The UK is set to buck global trends, with growth in the wine category predicted for every year to 2019. Helena Drakakis reveals why
Growth in volume of wines priced £8 or more in the past year
Ask any wholesaler and they will tell you the same thing – wine is a complex category. Its fragmented nature means that there is a plethora of suppliers and a landscape of varieties, countries, origins and vintages to navigate.
However, according to analyst International Wine and Spirit Research (IWSR), it is a category worth trying to understand. While globally, wine sales will see an annual decline of 0.03%, the UK market is set to see 0.35% annual growth in the years to 2019. But what is fuelling this, and how can wholesalers take advantage?
The Foodie Boom
From pop-ups to street markets, the foodie culture boom sees no signs of slowing. In the on-trade, the rise of casual dining has made wine the drink of choice for food-pairing.
According to Bidvest Foodservice, wine can easily achieve 60% gross profit. To capitalise on this, the wholesaler has teamed up with Bibendum to offer its Vivas range, which comprises 250 selected wines, as well as launching its Chalk Farm selection to simplify the category for waiting staff and diners.
Wine in convenience
One retailer looking to extend his wine range is Alpesh Patel, who runs Londis Ferme Park Road in London. Next year, he will allocate a 400sq ft area in-store for premium quality wines, which are growing in popularity in his area.
According to Shaun Heyes, channel controller for wholesale and convenience at Treasury Wine Estates, retailers should be looking to stock more premium £8+ wines: “In the past year, wines priced at that level have grown at 15% in volume in convenience,” he says.
Supplier Concha Y Toro agrees that category growth in wine is being led by convenience, but head of communications Ben Smith cautions that retailers must stock carefully. “There is a risk of overstocking on everything. But if done well, and if retailers focus on best-sellers, the category represents a great value opportunity,” Smith says, adding that retailers can educate themselves by using the company’s digital resource, WineWise, which contains information on best-sellers, as well as offering planograms.
Lighter and chilled As the weather turns cooler, consumers increasingly veer away from fuller-bodied wines to lighter varieties and those that can be chilled. According to UK drinks distributor Matthew Clark, consumers are increasingly preferring elegant wines with refreshing acidity and lower alcohol over heavier styles.
This also aligns with a trend towards quality and more food-friendly wines, which is expected to continue. The company has seen a spike in demand for grape varieties traditionally grown in cooler regions, including Austria, New Zealand and Germany, with volume sales of Sauvignon Blanc up 12%, Pinot Noir 22% and Pinot Blanc 27% – something wholesalers should bear in mind when planning next year’s range.
Simon Jerrome, Matthew Clarke’s wine purchasing director, says: “Consumers are now more-wine savvy than ever and appreciate the craftsmanship involved in cultivating grapes in often challenging climates – realising also that these wines are often synonymous with ‘high quality’.”
New world and fusion rising
Growth in the market continues to come from the New World, with still and sparkling wines from Argentina up 36%, Chilean wines up 21%, wines from New Zealand up 17% and Australian wines up by 3%. These should therefore be areas of focus for wholesalers next year.
You would also be wise to take note of the decline in rosé and make it less of a focus, says Concha Y Toro’s Smith. Meanwhile, Treasury Wine Estate’s Heyes flags up the growing popularity in fruit wines: “Over the past year, fruit wines including the likes of Blossom Hill Spritz have witnessed a growth rate of 49% in convenience and impulse. Now, there are key new players in the wine market that will drive volumes and profitability even harder.”
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Concha Y Toro believes that today’s younger consumers will be looking for something more exciting than just still wine – whether it is infusion-innovation products that came onto the market this year, such as Echo Fall’s fruit infusions range, or wine brands’ activity targeting younger shoppers.
“Consumers need to be persuaded of the benefits of value-added wine,” says Smith. “As consumers begin to see fewer and fewer sub-£5 offerings in the market, wholesalers should look to stock wines with value-added messaging that will appeal to retailers and shoppers.”
Smith adds that wine positioning is also changing. The company’s own Frontera brand is directly appealing to millennial shoppers through sponsorship of the Brit Awards 2017, and via on-pack competitions to win concert tickets. Next year, Casillero del Diablo will be sponsoring Sky Cinema, and Cono Sur will sponsor next year’s Tour de France.
The Office of National Statistics reports that the proportion of adults who drank on five or more days in a week has declined by 33% since 2005. In fact, drinking is down to 1979 levels.
Andrew Turner, director of wine at Halewood Wines and Spirits, predicts that with an increased focus on moderation, alcohol-free will be a major trend next year. “On any social occasion, there is likely to be a non-drinker or someone who is going ‘dry’ for a spell,” Turner says. “Sales of alcohol-free wine are booming in the UK. The category has seen an increase of 39% value and Eisberg, one of our brands, is leading the way with a sales increase of 40%.