Sometimes, the stars align: With sweet wine’s popularity increasing and consumer interest in authentic, traditional drinks on the rise, it’s no surprise that sangria is hot. The sangria category has enjoyed double-digit growth for the last several years, driven by new brands, new expressions and increasing consumer familiarity with the classic Spanish drink.
“Sangria has gained popularity over the past 10 years,” says Juan Coronado, corporate cocktail innovator for José Andrés’s ThinkFoodGroup. “If you went to a Spanish restaurant a decade ago, perhaps they had sangria. But now you can get it at all kinds of venues, not just Spanish places.” Ricky Febres, national marketing manager for Reál sangria marketer Shaw-Ross International Importers, agrees. “What Mexican restaurants did for the Margarita, Spanish restaurants have now done for sangria,” he says.
The Original Wine Cocktail
As sangria has grown more mainstream, on-premise operators have used mixology to transform the beverage, traditionally made from Spanish wine, brandy, citrus and other fruits, into a versatile and adaptable wine cocktail.
The Sky Terrace, a seasonal outdoor lounge on the 15th story of the hotel Hudson New York in Manhattan, centers its beverage program around sangria because of the drink’s accessibility. “It resonates with people,” says director of food and beverage Jonathan Knudsen. “But we didn’t want to approach sangria from a classic perspective. Instead, we came from a mixology standpoint.” The Sky Terrace offers traditional red and white offerings, as well as several signature sangrias ($16 a glass; $120 an 8-to-10-glass pitcher). “The classic red is the least popular of the bunch,” Knudsen explains. “People are looking to be a little more adventurous.”
The Berry Rosé sangria, which is made with Antinori Scalabrone rosé, Bulleit Bourbon, Cointreau orange liqueur, Rekorderlig Mixed Berry cider, strawberries, blackberries and lime wheels, is a particular hit at Sky Terrace. Another popular sangria offering is the Skinny Green Tea, made with Vicolo Pinot Grigio, Singani 63 (a Bolivian brandy), Caposaldo Prosecco, coconut water, Matcha Stevia syrup and lime juice, garnished with cucumber and lime wheels and a mint sprig. Rather than infusing the sangrias in advance, Sky Terrace prepares them to order. “When you sip sangria, the beautiful aromas and scents all come to life,” Knudsen says. “People associate these flavors with summer. Taking the essence of summer and translating it into a cocktail is a no-brainer.”
At Sugarcane Raw Bar Grill in Miami, lead bartender Jamal Giles prepares his sangria in advance, which allows the fresh fruit to infuse into the wine. “I would prefer that it sits for a couple days, but we’re almost never able to let it sit that long because it goes so quickly,” Giles says. Sugarcane offers two expressions ($8 a glass; $35 a pitcher): The red comprises Barefoot Cabernet Sauvignon, Bacardi Oakheart rum, and slices of red apple, strawberry and orange, and the white uses Barefoot Sauvignon Blanc, Bacardi Oakheart, and slices of orange, pineapple and lemon. Giles notes that sangria can pair very well with food. “The red sangria goes well with meat dishes—it doesn’t overpower them,” he explains. “The white pairs well with sushi and other raw items because it’s not too citrus-heavy or fruity.”
Spanish restaurants may not have a monopoly on sangria anymore, but they can still tap into tradition to blend old and new. At ThinkFoodGroup’s Jaleo in Washington, D.C., sangria ($8 a glass; $38 a 30-ounce pitcher) is the most popular item on the drinks menu. The restaurant’s traditional red sangria always uses a Tempranillo from either the Ribera del Duero or Rioja region of Spain. The wine is blended with a syrup made from macerated citrus and a variety of spices, which can include orange peel, cinnamon, cloves and laurel leaves. The syrup is prepared in advance, but the sangria itself is made to order. “It’s not pre-batched—it’s fresh and new. We don’t want it to get oxidized,” Coronado explains.
For groups of six or more, Jaleo offers a sparkling sangria ($52), made with 1+1=3 Cava and the same syrup of macerated spices. In the summer, the restaurant also offers a still white sangria, as well as Porrónes de Sangria ($22), a traditional offering comprising sangria and club soda that’s served in a Spanish pitcher called a porrón. “A porrón has a peak that allows guests to pour the liquid right in their mouths,” Coronado explains. “It’s very Spanish, very festive. You sell one, and everyone in the room says, ‘I want some of that!’”
Summer In A Bottle
The off-premise also reflects the continuing popularity of sangria. According to Impact Databank, depletions increased 10 percent in 2013 for leading brands whose primary label is sangria, a relative slowdown. Two of the largest bottled sangria brands were flat: Market leader Reál sangria ($8.99 to $9.99 a 1.5-liter bottle) added 2,000 nine-liter cases to reach 550,000, and No.-4 brand Yago Sant’gria (pricing varies by market) from Luxco held steady at 300,000. E&J Gallo’s Madria ($5.99 a 750-ml. bottle), the No.-2 standalone sangria label, rose 8 percent to 470,000 cases. Meanwhile, Biagio Cru & Estate Wines’ Lolailo ($8.99 a 1.5-liter bottle) advanced 37.3 percent to 460,000 cases, earning its second consecutive “Hot Brand” award.
“I expect Lolailo to continue to grow,” says Darren Restivo, marketing director and principal for Biagio. “The category of fruity and slightly sweet wines is big now, and I don’t think they’re going away.” He views sangria as a way for consumers to step into the wine industry and notes that Lolailo—a traditional sangria imported from Spain—sees strong conversions from beer drinkers. The brand recently launched a 187-ml. bottle and is introducing a 3-liter bag-in-box SKU this summer. “As far as the economy is concerned, the marketplace is lending itself to 3-liter boxes,” Restivo explains.
