Wine and spirits sales in grocery, drug and liquor stores enjoyed a “holiday bounce” in the four weeks ending Jan. 10, according to new figures from The Nielsen Co.
Wine sales increased more that 5 percent over the Christmas and New Year’s holidays in 2008 from the same period in 2007, while dollar sales growth in the fourth quarter slowed to 3.6 percent from full-year growth of 6.4 percent. Growth in the number of cases sold ebbed from 3.2 percent for 2008 to 1.9 percent in the fourth quarter.
Danny Brager, vice president and Beverage Alcohol Group client director, noted that retail promotional spending was lower in late 2008 than the year before, so the bump could have come from two extra business days in 2008 or a combination of consumer “cocooning” and gift-giving.
“They’re benefiting from a trend toward more in-home entertaining and more modest spending on gifts, from big-ticket items like wide-screen TVs to more modest gifts like wine and spirits, which provide a way to relax from the stress of the economy,” he said during a mid-February presentation of the figures. “I suspect those growth periods will come back down to pre-holiday levels.”
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The seven-member Cork Quality Council distributor group has lowered its threshold for the mold compound 2,4,6-trichloroanisole, or TCA, allowed in random samples of incoming shipments of cork stoppers from European suppliers.
Members of the Forestville-based council were finding that only 4 percent of stoppers represented in tests at ETS Laboratories in St. Helena were having to be sent back because they exceeded the previous limit of 2 parts per trillion for the often-fingered wine-taint culprit, according to council Executive Director Peter Weber. As of the beginning of this year, the standard is 1.5 parts per trillion.
“One reason we went with the new standard is that almost everything is passing,” he said. “We need to have teeth with the standards.”
When screening started in 2002, the average was 4 parts per trillion, with only 58 percent testing below 2 parts per trillion.
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Australia-based Foster’s Group, which produces North Coast wines such as Beringer, Souverain and Chateau St. Jean, said it won’t get out of the wine business but will restructure the effort, including a split of the beer and wine operations and a new managing director for the Napa-based Americas unit.
As part of a report on financial performance in the first half of its fiscal year, Foster’s announced that a review of its wine business undertaken in April 2008 concluded now wouldn’t be a good time to sell the operations, given the current worldwide banking crisis, according to Chairman David Crawford.
“The performance of our wine business has been unsatisfactory,” he said in the report. “In large part, this has been the product of poor execution in the Americas and pursuing a multi-beverage model in Australia.”
Today Foster’s also announced it would soon replace its managing directors for wine operations in the Americas and Australia, including Scott Weiss, managing director of the Americas group and part of the company since the acquisition of Southcorp in 2004.
Other changes to be implemented over the next 18 months at an estimated savings of A$100 million ($65 million) a year are the sale of 36 vineyards supplying lower-end wines, mainly in Australia and the Central Coast of California and an increase in the Americas sales staff.
The company is merging the Taz custom-crush winery into the Meridian winery on the Central Coast and closing down the Denman winery in Australia. The shifting of wine production to the Asti winery in Sonoma County will continue to allow the St. Helena winery to focus on luxury-tier Beringer wines, according to Foster’s Wine Estates Americas spokeswoman Allison Simpson.
About 300 positions have been identified as “redundant” in the restructuring. Ms. Simpson said she didn’t know how many, if any, positions would be from California operations.
Company earnings for the first half of the company’s fiscal year rose 3.2 percent.
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Windsor-based wine laboratory Vinquiry Inc., which has labs and offices in Napa, Santa Maria and Paso Robles, sold a majority interest to The Esseco Group, an Italian distributor of winemaking products and chemicals, for an undisclosed sum. Esseco said it wanted to break into the North American market.
Marty Bannister, who founded Vinquiry with MaryAnn Graf in 1979, said she will remain president and chief executive officer. A new director of operations position will handle daily management. Ms. Graf retired in 2003.
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Submit items for this column to Jeff Quackenbush at jquackenbush@busjrnl.com, 707-521-4256 or fax 707-521-5292.
