New Profits from the Red Blend Trend

(Re)consider the Red Blend

Consider the Red Blend. As a category, these wines enjoyed brisk sales in 2016 and they continue to surge ahead in 2017. According to Nielsen, blends account for just over 40% of the new wine entrants in the U.S. market, and nearly three quarters of these new entrants are Red Blends.¹ Last year, Red Blends edged up to the number three position in off-premise sales, just behind the workhorse varieties of Chardonnay and Cabernet Sauvignon.²

In the late 1980s, Napa Valley famously championed “Meritage” blends in homage to the classic blends of Bordeaux. However, the current demand for Red Blends didn’t sky rocket until they took on a personality unlike any traditional wine. Ornate, edgy packaging combined with an attractive price point and a plush, full-bodied profile successfully brought new wine consumers into the fold. It’s also empowered consumers to explore different categories.

 

Leading the premium Red Blend charge are digitally savvy Millennials, keen to embrace and explore new wine regions, new varieties and favoring blends over their single-varietal counterparts. This more global view of wine, in tandem with a strong U.S. dollar, has created a retail landscape that is especially favorable to domestic and imported premium blends. ³

What's Old Can Be New Again

One thing is certain, as domestic Red Blends gain in popularity, they're paving the way for classic wine growing regions to make a comeback. For those of us who were fortunate enough to cut our teeth in the business through Old World wines, this is a very good thing. It’s extremely satisfying to introduce a new consumer to Old World (Red Blend) wines that showcase the elegance of Sangiovese, the suppleness of Merlot and the fruity vivacity of Grenache.

There are a few stumbling blocks for classic regions hoping to garner favor with the younger set, though. Only a small segment of wine drinkers can interpret wine style from origin rather than varietal (refer to Issue 1: Our Love Affair With Napa for the importance of place in buying decisions). Awareness of regions other than Napa and Sonoma drops off precipitously among average consumers⁴—and bottles lacking obvious cues about their contents are likely to get passed up in favor of safer choices. It's exactly this insecurity that has given rise to apps like Vivino and Delectable.⁵

Therein lies the opportunity. Retailers can foster interest in Old World wines by leveraging the Red Blend trend.

Helping Consumers Make the Connection

Retailers can connect younger consumers to Old World blends by using familiar domestic brands as references. Blending is, after all, one of the world's great traditional winemaking techniques. Consumers who have tuned into domestic Red Blends can then discover Red Blends from regions like the Douro, Rioja, Bordeaux and Tuscany—many of which can be found at price points rivaling their American counterparts. Modernization in the vineyard and winery, along with an adventurous younger generation of Old World winemakers, has helped to usher in an era of exciting, unconventional blends with a decidedly modern edge.

Market to the Occasion

Further, staff can help their customers navigate the Old World wine landscape by describing how these wines might fit into their lifestyle. This can be done by shifting the conversation away from facts about the wine’s origin, to the sorts of social activities where Old World gems might shine. For this younger generation that prizes experiences over things, an elegant Italian Super Tuscan might be the centerpiece of an intimate dinner with friends, and a well-priced Crianza might be the perfect fit for a cozy Wednesday night at home. Through this lens, wine becomes an opportunity for a consumption moment, occasion or mood.

Mix Old World Wines in the Red Blend Set

Pairing up domestic Red Blends with a surprisingly affordable Côtes de Bordeaux or a fruit-forward Côtes du Rhône is one strategy. A well written staff recommendation using descriptors like sweet, spicy, robust or earthy can go a long way in giving shoppers a clear idea of what the wines will taste like, thus helping them to feel confident in their purchasing decisions.

Other Unifying Themes

There are deeper, perhaps less obvious ways to connect this inquisitive cohort to the classics too. Try mixing Old World wines into a domestic Red Blend set, while highlighting the group with other unifying themes. One theme could feature organic or sustainably grown blends. Millennials’ concern for the environment—where their food is sourced and whether it’s responsibly made, readily translates into wines grown with sustainably or organically farmed grapes. Alternatively, the comfort Millennials feel with breaking barriers associated with identity may offer an opportunity to feature Old and New World blends made by women winemakers.

The Next Wave

If evolving varietal trends have shown us anything in the past few years, it's that Red Blends are here to stay. Younger consumers are the driving force behind this trend—according to Decanter, U.S. wine consumption is expected to increase by 2% between 2015 and 2019. ⁶ Though less loyal to individual brands, Millennials will continue to seek out new varieties and new experiences with equal doses of veracity and enthusiasm. Interestingly, Old World wines are poised to be the next big thing beyond domestic Red Blends. France has captivated consumers' palates with yet another bumper crop of low-priced, pearly-pink rosés, and in Italy, Prosecco is still the go-to alternative to Champagne.⁷

IN THE NEXT ISSUE: The emotional power of Sonoma.