Are American consumers looking for cheap wines? Or are they developing more sophisticated 
palates that can appreciate pricier and more complex wines? 

Sales data suggests that the latter may be true. ACNielsen has released information showing 
that the best selling wines in the US are the ones selling for more than $11, with this segment 
seeing an 11 percent increase in dollar sales in the 52 weeks ending 5/7/05 in the combined food/
drug/liquor store channel. Wines costing between $7 and $11 are up 6 percent in sales, while 
under $7 wines are up just 4 percent. 

The study also suggests that Americans are drinking more imported wines, especially from 
South Africa, New Zealand, and Australia; imports tend to cost more. 

This change can be attributed to better marketing efforts by wine producers, who have found 
that by making their products more accessible to consumers they can generate greater sales; it 
also reflects a greater health consciousness on the part of the public, since moderate wine 
consumption has been identified by many medical experts (and well publicized) as part of a 
healthful diet. 

Americans may simply be trading up - and the wine producers now harvesting the benefits may be 
able to thank the companies that specialized in the low-priced wines that became all the rage 
over the past few years. Chief among these companies was the Charles Shaw Winery and its Bronco 
Wine Co., which created the enormously successful "Two-Buck Chuck," which sells for $1.99 at 
Trader Joe's in California ($2.99 elsewhere) and fostered numerous copycat versions. 

There is an irony to this, since mainstream wine interests in California went to court to 
prevent Bronco from using the word "Napa" on wine bottles that did not contain grapes grown in 
the Napa Valley; the latest offering from the folks that brought us "Two-Buck Chuck" is now 
called Napa Creek, and will sell for $3.99 a bottle. 

FMI/ACNielsen/Lempert E-Newsletter
http://archives.subscribermail.com/msg/FMIA3CC81A12.htm
July 11, 20051