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California wine sales up for first six months.

Contrary to the prevalent doom and gloom, the wine business overall improved considerably during the first six months of the year, Editor Jon A. Fredrikson of Gomberg, Fredrikson & Associates reported in his August 28 issue of the Gomberg-Fredrikson report.

"Traditional California wine sales (excluding wine coolers) advanced by 17 million gallons, or 11%, over the first half of 1991," Fredrikson said.

He acknowledged that last year's first half was affected downward because of price increases due to the federal excise tax hike. In comparison with the first half two years ago, the increase was a still-respectable 8%.

"Many wineries reported excellent table wine volume gains during 1992's first half. For example, the combined table wine shipments of the "Big Four" California wineries expanded by 17%. In addition, the index of fifteen premium California wineries climbed 16%," Fredrikson said.

"Both American and imported table wine sales benefited tremendously from last November's 60 Minutes broadcast about the healthful benefits of wine consumption. The revelation that moderate red wine consumption probably reduces the risk of heart disease brought about huge increases in consumer purchases of red wines. Other wine types also benefited to a limited degree.

"The red wine boom, generally lower prices and successful export programs overseas raised shipments of many California wineries across all market segments. Generally, wineries producing a high proportion of moderately-priced red wines reported some of the biggest growth rates this year.

"Among the giant commercial wineries, The Wine Group (+39%), Delicato (+35%) and Gallo (+13% excluding coolers) achieved tremendous growth during the first half." The other "Big Four" -- Heublein -- had +10%.

"Five out of the top six largest premium wineries (Sutter Home, Robert Mondavi, Wine World, Glen Ellen and Fetzer) all reported excellent gains of about 22% through June," Fredrikson said.

"Other large superpremium wineries with tremendous growth included Kendall-Jackson (+40%), The Wine Alliance (+45%), C. Mondavi (+20%), Wente (+44%), and Buena Vista (+38%).

"In addition, R.H. Phillips (+33%), Rodney Strong (+37%), Louis Martini (+53%), Rutherford Hill (+33%), McDowell Valley (+39%), and Guenoc (+29%) all posted impressive increases.

"According to scanner reports, all domestic and imported table wines grew by 12% in supermarkets during the first half. Cabernet Sauvignon sales soared 48%, while Merlot skyrocketed 94% and red Zinfandel jumped 33%. Red generic wines grew by around 35%. Among white varietals, Chardonnay sales leaped 31% and Sauvignon Blanc volume climbed 19%," Fredrikson said.

The summary is in full in Vol. 12, No. 6 of the 31-page Gomberg-Fredrikson Report, at 703 Market St., 21st floor, San Francisco, Calif. 94103, phone (415) 957-5071, by paid subscription.

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Publication:Wines & Vines
Article Type:Industry Overview
Date:Oct 1, 1992
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