Sherwood Schwartz’ 1970s sitcom “The Brady Bunch” was among the first TV programs to address blended family dynamics. Tackling the growing pains of a newly formed family, the Brady’s eventually no longer were “steps” but a functioning family unit. Although facing different complexities than blended families, the wine category is seeing its own spotlight on amalgamations.

In a Nov. 6, 2015 consumer insights post titled “It’s all in the mix: Red blends are stirring up U.S. wine sales,” New York-based Nielsen reported that red wine blends accounted for more than 13 percent of the category’s table wine market share during the 52 weeks ending Sept. 12, 2015. Divided among the total $13 billion in sales for that time period, the market research firm equated red wine blends to $1.7 billion, up from the $1.15 billion (11 percent market share) in 2011.

“Over the past five years, total annual wine sales (including sparkling) have grown $2.6 billion,” the online post states. “In the 52 weeks ended Sept. 12, 2015, total wine dollar sales were up 4.7 percent on a year-over-year basis, following consecutive years of strong single-digit dollar gains for the previous three years. While sales growth of the table wine sub-category over the past year (4.5 percent) is not insignificant given the overall size of this segment, a major opportunity has clearly blossomed for wine blends, with domestically produced red blends leading the way.”

Comparing the varietal segment to craft beer, Nielsen noted that the trendiness of red blends and their price points generated 8.7 percent in value growth and
3.2 percent in volume growth for the 52 weeks ending Sept. 12, 2015.

The strength of blends in United States also can be found in the segment's new product releases. According to Nielsen, more than 40 percent of releases in 2014 were blends, and more than three-quarters of those were red blends.

“No other wine type has even come close to the same amount of new offerings to market,” Nielsen states. “Cabernet Sauvignon is the nearest challenger, accounting for about 10 percent of the new entrants, and still much larger in sales than red blends. Having a red blend in a wine supplier’s portfolio is almost a ‘must have’ these days, with consumers seeking them out. And the winemaker certainly likes the flexibility and art that comes with mixing various grape varieties together.”

Capitalizing on this trend, Los Angeles-based Admirable Family Vineyards released Vigneronne and Blanc & Blanc, the first varietals in its collection. The 2013 Vigneronne is a dark, full-bodied red wine comprised of 56 percent Syrah, 43 percent Merlot and 1 percent other that has been aged for 18 months in 100 percent neutral French Oak barrels, the company states. A 2014 vintage, Blanc & Blanc is 98 percent Viognier and 2 percent Chardonnay and is aged in stainless steel casks.

Cabernet Corp., Novato, Calif., also is hitting on the blend trend with Llama Bonarda, an amalgamation of two of the company’s most renowned varieties — Bonarda and Malbec.

Import wines also have embraced blending practices. Barton & Guestier, Blanquefort, France, released a new estate-bottled rosé. Sourced from the St. Tropez region, La Villa Baron Côtes de Provence is a blend of 45 percent Grenache, 35 percent Syrah and 25 percent Cinsault.

Citing Nielsen’s Buyer Brand Purchase Set study, which was fielded Feb. 12-17, 2015, the market research firm found that 50 percent of survey-takers stated that blends are a good way to experiment with wine, while 24 percent indicated that they are more interesting than single varietals, and 20 percent noted the better value they offer. Nineteen percent stated the trendiness of blends for their reason of consumption.

However, variety might be the spice of life as 19 percent indicated buying single varietals and blends.

Fierce competition

Changes in consumer preferences have benefited the wine category as of late, experts note. In its December 2015 report titled “Wineries in the US,” Santa Monica, Calif.-based IBISWorld highlights the millennial generation, which has shown an affinity for domestic wines.

“Over the past five years, consumer drinking preferences have moved away from standard light beers, and many consumers have switched to wine for its perceived health benefits and diverse flavor profiles,” the report states.

Citing an annualized revenue growth rate of 2.6 percent for the five years to 2015, the market research firm predicts an increase in industry revenue of 4.2 percent to $18.7 billion in 2015. However, the dispersion of revenue seems to favor the larger players.

“Over the past five years, lower price points have helped the industry’s largest wineries to produce, distribute and market a variety of wines across the country,” IBISWorld reports. “Conversely, smaller wineries have struggled to provide the same services at such a large scale and low price, especially with major wineries, wholesalers and retailers undergoing increasing consolidation.”

For example, on Jan. 1, Treasury Wine Estates (TWE), Victoria, Australia, completed its acquisition of the majority of assets from London-based Diageo plc’s U.S. and U.K. wine operations.

Following the announcement of the acquisition, TWE Chief Executive Officer Michael Clarke stated: “This acquisition will transform our U.S. business into a larger player of scale in the attractive luxury and masstige segments of the high-growth U.S. market. The additional supply of luxury and masstige wine will be a game-changer for our U.S. brands, providing us with an immediate opportunity to step-change our growth in the U.S., Canada, Asia and Latin America.”

Large players also are acquiring smaller brands as a way to expand their luxury wine portfolios. Victor, N.Y.-based Constellation Brands acquired the Meiomi wine brand from Copper Cane LLC. At the time of the acquisition announcement in July, Meiomi had sales growth of more than 50 percent during the past 52 weeks, based on data from Information Resources Inc. (IRI), Chicago. Its Pinot Noir varietal also was among the fastest growing major Pinot Noir brands across all price points for the 12-week timeframe prior to the acquisition, IRI data notes.

“Meiomi complements the array of selections we offer consumers by filling a niche in our luxury portfolio,” said Jay Wright, president of wine and spirits for Constellation Brands, in a statement. “The rapid growth rate Meiomi has achieved in such a short time is evidence that the brand resonates with consumers, and we’re excited about adding it to our wine portfolio.”

Despite the challenges that smaller wineries have encountered, IBISWorld’s report notes that wine consumption rates still compel new entrants to the category. The market research firm estimates that during the five-year period of 2010-2015, the number of companies in the wine industry increased at an annualized rate of 6.3 percent to just shy of 6,000 operators.

To remain competitive, entrepreneurial wineries have found ways to entice consumers and help their profit margins.

“Smaller wineries have benefited tremendously from direct-to-consumer wine sales,” IBISWorld states. “Retail and on-premise (i.e. restaurant and bar) sales for smaller wineries are traditionally low, but the industry’s smallest vineyards have been buoyed by deregulation across many U.S. states, and that has enabled wholesale bypass and online retail of wine directly to consumers’ mailboxes.

“Although these regulations vary state-to-state, 42 U.S. states now allow some level of interstate production and direct sale of U.S. wines from the vineyard to the consumer,” the report continues. “Small wineries that had once been at a competitive disadvantage against major wineries with national distribution contracts can now simply ship the product to consumers.”

As consumers' thirst for wine continues to grow, operators will develop the products and explore more ways to satisfy this trend.