Moscato Madness

When hip hop stars started singing and rapping about moscato, no one was more surprised about it than the wine industry. Even more of a shock came with the news that moscato sales had climbed more than 70% in 2011, according to Nielsen data, on top of 100% growth in 2010, representing a leap from $100 million in sales in 2009 to some $300 million just two years later. Today, the moscato category is a whopping 10 million cases strong and still growing. Indeed, it now represents just under 4% of varietal wine sales in the U.S. The trend has brands and marketers wondering, just what is driving this unprecedented boom?

‘€œThis is a crazy one,’€ says Tom Steffanci, president of W.J. Deutsch & Sons, the New York company that imports Yellow Tail. ‘€œI’€™ve been in the alcohol beverage business for over 20 years and I’€™ve never seen a category like this in beer, wine or spirits.’€

Yellow Tail got into the moscato game a little later than it would have preferred, only adding the varietal to its line last year. The brand was forced to hold off on rolling out moscato in order to launch with the supply required to fulfill projected demand. It was a good thing, too: 450,000 cases of Yellow Tail Moscato were sold in that first year. The company is projecting up to 650,000 cases for 2012 and close to 1 million for 2013. Like other brands that have focused on millennials and new wine drinkers, Yellow Tail went broad in its marketing, targeting consumers beyond its core base. Yet, Steffanci believes that too much emphasis has been placed on defining a moscato demographic, which has been characterized as young, female, and low-income. Instead, he says, it is moscato’€™s ability to appeal to so many difference ages, ethnicities, socioeconomic and geographic segments that is responsible for its success. ‘€œIt’€™s hard to pigeonhole,’€ Steffanci says. ‘€œYou see moscato mentioned in rap songs, and that’€™s made the grape variety intriguing with younger people. But at the same time, it’€™s the wine of choice for soccer moms. I think this variety has something for everyone.’€

Old and New

It has been a long and improbable trajectory for the grape. As one of the world’€™s oldest known varieties, moscato was taken all over Europe by the Romans, and brought to Australia as early as the 1800s.There are now more than 200 types of moscato cultivated around the world, including both red and white varietals. It often comes in the form of an off-dry, gently effervescent, low-alcohol table wine and is also widely used for dessert and fortified wines. The first moscato grapes probably came to U.S. shores with the arrival of Italian immigrants as long as a century ago. In the last five or so years, rappers like Drake, Kanye West and Lil’€™ Kim started referencing the frizzante wine in their song lyrics.

Most experts agree that popular culture references to moscato have surely impacted the category. But rap lyrics can’€™t be the only factor in the grape’€™s surging popularity. Yes, it’€™s sweet, fizzy, light and moderately priced, all of which surely appeal to young, new drinkers. And perhaps, like Roy Cecchetti of the Cecchetti Wine Company, which produces Redtree Moscato, surmises: ‘€œthe word itself ‘€“ moscato ‘€“ it’€™s fun to say.’€ But one thing is certain: the varietal’€™s exponential growth has been driven almost entirely by consumer demand. And that is an anomaly. Drink trends are more often a result of marketers pushing a given product or segment. Rarely do brands have to scramble to catch up to such organically exploding demand.

‘€œTo be honest, as a marketer, I was surprised at how quickly it became mainstream,’€ says Wendy Nyberg, senior director of marketing at Sutter Home, the high-volume division of Trinchero Family Estates. ‘€œAnd now, we’€™re at no. 3 in white wine varietals, with moscato surpassing sauvignon blanc sales nationally.’€

According to Nyberg, social media has been a big driver of moscato sales. Sutter Home is active with Facebook and Twitter campaigns and has created a series of YouTube videos to educate consumers on specific varietals in a fun, dynamic way. ‘€œJust look at our Facebook page. Consumers are talking to each other, driving the demand,’€ she points out. ‘€œAnd when you look at the consumers who are engaging about moscato, it tends to be younger people because they are the ones using social media.’€

The Trinchero family has made moscato since it was first founded, back in the 1940s. It began with a small production, mostly for the family’€™s own consumption, and now has multiple moscato brands under its umbrella, including Sutter Home, Ménage à Trois, Zibibbo, Terra d’€™Oro, Nine Vines, and Fre, an alcohol-free wine. The company’€™s size and existing equity in various vineyards helped it respond better than many of its competitors to the sudden and swelling demand for moscato. The fact that consumers already associated the company with the varietal was half the battle.

