California Wine Continues to Drive Sales in Canada

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Volume 48, Issue 2

Written By: Alan McGinty

[dropcap size=big]T[/dropcap]he Golden State’s grape elixir continues to make waves. Case in point: the retail value of California wines sold in Canada topped $1 billion in 2014, and it’s also one of the fastest-growing categories, says Rick Slomka, director of the Wine Institute of California’s Canadian office in Burlington, Ont. “Case volume sales in Canada have grown by 78 per cent over the past five years, while the overall market has grown by just 16 per cent,” he says. In the past five years, sales of California wines by value rose 98 per cent in the LCBO’s upscale Vintages section, and the volume rose 78 per cent, so the average price paid for a California wine rose from $19.21 in 2009 to $21.25 in 2014, with some of the increase occurring when the loonie was at par. “I see tremendous quality and strong price-value correlation. California’s market share is increasing, and the premium priced brands are exploding,” says Jackie McAskill, category manager for New World Wines and Spirits for Vintages.

With the loonie hovering around the US$0.80 mark at press time, California wines may see some price increases but not necessarily right away. “Many of the larger companies quote their prices in Canadian dollars for this market,” notes Slomka. “And a lot of [California wine] companies have made substantial investments in the Canadian market; they’ll be slow to pass on increases.”

Either way, Will Predhomme, a Toronto-based consultant sommelier, who recently worked for the high-end NAO Steakhouse in the city’s Yorkville neighbourhood, worries California wines have reached a plateau: “Although they are consistently well made wines, the prices for the benchmark wines are too high for restaurants to mark up,” he notes. “More promotional work is needed for restaurants — California wineries seem to have focused heavily on the consumer/retail segment, but they’d benefit if they paid more attention to restaurants.”

On the upside, the Wine Institute of California has developed various educational presentations and videos to facilitate staff training (see discovercaliforniawines.com). Trade tastings in major Canadian cities are another good educational outlet.

Understanding the trends is key. For example, Cabernet Sauvignon and Chardonnay dominate California wine, but Pinot Noir is growing and Zinfandel is still struggling to break out, according to LCBO stats. McAskill confirms that while Zinfandel’s share is flat, sales of the pricier Zins are growing as people who like the varietal trade up.

California’s wine category leader is Cabernet Sauvignon. Red blends continue to show momentum, with sales increasing both at Vintages and the wider LCBO. White blends are not having as much success, but Chardonnay, already the leading white, is still growing. “Both the oakier and the fresher styles are doing well,” says McAskill. “There’s a customer for each of them. I can’t say one style is gaining ground over the other.”

California on Canada’s Wine Lists
When it comes to building a wine list, California wines are popular, but they aren’t necessarily a sure bet for top sales. In fact, Lenny Lighter, owner and wine buyer at Moishe’s, one of Montreal’s top steakhouses, notes his list’s Golden State wines rank third in sales after French and Italian varieties. “It’s the brand names that drive our California sales. People ask for Caymus, Beringer, Mondavi. We also get a lot of U.S. visitors here, and they often order what they know and like,” says the operator, whose Cab-heavy list features the better-known California wines and varietals.

At Hy’s steakhouse in Toronto, the majority of California wine sold is red, although whites sell well by the glass to the lunch crowd. More specifically, Chardonnay still rules, while Sauvignon Blanc (including California’s fume blanc style) is big in the summer. In reds, it’s no surprise Cabernet Sauvignon is the biggest category. “I know it’s a comfortable choice for a lot of customers, but I have to give kudos to the wineries for delivering consistently good quality,” says Randy Ostlund, sommelier and manager.

And consumers are willing to splurge, as noted by McAskill. Hy’s offers various California trophy wines, such as limited-production Cabs from Dominus, Caymus, Shaeffer and others, which cost up to $775 per bottle. “We get a lot of convention visitors, and sometimes the guys want to go crazy,” says Ostlund. One problem he noticed was his servers were nervous about decanting and serving expensive wines. The solution? “I ask that staff treat all wines the same, whether it’s $50 or $500. We do the full decant for older wines and unfiltered wines, which can have sediment. Quite a few California wineries are leaving their wines unfiltered these days, so it’s a good idea to decant.” (Wines are left unfiltered to preserve flavours and aromas and to avoid using techniques such as clarifying the wine using egg whites or bentonite.)

California vintages account for appro-ximately 65 per cent of wine sales at Vanc-ouver-based Cactus Club: “People trust it. There’s an expectation of a taste profile, and California producers are reliable,” says Sebastien Le Goff, service director and sommelier for the chain’s 27 restaurants.

With its lighter and varied menu, Cactus Club sells a lot of California white wines, and up to 50 per cent of the state’s wine sold in summer is white. The leader by far is Chardonnay, and Le Goff makes sure the two main styles are always available: the bigger oaky/buttery style and the lighter/fresh/crisp style. Examples of the latter are easy to find in Chablis, France and Niagara, Ont., but it’s no longer difficult to find the lighter, fresher style in California, says Le Goff. In reds, although Cabernet is standard, Calera Pinot Noir is a hit even at $30+ retail. Other pricey non-Cab successes have been Duckhorn Merlot (approximately $60) and Geyserville Zinfandel (approximately $50).

Whatever the grape, California wines give customers a beverage they know and trust as well as numerous options, which satiate their unending thirst for new experiences. Keeping staff informed about offerings remains pivotal to sales success. “Our California wine drinkers are more educated,” affirms McAskill of Vintages. “People are exploring more and different wines from California.”

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