Super Values Reshape Wine Market

Jun 20, 2003

By George Anderson

A survey of more than 300 drinkers of California Super Value Wine (Price points of $3 or less) found most are regular wine drinkers who are trading down from higher priced bottles.

The research conducted by The BRS Group and Context Marketing established that
super value wines are attracting only a small number of new consumers to the
wine category.

Tom Restaino, managing partner, The BRS Group said, “Short-term, it’s clearly bad news for the wine industry that super value wines are causing consumers to trade down. But there’s some long-term good news for the industry as well — the research clearly shows that the new price point is causing consumers to purchase more wine.”

Mr. Restaino added, “Some in the industry have been hysterical about the short-term trend, but let’s step back and remember the real issues, which are that per capita wine consumption is around two gallons and that 10 percent of Americans drink nearly 90 percent of the wine. For years, the wine industry has been trying to establish wine as an everyday beverage. Now the consumer is pointing the way for us as to how to accomplish that.”

Bob Kenney, president, Context Marketing said, “Conventional wisdom says you must change consumer perceptions in order to change consumer behavior. But sometimes the best way to change perceptions is to first cause abrupt behavior change, and we’re seeing that here. Super value wine drinkers say it makes them more comfortable with wine, and most consider it the ideal everyday wine. Low pricing brought down the risk, and that caused a psychological barrier to fall.”

Moderator’s Comment: Does the growing popularity of
super value wines represent a fundamental shift in wine purchasing behavior?

Context Marketing’s Bob Kenney said, “There is the feeling
in the wine industry that Two Buck Chuck (Charles Shaw wine) is merely the result
of a perfect storm of circumstances — a glut of inexpensive wine combined with
a recession. Sure it’s cyclical and may look like a fad, but we can’t just disregard
it. There’s an opportunity right now to learn some things that could serve the
industry in the long-term.”

An important finding of this research is that 70 percent
of super value wine drinkers recommend the wine to friends.

Our recommendation for an excellent wine at a super value
price is the La Boca brand of Argentinean wines selling locally for $2.99 at
Trader Joe’s.
Anderson – Moderator

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