8 Franciscan 41 264 305 -19% 7 9 Mark West 305 313 618 83% 9 10 Crawford, Kim 253 287 540 76% 3 11 Simi 41 63 104 -62% 13 12 Hogue 40 49 89 -67% 15 13 Nobilo 111 120 231 160% 10 14 Meiomi 286 329 615 ++ 2 15 The Prisoner Wine Co. 46 203 249 ++ 9 2013 2017 2017 Rank #BTG #BTB BTG+BTB % CHG Rank E&J Gallo 3078 3241 6319 24% 1 Ecco Domani 553 552 1105 7% 1 8 La Marca 362 204 566 147% 2 11 Apothic 266 265 531 465% 3 5 Canyon Road 269 253 522 62% 4 2 Mirassou 211 217 428 -26% 5 9 Martini, Louis M. 151 195 346 56% 6 7 Barefoot 152 152 304 24% 7 4 Alamos 125 134 259 -21% 8 NA Starborough 108 108 216 ++ 9 NA The Naked Grape 107 107 214 3467% 10 12 Dark Horse 82 116 198 161% 11 10 William Hill 89 104 193 89% 12 3 MacMurray Ranch 55 100 155 -65% 13 NA Carnivor 63 65 128 ++ 14 6 Red Rock 57 60 117 -53% 15
*Based on Winemetrics On-Premise Wine Distribution Reports 2013, 2017 which survey wine distribution in 170 chains and restaurant groups. Only wine distribution is measured in this report, but the assumption incumbent in our report is that chain beverage managers retain brands that provide the most revenue so greater distribution is congruent with greater revenue. Our observations pertain strictly to on-premise analysis based on Winemetrics restaurant database.
September 14, 2016 § Leave a comment
Winemetrics recently updated its 2016 casual dining wine list data and discovered a number of significant milestones which will be featured in our 2016 Wine Buyer’s Report. However in compiling this data, we were struck by the realization that despite over a decade of providing on-premise market intelligence to the wine industry, we had never sought to define the average casual dining wine list.
In 2016 we surveyed over 110 casual dining chains representing nearly 10,000 accounts throughout the U.S.. For this exercise, we averaged the numbers of By-the-Glass (BTG) and By-the Bottle (BTB) by chain, treating each chain as a single entity, this way distribution in a handful of the largest chains would not overwhelm that of the majority of smaller chains. The average is 20 wines BTG and 22 BTB with 13 varieties offered BTG and 14 available BTB. The average presence by variety, both By-the-Glass (BTG) and By-the-Bottle is listed below. Note that Syrah/Shiraz is no longer found on the ‘average’ list, its presence is now to minor to make the final cut. Zinfandel is only present as a minor BTB selection and many lists no longer carry this quintessential California variety. Sangiovese just makes the list due to its considerable presence on Casual Italian Chain lists, which represent 13% of the Casual Dining chains Winemetrics surveys.
The distribution by brand/variety was similarly calculated; each of the wines listed are ranked by number of chains with distribution, not total listings. To learn more about brand ranking by variety and account type, please download an excerpt of our 2106 Wine Buyer’s Report from http://www.winemetrics.com. In varieties were multiple producers are present, they are ranked in descending order from the leading brand. Pricing is also an average across chains
Should you have any question or comments about the information appearing in this article, please contact us at firstname.lastname@example.org.
September 12, 2016 § Leave a comment
On-premise wine selections are moving toward uniformity and mediocrity at the same time cocktail and beer lists skew toward variety and innovation. Here are 5 steps that restaurants can employ to rectifying this situation and possibly reversing wine’s continuing decline. Part 3 of this series will deal with wine suppliers and distributors role and how they must step up to resolve this.
- Offer a selection of High-Recognition, Emerging and Discovery brands
In casual chains, Winemetrics encounters a plethora of wines frequently found on the endcaps of retail chains. This would lead me to believe that chain wine buyers are basing their wine selections on the leading brands in retail stores. Can that be possible? While a certain portion of the population may be brand loyal in all occasions, aren’t restaurateurs aware that consumers dine out for variety? Even smaller wine lists can have one or two selections that are not well known but represent superb values. Of course, selling such wines requires some server education, see #5.
- Offer value on your wine list
That doesn’t mean discounts across the board; many chains charge a little more for their by-the-glass selections but offer a steep discount on bottles. Others offer benchmark wines at modest markups. What you don’t want to do is price the wines with a huge retail presence at an excessive mark-up. Nothing says ‘rip-off’ more than charging +3x standard retail for a bottle everyone know the retail price of. Special Note: If you are a fine dining establishment, don’t offer me the same wine as those I might find in a casual chain (with the accompanying excessive markup). Recently I have found identical wines by-the-glass (BTG) on the lists of fine dining steakhouse chains as those on casual dining chains. When I see this, I immediately assume that the fine dining establishment doesn’t care about its BTG business and wants to push its customers to purchase an over-priced bottle or is simply to lazy to care about its BTG selection. Again, as a wine consumer I find this insulting and never return to such establishments.
