Champagne may have ridden a roller coaster in the U.S. market over the past few years, but its lower-profile counterpart, Cava, has enjoyed stronger and more consistent growth. Even after a solid performance in 2010, U.S. Champagne depletions were still more than 20% down from 2007, according to Impact Databank. Cava, meanwhile, has actually gained ground during the economic downturn.
“The downturn has helped us. Our main customer has, for the most part, stayed with our brand because the pricing is still competitive at well under $10 retail per bottle,” says Vince Friend, president of CIV USA, which imports Cristalino, the market’s second-leading (and fastest-growing) Cava brand. “A lot of consumers who no longer had the budget to buy higher-priced sparklers began buying Cristalino.”
Cava’s three biggest brands—Freixenet, Cristalino and Segura Viudas—collectively sold roughly 1.05 million cases in the U.S. market in 2007. By 2010, the three brands' aggregate volume had jumped by 12%, to more than 1.17 million cases. That impressive progress has pushed Cava’s total U.S. volume (estimated at around 1.3 million cases) past Champagne’s, which was at 1.25 million cases last year.
Freixenet USA dominates Cava in the U.S. market, with flagship brand Freixenet and fast-rising Segura Viudas comprising around 60% of category sales. The company is now aggressively courting new consumers for the Freixenet brand, which has been the longtime market leader but hasn’t kept pace with other top sellers of late. “My top objective with Freixenet is to build more of an emotional link with consumers through face-to-face interactions and to focus on the younger demographic,” says Tom Burnet, president of Freixenet USA. “We’ve put the necessary pieces in place, and we’re deep in the process of implementing a slew of new consumer-facing programs targeted at trendsetters.”
With positive growth trends, the economy’s ongoing challenges and a flurry of new product activity, Cava should see sustained growth ahead. Its leading marketers certainly have ambitious goals. “We expect Cava sales to grow to over 2 million cases within three years, with Cristalino surpassing the 1-million-case mark in that period,” says Friend. “To help accomplish that, we’re planning more direct-to-consumer marketing and aggressive promotional activity in all channels.”
Who says the beer business is hyper-competitive? One look at an emerging trend among craft brewers and any observer would think the business is a giant love fest. Increasingly, craft brewers are collaborating to jointly produce special edition beers, and consumers are lapping them up. “With craft beer being the only growth segment in the beer industry—and the most profitable—retailers are embracing collaborative beers,” says Sam Calagione, founder and president of Dogfish Head Brewing.
Ken Grossman, founder of Sierra Nevada Brewing, says consumer response to beers like Life & Limb—produced with Dogfish Head—has been strong. The latest edition, Life & Limb #2, is rolling out this summer. “Fans of both brewers are anxious to see what the collaboration will be,” Grossman says. Volumes are small: About 1,000 barrels of Life & Limb #2 are slated for release, priced between $8 and $9 for a 750-ml. bottle.
Natalie Cilurzo, co-owner of Russian River Brewing, says, “Collaborative beers are a great way for breweries to try different styles. It’s a fun way to expand your name into new markets.” Santa Rosa, California-based Russian River has been joining forces with Colorado’s Avery Brewing since 2004 on Collaboration Not Litigation Ale. It’s a blending of Russian River’s Salvation with Avery’s Salvation, both Belgian-style ales coincidently sharing the same name, and the reason the two brewers joined together in the first place.
Russian River has partnered with other brewers, including Dogfish Head, and next year it will team up with Sierra Nevada. Dogfish Head has collaborated with several brewers, including Stone and Victory Brewing companies, as well as Boston Beer Co., Three Floyds and Sierra Nevada for the second release of Life & Limb. In Colorado, nine Fort Collins craft brewers joined forces in May on a beer to celebrate American Craft Beer Week. Craft brewers are also teaming up with overseas players. Encino, California-based Stone Brewing, for example, has worked with Scotland’s BrewDog and Norway’s Nogne-O, while Russian River has collaborated with Italy’s Birrificio Italiano and Boston Beer with Germany’s famed Weihenstephan Brewery.
“These beers are great—the only downside is that there aren’t enough of them,” says Dave Brodrick, founder of the Blind Tiger ale house in New York. Brodrick says his customers don’t mind spending $7 to $8 for 12-ounce draft pours of collaborative beers because they know they’re limited releases. The New York bar pours at least two collaboration brews a month, with new arrivals promoted via e-mail blasts and Facebook.
•After selling its Widmer winery to Hazlitt 1852 Vineyards last year, Constellation has made a $16.5 million investment to expand production at its Canandaigua winery and create a new warehouse and distribution center nearby, which will become one of the company’s North American distribution hubs. The winery investment will allow Constellation to bring production of former Widmer-made brands like Manischewitz and Arbor Mist to Canandaigua, along with adding bottling for other brands like Red Guitar and Marcus James. Constellation says the Canandaigua distribution center will handle about 10 million cases a year, or about one-fifth of Constellation’s U.S. wine production.
•Crown Imports’ Corona Extra has introduced two new television spots under its “Find Your Beach” U.S. campaign. Developed by ad agency Cramer-Krasselt and launched earlier this month, the “introspective” spots depict “everyday situations transforming into picture-perfect settings,” according to Corona. The ads join the campaign’s existing Facebook and outdoor components, and also follow the brand’s “Corona Beach Getaway” sweepstakes, which launched nationwide last month.