Green Wines
The organic segment represents a small part of the wine business, but it's on course for rapid growth, according to retailers and market research. We're getting a lot more requests for organic wine, said Todd Templin, Dorothy Lane Market's beer and wine director. Organic wine generated $18 million in sales at food, drug and liquor stores for the 52 weeks ending Feb. 10 a whopping 40% growth from the
March 26, 2007
CAROL ANGRISANI
The organic segment represents a small part of the wine business, but it's on course for rapid growth, according to retailers and market research.
“We're getting a lot more requests for organic wine,” said Todd Templin, Dorothy Lane Market's beer and wine director.
Organic wine generated $18 million in sales at food, drug and liquor stores for the 52 weeks ending Feb. 10 — a whopping 40% growth from the same period a year earlier — according to ACNielsen. While the overall table wine category is much larger, standing at $7.2 billion, the growth was just 7% for the same period. “Organic wine is dramatically outgrowing the category, albeit on a relatively small base,” said Danny Brager, ACNielsen's client services/beverage alcohol vice president.
The segment's strong performance comes at a time when food and beverages with organic claims are a $3 billion business that's up 30% from a year ago, according to ACNielsen.
“This shows that people care more about what they eat and drink,” said Brager.
The Organic Trade Association predicts demand for organic wine will continue to rise as more and more consumers realize the benefits of organic products in general. Likewise, more vintners are getting involved in the business.
“A few years ago, wine producers were reluctant to make organic wine, because they thought it wasn't sophisticated enough,” OTA spokeswoman Barbara Haumann told SN. “That changed once all these nice organic wines came out — consumers liked them, and wine makers realized there was a market for them.”
There are several types of organic wines. Those marketed as “organic” means they're made from certified organic grapes and contain no additives, such as sulfites or tartaric acid. Wines that contain organic grapes, but have added sulfites or other additives, can only be labeled “Made with Organically Grown Grapes.” Then there's biodynamic wine. Biodynamic farming is an agricultural system that is a bit more strict than organic. It views the farm as a self-sustaining organism within the surrounding ecosystem. Biodynamic farming supplements organic methods with homeopathic-like preparations and sprays on the farm to enhance and regulate plant growth, compost production and soil fertility.
“There are a lot of wine properties that practice organic and sustainable farming,” Templin noted.
Dorothy Lane, Dayton, Ohio, carries about 20 wines labeled as either organic or grown with organic grapes. It also carries others that are organic but aren't marketed that way. Wine producers do this for several reasons, such as to avoid the red tape in getting organic certification, or for fear that their products will be segregated from mainstream wines.
Some retailers do indeed segregate organic as a way to draw attention to it. Dorothy Lane, however, opts to integrate. It arranges all wines — including organic — according to varietals and wine-growing regions. It chose this merchandising scheme because it found it simplifies the shopping process for consumers. Shelf tags are used to highlight organic wine brands.
Dorothy Lane's top-selling organic wines include Badger Mountain from Washington and Frey from California.
It occasionally cross-merchandises organic wine in its Natural Living department, which contains vitamin supplements and nutrition drinks.
Organic wine currently accounts for just 1.5% of Dorothy Lane's wine sales, but interest is growing.
“More and more people are looking for organic wine,” Templin said.
He attributes this to the fact that people are getting more educated about the quality of organic wine.
“People initially thought it was more expensive or inferior to regular wine. But that's no longer the case,” Templin said.
Katrina Frey of Frey Vineyards, a Redwood Valley, Calif., organic and biodynamic wine producer, agreed. Organic wine suffered from bad press years ago, and as a result, a lot of people didn't try it, said Frey, the vineyard's sales director. But the segment has since matured, thanks to increased interest among wine producers in California, Oregon and other areas.
“There are now enough players to make people feel it's a legitimate category,” Frey said.
So much so that Frey wines can now be found not only in natural food stores like Whole Foods, but also at mainstream chains, including Safeway, Giant Eagle and Raley's.
Those who try organic wines for the first time are often impressed that a sulfite-free wine can taste so good, said Frey.
“Sulfites can sometimes mask the flavor of fruit, so people often comment about how fruity our wines are,” she said.
Frey noted that many of the company's wines have won awards.
A ShopRite liquor store in Lincoln Park, N.J., has carried organic wine for more than five years in a 6-foot section. Sales have grown in the past few years, according to store manager Keith Johnson.
Frey is the top seller, but Bonterra wines also do well.
Johnson said there is a learning curve associated with the segment in terms of “organic” versus “made with organically grown grapes.” But people are increasingly understanding their options.
Jungle Jim's International Market in Fairfield, Ohio, carries about 32 different organic SKUs in a 4-foot set, said wine director David Schmerr. Price points are comparable to mainstream wines, ranging from $7.99 to $25.
“We have a nice selection of organic wines,” he said.
The top seller is Frey, followed by Badger Mountain.
Most are either low in sulfites or sulfite-free. Several selections are occasionally sampled during storewide health food promotions.
Organic represents a mere 2% of Jungle Jim's wine sales. But interest is rising: Jungle Jim's gets a handful of requests for the segment each week.
“We look at it as a complement to our other wines,” Schmerr said.
The segment also complements the retailer's vast natural/organic packaged food and produce departments.
“People who shop our organic food section naturally gravitate to pick up other organic items, including wine,” Schmerr said.
Along with organic wine, retailers are getting involved in biodynamic wine. On its website, Wild Oats Markets promotes a variety of biodynamic wines from Ceago, Cooper Mountain, Quivira, Frey Vineyards and Patianna.
Jungle Jim's carries several bottles of biodynamic Pinot Noir from Oregon. They are merchandised directly next to organic wines.
BEVERAGE WATCH
Dollar and unit sales were up in each of the top five beverage categories compared to the same four-week period last year.
CATEGORY | $ SALES* | % CHANGE VS. YEAR-AGO | UNIT SALES* | % CHANGE VS. YEAR-AGO |
---|---|---|---|---|
CSD | $959.5M | 2.06 | 480.7M | 7.71 |
Milk | $868.6M | 2.56 | 341.6M | 1.22 |
Beer | $609.6M | 1.99 | 34.5M | 0.52 |
Bottled Water | $338.0M | 13.97 | 166.8M | 9.23 |
Wine | $406.0M | 8.52 | 48.7M | 7.00 |
Source: Information Resources Inc. *Sales in food, drug and mass outlets (excluding Wal-Mart) for the four weeks that ended Feb. 25. |
Wine Lines
From farming to certification standards, there's a lot to know about the organic wine business.
FOLLOWING ARE SOME KEY TERMS:
Organic Wine — Wine made from grapes grown in accordance with accepted organic practices and that contains no added sulfites. (Some sulfites occur naturally in wine as a result of the fermentation process.)
Wine Made With Organically Grown Grapes — Wine made from organic grapes, but which may have some sulfites added during the production of the wine.
Sustainable Farming Practices — This involves adding organic matter to the soil from the normal operation of the winery. Stems, skins and other byproducts are returned to the vineyard's soil for irrigation and weed control.
Biodynamic Farming — Stricter than organic standards, this process emphasizes farm animals, soil and compost preparations that enhance and regulate plant growth and fertility. Biodynamic farming often introduces the grazing of cows, sheep and chickens throughout the vineyard rows, and encourages a diversity of plants to grow in buffer zones around vineyard plots.
Sulfites — An additive used by winemakers as a preservative and to control the quality of their product.
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