Drizly forecasts Chardonnay to continue driving off-premise wine sales

2 Nov 2020

The alcohol delivery platform Drizly released its 2021 forecast and highlighted Chardonnay as a wine varietal that retailers should embrace rather than relegate to the back of the SKU priority list in favor of more niche varietals. On Drizly’s platform, it is the second-best selling varietal white wine, comprising 25.3 percent of white wine sales.

For American wine drinkers, Chardonnay remains a popular established varietal with Nielsen data showing that off-premise Chardonnay sales reached $2.6 billion in 2019. Although the category grew 3.8 percent from 2014 to 2019 – which is nearly two percentage points more than the overall wine category, per IWSR data – more recent sales figures indicate that the category is on a slow downward trajectory. Over 2019, Chardonnay sales were down 2.2 percent, falling slightly more than total white wine volume (-1.9 percent).

Drizly forecasts Chardonnay to continue driving off-premise wine sales

Nevertheless, this perennially popular white wine remains a powerful component of overall sales for retailers selling wine. Nielsen data showed that Chardonnay was responsible for 41% of total off-premise white wine sales in the Covid-19-affected sales period, which began this spring.

While the majority of Americans maintain a strong preference for American Chardonnay, particularly California Chardonnay which represents 81.7% of Drizly’s white wine sales in 2020, the alcohol delivery company’s forecast suggests that retailers may look into lesser known regions to liven up their portfolios and capture wine drinkers that are interested in novel grapes but that are still partial to familiar options. Washington state, Australia and Argentina were noted as regions where Chardonnay production has gained interest from consumers.

Price points are also a big advantage that Chardonnay holds over less common varietals. Due to the large production of Chardonnay by many wineries, producers are more likely able to sell their bottles within the $10 to $19.99 range, which accounts for 63.7% of sales on Drizly. Boxed wine also presents an opportunity for Chardonnay. Wine in large format boxes has increased in popularity over the last several years, led in large part by the tried and true Chardonnay variety. In the Chardonnay category, boxed wine represents 11.7% of sales — higher than the 7.9 percent share that boxed wine holds across all wine categories.

Despite these bright spots for this white wine, Nielsen data shows that the category is still losing share to more adventurous varieties that are arriving on American shores. Off-premise Chardonnay sales increased by 14.4 percent year-over-year during the 29-week, Covid-19-affected period ending September 19, but during the same time period, total white wine sales growth outpaced the Chardonnay category with 19.5 percent year-over-year growth across off-premise channels.

However, retailers should not write off this slow and steady category. Its prominence in the consumer consciousness gives Chardonnay a leg up, and the wide variety of styles that this grape can produce allows retailers to build a robust portfolio with interest and diversity that still relies on this single workhorse grape.

Drizly’s sales have grown exponentially this year due to the pandemic forcing many consumers to sample online retail and delivery. The company’s overall platform increased more than 350% compared to 2019, and white wine sales jumped 380% year-over-year. And now with a $50 million funding round closed in August that Drizly said it hopes to use to propel its alcohol delivery service further, it will be no surprise to see these sales figures grow further.

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