Jeff Kross, who owns Newton Wine & Spirits in upstate New York, isn’t quite sure what his younger male customers see in red wine aged in bourbon barrels – products like Fetzer’s 1000 Stories Zinfandel and Treasury Wine Estates’ Beringer Bros Bourbon Barrel Aged Cabernet Sauvignon.
“I am surprised by its popularity,” says Kross, who sells enough of the wines so that he has noticed who is buying it. “I’m a more traditional wine drinker, and I just don’t like that style. It’s too over the top, too big and bold. But the younger people, they seem to like it. They seem to be new wine drinkers, and this is the kind of thing that gets their attention.”
Welcome to the world of wine crossovers. They may be wine aged in spirits barrels, and include bourbon barrel aged Chardonnay and tequila barrel aged Sauvignon Blanc. Or they could be wine-flavoured beer, cider-wine blends, mocktails made with wine instead of spirits (especially trendy in the on-premises market), and ready-to-drink beverages (RTDs) such as canned sangria. The list is almost endless, and the permutations seem to keep coming.
But whatever the crossovers are (and the definition seems to be constantly changing), many in the wine business see them as a chance to attract more of the same young consumers who are buying bourbon barrel wines in Kross’s shop and who might not be interested in wine otherwise.
“I wrestle with that same question whenever I see someone walk out of a retailer with one of those Frankenstein-ed wines,” says Dan Fredman, a long-time Dallas-based wine marketer and retailer. “But is bourbon barrel Cabernet that much different than sherry or Port cask-aged Scotch? That so many of these oddball wines and wine-related items are coming from big industrial producers shows that it may be their way of getting consumers primed for different flavours and different styles. Do consumers like that sort of thing? Or do the producers think they will like them?”
Defining wine crossovers
There seems to be agreement that crossovers can be divided into two categories – those strictly about wine, like the spirits barrel aged wines, and everything else. That’s because the spirits barrel wines aren’t necessarily anything more than ageing wine in something other than traditional barrels, and California winemakers have played with spirits barrels in some form or another for decades.
“It’s worth noting that similar types of neo-wines have waxed and waned over the decades, like wine coolers, white wine spritzers, apple or strawberry wine, and even Thunderbird,” says Christian Miller, the proprietor of Full Glass Research in the San Francisco area. “What is different in the current environment is that categories are so much more blurred – you have wine-flavoured beer, oak-aged beer, non-apple ciders, cider-wine blends, mocktails, wine in cans, cork-aged beer, rosé spirits, on and on. In the 1960s to the 1990s, the main categories were far more separated and insular.”
Consumers don’t necessarily distinguish between these products by whether they include wine, says Bryan Criswell, the wine director for 21st Amendment Wine and Spirits, which has 18 locations in the Indianapolis, Indiana, area. “It doesn’t matter whether it’s something like an alcoholic seltzer or hard lemonade or an RTD wine,” he says. “The customer sees these products as interchangeable, because they’re not about the alcohol, but about the other part of it. They see all of them as lighter than actual alcohol and lighter than a soft drink.”
And there is no doubt that sales – albeit from a sometimes very small base – are increasing rapidly. Most of the faux categories are showing double-digit growth, and this is especially impressive because so many are sold outside of traditional wine and spirits outlets, says Miller.
What about the audience?
Which leads to the three most important questions about crossovers: Who buys these products? Will they keep buying them? And are they a gateway to more traditional wine?
“Years ago, I worked on a product launch on an RTD cocktail line that was to be wine-based, natural, and sparkling,” says Napa wine marketer Paul Tincknell. “It did launch and still exists – Dirty Blonde Cocktails. The name alone should give you an idea of the target customer.”
And, adds Criswell, that’s exactly the audience today, whether for an RTD wine or for Constellation Brands’ Mondavi Private Selection bourbon barrel red blend and Chardonnay. “It’s absolutely Millennials,” he says, noting that the demographic seems to skew more male – something that isn’t always the case for traditional wine products, where women buyers continue to dominate the market. He also sees a relationship between some of these buyers, especially for spirits barrel wine, and those who buy sweet red blends like Trinchero Family Estates’ Ménage à Trois and E&J Gallo’s Apothic (which also has coffee-flavoured and whisky barrel wines).
Which is why Treasury Wine Estates’ chief marketing officer, Michelle Terry, thinks her company’s Beringer Bros products are a key addition to its portfolio. “We see these as [having] a growing value for both consumers and retailers,” she says. “Something like the tequila barrel aged Sauvignon Blanc ties into two major trends – the growth in tequila and the growth in Sauvignon Blanc. And the idea of tequila ageing fits well with the ideas of Sauvignon Blanc.”
Terry says Treasury is more than pleased by sales growth for its three spirits barrel wine products, some 30% in the past year. And the demographics, she adds, are all the company could hope for: buyers are generally 20- to 40-year-olds, both men and women, with higher incomes, and who are interested in wine but don’t drink much of it and are also on the lookout for what’s trendy. That also seems to be the case for Treasury’s new wine spritzers, such as its 95-calorie Main & Vine, which seem to be purchased by more affluent and younger consumers and are part of a category she says is showing a 50% sales increase.
Also playing into crossovers’ popularity is the increase in wine-drinking occasions, a trend that started in the late 1990s and has continued to expand and has benefited wine, says Miller. Red wine is being drunk as an aperitif, on its own, or with pizza. “And it has also opened it to more competition. It’s hard to measure the total impact of this, but it’s surely significant.”
As difficult as it may be to believe, almost everyone interviewed for this article said crossover growth is in part because many of these products are seen as more healthy than traditional wine, beer and spirits. “I can’t think of any other term to use for many of the people who buy these than ‘health conscious’,” says Criswell. “You’ll see women in the store coming back from the gym, and they’ll buy an RTD because it is light and it is refreshing and it has less alcohol and they see it as more healthy. It isn’t as as sweet, and they don’t want something as sweet. That’s a completely different demographic than we’ve ever seen before.”
Whither the gateway?
Hence Terry’s optimism about the long-term future of crossovers of all kinds. “I think there’s an evolution going on in wine, but then wine always reinvents itself,” she says. “Today’s consumers are more educated, better travelled, and less married to the myths and tenets of wine than other wine drinkers. And that provides us with an opportunity for growth.”
Yet, for all of Terry’s enthusiasm and high-flying sales numbers, others aren’t so sure. Maybe hard ciders and seltzers, RTD wine coolers, and similar products may last a while, but some say there is little evidence they will be anything more than the 21st century version of the Bartles & Jaymes wine coolers that flamed out in the 1990s. And there is even less optimism from some about spirits barrel aged wines.
“This seems a passing trend; something that will not last all that much longer,” says Criswell, whose chain saw big interest in the products, but which has faded over time. In fact, it has cut the number of SKUs it carries as interest has waned.
And Miller warns anyone who uses the gateway tag to be very, very careful.
“Based on research I have seen, the 1980s wine coolers did not in fact serve as a gateway to wine,” he says. “On the other hand, white wine spritzers and Lambrusco – the Italian sweet wine that is actually similar to the neo-wines in style and marketing – did serve as a gateway. It would be very good news for the wine industry if these new versions of neo-wine behaved like spritzers and Lambrusco.”
So are these products part of the resurgence of wine in the US? Or are they just more fragmentation of the traditional wine market into categories, sub-categories, and sub-sub-categories? Only time will tell.
