Winery Marketing: U.S. Consumers View Alcoholic Beverages As Affordable Indulgence For Holiday Season

holiday-hamperA recent Nielsen Company report finds that “despite a fragile economy, consumers continue to see alcoholic beverages as an affordable indulgence.” Online alcoholic beverage shopping is expected to continue to increase and will be especially evident in the wine sector.

According to Richard Hurst, Sr. VP of Beverage Alcohol, The Nielsen Company, “Many stores are adding alcoholic beverages to their assortment, providing more opportunities for consumers to purchase alcoholic beverages at competitive prices,” said Hurst. “And as we’ve seen in the past, some states may experiment with extended hours for alcoholic beverage purchases, such as Sunday sales, for an additional boost. Given that fewer consumers are likely to be able to afford luxury wines and spirits in their holiday budgets – – and there is evidence of trading down — stores would do well to ensure that they offer products across a variety of price segments.”

Another key finding: with exchange rates continuing to be unfavorable to the American dollar, imports have had to increase their prices, affecting their growth rates in favor of domestics. A few other key take-aways from the study:

  • During tough economic times, consumers are often biased toward national or local products, further enhancing the prospects for domestic brand growth, whose prices have remained relatively stable through the year.
  • The weak dollar helps tourism, especially in major cities.
  • Wine and spirits are popular gift items and there will be a tendency toward value-added packaging and “retailers should consider multiple store display locations to capitalize on impulse purchasing, as well as providing gift accessories nearby, such as bottle openers, gift bags, mixed drink party pack ingredients and glassware.”
  • “While there is evidence of consumers reducing on-premise consumption, as well as trading down to less expensive beverages, they are reluctant to cut back significantly on beer, wine and spirits, especially for at home consumption and entertaining. With the prospect of limited economic recovery in 2009, consumers are likely to consider alcoholic beverages as an affordable indulgence during the holiday season.”

Overall, this study indicates opportunities for growth of the domestic wine segment with consumer mindsets in favor of American and local wine products (if you like Riesling from Mosel, Rheingau or Alsace, have you tried a Riesling from the Finger Lakes?)

With the consumer mindset toward at home consumption and entertaining, are you catering to wine lovers who are pressed for time and looking for items to enjoy in the comfort of their homes? Do you have attractive displays of items and wines that deliver a high quality-price ratio? (Think Target’s popular and lucrative “cheap chic” trend.) A favorite example from here in the Finger Lakes is Ventosa Vineyards’ Tocaice Dessert Wine, one of the nicest dessert wines I’ve tasted, and at a very affordable $27.95 for 375 ml bottle, it is sure to fit most gift-giving budgets.

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3 responses to this post.

  1. My friend Marcus Pape posted this note called “Tough Times Mean Good Things Ahead for Wine Consumers” http://www.winechatr.com/fullpost.aspx?p=899

    Reply

  2. This is so true! Restaurants are empty, but wine sales have increased, particularly in the “value” category between $10-25. As much as I love to go out, you can enjoy a great bottle of wine and home cooked holiday meal for a fraction of the price.

    I’m not buying any wine right now, but it’s fine to go back through my cellar and pull out those special bottles more frequently!

    YUM

    Reply

  3. winebratsf,

    I’m with you on tending toward breaking out a nice bottle in the value category and enjoying it with a nice meal at home. Right now, it just feels better to be more cautious and seek out wines with a high quality-price ratio…it’s fun to explore and find new favorites too.

    Reply

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