Riding The Sparkling Wine Boom, Cava Quietly Emerges In The U.S. Market

While Prosecco has surged and Champagne has enjoyed impressive growth over the past few years, Cava has quietly made solid progress of its own in the U.S. Last year, the Spanish sparkler grew by 8.6% to 1.65 million cases—just 60,000 cases shy of Champagne, though still far behind Prosecco’s more than 4 million cases of U.S. volume. “Consumers see non-Champagne sparkling wine as a superior price-value proposition,” says Tom Burnet, president of Freixenet USA, which controls roughly half of the U.S. market’s Cava sales with its Freixenet flagship brand as well as stablemate Segura Viudas. “As sparkling wine becomes more of an everyday drink, categories like Prosecco and Cava will continue to do well.”

Top-selling Cava brand Freixenet has made strong gains over the past two years, while Segura Viudas has become a major player in its own right, surpassing the 250,000-case threshold on double-digit growth in 2015. Progress has continued into 2016, with Segura Viudas up by around 20% in Nielsen channels and Freixenet up 9%.

“We’ve been much more active in marketing to Millennials over the past few years,” says Burnet. “That includes focusing less on traditional marketing and more on experiential marketing.” With the Freixenet brand, the company has tapped into marketing support for Halloween festivities—in New York in 2014 and New Orleans last year. Additionally, Burnet says a key focus has been promoting mixability—marketing Freixenet as a cocktail component both for on- and off-premise consumption.

CIV USA’s Jaume Serra Cristalino and Opera Prima are also among Cava’s leading brands, giving CIV USA a category share of more than 30%. Meanwhile, Codorníu, a force in the global Cava market, lacks a major presence in the U.S.—where it’s handled by Codorníu subsidiary Aveníu Brands—but it’s also showing promise. “We’re outpacing the category in the U.S. with Anna de Codorníu (the brand’s flagship offering), but we don’t really focus specifically on the Cava segment,” says Javier Pagés, CEO of Grupo Codorníu. “We view our competitors as the best sparkling wines, from across Champagne, Prosecco, the domestic segment and Cava.”

Rémy Cointreau’s Sales Flat In First Quarter, But Rémy Martin Thriving In U.S.

Rémy Cointreau’s first quarter sales were flat on an organic basis as strong growth for flagship brand Rémy Martin in the U.S. was offset by declines in Asia Pacific and Europe. The results were in line with the company’s expectations.

Rémy Martin’s sales in the three months ending June 30 were down by 0.5%, but the Cognac brand is thriving in the U.S., where the category has been enjoying a renaissance led by top-seller Hennessy. The company said Rémy Martin’s depletions jumped by 17% in its fiscal first quarter, while the overall Cognac category grew at roughly half that rate during the three-month period. Remy Cointreau also reports that, in the 12 months through June, the brand’s depletions were up by 14.5%—also well ahead of overall category growth. Cointreau is also achieving strong growth in the U.S., with depletions up 9.5% in the quarter and 6% in the 12 months through June. The liqueur brand fared worse in Europe, however, leading to an overall slight sales decline.

Rémy Martin also experienced solid progress in China in the first quarter, with mid-single digit depletions growth, but the Cognac brand still lost ground in the Asia Pacific region. For the full 2016-17 fiscal year, Rémy has confirmed its projections of modest growth in operating profit.

News Briefs:

•Craft + Estate, part of The Winebow Group, has added Australia’s Burch Family Wines to its portfolio. Burch Family’s lineup from Western Australia’s Margaret River and Great Southern regions includes the Howard Park, MadFish and Marchand & Burch brands, with retail prices ranging from $17-$90 a bottle.

•Napa-based importer and marketer Quintessential Wines is releasing new wines from Rioja’s Conde de los Andes. The new launches include a dry Blanco, a red Tempranillo, a Semi-Dulce white ($30-$50 a bottle) and limited amounts of a 2001 Tempranillo ($80). Based in Rioja Alta, Conde de los Andes was acquired in 2014 by the Murua family, owners of Quintessential portfoliomate Bodegas Muriel, who have renovated the winery and catalogued the cellar’s 400,000 bottles, the oldest of which date back to 1892.

•Kimo Sabe Mezcal has tapped former Walt Disney Imagineering chief creative executive Bruce Vaughn to join its brand team. Vaughn spent two decades with Disney. Concurrently, Kimo Sabe—which has launched in Dallas, Houston, Phoenix, San Francisco and Las Vegas, among other key markets—has named co-founder Ashley Walsh Kvamme as COO.

Craft Brewing and Distilling News:

•Norwood, Massachusetts-based Castle Island Brewing Company is increasing production capacity by 50% to more than 9,000 barrels annually. Launched just last year, Castle Island says its core Candlepin session ale and Keeper IPA are driving growth, spreading to more than 650 accounts throughout the greater Boston area. Meanwhile, Castle Island is releasing a new limited edition, Juice Patrol Pale Ale, which is at 7% abv and features Cascade and Centennial hops. Other limited releases from the brewery have included Vern Wheat IPA, Causeway Double IPA and Big Ern Double IPA.

•San Diego, California’s Coronado Brewing Company is introducing its Stingray IPA in canned format. The release marks the fourth Coronado year-round offering to launch in cans, following Islander IPA, Orange Avenue Wit and Easy Up Pale Ale. Stingray (7.9% abv) is an Imperial IPA made with Citra, Mosaic, Southern Cross and Simcoe hops. It’s hitting the market in six-packs of 12-ounce cans—as well as its previously launched 12-ounce bottles and draft—across Coronado’s 18-state distribution footprint.

 

Recently in the News:

• Battleground Florida: ABC Confronts Wave Of New Competitors In The Sunshine State
• Napa’s Quintessential Wines Rises To Become A Million-Case Player
• Lost Spirits Distillery Unveils New “Flash-Aged” Rums And Whiskies