- Publish your wine list online and keep it current
Nothing upsets me more than a restaurant whose website lauds its awarding winning wine list and brilliant sommelier only to neglect to provide a wine list (with prices) on its website. And nothing is more insulting to a consumer who plans to purchase significant wines with his or her meal only to open a wine list and find them all egregiously overpriced. I never return to such establishments and I’m certain many other wine aficionados are of the same mind. If you’re going to rip me off, at least have the decency of letting me know in advance so I can make a reservation elsewhere. On the other hand, if you have a great wine program with reasonable prices (are you listening Legal Sea Foods?) then mention it on your website. Looking at many chains’ websites, you wouldn’t even know they even offered wine – unbelievable!
- Ask my opinion about my dining (and drinking) experience at your restaurant but provide an incentive
Nearly every restaurant provides a survey form with the check these days. Most ask about the food quality and service but few ever request input on the beverage program (the most profitable segment of their business!). I generally ignore these as no compensation offered in return for my input. However most consumers would be willing to provide extensive information on their dining experience, preferences and even demographic information if offered an incentive such as a free appetizer or half-price glass of wine on their next visit. Unfortunately, I have yet to see such an offer on any survey in the hundreds of chains I have visited.
- Innovation + Education – One won’t work without the other
A few years ago I was dining out in an upscale casual chain that had a small but excellent list with a number of great values. They also offered flights of any 3 BTG wines for a reasonable price. The only problem was that the server did not know the restaurant offered flights, even though it was prominently printed on the menu (This was one of the savvy chains that actually had the food selections and wine list on the same menu!) Apparently, the server had never been trained on this feature despite his many months of employment and did not know there were special tasting glasses for the flight, so my 2 oz. pours were delivered in the bottoms of 3 balloon glasses. Sadly, this restaurant chain no longer offers flights nor its interesting and well-priced wine selection. The best wine program in the world won’t work unless some investment in education is made. Predictably, I have not been back to this establishment.
In Wine Crisis On-Premise and How to Resolve It – Part 3, the final installment on this subject, we examine how wine suppliers, in their pursuit of profits and on-premise hegemony, have been complicit in the decline of their product in the restaurant dining arena.
August 15, 2016 § 3 Comments
Winemetrics is halfway through its 2016 on-premise wine list surveys, and to be frank, there is very little good news to report. Wine lists are not only decreasing in size but also in variety. Selections are increasingly based on brands controlled by the top 10 suppliers. Since the start of 2015 we have seen many iconic independent wineries ‘absorbed’ by the largest suppliers. Benziger, B.R. Cohn, J. Winery, Orin Swift, Patz & Hall, Siduri, Talbott, The Prisoner to name just the ones that come to mind. But this decline of wine on-premise is just half of the bad news for wine. The meteoric, unstoppable rise of craft beer and craft cocktails may spell the end of wine on-premise as we know it. The key, and most damning piece of evidence is the admission (in confidence) from wine professionals themselves. When not at company functions or on the corporate expense account, they are drinking beer and cocktails, simply because there is more variety, flavor and value in the average beer and cocktail list. This is especially true in casual restaurants where the same wine products appear with monotonous regularity. For the record, I am not a proponent of the ‘small is beautiful’ school of wine marketing. Major national brands are extremely important to a segment of wine consumers that seek the comfort of a consistent, well-known producer. However, when these brands or their line extensions dominate wine lists to the exclusion of any innovative or more esoteric products, it is at that point that any wine consumer with a slightly more adventurous palate closes the wine list and orders a beer. And, I confess, that’s what I do now.
If you believe my observations aren’t supported by facts please click on the link below to Lewis Perdue’s Wine Industry Insights where he features a recent Gallup survey.
From Winemetrics’ observations of hundreds of chains and independent restaurants, it does not appear that the wine industry is taking this threat seriously. As a 35 year veteran of this industry, I have seen trends, brands and fads come and go. I remember vividly a distributor presentation by a wine cooler executive in the 1980’s who extrapolated his brand’s 2 year growth curve a decade into the future, promising his audience of a massive windfall in profits. According to the executive, this was ‘guaranteed’. It didn’t quite work out that way – has anyone seen a wine cooler recently?
Of course, we cannot lay the blame solely on the wine industry, as the restaurant industry is also complicit in this process. Possibly persuaded by off-premise sales figures and incentives of the larger suppliers, restaurateurs have yielded too much control of their wine lists to big corporate interests. In Part 2, I’ll discuss steps restaurants can take to not only invigorate interest in the wine segment, but actually take ownership of innovation for their wine selections.