Laura Bogart, brand manager of ready-to-drink products for Luxco, has observed similar trends. “Our sangria drinkers are very loyal,” Bogart says. “We see a lot of movement on the 3-liter and 1.5-liter bottles.” The company has also observed an expansion of Yago’s demographic in recent years. “In the past, Yago drinkers skewed more toward the Latino population,” Bogart says. “These days, the average sangria drinker is often a millennial.”
The market for Reál sangria has also broadened in the last few years. The No.-1 standalone sangria brand in the United States has traditionally been more popular with older drinkers. However, Shaw-Ross’ Febres notes that its demographic has expanded to include all drinking ages and genders—particularly younger people.
The bottled sangria category does have its weak spots. Most of the major brands are available in both red and white expressions, but Febres notes that white sangria has been more difficult to communicate to the consumer, in part since traditional red sangria is more well known. “Consumers buy sangria at the supermarket,” he says. “If they don’t see the white next to the red, it’s difficult to sell the white by itself. The trade should display them together.”
Hot On Their Tail
The slowdown in growth for standalone sangria brands is due in part to successful sangria extensions to larger wine brands. One new entrant in particular has made a stir: Yellow Tail sangria. Deutsch Family Wine & Spirits launched the extension to the country’s No.-1 imported wine brand in September 2013, and it’s off to a stellar start. “We’ve been tracking well ahead on distribution and on depletions,” says Deutsch president Tom Steffanci. “We did 88,000 cases in the first six months. We’re forecasting the coming 12 months to be 220,000.” He notes that the company expects to significantly widen distribution this year: Deutsch launched Yellow Tail sangria outside of the typical chain cycle, and much of the initial build has been in independent accounts. “Chains are resetting over the next few months and we’ll see distribution triple,” Steffanci says.
The company sees enormous potential in the sangria category. “We were the first brand within our competitive set to add a sangria,” Steffanci says. He notes that Yellow Tail ($7 a 750-ml. bottle) is expensive by sangria standards, but that sangria in the $6-to-$10 range grew 21 percent last year, according to Nielsen, and he expects that trend to continue. “In two years, I think Yellow Tail sangria will be a top-four offering within the Yellow Tail family,” he says. “That would put it at 400,000 or more cases.” He notes that the company expects other major wine brands in the $6-to-$7.50 price range to release sangrias this year as well. Rex Goliath, for example, launched a sangria in April.
Deutsch is also experimenting with another underexplored area of the sangria category: the premium segment. Its Eppa brand, which it acquired in early 2013, is made from organic grapes and retails at $11 to $12 a 750-ml. bottle—far above other large sangria brands. “I don’t expect a lot of competition for Eppa,” Steffanci says, noting that the brand has done very well in the grocery channel, particularly at Whole Foods. “Consumers tend to be affluent, health-conscious women.” He expects that the brand will finish its first full year with Deutsch at 80,000 cases, double what it was before the acquisition, and that growth will continue as Eppa is built out as a national brand.
Dispelling Myths
Double-digit growth notwithstanding, sangria still suffers from a number of misconceptions. The most significant is that it’s exclusively a warm-weather drink. “Just because everyone assumes that sangria is a summer drink doesn’t mean it really is one,” Biagio’s Restivo says. “Lolailo has strong sales right through the winter.” Shaw-Ross’s Febres adds that the holiday season is a particularly bright spot for Reál, and top winter markets for the brand include the Northeast and Michigan, as well as warm-weather states like Texas and Florida.
Yellow Tail sangria and Eppa both see slight seasonal swings, and Deutsch’s Steffanci cites getting retailers to display sangria in the winter as a major challenge. “I think it’s almost self-fulfilling,” he says. “If retailers don’t support sangria in the winter months, it’s going to sell less. The seasonality is controlled by the gatekeepers.” He sees the problem fading over time as the brands grow larger, noting that Prosecco overcame a similar challenge a few years ago.
Likewise, bottled sangria is not exclusively limited to the off-premise. While Spanish restaurants tend to make their own house sangrias, many other venues either serve bottled offerings by the glass or use them as the base for their own sangrias. “We had planned very low on-premise volume for Yellow Tail sangria, but it looks like it’s going to be more than 10 percent,” Steffanci says. Reál sangria has enjoyed a similar pattern. “Chain restaurants are willing to use bottled sangria for the quality and consistency,” Febres says, adding that the brand’s on-premise business is growing.
Divided Category
Despite the proliferation of new brands, the old stalwarts still hold sway in many areas. ABC Fine Wine & Spirits, the largest spirits retailer in Florida, has struggled with sangria over the past year. “It’s a niche category for us, with just a few real players,” says merchandising and inventory manager Chris Larue. “These trends represent a reversal of what we had seen over the last few years.” The company, which operates more than 140 locations in the Sunshine State, has seen the most success with Carlo Rossi sangria. Yago’s 3-liter bottle and Franzia’s 3-liter bag-in-box are also doing well. Among
premium brands, Larue cites Reál, Eppa and Gallo’s Madria as standouts, but notes that “sales per SKU in the premium segment aren’t high compared to other categories.”
Overall, the market for bottled sangria remains strong. “People love that you can just twist off the cap and pour out a sangria that’s already made, rather than spending an hour chopping up fruit,” Restivo says. ThinkFoodGroup’s Coronado also sees value in both house-made sangria and bottled options. “If you have two hours for a picnic and you don’t have time to fix up all the ingredients, a ready-to-drink sangria is a good choice,” he says, adding that the fresh-made variety has its own advantage: “Making a sangria is the most fun thing ever.”