Imported Wines, The USA Winescape

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Wine Australia recently continued with its Connect program looking at wine business trends and needs in the post-pandemic wine-world, and addressing imports into the US market.  The format is a panel discussion, Imported Wines: The USA Landscape for 2021– 2023.  The conversation addresses the post-pandemic marketplace across three different channels – on-premise (restaurant), online, and on the shelf (grocery).

Three extremely well-versed panelists, including Moderator Jon Moramarco, discussed the subject matter.  Jon is Managing Partner of BW166 – Gomberg & Fredrikson, the publishing, marketing, and media firm.

Curtis Mann earned the coveted Master of Wine Diploma and also an MBA Degree.  A 20-year veteran of the US wine industry, he is Group Vice President at Albertson’s Companies.

Mike Osborn is Founder and Executive Vice President of the omnipresent Wine.com (formerly eVineyard in Portland, Oregon).

Helen Mackey is Senior Vice President of Marketing at Darden Specialty Restaurant.  Helen typically serves a few guests at Darden each year, about 390-million.

Emphasizing the US marketplace, the Panel examines:
• The shifting demographics of US wine consumers
• Which of the pandemic-caused changes will remain
• Technology’s evolving role in consumers wine shopping
• Imports recent past, outlook and opportunities

Before reviewing the Panel’s discussion, I’ll mention some trends in the marketplace.  For a long while beer, wine, and spirits have been in a struggle for share of servings in the US market.  Between 1960 and 2020 trending changes have been moderate, with wine proceeding slowly but steadily uphill.  Spirits had been declining, showing an inflection point near the start of the new millennium, and then moving upward.  Beer was roughly a mirror (opposite) image of spirits.

Still wines are a big leader over sparkling and flavored wines in US market volume.  Flavored wines had a go from the early through the late 80s, with an upward burst in 2020, while sparkling wines maintained a fairly constant share.  Still wines assumed a more definitive upward trajectory in 1993.  This was the year Boomers averaged 37 years of age.

Shifting Demographics
In 1993 Boomers made up a significant portion of the pertinent US population.  They clearly developed an affinity for still table wines.  The Millennials of 2023 will be quite different from the 1993 Boomers in ethnicity, race, and life style.

Two years from now the Millennials average age will be  37 years, the same as the 1993 Boomers who notably impacted the charts.  White Millennials will make up only about half of the applicable US population then, far less than in 1993.  The US populace is becoming far more diverse, composed of a greater mix of ethnic and racial groups, particularly Hispanics, Blacks, and Asians.  The challenge is how to show all groups the benefits of still wine in 2021 and beyond.

Will Pandemic-Caused Changes Remain?
Curtis Mann’s young customers at Albertson’s buy more wine than previously but with less dollars.   However, in purchasing wine online the younger customers are actually spending more.  With the prodigious amount of wine information available today on mobile technology and on the desktop, clients understand wine much better than in the past.  They act differently and more decisively.  Focus on the key varietals being selected.

It was said that in this marketplace authenticity is important.  Authenticity can take many forms: dedicated passionate wine producers, top winemakers, and representation of terroir and the grape varietal in the wine.  Other forms of authenticity are single vineyard wines, organically or biodynamically produced wines, and wines without oak or malolactic fermentation, and also those with.  Wide selection, sufficient inventory, and great service are all forms of authenticity.  The better wine-educated customers today reinforce the need for authenticity.

A need was raised.  Often, people discover wines new to them in restaurants, an important venue.   As Helen mentioned, there’s no doubt customers are anxious to get back together around the table with good food and wine.  Enough restaurants will need to open and get running again to make this happen post pandemic.  

National account presence and distribution in all states  matter.  During the pandemic many experienced distribution issues.  Executing basics makes a difference.

Perception and reaction to the market are especially important.  Wine can be served in restaurants by the glass or bottle.  Today wine pricing is quite transparent.  Well structured formats and pricing plans are needed

Technology – Shopping and Selecting Wine
The evolving role of technology has modified the ways shoppers search for wine.  While selecting wine at a restaurant, guests simultaneously learn more about the wine from information online.  Conversely, they initially find the wine online, and later enjoy it at a bistro.  It was also brought out that fewer shoppers in stores today are bewildered by the large displays of imported and domestic wine, mainly due to mobile technology and also the desktop computer.

Thanks to the enormously increased volume of information available on the word wide web, more options are available to customers.  A client can be shown several other wines comparable to the one they usually purchase, thus giving them added choices.  Similarly, customers can be presented with wines of greater quality yet at the same price as their usual selection.  Or wines of similar quality at more attractive prices.

Mike was enthralled by the outcome of his live tasting events at Wine.com which technology made possible.  Participants can learn from a wine principal this way without the need to travel or fly to Australia.  A software application was employed that preempted the need to book flights and fly to three different continents around the globe.  Remote wine principals each conducted a segment of the live tasting, enhancing the knowledge of viewers and explaining the benefits of their wines.  More of these are in the works!

Imports
Table wine imports fell in 2020 due to tariffs and pandemic-related chaos.  The decline was exacerbated by the fact that numerous importers chose to increase inventories in late 2019 due to the threat of further tariff increases.  It was also reported that U.S. importers are striving to find a place on freighters for their wines.  However, as of late December 2020 imported wines continued notable growth at retail.

Some report selling more imports than domestic wines. Reportedly, wine customers find the quality of imports and US domestic wines to be about the same level, but imports appear to have a lower price.  On-premise closures and shelf-shortages have acted as constrictors, and pantry stocking has appeared.  The surge in wine sales online is particularly notable.  Very recently reports have it that on-premise clients are paying more for upper tier wines.  Their thicker pocket books come from the pandemic caused closures of on-premise establishments.

A question-and-answer session concluded touching upon some added aspects.  In the markets the low alcohol wines are experiencing low demand, but “low” may have a better chance than “no”.  However, seltzer is moving.  Canned wine has price limits, but provides the plus of adding stability to the wine.  In restaurants the low-calorie wines are infrequently requested.

French writer Jean-Baptiste Alphonse Karr wrote, the more things change, the more they remain the same.  I think that most perceived change is a matter of viewpoint and emphasis.  Voila!  I also think that good business people practice the idiom, keep your eyes open and ears to the ground!  That’s just smart business, and that’s what is demonstrated in the Panel discussion.  One thing for sure, Australia is offering a wide range of varieties and styles in delicious and enticing wines.

(1) Credit all images (one at top, and one featured) to Wine Australia

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