THE WINE ENIGMA: Wine in a Box

Published on: August 27, 2001

by Dennis Manuel

Why does the best selling wine in America come in a box, and get the lowest rating in consumer taste tests?

Franzia Wine outsells its nearest competitor, Carlo Rossi by two to one. According to a BRANDWEEK survey, the wine sales breakdown of the top ten wineries are as follows: [In millions of cases]

Franzia 20.2 [Quality rating 5.28]
Carlo Rossi (E & J Gallo) 10.3 [Quality rating 5.44]
Livingston Cellars (E & J Gallo) 9.4 [Quality rating 5.45]
Almaden 9.4 [Quality rating 5.30]
Vineyards of Earnest & Julio Gallo 7.2 [Quality rating 5.81]
Sutter Home 7.2 [Quality rating 5.91]
Woodbridge 6.3 [Quality rating 5.84]
Beringer 5.9 [Quality rating 6.02]
Inglenook 4.8 [Quality rating 5.61]
Vendange 4.6 [Quality rating 5.38]

According to a spokesperson for Franzia, the reason for Franzia's success is the premium quality, reasonable prices, the numerous advantages of the Winetap package (keeps the wine fresh after opening, takes less space to store, easier to open/easier to pour, etc.) and Freshness Dating. Franzia Winetaps are the only wine package with a Freshness Date clearly printed on the package.

So, what does that tell us about wine consumers? That the last thing they consider when buying wine is taste? Possibly.

Wine trends are moving away from the under $3 a bottle. According to a survey done on consumer purchases in food stores, following is the trend from 1991 - 2000:

Up to $3 Down 4%
$3 to $7 Up 3%
$7 to $10 Up 24%
$10 to $14 Up 25%
$14 and over Up 24%

According to ACNielsen/Adams scanning data from 3200 U.S. supermarkets and large-volume retail outlets, representing 38% of all off-premise sales, high-premium table wines, $7 and over, advanced a solid 22% by volume last year. In contrast, value-priced wines, $7 and below, declined one percent I volume. Most of the losses were in the large-sized containers below $3. [California Wine Institute]

And yet Franzia leads its competitors by 2 to 1!

The type of wine that is being consumed from 1991 - 2000 shows:

Blush wine Down 38%
Red wine Up 124%
White wine Down 16%

And yet Franzia's White Zinfandel, a blush wine, is their best selling product.

The trend towards red wine tells us one thing, that consumers are getting more sophisticated in their tastes, moving from blush and the generic Chardonnay to reds, which are more complex, and require a more sophisticated palate to be appreciated. Few people jump right into wine drinking and love the high tannins of red wine. New drinkers tend to go towards the sweeter blush wines, such as Franzia's White Zinfandel. Americans taste buds are reared on sweet liquids, like soda.

Our per capita annual consumption of wine is 2.8 gallons, as opposed to soft drinks, which is 54 gallons. Italy consumes 16.2 gallons of wine per capita, and France 15.8. The difference in wine consumption between us and them is huge. So, when someone goes from soda to wine, their first step is usually towards something sweet, such as White Zinfandel.

The number of people having a glass of wine with dinner is growing. In 1980 Americans consumed 360 gallons of table wine. In 2000 they consumed 505 million gallons of table wine, a big increase. Obviously many of them are new to the wine world, because the per capita consumption went from 2.11 in 1980 DOWN to 1.95 in 1997 (2000 stats are not available). New wine drinkers want something that does not boggle the mind in its complexity, is reasonably priced, a bit sweet, and has some shelf life in the refrigerator. Many new wine drinkers will have only one glass of wine with dinner, so they want something that will stay fresh for a while, and doesn't have to be consumed in one day, like a bottle with a cork. Hence the success of Franzia's Winetap package with a Freshness Date on it.

So, despite the low quality rating Franzia got in the survey, it seems they are doing a few things right. They are understanding the trend and the taste buds of those people switching to wine from other beverages, mainly soft drinks. They know that new wine drinkers are not apt to go off and spend a month's salary on a case of 1rst growth Bordeaux. Their budget is limited, their palate in new to the world of wine, and has to be weaned from the sugary sweet taste of soda, and they want shelf life in the product, along with ease of storage and use.

Obviously Franzia has done their homework, and the spokesperson for Franzia hit the nail on the head when I asked him why Fanzia was so popular.

The proof is in the pudding, and Franzia is out there by 2 to 1.

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