Editor's note: This article appeared in the December 8, 2009, edition of Quirk's e-newsletter.

Moderately-priced domestic labels are the driving force behind wine's bright future, but don't invest all your money in Franzia stock just yet. The wine trade-down trend may not be as extreme as it is in other markets, perhaps because of wine's role as a symbol of status and sophistication. 

During the height of the financial crisis in 2008, shattered consumer confidence caused a 3.2 percent decline in the U.S. wine market. However, as confidence and spending picks up, Chicago research company Mintel predicts the wine market will stabilize and increase by 2.1 percent in 2009, putting it back in line with the market's 20 percent increase from 2004-09. 

"Value wines have helped consumers rethink their perceptions about wine. Domestic wines have proven to be somewhat recession-proof as unpretentious, economy-priced wines are fuelling recent sales," says Sarah Theodore, senior food and drink analyst at Mintel. "As wine finds its way out of the recession, it might be taking on a new form. The down economy has given impetus to boxed wine. Marketers have an opportunity right now to really play up the benefits of this type of packaging and finally eliminate its 'cheap' image."
 
Nearly one in five respondents appears to be status-conscious when it comes to drinking boxed wine. Consequently, 35 percent of those ages 21-24 say they would drink boxed wine at home, but not serve it to guests, compared to 19 percent of all ages. In addition, 35 percent of 21-24-year-old wine drinkers believe the wine brand they choose reflects their status to friends, compared to only 14 percent of all ages.
 
Mintel points to Black Box Wines of Walnut Creek, Calif., as a brand that brings sophistication and a luxury feel to the economy of boxed wine, suggesting that Black Box Wines' success indicates that Americans are ready to put aside their perception that all boxed wines are of poor quality and embrace box packaging for its cost and environmental advantages. Other environmentally-friendly and/or convenient packaging innovations (such as screw caps and on-the-go options) are also helping to drive growth, as are unique/nontraditional labels, celebrity wines and artisan, fruit and organic/fair trade wines.