Sangria can shake ‘rock bottom’ party price tag and premiumize: Mintel
The drink is essentially a punch that usually consists of wine, chopped fruit and a sweetener - anything from sugar to lemonade and orange juice.
It's roots go back 2,000 years to Ancient Rome, when the Romans planted vineyards on the Iberian peninsula - the name comes from 'sangre' or blood that refers to the drink's color, which is often dark.
"While sangria is a relatively popular drink in Iberia, it has little in the way of an international presence - and when tourists are exposed to sangria, it is not always of the highest quality," Forsyth, who is global drinks analyst at Mintel, warns.
"Its biggest international market is the US, where it is especially popular among Hispanics, and selling well (albeit from a small base) in both the on and off-trade," he adds.
Sangria taps a number of trends that are attracting younger drinkers into wine and the wider alcohol sector, Forsyth says.
Sweeter, refreshing, fruitier flavors grab millennials
These include a preference for sweeter, refreshing, fruitier flavors, an interest in alcohol category blurring (sangria can often include spirits such as brandy as well as wine) and curiosity in drinks with a rich social history, he adds.
Spain, Portugal, the US, UK and Japan are the core sangria markets, Forsyth says, but he notes that it is generally sold at rock bottom prices.
"While the value segment should play a strong role in sangria's development, premiumization is key to its long-term success," he insists.
A new European Parliament ruling that only sangria made in Spain and Portugal can be called 'sangria' will help the drink in that respect, Forsyth explains.
This entered into effect on January 1 2014 and ensures that cheap imitation products cannot flood the marketplace, and the analyst says there are many interesting regional varieties of sangria, which fits increased consumer interest in regionality.
Forsyth explains that sangria's differ according to the fruit used, whether it contains, red, white or rose wine and what spirits are used to fortify it.
"Even the name can vary. For example, in some parts of Spain it's called Zurra and often includes peaches or nectarines, while in some regions of Portugal it includes cinnamon and 'medronho' brandy," the analyst writes.
Growing sangria sales in the States is due, in part, to the millennial preference for sweeter red wine blends and the rise of 'Moscato madness', Forsyth says, a shift away from the baby boom perception that sweet wine is de facto inferior.
Sangria and the rise of 'Moscato madness'
Noting that 18-24s in key European markets prefer 'stronger fruit flavored' wine (42% in Italy, 58% in France, 59% in Spain and 71% in Germany), according to Mintel data, Forsyth also highlights the Old World opportunity.
"Another market where sangria can succeed is China," he writes. "The Chinese have now become the biggest consumers of red wine globally, and red wine sangria can provide an accessible and affordable option for middle-class consumers still new to the acquired taste of red wine.
"One of the big attractions of red wine for the Chinese, apart from the positive cultural significance of red, is its health connotations, and sangria's serve with fruit can help to accentuate this perception," Forsyth adds.
Summing up his insights, the Mintel analyst says he believes sangria has a "golden opportunity" to increase currently minimal international sales.
Producers can do so by stressing the drink's regional identity and differences, to premiumise sangria and increase its appeal to variety-seeking millennials, Forsyth adds.