Our Love Affair With Napa
Capture High Value Sales
Among wine drinkers, Napa is the most well-known wine producing region in the U.S. with nearly universal recognition.1 But not only are consumers aware of the Napa region, they associate it with high quality wines. How do we know? The sales data tells it all.
In 2016, Napa was the clear leader with an average bottle price at $61.72 on wines shipped Direct-to-Consumer. For comparison, Oregon came in a distant second place with an average bottle price of $38.09. Not only that, Napa wines comprise nearly half of the total $2.33 billion DtC market. 2
We can affirm Napa’s dominance by using syndicated data. In 2016, among California Luxury+ priced wines ($20 and above), sales of Cabernet and Chardonnay grew 15% ($36MM ) to $275MM. Furthermore, California Chardonnay growth at prices above $25 outpaced Cabernet growth by 13 points, or more than 18,000 cases last year.3
Finally, consumers also reward flash sites featuring Napa wines – 39% of all domestic offers are wines carrying the Napa appellation.4
To capitalize on consumer’s love affair with Napa, make the wines easy to find by featuring them in your set.
- We know that consumers (of all generational cohorts) look for place of origin more than any other factor when purchasing a wine.5
- If you have a price flow set, carve out a section for Napa and take advantage of the consumer’s bias to Napa wines.
- If you have a varietal set, consider blurring the lines and creating a geography call-out for Napa wines, regardless of varietal type.
- You can leverage the power of both “new” and “Napa” by creating an up-front section with new wines from Napa.
BRINGING NAPA TO LIFE
Merchandising is important, but Napa is more than a wine label. With more than 3.3 million people visiting Napa annually,6 how can you bring Napa to your consumers?
- Feature Napa wines consistently in your emails and social media channels. Many wineries can provide re-purposeable, high-quality educational or promotional digital content and video.
- Harness the power of Napa by starting a Napa wine club, and stage wine pick-up parties similar to what many wineries offer their club members.
- Schedule some of your in-store tastings to feature only Napa wines and offer a premium experience, such as a cheese pairing.
- Where legal, create an epicurean event with chef-executed small bites and a reserve level tasting for an additional charge.
These high-touch experiences capture the shift in consumer spending from goods to services. In the overall retail sector over the next five years, eRetail is projected to grow at a CAGR of 14.4%, compared to Grocery at a CAGR of 3.3%.7 Tying goods to services and experiences is one strategy to hold on to your share of the wine retail dollar.
No matter which path you create to attract the Napa consumer, the trends indicate your success will be rewarded.
IN THE NEXT ISSUE: We’ll look at the retail category and consumer trends in luxury Pinot Noir.
- E&J Gallo Consumer & Product Insights Research, 2015
- 2017 Direct to Consumer Wine Shipping Report, Sovos/Ship Compliant and Wines & Vines
- IRI, Total US MULO, 52 weeks ending 01/08/2017, Luxury and Super Luxury price segments, Cabernet Sauvignon and Chardonnay varietals
- Wines & Vines, Flash Sale Analytics, January 2016-January 2017
- E&J Gallo Consumer & Product Insights Research, Consumer Wine Trends Survey, December 2015
- Economic Impact Quick Facts, Visit Napa Valley, 2014
- Kantar Retail IQ, US Channel Facts, June 2016
FOR ADDITIONAL INFORMATION OR QUESTIONS REGARDING E. & J. GALLO WINERY BRANDS, PLEASE CONTACT YOUR LOCAL SALES REPRESENTATIVE.