July 13, 2016 § Leave a comment
Our readers may have taken note of a recent FSR article on Growler USA, a beer-centric chain boasting 100 tap lines and dedicated to serving craft beverages (including beer, cider, mead and, yes, some wine). According to the article, the chain has plans to expand from 3 to 35 units by the end of 2017. We should note that this concept has precedence with World of Beers, which started with one location in Tampa, Fl in 2007 and is planning to grow to over 100 units by the end of this year. Additionally there are numerous growing regional chains offering a dozen or more drafts and many more craft brews by the bottle. The ones we have surveyed have partnered extensively with local and regional craft brewers and provide vital opportunities for endorsement and consumer trial.
So what compels me to draw your attention to Growler USA? First, they have an unparalleled commitment to serving a superb product, equivalent to a craft brewery tasting room. Second, they are seriously dedicated to providing consumer education, with all of their bartenders qualifying as Cicerone Certified Beer Servers. Third, they are devoted to supporting local, innovative craft beverage producers. Finally, and this is key, every Growler USA location provides a continuously updated list online of all their 100-plus selections with prices, something offered by virtually none of the hundreds of chains and independents that Winemetrics currently surveys. This means that a consumer can be pretty certain that what is on the website is available on tap. I know this is a relatively simple process from a technical standpoint, yet when it comes to craft beer selections, most chain websites merely state, “Ask your server about our selection of craft beers” or words to that effect. Apparently, informing potential customers about what is being served and at what price, by location, is too much work for the average chain IT department. In fact, there are an increasing number of chains that provide no beverage information on their websites and even fail to provide prices on their printed menus! (More on that issue in a future post).
Congratulations to Growler USA; I hope it prospers and reserves some of its taps for innovative, regional wine producers.
(Note: Winemetrics has no relationship whatsoever with Growler USA or anyone associated with the company)
July 13, 2016 § Leave a comment
While wine lists across the board are decreasing in size and variety, beer list trajectories are in the opposite direction, expanding in both size and diversity in even the most casual chain restaurants. Moreover, there has been a quantum leap in beer-oriented chains at all levels of the chain spectrum from national chains such as Yard House and World of Beers, now 70+ units strong, to regional chains such as Eureka and Plan B. These chains have certainly been helped by the explosive interest in craft beer, which has seen growth in both the mundane e.g. Pumpkin Ale, to the esoteric e.g Gose and Brett-fermented ales. So why hasn’t the wine industry begun introducing exciting and buzz-worthy products to keep pace with their beer brethren?
The answer lies largely in the attitudes prevailing among the thought leaders in each industry. With few exceptions, the wine industry has doggedly remained loyal to the European concept of wine, that wine is a product of terroir and tradition, e.g. the fixation that the best wines are representative of a specific variety and place. Estate-grown wines of approved varieties or blends that follow traditional production methods are held in the highest esteem by an increasingly narrow group of gatekeepers in both wine production and wine media circles. Had the beer industry followed the same path, the majority of producers would still be following the Rheinheitsgebot, which dictates that beer consist only of malted barley, yeast, water and hops. And we would never have had the vast array of products that has vaulted the American beer industry from mediocrity to its current apex of innovation and growth. Fortunately, American beer producers rightly found this European model too constraining and began experimenting with untraditional flavors, fermentation techniques and aging methods. In a few short decades, American craft beers have become the global standard of beverage innovation. If you had suggested 30 years ago that American brewers would be opening facilities in Germany, the birthplace of modern brewing, you would have been laughed out of the bierstube. In the 1990s, hypothesizing that someday small American brewers might have a market value of over $1 billion (Lagunitas, Ballast Point) would have earned one a trip to a local asylum. Yet it has come to pass.
What remains puzzling is that, despite craft beer’s incredibly successful example, which has been eating the wine industry’s lunch for the past decade, few wine producers have dared to defy the ossified old guard who continue to enforce the standard of European wine production. Is it arrogance or merely ignorance that prompted the wine industry to relinquish an entire segment that it should rightfully own – cider ( a low alcohol fruit wine), to the American beer producers?
Having been in the alcoholic beverage industry for over 3 decades I have a fairly good ideaof how this saga will play out, unless drastic measures are implemented very soon.
The wine industry today is much like the U.S. auto industry of the 1970’s, which took the attitude that the public will buy what it tells them to purchase. We have all seen how successful that approach has been. Now Toyota is the world’s largest car company. Hopefully, the wine industry will come to its senses before it is too late.
October 29, 2015 § Leave a comment
Winemetrics 2015 survey of 100 top casual dining chains has seen a drop in both by-the-glass and by-the-bottle listings. In our 2014 survey, the average casual dining list had 18 by-the-glass (BTG) and 23 by-the-bottle (BTB) selections. This year our preliminary survey indicates that those numbers have fallen to 17 BTG and 21 BTB. Domestic wines dominate this segment, making up 70% of all listings. The smaller selection size also limits the diversity of these lists. Below is the typical allocation of placements by variety. Varieties not appearing on the table below would be found in the Other category, this would include Zinfandel and Syrah/Shiraz which, until recently, were among those varieties that had a presence on casual dining lists. Part 2 of this blog will reveal the leading wines in casual chains as well as average pricing.
|Average Casual List||#BTG Listings||#BTB Listings|