The Wine Is Fine According to the latest data (2016) from the Wine Institute, total wine sales, as measured in 9-liter cases, increased 4.2% to $59.5 billion in retail value. Total case shipments increased 3.0% to 399.2 million. California wine shipments increased 4.65% in retail value, or a total of $34.1 billion, with case shipments to all markets (US and international) increasing 1.1%, and to the US market, increasing 2.3%. Despite the devastating October 2017 wildfires in Napa and Sonoma counties, only approximately 10% of all California wine grapes are grown in those counties, while 70% are grown in the Central Valley, thus not affecting the 2017 harvest much at all.

Variety Is the Wine of Life According to Silicon Valley Bank’s (SVB) State of the Wine Industry 2017 report, Cabernet Sauvignon, Red Blends and Pinot Noir were the dominate premium wine varietals for the 52 weeks ending 10/31/16. Cabernets and Pinot Noirs were strongest in the $11–$14.99/glass category and Red Blends in the $8–$10.99/glass category. The SVB research found that Millennials and Gen Xers are the primary drivers in the popularity of these three varietals. Analysis suggests Baby Boomers will likely prefer the lower premium price segments as more of them retire.

Wine Sales at Restaurants Fall Off the Table The SVB report highlights the unfortunate and precipitous decline in restaurants’ share of wine sales, which was 31% as recently as 2014, but decreased to 16% for 2016. This is a reflection of the tepid condition of overall restaurant revenues. The only wine categories that increased restaurant wine sales during 2016 were red varietals and blends costing more than $25 a bottle, and they increased just 1.8%. In addition, only the segment of larger than 250,000 cases increased sales from 2015 to 2016. A major factor was big restaurant chains purchased their wines from large wholesalers, limiting the selections to those from big wineries.

Tasty Choices The Wine Institute reported that total wine consumption per US resident for 2016 was 2.94 gallons, compared to 2.87 gallons for 2015. This included all wine types: sparkling wine, dessert wine, vermouth other special natural and table wine. The 2016 Survey of American Wine Consumer Preferences found that American wine consumers chose red wine first, at 73%; followed by white, 68%; rose, 36%; sparkling, 31%; dessert, 13%; and fortified, 5%. Price was the primary factor in Americans’ wine purchase decision, at 80%, followed by brand, 66%; varietal, 46%; country, 35%; region (appellation), 21%; state, 19%; label, 18%; alcohol level, 18%; and vintage, 16%.

A Spirited Toast According to the Distilled Spirts Council (DISCUS), US spirits suppliers’ revenues increased 4.5% to $25.2 billion for 2016 and US volume increased 2.4%, or an additional 5.2 million cases, to 220 million cases. Spirits market’s share of alcoholic beverage revenue was 35.9%, an increase from 2015’s 35.4% share and volume share was 33.8%, compared to 33.5% for 2015. Spirits’ premium-price category had the largest share of the total US spirits market, or 35.4%, and, subsequently, the largest share of 9-liter cases, or 78.0 million. The value category was second, at 34.0% share and 75.0 million 9-liter cases.

Spirits Liberated According to analysis from Mintel, the spirits category enjoyed a robust increase in 2016 revenues because of better positioning of premium and super-premium brands and new flavors, such as fruit, spice and sweetened, which attracted more Millennials. Another factor was state/local legislation that increased spirits availability, such as spirits sales in Colorado grocery stores; “brunch bills” in Connecticut, New York and West Virginia that allow spirits to be served earlier; and 21 wet-dry alcohol wins. DISCUS also reported that 55% of consumers strongly or somewhat trusted the spirits industry while 78% were very or somewhat favorable towards the industry.

Advertising Strategies Given the popularity of Cabernet Sauvignon, Red Blends and Pinot Noir, retail wine merchants may want to launch a promotion for a special combination price when customers buy two of each or all three varieties. Retailers in states and localities that can now offer spirits because voters approved of more “liberal” spirits sales laws should feature their inventory and possibly offer a discount during the 30 days following the passage of these more liberal laws as a reward to voters. Share the table in the Additional Analysis section of the Profiler with local bar and restaurant advertisers to help them promote specific types of liquors during the months that more customers order and enjoy them.

New Media Strategies WineRing and Delectable and learn how their location(s) can be added to the geo-location or mapping feature of these apps. Bars and restaurants should prominently promote the availability of Uber and/or Lyft services to discourage drunk driving, and consider partnering with specific drivers to provide this service. Invite customers and patrons to share “healthy” and drinking-in-moderation stories via videos posted to bars and restaurants’ social media sites. Encourage them to tell stories of what prompted them to become more responsible wine and spirits drinkers.