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United States

Malbec consumption triples

May 12, 2010 by Laura Saieg | in Business, News

According to a report issued by Nielsen, in the last 52 weeks, the consumption of Malbec grew by 60%. This makes Malbec the best performing variety in the US market.

The United States is one of the most attractive markets for business. On the one hand, it is the third largest country in the world in area and population, with 307 million inhabitants in 2009 (Central Intelligence Agency, 2008). In addition, it is one of the strongest economies in the world, with a GDP per capita of USD 46,900. Although its stability was affected by the credit crunch, according to estimates of the International Monetary Fund, its growth rate could reach 3.1% in 2010 and 2.6% in 2011. These data were presented during the second meeting of the Argentinian Society of Wine Professionals (SAPV, for its acronym in Spanish).

It is expected that the recovery trend will be reflected in consumer behavior and changes in consumption habits.

Wine consumption in the US market has shown an interesting increase in the last few years. In 2008, per capita consumption was 9.39 liters, while in 2009 it grew to 9.46 liters – 1% higher than the previous year.

It is also interesting to note that, even when beer is still the most widely consumed alcoholic drink in the US market, the rate of beer consumption has decreased with respect to that of wine. While in 1998 the consumption of wine represented only 9% of the consumption of beer, in 2008 it reached 11%.

Three varieties lead the ranking of total wine consumption and keep growing: Chardonnay, Cabernet Sauvignon and Merlot. However, even when Malbec is not among the ten most consumed varieties, it is the varietal wine whose consumption has grown the most in the past year (January 2009 vs. January 2010).

Consumption trends

On the one hand, according to a study conducted by Nielsen Economic Advisor on February this year, the financial crisis made part-time employment grow 8.3%, as compared to full-time employment, which fell by 9.3%. This implies there was a sharp decline in income for Americans, particularly for the so-called ‘Millenials’, who are now starting to search for jobs.

It is because of this that consumption trends have been shifting, and there are better opportunities for wines in the off-trade, which translates into an increase of home consumption. Besides, consumers are looking for better value when it comes to purchasing a product and search more for special deals, although discounts are more limited after the crisis.

Another remarkable tendency is that consumers nowadays are more connected and better informed. As a result, in the last 26 weeks the online channel has shown the greatest growth, with a 10% increase. It should also be highlighted that there are more than 231 million Internet users throughout the country, which places the US as the second country in the world in number of cybernauts.

Finally, in the on-trade channel (consumption within the premises), wine was the product that showed the greatest drop (5%) with respect to other alcoholic drinks.

In 2009, in spite of the pronounced decline of American economy, there was a consumption increase of 6 million cases with respect to 2008. Most of these cases were within the retail price bracket of under USD 10 per bottle. This was due to the fact that, in response to the crisis, consumers changed their habits and chose less expensive wines. Americans changed from consuming less expensive bottles to focusing on obtaining the best possible value. Restaurant wine sales fell by 6% to 9% this year as consumers, under tight budgets, stopped dining out and preferred to stay at home and buy wine at wine stores.

The trade-down phenomenon is reflected in the variations observed in different price segments. While the number of cases of wines below USD 7 per bottle retail price put on the market by California – the largest wine producing area in the US market – grew by 4% in 2009 with respect to the previous year, shippings of wines above USD 14 fell by 4%.

Likewise, in 2009 an American consultant issued a report based on interviews to members of the Wine Opinions Panel, which represents 18.5 million wine consumers who drink wine daily or several times a week and lead the quality wine sector in the US market. Among the results that are worthy of mention are the following:

. Increase in the consumption of well-publicized wines, though the relationship between wine critic scores and wine purchases is limited to a reduced number of consumers.

. Emerging trend favoring the consumption of 3-liter boxed wines and smaller cases

. Migration from the concept of luxury to the concepts of need and value

. Decrease in the number of meals outside the home

Translation: Inglés del Vino

Source: Nielsen Economic Advisor – Beverage Alcohol

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