New Zealand Wines Continue Double-Digit Climb

Today Shanken Daily News Reported: 

February 11, 2013

Fernz Kiwi SB

New Zealand wine continues to thrive in the U.S., particularly at the premium-and-above sector. For the year ending June 30, 2012, New Zealand wine shipments to the U.S. rose by 22.5% to 4.4 million cases, marking the category’s fourth straight year of double-digit growth.

Despite its relatively high price point, Constellation’s Kim Crawford ($17-$33 a 750-ml.) is the category’s leading brand. Kim Crawford has steadily accelerated its growth over the past few years. After climbing 11% and 15% by volume in 2010 and 2011 respectively, the brand rose by 23% in calendar 2012 to reach 555,000 cases, according to Impact Databank.

“The outlook is  bright for New Zealand wines in the United States, and we continue to see distribution and velocity growth from our higher-priced New Zealand wines (like) Kim Crawford,” says Kate McManus, Constellation’s vice president of marketing for imports and innovation, who adds that Kim Crawford has performed particularly well in the on-premise. Constellation’s New Zealand portfolio also includes Nobilo ($11.50)—which last year grew 20% to reach 355,000 cases in the U.S.—and Monkey Bay ($11). The company says its New Zealand offerings comprise around 45.5% of the category in the U.S. market.

The fastest growing New Zealand wine in the U.S. market last year was Oyster Bay, which advanced by 30% to 390,000 cases. Oyster Bay, which retails at $15-$19 and is handled by Oyster Bay Wines USA, leapfrogged Nobilo to become the second-largest brand in the category, while also gaining notable traction in the on-premise. “New Zealand wine commands the highest average price point for any country of origin,” says Peter Edgar, vice president, national sales manager for Oyster Bay Wines USA.

As the category heats up, competition and pricing pressure is likely to grow. Smaller brands like Pernod Ricard’s Brancott and Treasury Wine Estates’ Matua Valley are also on the rise. And last year, Terlato Wines partnered with New Zealand’s Kim and Erica Crawford—founders of the Constellation-owned brand—on a new wine company, Loveblock Vintners.

“New entrants show the strength of the category,” says McManus. “But while there is strong loyalty for our premium brands, there is more competition for lower-priced wines like Monkey Bay, due to the fact that the consumer is buying more on price and that a number of aggressively-priced wines and private label products are emerging.”


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