Talking Sweet

‘€œIn the 1980s, we used to say that consumers ‘€˜talk dry, but drink sweet,’€™’€ says Nyberg. ‘€œWhen you look at the younger consumer now, sweet is a good thing, not a bad thing. Young adults are being brought up on the taste of sweet and moscato will serve as an opportunity for consumers to come into the wine category because it’€™s a pleasant varietal for them to drink.’€

Sutter and other brands are now putting the taste profile of moscato right on the bottle, empowering consumers to know exactly what they’€™re buying. And yet, there is still the hope that moscato will act as a gateway wine, luring new wine drinkers to other varietals, much like White Zinfandel did 20 or 30 years ago. Luckily, moscato isn’€™t burdened with the stigma that has attached itself to White Zin. ‘€œThere are consumers who come into moscato and will migrate to other varietals,’€ says Nyberg. ‘€œOthers come in and enjoy moscato and just stay with it. They may branch out to a bubbly moscato or pink moscato. But that’€™s it.’€ Bubbly and pink moscato were natural portfolio extensions for Sutter. Most recently, it launched a red moscato, blended with merlot. Sweet reds are a hot category in their own right ‘€“ according to Nielsen, the segment grew more than 200% last year ‘€“ and brands like Sutter are hoping to capitalize on both trends. Gallo Family Vineyards, which launched its first moscato back in 2006 and now produces two of the three most popular moscato brands sold in the United States, has expanded its offerings to include pink and red moscato, as well as a white, pink and red wine in the Barefoot line. It also has Barefoot Bubbly, Barefoot Bubbly Pink, and Barefoot Bubbly Red moscatos. But portfolio extensions aren’€™t the only way brands are hoping to entice consumers to drink more moscato. Another trend they’€™re hoping to capitalize on is cocktails.

‘€œWine cocktails have become more and more popular and people are excited to experiment with different flavors,’€ says Stephanie Gallo, vice-president of marketing for Gallo Family Vineyards and Barefoot Wines. ‘€œOne of our favorite Barefoot Moscato cocktails is called The Fizzy Grape (red and green grapes, muddled lime juice, simple syrup and topped with Barefoot Moscato Spumante).’€

Speaking of cocktails, wine brands aren’€™t the only ones banking on the moscato craze. Several spirits companies have launched moscato-flavored products, including Seagram’€™s Grape Moscato Vodka and Exclusiv Vodka’€™s Moscato Rosé Extra, a blend of flavored vodka and pink moscato wine.

Growing Still?

Purists may associate moscato with northern Italy: for example, the well-known Italian brand Martini launched Martini Moscato d’€™Asti ($14.99 suggested retail) in the U.S. in mid- 2011. Originating in the Asti area in the Piedmont region of northern Italy, Martini Moscato d’€™Asti is made from 100% moscato bianco grapes and carries the respected D.O.C.G. classification. It features the well-known Moscato d’€™Asti profile of a lightly effervescent, slighty sweet, low alcohol (5% abv) refreshingly aromatic and crisp wine that is appropriate for consuming in a variety of occasions.

Still, the current American market is dominated by homegrown brands. While imports, especially Moscato d’€™Asti, are generally able to command slightly higher prices than domestic moscato, most of today’€™s young moscato drinkers seem to be more drawn to a moderate price point than the wine’€™s origin. One exception is Zonin’€™s Castello del Poggio Moscato, currently the best-selling Italian moscato in the country and consistently listed as one of the most searched wines on Snooth. Another is California’€™s St. Supéry, whose Napa Valley Estate Moscato retails for a steep $25.

As the category continues to grow, large American brands have been forced to start looking beyond U.S. borders for supply ‘€“ namely, Chile and Argentina. Because moscato tends to be less terroir-driven than other varietals, consumers don’€™t seem to mind or even notice when a famliar brand starts sourcing grapes from elsewhere. Sutter Home sources most of its moscato from California, but has also gone to South America for additional supply. ‘€œWe have very vocal consumers and when we make a change, we hear from them,’€ says Nyberg. ‘€œIf it was a problem, our consumers would have told us.’€ She and other marketers like to recommend to retailers that they get their moscato off the shelves and on the store floor. Secondary placement is key, as is keeping a selection of moscatos in the cold box, given that many white wine buyers go straight for it, ignoring the shelves altogether. Offering different sizes and packaging options, from Tetra Paks to 1.5-liter bottles to six packs of half bottles is another way to move moscato. It’€™s the quintessential picnic wine, after all, so why not sell it in a portable format?

The exponential growth of moscato sales has slowed, but is in no way projected to stop. And, while the premiumization of the category is unlikely, there appears to be much more room for new brands and variations. ‘€œAmerica’€™s interest in moscato continues to grow,’€ says Gallo. ‘€œI believe moscato will maintain its popularity, particularly because of the demographic driving its growth. Millennials are the future of the wine category.’€

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