Wine sales ended 2011 on a positive note

[caption id="attachment_50669" align="alignright" width="470" caption="How fourth-quarter wine sales differed by region, according to respondents in a Burr Pilger Mayer survey."][/caption]

Sales of California fine wine ended 2011 on the upswing, and vintner margins are improving, according to a recent industry survey and new data on California shipments.California wine shipments in 2011 rise 5.6 percent to new recordMarch 22, 2012

Sales of California wine within the U.S. in 2011 grew to a record 211.9 million cases, up 5.6 percent in volume compared to the previous year, according to preliminary figures released today by industry analysts. [read more]

Estimates by Woodside-based industry consulting firm Gomberg Fredrikson & Associates of California table wine shipments revealed about 8 percent volume growth last year both in the $7- to $14-a-bottle mass-market segment and in the over-$14 segment.

Sales in the premium and superpremium price tiers were driven by hot-selling red wine blends and sweeter wines, particularly made from moscato grapes and a continued shifts in consumer demographics toward drinking wine, according to Jon Fredrikson.

For ultrapremium wines, largely retailing $14 to $25 a bottle, sales growth comes after more than a year of heavy discounting to bring back sales lost in 2008 through most of 2010 when trade buyers stopped buying and fine dining revenues were weak, he said. For example, grocer Safeway has been running a 30 percent wine sale with another 10 percent off when buying six standard-sized bottles, and alcoholic beverage chain BevMo offers basically a two-for-one wine deal.

"People can buy great wines at discounts, and that's certainly spurring sales," Mr. Fredrikson said. "In spite of tough times, enough people are drinking wine."

[caption id="attachment_50670" align="alignleft" width="320" caption="Source: Burr Pilger Mayer"][/caption]

And ultrapremium vintners have been moving a lot of wine via cyberselling, he said. In addition to offering their email subscribers price and shipping discounts, wineries are increasingly turning to the ever-growing list of flash-sale websites, such as newly launched Last Bottle of Napa.

In the smaller market for wines retailing for more than $25, discounting that encouraged a big uptick in purchases in 2011 gradually reduced toward year-end, according to Mr. Fredrikson.

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