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features U.S. Wine Sales Reach New Record as More Retail Locations Beginning Off-Premise Sales Total wine sales in the United States increased 2 percent in 2012 over the previous year, reaching a new record of 360.1 million 9-liter cases with an estimated retail value of $34.6 billion. This is according to wine industry consulting firm Gomberg, Fredrikson & Associates. Of this total, 58.7 percent of all wine purchased in the United States was produced in California, accounting for 207.7 million cases with an estimated retail value of $22 billion. Minimum Wage Continued from Page 1 now beginning to heat up in Washington, has already been simmering in a number of states across the country. In 2013, 10 states saw increases in their minimum wages, including Arizona, Colorado, Florida, Missouri, Montana, Ohio, Oregon, Rhode Island, Vermont and Washington. In addition, a number of state legislatures are currently debating bills that would grant workers there pay increases as well. In New York, for example, there is a proposal that would raise the state's minimum wage to $8.75/hour, just shy of Obama's target goal. And in Minnesota, a proposed bill there would raise the minimum hourly salary to $9.50. Currently, Congress is considering the Fair Minimum Wage Act of 2013, a bill that would gradually over three years increase the minimum wage from its current level to $10.10/hour. The rate would then change each year thereafter, based on the rate of inflation. In addition, if passed, the bill would gradually raise the minimum pay of tipped workers until it reaches 70 percent of the regular minimum wage. 10 C onvenienceRETAILER May/June 2013 "The U.S. is the largest wine market in the world with 19 consecutive years of volume growth," said Wine Institute President and CEO Robert P. Koch. "Competition for retail shelf space and consumer attention is intense, so California's high quality, record winegrape harvest in 2012 could not have come at a better time. California vintners continue to respond to growing worldwide demand with a wide array of outstanding wines from regions throughout the state." "Wine shipments to the U.S. market climbed by nearly 50 percent since 2001, and it is likely that American consumption will continue to expand over the next decade as wine continues to gain traction among American adult consumers," said Jon Fredrikson of Gomberg, Fredrikson & Associates. "The amazing diversity of choices and exciting new offerings are attracting new consumers and boosting consumption. Among the key growth drivers are favorable demographics, a widening consumer base and increasing points of distribution in both on- and off-sale outlets." Wine sales in U.S. food stores and other off-premise channels grew 2 percent by volume and 6 percent by value in 2012. This is according to global consumer research firm Nielsen. California wines grew faster than the overall category by a full percentage point. By varietal in the table wine category, Chardonnay remained the most popular varietal with a 21 percent share of volume, followed by Cabernet Sauvignon with a 12 percent volume share, Merlot with a 9 percent share and Pinot Grigio with an 8 percent share. The largest percentage gains were made by Moscato, up 33 percent in volume with a 6 percent market share, and sweet red wines, up 22 percent in volume with a 5 percent share of market. Also of note was Malbec, which was up 21 percent by volume with a 1 percent market share. Shipments of sparkling wine and champagne reached 17.7 million cases in 2012, up 2 percent over the previous year. California sparkling wine grew 3 percent with Moscato based sparklers driving much of the growth. Sparkling wine shipments to the U.S. market in 2012 were at their highest level since 1987. "Consumers have more access to wine throughout the country, with wine-selling locations expanding by well over 50,000 from five years ago. Off-premise retail outlets grew 15 percent to almost 175,000 outlets, while restaurants and other on-premise outlets increased 12 percent to 332,000 locations in the U.S.," said Danny Brager, Vice President of Beverage Alcohol Practice at Nielsen. "Retailers recognize that wine is a large and growing category, even in economically challenging times, and tends to attract upper income consumers and all legal drinking age groups. Wine also pairs well with food, leading to larger, more profitable shopping baskets." For more information on the recent surge in U.S. wine sales within the retail sector, visit www.wineinstitute.org. n Businesses are currently required to pay tipped employees just $2.13/hour, a rate that has not changed in 21 years. Proponents of a federal minimum wage increase point out that such a move would not only increase the standard of living of many low skilled workers, but that it would actually benefit business and the country more generally. In a piece published in the Harvard Business Review, Zeynep Ton argues that there is a chronic underinvestment in labor in this country, resulting in one-fifth of U.S. workers being poorly remunerated, with bad schedules and no benefits. Ton points out that when businesses go out of their way to create better jobs for their employees, they support an improved culture of labor and contribute to the national economy, but also potentially maximize the profits of the business itself. "Today many retail managers believe that there is a trade-off between investing in employees and offering the lowest prices. That…is false," writes Ton. "When backed up with a specific set of operating practices, investing in employees can boost customer experience and decrease costs. Companies can compete successfully on the basis of low prices and simultaneously keep their customers and employees happy." Still, many leaders of business and industry remain skeptical that a minimum wage hike is needed, or that it would even in fact be beneficial. The main criticism that opponents of a minimum wage increase have made is that businesses will be forced to offset the cost of such an increase in ways that would ultimately harm both workers and the economy itself. Hiring of new employees will stall, and existing workers will be let go. Hours will be cut. The prices at retail establishments, restaurants and other businesses will be forced to increase. The ultimate result will be a renewed wave of unemployment and a weakened U.S. economy. In response to the proposal in the New York State Legislature to raise the minimum wage there to $8.75, the New York Association of Convenience Stores has expressed deep concern over the impact such a move would have on their industry. According to a statement issued by James Calvin, President of NYACS, the $1.50/hour wage increase could potentially cripple thousands of small independent convenience stores, which would not be able to absorb the added expense. Calvin argues that the ultimate result of this minimum wage increase for the convenience store industry will be an increase in prices and/or a reduction in job opportunities. "Between declining motor fuel demand, skyrocketing credit card swipe fee expenses, and the loss of tobacco customers to state-induced tax evasion, our overall sales are down. Thus, New York convenience stores are in no position to absorb a 20 percent increase in payroll costs," writes Calvin. "New York convenience stores cannot afford a minimum wage increase without eliminating jobs, scaling back benefits, inflating prices or a combination of the three." Still, there is some evidence that convenience stores can benefit when they increase their workers' benefits and wages. Oklahoma-based convenience store chain QuikTrip, in particular has been cited as a positive example of what can happen when a company invests in its workforce. QuikTrip has been listed 11 times as one of the "100 Greatest Companies to Work For," by Fortune Magazine, and the company's recent financial success has been in part attributed to its commitment to worker satisfaction. n

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