Retailers to uncork holidays with value-priced wines

Affordable in-home dining and entertaining will be the trend this holiday season, and consumers will be more willing to open their wallets for affordable indulgences in wine and spirits to help them celebrate.

A recent survey from Information Resources Inc. revealed that 90% of consumers expected to spend no more than $200 on beer, wine and spirits this holiday season. That’s good news since it’s a 25% increase from the $150 to $175 consumers said they were willing to spend last year.

It also might mean that consumers will be willing to pay a bit more for their wines this holiday season. “Consumers are likely to tread lightly back into higher priced brands,” said IRI’s consulting and innovation president Thom Blischok. Blishok cautioned that consumers looking for deals and sharply priced wines will drive most of the business this season.

As budget-conscious consumers have shifted to value-priced wines, sales of California wines to the U.S. market were up 2% in volume in 2008, according to the Wine Institute.

The under-$5-per-glass bottle and under-$2-per-glass box wines made up nearly 50% of the drug channel dollars for the category, and close to 75% of its volume sales, according to Dan Wandel, SVP and beverage alcohol expert at IRI. “These economy-priced items continue to do well in drug stores, with growth rates that outpace the food outlet,” he said. “Expect these to continue to be strong in this channel for the holidays.”

Wandel said that while such major varietals as chardonnay continue to perform well in the drug channel, retailers can expect strong performance from pinot grigio/pinot gris, pinot noir, red blends/meritage and nonvarietal sangria during the upcoming holidays. “These varietals are growing double-digit this past year,” he said.