A new study of Zinfandel consumers and producers found that Zinfandel trends discussed in the wine industry do not necessarily reflect the trends and opinions of consumers. The research, conducted by Christian Miller of Full Glass Research on behalf of the Zinfandel Advocates & Producers (ZAP), found that a majority of consumers do not associate Zinfandel with heavy or high alcohol levels, and they want more Zinfandel on restaurant wine lists and in by-the-glass programs.

ZAP commissioned the study to understand the Zinfandel consumer despite booming sales of Zinfandel, especially over $9 per bottle. In the ACNielsen-tracked supermarket channel, case sales of the varietal have grown in the last year, up 10 percent in the 52 weeks ending October 21, 2006. However, between January 2004 and October 2006, Zinfandel case sales have actually fallen 4 percent, which can be attributed mostly to the rapidly declining case volume sales of the 1.5-liter bottle.

Specifically, the case volume of 1.5-liter Zinfandel bottles has fallen 26 percent in between 2005 and 2006. By contrast, in the same time period 750ml case sales have increased 6 percent.

Consumers Reject Notion Zinfandel is "Too Alcoholic"

The Full Glass Research survey found that Zinfandel producers identified "perception of Zinfandel as high alcohol, ultra-ripe wines" as their most important issue. Secondly, they worry about a "lack of consumer understanding of Zinfandel." However, despite widespread criticisms in the press and trade about high alcohol levels in Zinfandel, consumers are not swayed by the objections.

While 20 percent of Wine Opinions panelists (see sidebar next page) and 40 percent of ZAP members did indicate that Zinfandel was "heady and alcoholic," this was not seen as a negative descriptor. Only 10 percent of the Wine Opinions panelists, and less than 5 percent of ZAP members and high-frequency Zinfandel consumers, feel that Zinfandel is "too ripe and alcoholic."

"Clearly consumers in general do not feel that Zinfandel is over-ripe, cloying or too alcoholic," said Miller. "But it's an evolving issue because once things start bouncing around in the trade press, the consumers will eventually hear about it. What they'll do with that information is unknown, but it's very clear [high alcohol is] not perceived as a problem."

Kent Rosenblum of Rosenblum Cellars also said the study confirmed what producers had long suspected. "The perception of alcohol is not an issue for consumers, while for some wine writers it's a crusade," he said. "I think some of the writers are just looking at the alcohol, so they don't like it. But if they taste it blind, they do. Just having it on the bottle can be a disadvantage to the wineries.

"The rich, fruit-driven style that we use means the grapes have to be ripe to get there," continued Rosenblum. "We don't go out to make high-alcohol wines, they just come out that way. But, it looks like we are going to have to address the alcohol issue because the writers keep harping on it."

Miller surmised that Zinfandel suffers, at least among members of the trade, from "an intersection of images." Specifically, Miller identified four issues that may be detrimental to the varietal. First, there is a concern that California wines in general are too alcoholic-and what is more Californian than Zinfandel? Secondly, the extremely popular Zinfandel Festival tasting attracts what Miller describes as a "boisterous and jolly" crowd. Thirdly, Zinfandel lacks a European pedigree. Finally, many of the Zinfandel masters are "unpretentious, down-home types," said Miller.

"I think one perspective that has been lost by many gatekeepers is that Zinfandel is probably the best exemplar and flag-bearer for terroir in California," said Miller.

Bob Biale of Robert Biale Vineyards, a high-end Zinfandel producer, agreed that more and more Zinfandel consumers are looking for terroir in the wines they purchase. "I think people like a more sophisticated palate. They want to taste the site," he said. "They want the Zinfandel flavors, but also the different flavors because it comes from different sites."

"Zinfandel wineries continue to be bullish, according to the producer survey," said Miller. "I think Zinfandel fits nicely into many modern flavor trends. I would look for Zinfandel to maintain pace with the market. Increasing share will depend on how well Zinfandel producers market the wine, whether they can tackle on-premise and the Northeast in particular."

On-Premise Sales Lacking

The "lack of restaurant support for Zinfandel" was identified in the survey as the third most important issue facing Zinfandel producers-but this is also being noticed by consumers. Of Wine Opinions panelists, 63 percent agreed that they "would like to see more and better Zinfandels available by-the-glass in restaurants," while only 7 percent disagreed. Also, 52 percent of the Wine Opinions panelists agreed that restaurants "rarely have a good Zinfandel selection," while only 12 percent disagreed with the statement.

