BC Sparkling Sales Bubble Upwards
Guest Post by Paul Rickett of VARketing!
Since 2016 BC Sparkling 750mL volume has grown by 94% in the five years 2016-2020. And despite all the challenges, in 2020 grew 14.5% over 2019 well above the overall BC wine volume growth of 4.5% for the year. Only the Rosé category was higher growth. However, Sparkling is the lowest volume of the four major Red, White, Rose and Sparkling categories accounting for 3.4% of total BC wine sales.
In August this year we released to subscribers a comprehensive analysis of 100% BC wine sales in 2020. The initial base report has been complemented with additional data supplements and the development of dashboards that allow further interactive segmentation and analysis. The base report provides baseline benchmarking data and the detailed rationale and logic of price bands and winery size used. There is groundbreaking data analysis on the following:
- Accurate segmented market shares for 750mL BC wine
- Regional sales in volume, value and wine style
- Sales by Variety as sold (i.e., blend or single variety for virtually all grape varieties)
- Independent winery performance versus Big 3
- Analysis of BC vs Imports over red, white, sparkling and rosé categories
All dollar data is based on wholesale pricing at year end rather than relying on retail pricing which is highly variable by channel. The charts below use the various codes developed for the Report on price bands, winery size, region and wine style.
Figure 1 below shows a snapshot from our dashboards with volume by channel, price band and Independent winery size for BC Sparkling 750mL.
Figure 1 – BC Sparkling 750mL 2016-2020
Note that while volume has grown substantially, the average price per 750mL has not materially changed in the period. It is, however, the highest average price of any of BC’s major wine categories.
This volume translates into a significant market share versus imports in the middle price bands. The average $19.62 per 750mL falls just under the midpoint of Price Band D (A is the least expensive, H the most). Price Band D is where BC’s market share is the greatest as well. However, in the total market 61% of all sparkling volume falls into the two lowest Price Bands (A and B).
Figure 2- BC Sparkling 750mL Market Share
This table shows the comparison of BC Sparkling 750mL to the average price of imports from selected countries and the premium (or discount in one case) of BC to the import average.
Given the volume in the lower price bands above it is not really surprising that BC has a huge premium over many countries. In contrast, the discount BC has against France reflects the high value of Champagne sold here.
While the overall premiums above may look discouraging, the picture is brighter when looking at BC averages by price band against all sparkling imports. One might expect BC to command a local premium. BC sparkling is generally competitively priced against import alternates, especially in Bands D-F with their resulting significant market share.
Coming back to BC, Independent wineries account for 79% of all BC sparkling sales but there are variations by BC region. The chart below shows premiums and discounts from the overall average for BC regions with >500 case sales of Sparkling 750mL by Independent wineries. Of the three DVAs shown, Vancouver Island has the highest percent of its total sales generated by Sparkling wine. Of the sub-regions, Summerland has the highest volume.
Figure 3- Independent Wineries Premium/Discount to average 750mL wholesale price
Some Actionable Takeaways
BC wine is very competitive in its sweet-spot of price Band D but has a dominant market share so may not have that much room to grow and intra-BC competition is fierce. Band A and the lower reaches of Band B are likely tough economic propositions for most BC wineries. Bands F-G are very small in total volume but offer opportunity for premium producers. That leaves Band C as the most open to BC wineries but, for economic reasons, more likely with non-Traditional Method sparkling.
For information about becoming a subscriber, please contact Paul Rickett at [email protected]