Bottled (And Boxed) Sangria Draws Rising Interest

Publisher: Shanken News Daily
Date Published: November 22, 2016

The sangria category has been riding high lately, with dollar value up nearly 10% in Nielsen channels in the 52 weeks through July 16, and volume up 6% in IRI data year-to-date through August 7. The bottled sangria sector has ramped up, with leaders emerging amid a plethora of new brand introductions. “People are waking up to the reality that this could be a strong growth category,” says Peter Deutsch, CEO of Deutsch Family Wine & Spirits.

Depletions for the top six bottled sangria brands—Reál ($6.99 a 750-ml.), Lolailo ($5.99 a 750-ml.), Madria ($4.99 a 750-ml., Yago ($9 a 1.5-liter), Yellow Tail ($6.99 a 750-ml.) and Eppa ($13.99 a 750-ml.)—grew 7.6% to 2.33 million cases last year, according to Impact Databank. Lolailo, Yellow Tail and Eppa all increased by double-digits. Sales for the top six have nearly doubled since 2010, when volume stood at 1.25 million cases.

While there’s been an influx of new entrants, the category’s expansion is lifting all boats. “Demand has been growing, so brands haven’t had to depend on aggressive discounting,” says Stephanie Gallo, vice president, marketing at E.&J. Gallo, whose Madria label rose 1% to 505,000 cases in 2015. “The average price per unit for sangria has risen since 2013, with velocity and dollar sales growing steadily.”

Among the category newcomers, Beso del Sol, retailing at $20 a three-liter box, has seen a rapid rise out of the gate, and is projecting growth from 70,000 cases last year to a quarter-million cases for 2016. “Beso del Sol sells about 65% red sangria and 35% white. Most sangrias sell only about 10% white,” says CEO Bradd Levitan, adding that the brand has seen a strong response from its recent release of a 500-ml. Tetra Pak format.

While consumers are gravitating to bottled (and boxed) sangria, challenges remain. “The retailer reaction has been a bit slow. There’s no definite placement for sangria. It’s in one section at Kroger and in another at Publix,” says Ricky Febres, national brand manager for Shaw-Ross International Importers, which imports market-leader Reál (up 4.5% to 585,000 cases last year). Melissa Devore, vice president of wine buying at Total Wine & More, acknowledges that “retailers and wine shops are struggling a bit with how to merchandise it.” Currently, Total Wine shelves sangria in the fruit wine section rather than in an area of its own.

But as growth continues, sangria may begin to command a bigger spotlight. Deutsch—whose Eppa brand is the most premium among the category leaders—sees innovation playing a greater role looking ahead, including new flavor angles. “Eventually, once white sangria becomes established in the marketplace, we’ll see new flavors enter the market along with increased experimentation by consumers,” he says.