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MOSCATO : IS IT A FAD OR HERE TO STAY?

It's the No. 3 white wine in the United States, more popular than Riesling or Sauvignon Blanc. It's Moscato. About 3.6 percent of the wine sold in the U.S. last year was Moscato, according to Nielsen data for off-premise retail sales, making it the fastest-growing style of wine stateside: up 73 percent in both volume and revenue from 2010. That's on top of a 100 percent spike the previous year.
"You're probably talking about 7 million cases for Moscato that didn't really exist five years ago," said Tom Steffanci, president of importer W.J. Deutsch & Sons, whose Yellow Tail Moscato is one of the top labels in the market.
"Moscato" is a broad category, made from the Muscat family of vinifera grapes, usually white, that grow in virtually every major winemaking country (another alias is Moscatel; Muscadelle is a different grape, while Muscadet is an appellation in France's Loire Valley). It is one of the oldest identified winemaking grapes, but until recently, it was best known as the variety behind Piedmont's Asti Spumante.
The style of Moscato that has enthralled American drinkers is native to Northern Italy, lightly sparkling (frizzante) and fruity, with low alcohol levels (7 to 9 percent) and a few grams of residual sugar. "We introduced Barefoot Moscato in 2008 because many of our consumers were asking for a sweeter, light-bodied wine," said Stephanie Gallo, vice president of marketing at E. & J. Gallo. The company's prescience paid off: Barefoot is the No. 1 Moscato brand in the U.S., while the company's Gallo Family Vineyards bottling is third. Gallo now produces Moscato in seven different brands, with three more SKUs on the way.
Steffanci believes that while other categories, like Malbec, have shown muscular growth in the U.S. recently, the Moscato phenomenon is different. "I think this is a category buster," he said. "Thinking of it the way we do as wine professionals may not be the way to look at it." He predicted that the Yellow Tail Moscato, which was only launched last April, will reach 800,000 cases next year—a full 10 percent of Yellow Tail's volume.
Importers likened the role of Moscato to white Zinfandel, wine coolers and sweet rosé, entry-level categories that have been in decline. But several dismissed the idea that the drink would prove a brief fad. "I think it's a trend that's here to stay. I think you'll see two, three, four years of this crazy growth," said Marc Taub, president of Palm Bay International, which imports five Italian Moscatos, including Cavit.
The wine's sudden ubiquity is undoubtedly helped by its appeal across a range of demographic groups. "If you look at where Moscato volume is coming from, it's young and it's old. It's African-American and it's Hispanic, as well as white. It's in the cities and the suburbs," said Steffanci.
Younger drinkers are playing a big part; Nielsen data indicates that more than half of Moscato consumers are under 45. "Millennials are driving the success of this category," said Gallo. Moscato has also recently enjoyed a pop culture presence. Hip-hop tastemakers Kanye West, Lil' Kim, Drake, Waka Flocka Flame and DJ Khaled have all given the wine a nod in songs or videos. Real Housewife of Atlanta NeNe Leakes is developing a "Miss Moscato" line. Moscato has proven versatile as a mixer—partnered with vodka, it has become a nightlife staple.
Why didn't Moscato catch on sooner? Matteo Marenghi, director of the Oltrepò Pavese appellation in Northern Italy, said that traditional drinking habits relegated it to a dessert companion. "In the United States market, the consumer is saying that Moscato is a wine you can drink even during the day, with good meals or without," he said.
In Italy, America's Moscato mania has provided a modest but welcome lift amidst economic turmoil. "There's a crisis now, so winegrowers are not [typically] planting new vineyards, but they are planting Moscato," said Marenghi, who reported that the American taste for Moscato has helped restore its cool among Italian drinkers as well.
But the sudden surge in demand has put a strain on worldwide supply. "California doesn't seem to be able to put it in fast enough, and they're tapping resources from Australia to Italy to Spain to Portugal, anywhere that Moscato grows," said Taub. Casella Wines, the producer of Yellow Tail, delayed its Moscato launch for a year to source enough fruit for a meaningful production level, and the company continues its scramble to plant new vines, connect with growers and hunt down existing juice. In Italy, meanwhile, "pricing [of grapes] has definitely been impacted, and pricing has had to go up on certain of the brands. I think you'll see more of that in the coming years," predicted Taub.
Industry members disagree on whether buyers will tolerate higher prices. "I don't think the consumer's going to be terribly tolerant of higher prices of Moscato. I don't see $12 Moscatos being a big part of this market," said Steffanci.
Gallo, on the other hand, is betting on a midrange offering in an upcoming release under the Ecco Domani label. Palm Bay's bottles grown in the official Moscato d'Asti DOCG, priced at around $14, are selling well, if not as wildly as cheaper generic Moscatos. With these wines, importers are eyeing on-premise, by-the-glass sales in hopes that Moscato will prove a stepping-stone wine for connoisseurs in the making, and not a dead-end trend.