Wine sales resume in 2009 after earlier dip

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Wine sales for 2009 are forecast to be up from last year, in a sign consumers may be regaining some confidence in the economy, a new report shows.

Market research group Mintel predicts wine sales will have risen by 2.1% to USD 27.6 billion dollars in 2009, up from USD 27 billion last year.

In 2008, sales declined 3.2%, after years of constant growth.

"In 2008, the recession was at its peak," said Garima Goel Lal, an analyst at Mintel, adding that people drank less wine in restaurants and in bars.

Consumers ditched luxury and imported wines priced at over USD 16 dollars a bottle in favor of bargains such as boxed and domestic value-priced wine, according to the report.

"Customers traded down in favor of domestic wines," Goel Lal explained.

The report showed domestic wines accounted for almost three quarters of sales by volume in 2008. The growth is set to continue as a weak dollar puts an extra premium on imported vintages.

"People are more open to getting a good value for wine, it's hip now," said Nora Feeley, of U.S. wine and spirits maker Constellation Brands Inc.

Sales at Black Box, a boxed wine company in the Constellation group, increased 36.8% through September of this year.

"Wine growth has slowed a bit due to the economy," Feeley said, adding that it has also given consumers the chance to discover cheaper domestic wines they wouldn't have otherwise sampled.

In a survey included in the study, a quarter of people said they were drinking less wine than last year because of the recession. Nearly 40% said they are drinking cheaper wine.

"We noticed a real trade down from champagne to sparkling wines," said Chris Adams, CEO of Sherry-Lehmann Wine and Spirits, a major retailer in New York.

But for the first time since last Autumn, sales have begun to pick up said Adams, adding that he would start buying inventory again in the new year.

November sales were up 21% from last year, he said.

But beer sales still far exceed wine sales. Almost half of consumers say they drink beer compared to just over a third for wine, the report showed.