Wednesday, July 21, 2004

Large Wineries Losing Market Share to Small and Medium Sized Wineries???

Now, we ain't so good with cipherin' round here, but we're having a bit o' trouble figurin' out how small-to-medium sized wineries gained market share over big wineries.  You see, we happen to have shipment figures for California wineries last year.  The claim that small wineries gained 5 points of volume share does not seem possible.     
                                                                             2003                  2002
Total CA shipments      (in cases)                193mm               206mm 
Shipments from wineries >1mm cases       172mm               182mm
Shipments from wineries <1mm cases        21mm                  24mm
Small wineries % of total                                 11.0%                11.8%

Bronco, maker of "Two-Buck Chuck" grew by 5 million cases alone, and none of the other big guys reported material drops, so from where did the small wineries take their cut?!?!

When we look at revenue, small wineries probably sell for about 2.5x per case when compared to the big guys.  Let's assume its about $32 per case for the big guys and $80 per case for the little guys.  Therefore, we can assume that the .8% volume growth translates to about 2% in revenue (or $80/$32=2.5 x .8%).  Where did the article's 11 points of revenue gain come from then?


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