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business of wine

New Nielsen Study Reveals Positive Consumer Trends for Merlot #wine – is SA the same?

Merlot has the single largest consumer base of any varietal wine in the U.S. and, of the major wine varietals, is the one most closely associated with high quality at an affordable price.

New research by The Nielsen Company into consumer wine consumption patterns and attitudes reveals surprising facts about a wine both loved and maligned in the United States: Merlot. Commissioned by Blackstone Winery and utilizing multiple Nielsen data sources, the research finds that Merlot has the single largest consumer base of any varietal wine in the U.S. and, of the major wine varietals, is the one most closely associated with high quality at an affordable price.

Complete results of the research are detailed in a report entitled, “Merlot Today: The State of the U.S. Merlot Market, Consumer Attitudes and Trends.” Its key findings show:

• More American households purchase Merlot than any other wine variety, red or white

• Consumer affinity for Merlot is based on the key factors of taste and value

• Merlot has the highest repeat purchase rate of any wine variety in the U.S.

• Merlot drinkers strongly agree that Merlot is a good, versatile and food-friendly everyday wine

Merlot remains the second best-selling red wine variety in the U.S. behind Cabernet Sauvignon, and the third most popular varietal overall. However, Nielsen’s analysis reveals that Merlot enjoys higher household penetration than any other wine variety, with 9.5 percent of U.S. households purchasing at least one bottle of Merlot in 2008 compared to 9.3 percent for Chardonnay and 8.8 percent for Cabernet Sauvignon. Merlot also boasts the highest repeat purchase rate of any variety, with 49 percent of Merlot consumers making multiple purchases year over year.

Nielsen’s research also challenges conventional wisdom within the wine trade that consumer perception and purchases of Merlot declined as a result of the 2004 movie “Sideways.” In fact, according to Nielsen’s findings:

• Merlot sales, measured in both dollars and volume, have grown steadily since “Sideways” was released in 2004

• The number of U.S. households purchasing Merlot is more than double those purchasing Pinot Noir

• Over 50 percent of current U.S. Merlot drinkers are consuming more Merlot than they did five years ago

• Despite rumors of a “Sideways effect,” 45 percent of participants in Nielsen’s custom survey of Merlot drinkers never saw the movie, and 93 percent of those that saw the movie say it had no effect on their opinion of Merlot

“Contrary to what people may think, Merlot never died,” says Danny Brager, Nielsen vice president and group client director of Beverage Alcohol. “Even post-Sideways, Merlot sales continued to grow and it is the third most popular wine variety behind Chardonnay and Cabernet Sauvignon in sales, while having the largest consumer base of the three. The bottom line: Merlot is a large and healthy category.”

According to the Nielsen research, strong consumer affinity for Merlot is based on a trifecta of three key factors: taste, value and approachability. Over 90 percent of respondents to one component of the research – a custom survey of over 1,800 Merlot drinkers – listed “taste” as the most important factor in their wine-buying decisions, with “good value” ranking second. Indeed, over 80 percent of respondents to the survey consider Merlot “a good everyday and food wine,” while roughly 70 percent find Merlot to be “a good value” (rising to “great” when priced under $12 per bottle), “a good wine to drink at home,” and “approachable and reliable.”

The survey’s attitudinal findings suggest that these attributes dovetail with current sales trends and with consumer demand for wines that taste good and offer good value. With data showing U.S. wine consumers retreating from higher-priced wines, experimenting less and dining out less frequently at restaurants, taste, value and approachability have become key factors driving consumer demand for wines like Merlot.

Gary Sitton, winemaker for Blackstone Winery, which produces America’s best-selling domestic Merlot, sees Nielsen’s findings as confirmation of Merlot’s enduring appeal.

Says Sitton, “What initially attracted wine drinkers to Merlot continues to attract them today – bright fruit aromas, plush flavors, and a round, smooth mouthfeel. There’s no question there was some mediocre Merlot in the market earlier this decade as a result of growers planting too much in ill-advised areas. But much of that acreage has been pulled out, and the quality of California Merlot has greatly improved – supply and demand have come back into balance. Today, Merlot winemakers have much better fruit to work with, and Merlot consumers are benefiting from that combination of quality and value.”

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