The Final Word: Too Many Wine Labels?

January 19, 2011 § Leave a comment

It is not my role to judge whether there are too many wine brands on the market. As a consumer, I like variety and as the CEO of Winemetrics, wine brands and their distribution are the source of our business. However, there are some statistics every wine professional should be aware of, especially brand managers who might think a new varietal/appellation/designation in an existing brand or a new sub-brand will be beneficial in building  awareness or improving sales.  First, the number of California wineries has more than doubled from 2000 to 2009 as have the total number of wineries in the U.S.  There are now nearly 3000 wineries in California and more than 6700 wineries throughout the country.

Second, in terms of distinct labels, there has been a steady rise of COLAs (Certificate of Label Applications) approved since 2000, from about 51,000 that year to nearly 98,000 in 2009, according to the TTB (Alcohol and Tobacco Tax and Trade Bureau).

Now overlay the above information with the findings of Constellation Brands’ Project Genome, which reports on the purchasing behavior of 10,000 premium wine consumers. According to this research, 68% of wine consumers representing 51% of total wine consumption are typically buying brands they know and trust. And nearly a quarter of wine consumers, which the study classifies as “Overwhelmed”, simply find the variety of choices excessive and will often choose not to buy any wine if the process is too confusing.

Given the above evidence, one has to question the value of introducing additional labels or sub-brands if all it accomplishes is merely adding more confusion to an already bewildered customer base.

One final piece of data from Winemetrics’ 2010 On-Premise Wine Distribution Report.  In 2010, the top 100 brands accounted for 54% of distribution on-premise  and the top 200 brands accounted for nearly 70%.  More commentary of Project Genome to follow.

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