According to GuestMetrics, the overall average price for wine in full service restaurants and bars moderated slightly during the first quarter of 2013, the result of consumer trade-down to wine-by-the-glass offsetting the trade-up to higher priced wines taking place in the category. Similar to YTD off premise trends, there is very little in the way of underlying price increases taking place.

“While wine’s price/mix was up +1.0% during 2012 compared to the prior year, that moderated to +0.2% during the first quarter of 2013,” said Bill Pecoriello, CEO of GuestMetrics LLC. “As we wrote about earlier in the year, wine-by-the-glass took share from wine-by-the-bottle in 2012 as consumers remained under economic pressure, and this trend has continued into this year. While wine-by-the-glass accounted for 56% of wine sales in 2011, it increased to 59% in 2012, and moved up even further to 61% during 1Q13. However, somewhat paradoxically, while consumers continued to trade down from by-the-bottle to by-the-glass, when they do order bottles or glasses of wine, they are increasingly choosing more expensive wine selections,” continued Pecoriello. Based on data from GuestMetrics, while by-the-bottle saw year-over-year sales growth decelerate from -4.1% in 2012 to -4.7% in 1Q13, by-the-glass’ sales growth accelerated from +7.8% in 2012 to +8.8%, netting out in the slight acceleration in overall wine sales increasing from +2.6% in 2012 to +2.7% in 1Q13.

“During the first quarter of 2013, the average price paid for wine-by-the glass increased by +3% and the average price of wine-by-the-bottle increased by nearly 9%, continuing the premiumization trend we saw take place in 2012,” said Peter Reidhead, VP of Strategy and Insights at GuestMetrics. “The higher price paid was almost entirely due to mix with little to no actual rate increase in most price classes except slightly at the lower end. The lack of underlying price increases is consistent with YTD trends in the off premise channels. The Ultra-Premium segment continued to achieve strong share gains both in by-the-glass and by-the-bottle, despite consumers trading down to by-the-glass. Within by-the-glass, the Ultra Premium’s share of sales increased from 8% in 2011 to 10% in 2012, and reached 13% in 1Q13. In by-the-bottle, the premiumization was even more dramatic, with Ultra Premium’s share of sales going from 14% in 2011 to 18% in 2012, and reached 21% in 1Q13. However, despite the premiumization taking place in the category, this was more than offset by the trade-down from bottle to glass, resulting in the slight moderation in the overall price/mix in the category.”

“The wine category is displaying dynamics that are rapidly changing in terms of what consumers are buying. It is critical that restaurant operators have the accurate on-premise facts in to order to make decisions on which wines to offer and how to price them. While consumers are increasingly migrating from by-the-bottle to by-the-glass due to the differential in the price tag, they nonetheless continue to migrate to more expensive choices within each, which is important for restaurant operators to know when deciding what wines to offer on the menu,” said Brian Barrett, President of GuestMetrics. Based on data from GuestMetrics, the average price for wine-by-the-bottle was $46 while the average price for wine-by-the glass was slightly under $10 during the first quarter of 2013.