Unlocking Growth with California Sparkling

If your business has seen recent growth in sparkling wine, you are not alone. In fact, our data shows the sparkling wine category grew 13.1% from 2016 to 2017.¹ Contrary to long-term industry forecasts of only modest growth from 2016 to 2020 of about 2%.² This continuous surge is driven by three primary sources. The biggest growth driver is an increase in consumption driven by more bottles per buyer. This growth driver alone accounts for over half of sparkling growth in the past year. The remaining growth comes from a mixture of still category conversion (29%) and buyers who are new to the category (15%).

Within this category boom lies an opportunity to grow your business through luxury California Sparkling Wines. These $35+ bubblies, which are generally more fruit-forward and approachable than traditional Champagne, offer you the unique opportunity to attract a frequent buyer who is likely to explore—not just sparkling—but across your portfolio.

Capitalizing on this relatively untapped opportunity requires two key components: consumer insight and a consultative sale. Even during the hectic year-end rush, a few simple changes will help you appeal to a segment of the market driven by a unique set of factors compared to a traditional Champagne buyer.

MEET THE CALIFORNIA SPARKLING CONSUMER

Sparkling wine consumption centers greatly around social occasions. What differentiates a California Sparkling luxury wine buyer from a Champagne buyer is her quest for exploring food and wine in social settings. Traditionally, this consumer tends to be female, over 40, college educated, married, lives in the suburbs, and has a higher household income ($100k+).

This customer segment represents more than one- fifth of total wine purchasers and buys more than one- quarter of her wines at the Super Premium+ ($20 and above) price point. Her social nature, openness to a broad definition of what makes for a sparkling wine occasion, and exploratory nature make for a compelling opportunity to capture a high value, discovery-minded customer.

Additionally, one only needs look at recent earnings reports and industry studies to see Millennials are increasingly shifting their beer purchases into wines. These consumers are reportedly jumping into the category aimed with a premium palate shaped by craft beer and culinary explorations in their 20s and early 30s. This indicates a younger generation of passionate food and experience explorers will continue to enter the market. Regardless of age, this consumer is more adventurous when exploring sparkling wine choices. This is, in part, due to the fact that they are making purchases more frequently and tend to select more premium offerings.

WINNING THROUGH WINE STYLE

Champagne’s wine style makes it an acquired taste for many consumers and its reputation as a precious commodity throw up barriers to frequency and approachability. By contrast, the fruit-forward nature of California Sparkling Wines welcomes the luxury consumer with an imminently appetizing and shareable wine style.

Another factor to consider when encouraging trade over is occasion. Many sparkling wine consumers regard traditional Champagne as an exclusive indulgence, reserved only for special occasions. While a premium bottle of champagne may be conscientiously saved and cherished for a significant moment, the California Sparkling Wine buyer views it as suitable for virtually any occasion and enjoys it with a wide range of foods. She believes sparkling wine is to be shared – generously and often. When you invite her to discover California Sparkling Wine, she’ll love that you would rather help introduce her friends to something new than make the safe choice.  

Perhaps most surprising when it comes to the overall sparkling wine category is that consumers weigh their prior experience with a brand more heavily than they do country of origin or even winery heritage.³ This means consumers are more likely to trade up or trade over to a sparkling option from a brand they already trust – regardless of whether that brand is a Champagne, Cava, Prosecco, California Sparkling or even a still wine.

FROM ONE-TIME SALE TO REPEAT CUSTOMER 

While 80% of new holiday buyers will exit the category at season’s end, the true potential of high holiday foot traffic has always been the opportunity to increase basket size during the visit as well as to convert first-time and infrequent shoppers to repeat visitors.⁴ The California Sparkling Wine target consumer provides a unique opportunity to do both as the year winds to a close.

Building Bigger Baskets

The California Sparkling Wine consumer also purchases luxury vodka and tequila — and vice versa.⁵ Offering her additional products, such as spirits, for her holiday entertaining will increase basket size and result in a more engaged and satisfied shopper.

Offering a California Sparkling Wine add on to your luxury Still Wine shopper provides another path to bigger sales and happier customers. Because experience with a brand outweighs all other factors for sparkling consumers, recommending a sparkling option from a brand she’s enjoyed in the past makes for an easy win.

Creating Lifetime Value

Once acquired, a California Sparkling Wine consumer possesses greater potential for increased frequency at a Luxury price point. By introducing them to California Sparkling Wine, you are taking the first step to converting them into a lifetime customer.

By providing your expertise to the adventurous consumer willing and even eager to expand beyond Champagne, you establish yourself as their primary source for future exploration in this and other categories. This same consumer is likely to share their experience through word-of-mouth, benefiting your business even more through advocacy and referrals.

4 CONVERSATION STARTERS

By identifying potential California Sparkling Wine trade-over and trade-up consumers, you can end the year strong with very little effort and no investment. Here are four ways to help your staff start that conversation:

• Have your floor staff open bubbly conversations with a California Sparkling offering. If the consumer has a brand preference or desires the safety of Champagne, it’s easy to shift the conversation.
• For consumers who request a California luxury Still Wine in a brand that offers sparkling, ask if they’d like to add a bottle of that brand’s sparkling wine for the holidays.
• Ask consumers who are purchasing luxury vodka or tequila for entertaining occasions if they’ve considered California Sparkling Wine. This provides an opportunity to grow your basket size and highlights the personalized service you offer customers.
• Encourage younger sparkling consumers to trade up from lower-priced options for New Years’ Eve.

SUMMARY

As the holidays hasten, look out for opportunities to trade over from Champagne as a way to delight the California Sparkling Wine consumer and her friends with a new indulgence at her next gathering. By finding opportunities to offer a conversion to luxury California Sparkling Wine, you’ll close the year strong and drive greater, more frequent sales for your business into 2018.

^1. IRI Brand Switching Analysis – Still + Sparkling and C&PI Analysis, 2017.

^2. Global Sparkling Wine Market Analysis Through 2021 by Technavio, 2017.

^3. Internal E&J Gallo Research, US Sparkling Wine Tracking Study, 2017.

^4. IRI Household Panel Buyer Cross Purchasing Analyses Sept 2017.

^1. IRI Brand Switching Analysis – Still + Sparkling and C&PI Analysis, 2017.