Correspondingly, ZAP members also feel that Zinfandel is under-represented in by-the-glass programs, with 89 percent agreeing to the survey statement, and on restaurant wine lists, where 66 percent agreed with the survey statement.

"I think it goes back a long way. It takes a long time to change," said Rosenblum. "Zinfandels are generally better values for the dollar, so maybe people who want to impress somebody buy the $150 bottle of something else. I think getting more expensive Zinfandels on that list will help." Rosenblum also suggested producers should create reasonably priced restaurant-only Zinfandel brands to help build momentum in by-the-glass programs.

Zinfandel prices may be a factor in the lack of restaurant representation. Joel Peterson, founder and winemaker at Ravenswood said that while Zinfandel has gained more acceptance in the trade, there is still a ways to go. "What hasn't changed is that Zinfandel still needs to push to gain its way into the market," he said. "And while there are certain people who understand the uniqueness and special-ness of very small lot Zinfandels that are extremely well made, it's harder to get acknowledgement for that. There's no wine that has been lionized to the point of some of the high-end Cabernet Sauvignons."

While Miller acknowledges that there is no flagship, he does point out that consumers are trending toward higher-priced Zinfandel. "There's no doubt that there's growth in the high-end with Zinfandel over $15. There's been growth there for the last 10 years running. It's come from almost nothing to create a substantial market."

ACNielsen data found that consumers are spending more on Zinfandel than they have in the past. Case volume of Zinfandel priced below $6, which accounts for 38 percent of the market and is the largest price segment, has decreased 27 percent. Volume sales between $6 and $8.99 have decreased 15 percent and now account for 16 percent of the Zinfandel market.

Although Zinfandel priced below $9 still represe nts more than half of all Zinfandel case volume, in January 2004 the category accounted for two-thirds of all volume in the ACNielsen-tracked channel.

Zinfandel priced $9 and over, though, has grown 36 percent since January 2004, adding almost a third of the Zinfandel market share. The majority of the wine sold, 32 percent, is in the $9 to $11.99 range, a segment that has grown 28 percent. The $12 to $14.99 tier has risen 54 percent and now represents 8 percent of overall Zinfandel sales. Wines priced $15 and above have shown the strongest growth, 61 percent, though off a small base of just 6 percent of the market.

"I think that the next generation of growth will be in the $10 to $15 range," said Peterson. "There is an open niche, if you will, for luxury Zinfandels, for that sort of iconic wine. It won't be a huge [segment], but it will be there. That mid-tier, though, is probably where the next serious growth will be."

There are several other market factors that also impact on-premise visibility. Although the varietal is very popularly recognized, the Zinfandel market is still only a fraction of the size of the most popular varietals. In the ACNielsen segment, for example, Zinfandel has a market share of just over 2 percent while Merlot and Cabernet Sauvignon have market shares of 12 to 13 percent.

"This is one of those things where not having an iconic Zinfandel hurts," said Peterson. "When people are building a core wine list, they spend their money on Chardonnay, Cabernet Sauvignon, Merlot and Pinot Noir. Those are the big names in wine, the categories with all the sales. Zinfandel is still relatively small, so it gets put into the same category as a lot of other esoteric reds, which are always a smaller segment of the list. As a consequence, when they start running out of space [on the list], they are running out of space for Zinfandel. They might have one or two Zinfandels, but not four or six. So it makes it much more difficult."

The on-premise situation has improved through the years, however. In the past there might not have been any Zinfandels on restaurant wine lists. "My guess is that because the quality of Zinfandel on a per-bottle basis is much higher than it used to be, there is more security among people in the restaurant trade for putting a bottle of Zinfandel on the list," said Peterson.

Zinfandel Under-Represented in Northeast

The study also found that high-frequency Zinfandel consumers tend to be located in the West Coast and are underrepresented in the Northeast. Producers overwhelmingly identified California locations as their top markets-88 percent chose Northern California and 42 percent chose Southern California. Other top markets, but chosen by less than 30 percent of respondents, were New York, Texas, Illinois and Florida.

Additionally, several large wine markets were chosen by less than 10 percent of the Zinfandel producer respondents, including Washington, D.C./Virginia/ Maryland, Pennsylvania, Georgia, Michigan and Connecticut.

