North Coast vintners celebrate a banner year for sparkling wine

It’s been a banner year for sparkling wine as consumers expand their thirst for bubbly well beyond New Year’s Eve - and North Coast producers are celebrating.

The growth reflects the continuing trend whereby consumers are buying more sparkling wine for everyday occasions and not just to mark special events. The largest sparkler producer in the country, Korbel Champagne Cellars, is based in Guerneville.

The sector also has received a big boost thanks to a rise in popularity of lower-priced Italian Prosecco, which has gained a tremendous following among millennials.

“I hate to say anything to spoil it,” Joy Sterling, CEO of Iron Horse Vineyards in Sebastopol, said of the trend. About half of Iron Horse’s production is in sparkling wines that sell from $40 to $375 a bottle.

“Our sales have been consistently high throughout the year... whereas normally it was overwhelmingly in the last quarter,” Sterling said, reflecting holiday popularity.

The data back up the anecdotes. While the overall wine market is growing at 2 percent annually, sparkling wine sales have increased more than 12 percent despite being only 6 percent of the entire market, said Jon Moramarco, an industry consultant and managing partner of the local business consulting firm BW166. California sparkling wines are growing at a rate of 11 percent by volume year to date.

The rise in popularity can be seen in local bars and restaurants. Patrons at K&L Bistro in Sebastopol, for example, love sparkling wines, whether mixed in the $10 bottomless mimosas served during weekend brunch hours or paired with raw oysters, said server Ali Spotelson.

The restaurant serves Iron Horse as well as Taittinger from France.

“We see it for lunch and dinner,” Spotelson said, adding that small bottles of Prosecco also are popular.

Korbel’s premium sparkling label is the top seller through supermarkets, drugstores, convenience stores and other retail establishments tracked by IRI, a Chicago-based market research firm.

The Korbel product brought in $105 million in sales over the past year, representing more than 10 percent of the overall sparkler marketplace, according to IRI.

“It’s been a good year,” said owner Gary Heck, who added his company will likely produce 1.5 million cases in 2016, representing about 6 percent annual growth.

Part of the effort to spur demand throughout the year has been introducing a Korbel cocktail every month as well as special seasonal packages for Valentine’s Day and summer. That strategy was augmented by a $6 million TV advertising campaign, Heck said.

Domestic growth has been mirrored with increases by foreign sparkling imports that this year are up 15 percent by volume, according to Moramarco.

“My outlook is still clear skies to come,” he said of the category.

Italian Prosecco was the leader, with a growth rate at more than 20 percent, and Spanish Cava registered a more than 9 percent rise in sales.

French Champagne grew 4 percent, lower than other imports, reflecting the heftier retail price at more than $40 a bottle, that puts it out of reach for many consumers.

The imports are not viewed locally as competition. Instead, most believe a rising tide of bubbles lifts all wineries across the world.

“They bring the millennials into the category,” Heck said of the Prosecco sales.

Moramarco compared millennials’ love of Prosecco to that of baby boomers’ embrace of white zinfandel that began in the 1980s.

“That was a pretty long run,” he said.

The continued popularity could put pressure on the market in the future, as much of the sparkling wine is made from pinot noir grapes. Popularity and prices for that varietal’s still wine have skyrocketed in the past decade in the aftermath of the 2004 movie “Sideways,” said Bruce Lundquist, co-owner of Rack and Riddle Winery in Healdsburg, which produces its own sparkling wine and assists more than 150 wineries in production of their wines.

Sonoma County growers averaged $3,519 a ton for pinot last year, which was a 67 percent increase over the past decade.

“That’s going to be a challenge when you start paying higher and higher prices for fruit,” Lundquist said.

The cost could have some producers turning to other grape varieties to make their sparkling wine for sale at under $20 a bottle.

“I think once you get above $20, there is a psychological barrier there,” he said.

You can reach Staff Writer Bill Swindell at 521-5223 or bill.swindell@pressdemocrat.com. On Twitter @BillSwindell.