• by Karlene Lukovitz  @KLmarketdaily, August 17, 2007

Millennials' seemingly unquenchable thirst for Yellow Tail and other "approachable" brands targeted to consumers ages 21 to 30, such as Pinot Evil, Killer Juice and Dog House, helped push U.S. wine industry sales up 3.4% last year, according to the 2007 edition of the Adams Wine Handbook.

Overall wine consumption rose to 283.1 million nine-liter cases in 2006. Domestic wine sales rose 2.6% to 209.4 million cases, and imported wines rose 5.7% to 73.6 million cases.

This marked the industry's 13th consecutive year of solid growth. If the pace continues, the U.S. is on track to become the world's largest wine market by 2010.

Sales of wallaby-monikored Yellow Tail, the top imported wine, jumped by 7.3% to 8.1 million cases. As a growing number of "critter" wine emulators know, the brand's phenomenal leap to stardom since its introduction in 2001 has been driven not only by its taste-appeal to wine novices but by its distinctive brand name and label. (Not to mention a joint venture with importer W.J. Deutsch & Sons that gave YT out-of-the-box distribution in more than 40 states and savvy marketing programs that include liberal use of point-of-sale promotions and outdoor advertising.)

Even French wine producers have taken note of YT's animal attraction: A growing number of Burgundy wines are sporting new, consumer-friendly labels.

Among imports, another top-growth performer was Italian vintner Cavit (up 13.2%, to 3 million cases). However, among the top three domestic brands, only No. 2 brand Carlo Rossi showed gains (up 2.6%, to 12.7 million cases). No. 1 brand Franzia Winetaps experienced a 3.2% decline (to 22.8 million cases), and Twin Valley's 8.9 million cases represented a 5.9% decline.

The younger set is far from alone in developing its palate for wine. Indeed, Charles Forman, vice president/group publisher of the handbook's publisher, Adams Beverage Group, stresses that the industry's sustained growth is based on its success at appealing to an increasingly broad range of consumers.

According to a Gallup Poll conducted in July, wine now rivals beer as America's alcoholic beverage of choice. Among the 64% of Americans who consume alcohol, 34% now name wine as their beverage of choice (up from 27% in 1992, although slightly below the peak 36% reported in 2005), versus 40% for beer and 22% for hard liquor. Wine is the favored spirit among women (54% say it's their BOC) and those 50 and older (43%), but it's also the pick-me-up of choice for 28% of 18- to-49-year-olds and 18% of men.

Together, Baby Boomers and Millennials account for more than half of all U.S. wine consumers, Adams reports.

Packaging innovations are also helping to ferment growth. Screw-tops are becoming common among new brands, and premium boxed wines are seeing increased popularity because they're easy to transport and store.