One of the advantages of the Zinfandel category-that is filled with smaller wineries producing geographically specific wines-may actually be a reason there is less penetration in the Northeast. Consumers that are looking for small, regionally-focused producers "can easily be satisfied with direct imports, and that's a very big business in the Northeast in particular," said Miller. "If I was going to throw out a theory of where your competition is coming from in the Northeast, I would say that's it."

Imports also have other effects. A culture of drinking imported wines has been established in the Northeast, and small importers proliferate. In the Northeast, imports fill the niche in offbeat wine lists and high-end wine retail stores that Zinfandel may fill in other, more Western markets.

Finally, because Zinfandel is so successful in direct sales and in the West, producers have not had to make a major push into the Northeastern markets.

However, a third of Zinfandel producers reported that they expect to increase shipments to distributors by over 10 percent. According to the study, "Given the underdevelopment of markets outside California, this may be feasible, but it will require extensive sales, marketing and PR efforts."

The study findings did indicate that current marketing efforts on a winery level focus on the product and producer rather than sales and marketing execution. Miller indicated that in addition to promoting the brand and quality, "some attention needs to be paid" to measuring and monitoring the consumer perception of the wines.

"At the high end, I think more emphasis on terroir and clearly communicating the different styles of Zinfandel will help in the long run," said Miller.

Surprisingly, one style of Zinfandel that did not appeal to the studied consumers was White Zinfandel. Only a tiny minority of high-frequency Zinfandel consumers also drink White Zinfandel.

Overall Wine Sales Up 8 Percent in September

Wine sales are continuing to rise in the ACNielsen-tracked supermarket channel, though not as much as in recent months. In the 13 weeks ending October 21, 2006, overall wine sales rose by 8 percent, down from 10 percent in the previous month, and case volume sales again gained 3 percent, down from 5 percent in the September sales period.

Year-on-year, sales have risen 9 percent, down from 11 percent, in the 52 weeks ending October 21, while case volume has grown by 3 percent, down 1 percent from last month. Dollar sales are continuing to outpace case sales, currently by a three-to-one margin, meaning consumers are buying more wine at higher prices than in 2005.

As always, the "big three" varietals still dominate the retail arena. Chardonnay sales rose 6 percent in the 13 weeks ending October 21, down 3 percent. By case volume, Chardonnay was up 5 percent in the October data, down 2 percent from last month. Chardonnay is the top-selling varietal in the ACNielsen-tracked marketplace, claiming 24 percent of the market in terms of dollars and 21 percent in terms of case sales.

Cabernet Sauvignon increased sales by 13 percent in the 13 weeks ending in late October, down 2 percent from September. By case volume, Cabernet Sauvignon gained 11 percent in the 13 weeks ending October 21, 2006 over the same period in 2005, a 1 percent drop. However, market share remained steady as Cabernet Sauvignon claimed a 13 percent share in dollar sales and a 10 percent share in case volume.

Merlot sales are continuing to bounce back after stumbling in late 2005. Merlot sales rose again, by 3 percent, in the 13 weeks ending October 21, 2006. In terms of case volume, the varietal also grew 3 percent in the October data. Both figures are down from 4 percent last month. Merlot is the second-largest selling varietal, with 12 percent of market share in dollars and 11 percent in case sales.

The fourth-largest selling varietal, White Zinfandel, also dropped slightly. The varietal dropped 0.1 percent in dollar sales for the 13 weeks ending in late October, and dropped 2 percent in case volume in the 13 weeks ending October 21, 2006. White Zinfandel still holds a market share of 5 percent in dollar sales and 8 percent in case volume.

Domestic wine sales gained 8 percent (down from 11 percent) in the 13 weeks ending October 21, 2006 over the same period in 2005, while imports rose 7 percent (down from 8 percent) in the same time period. In terms of case volume, domestic wines grew 3 percent, while imports rose by 5 percent.

Australian wine sales grew by just 3 percent in the 13 weeks ending October 21, 2006. By case volume, sales rose by 4 percent. It appears Australian wine prices are not keeping pace with volume increases. Australian wines account for 10 percent of all sales and 9 percent of case volume.

Sales of Italian wines, the second-largest imported wine sold in the U.S., grew 6 percent in the 13 weeks ending in late October, while case volume increased by 5 percent. Italy accounts for 10 percent of the overall wine market in sales, 8 percent in case volume. wbm

*Note: ACNielsen data is collected from in-store sales scanners in grocery, liquor and mass merchandise stores in 34 U.S. markets.