August 16, 2007 / 3:10 PM / 10 years ago

California wines most featured by U.S. restaurants

3 Min Read

NEW YORK (Reuters) - U.S. restaurants are most likely to feature California wines that sell for less than $39 a bottle, according to a new report.

Start-up research firm Winemetrics LLC released its first annual "On-Premise Wine Distribution Report" on Thursday, ranking the nation's top 100 wine brands based on the frequency of their inclusion on restaurant wine lists.

Topping the list are Beringer, owned by Foster's Group Ltd., Kendall-Jackson, and Constellation Brands Inc.'s Robert Mondavi.

In fourth and fifth place, respectively, are Diageo Plc's Beaulieu Vineyard, also made in California, and UST Inc.'s Chateau Ste. Michelle, made in Washington state.

Winemetrics' data was gathered from over 10,000 casual and fine-dining restaurants in 20 states. The majority of the restaurants in the survey were casual locations, though upscale restaurants had more extensive lists.

Winemetrics Chief Executive Charles Gill told Reuters that such information can be useful to wine makers, distributors, restaurateurs and investors hoping to scan the industry's competitive landscape and gauge potential performance, since many consumers buy wine based on what they taste at restaurants. Consumers feel that by featuring certain wines, restaurants are endorsing those brands.

"Brand image is built on-premise, and volume is built off-premise," said Gill, a former wine brand manager who founded a company called Alambicor seven years ago. Alambicor recently changed its name to Winemetrics.

While sales of wine drunk "on-premise" -- meaning in restaurants or bars -- make up less than one-quarter of the volume of wine sold in the United States, such sales account for nearly half of the revenue, Gill said, due to the price mark-ups that restaurants put on the bottles they sell.

U.S. consumers spent $24.3 billion on wine in 2005, with $11.8 billion coming from restaurants and bars, Gill said.

The top 100 list is dominated by U.S. producers, with most coming from California. There are also 15 wine makers from France, seven from Italy, two from Australia and one from Chile.

Other brands near the top of the list include the independently owned Caymus and Cakebread as well as Diageo's Sterling Vineyards, LVMH's Veuve Clicquot, and Fortune Brands Inc.'s Clos du Bois.

According to the sample, the largest portion of wines consumed in restaurants sell for between $25 and $39 per bottle, according to the report. Those bottles would cost $13 to $19 at retail.

Red wines outnumber whites by a ratio of two to one, with Cabernet Sauvignon edging out Chardonnay for the top variety. Pinot Noir was the second most common type of red wine listed, a development Gill guessed was caused by the 2004 film "Sideways," in which a wine enthusiast espoused Pinot's virtues over Merlot, which is now third.

"'Sideways' did a number on Merlot. You can't discount that," Gill said, though he noted that Merlot far outsells Pinot Noir by volume.

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