Brunello di Montalcino (+1%) gains share over competitors in a difficult year for reds (-9%)
The green light remains lit for American sales of Brunello di Montalcino. Despite the general context of a wine market in a depressive phase – with global performances in volume and value showing negative signs at -8% and -7%, respectively – Brunello closes the first nine months of 2024 with a growth trend of 5% in volume and 1% in value.
An over-performance, as noted by the UIV Observatory based on SipSource, in the market analysis prepared for the Consorzio del Vino Brunello di Montalcino on the occasion of Benvenuto Brunello (Montalcino 14-18 November): even more evident if measured within the relevant macro-category of still red wines, where in value, the Italians score -6%, but even worse are the French (-8%) and the hosts, at -9%. The luxury positioning is also good: the prince of Tuscan wines is first in consumption for Italian reds with distribution price greater than $50 per bottle, at 32% of total.
Off-Trade Drives Growth
Driving the growth in Brunello consumption, continuing now for about two years – as revealed by the UIV analyses on WSWA’s SipSource database, measuring distributor depletion towards the market – is the off-trade, with +10% in value, covering a drop in on-trade (-6%).
Among channels, at the end of the third quarter of the year, the liquor-shop segment stood out, confirming its position as the top retail path with a 63% share and a +5% year-on-year rise, and also the second-ranked outlet of clubs/wholesale (+76%), which includes major chains such as CostCo, from which restaurants are also supplied.
HoReCa Sector Shows Mixed Results
On the HoReCa side, the gap in catering (-20%) is answered by the performance of hotels (+20%, with 8% share of total value) and recreation, +14%, driven mainly by sales at casinos (particularly in Nevada) and sports clubs.
For Fabrizio Bindocci, President of the Consorzio del Vino Brunello di Montalcino: “2024 was probably the most difficult of the latest years, due to an international context of great uncertainty; the hope is that after the American elections a process of normalisation can begin, both in economic and geopolitical terms. In substance, Brunello has defended itself well and the Montalcino companies are confident of regaining share, including in the core channel of catering: HoReCa has always been the primary outlet of our top wine, and proof of this is the fact that this sector counts for 54% of total sales value, compared to a 31% share for Italians in general, dropping still further to 29% for French reds.”
Maintaining Premium Pricing: High-Value Bottles Drive Growth
Good news, despite the economic situation, also on the price structure front, which remains unchanged. In both off-premise and on-premise, the highest value is generated by the most important price brackets – above USD 50 per bottle at distribution – with a weight of 71% in volume, rising to 84% on the value side.
Outperforming Key Competitors
Finally, when compared with direct competitors, Brunello di Montalcino performed better in this part of the year relative to its foreign competition. With respect to the French, apart from the positive performance of Bordeaux Superieur (+4%) and Saint-Emilion (+6%), the +1% of Brunello acquires greater value when compared to the -30% and more of Beaune, Chateauneuf du Pape, the -23% of Margaux, or the -15/18% of Bourgogne and Pomerol. The great American wines also suffered, with losses in value ranging from -6/8% for Oregon and Sonoma to -20/27% for Oakville and Howell Mountain, up to the 40% loss for the champion of Californian wines, Atlas Peak.
SipSource
SipSource, a platform of the Wine and Spirits Wholesalers of America (WSWA), measures the depletions of US distributors, i.e. the stock outward of products destined to reach consumers in some 450,000 outlets (75 per cent of the US total). The numbers thus refer to actual wine sales in the US, with precise indications close to actual consumption.