Retailers should find some comfort in the performance of the top 20 wine brands, which have enjoyed average growth of 14 per cent - 12 per cent higher than the take-home light wine market overall.
Eleven brands grew sales, including seven at more than 20 per cent. Top 20 newcomers FirstCape and Calloway Crossing performed significantly above that - making up for the nine brands which saw sales value drop.
Constellation's Australian brand Hardy's has maintained its top position, although it has lost 5 per cent sales by value in a market dominated by wine oversupply issues.
The US giant's Cape brand Kumala, a Vincor brand before Constellation snapped it up last year, was highlighted as a star performer in OLN's 2006 Brands Report. Since then, sales have drop ped 25 per cent in value and 26 per cent in volume. Constellation International boss Jon Moramarco says Kumala's former owner Vincor put prices up just before it was sold to Vincor, and it decided to retain those prices.
"The majority of the drop in sales is attributable to Vincor's price increases, which had a knock-on effect on sales. Retailers were saying they couldn't promote it at £3.99 any more," Moramarco says. Constellation plans range extensions in 2007 to support Kumala.
Californian favourite Gallo has leapfrogged over fellow American Blossom Hill, enjoying value growth of 23 per cent during 2006. Its rebranding last May, with Gallo Family Vineyards replac ing E&J Gallo on labels, can only have strengthened its consumer appeal. Marketing director for Western Europe Jane Hunter says: "It's been an excellent year for Gallo Family Vineyards."
Hunter says the rebranding has been well received by both trade and customers and picks out the brand's White Grenache and White Zinfandel as having performed particularly strongly.
Brand Phoenix's South African range FirstCape has had the most impressive sales growth at 131 per cent, propelling it into the top 20 for the first time. Ranked at number 15, it has toppled Namaqua to become the second best-selling Cape brand after Kumala.
Brand Phoenix director Steve Barton says several factors have contributed to FirstCape's rapid growth, including an increase in the number of SKUs to 15 . Barton says the mid-priced Limited Release tier has accounted for 60 per cent of sales, but the entry-level First Selection wines have also proved successful.
Brand Phoenix is planning additions to the range and wants to increase FirstCape's market share by targeting independent s. "We still only operate within the top seven or eight accounts in the UK, holding 59 per cent market distribution," Barton says, "so we're going to increase distribution into the independents ."
While he does not deny he would like to see FirstCape close the gap on Constellation's Kumala, he thinks it's better for all concerned if Kumala performs well. "We all agree each big category needs three or four big brands and this will create more interest around South Africa," he says.
McGuigan Simeon's Australian Calloway Crossing has enjoyed the second-largest boost in sales and is the second new entrant to the top 20. Its value has increased more than its volume, by 60 per cent and 39 per cent respectively, so shoppers are paying more per bottle.
Th is also shows Australian wines can grow value in the mass market. Other s enjoying growth are Wolf Blass and Lindemans with volume and value figures only a few percentage points apart - quite an achievement given the over supply and heavy discounting of Antipodean wines in the multiples. But Jacob's Creek, Banrock Station and Rosemount have seen sales drop, probably for those very reasons.
The two top 20 brands that experienced the biggest drops in sales are best-selling South African brand Kumala and recently re launched Rosemount.
Australian brand Rosemount has been struggling for a while and dropped 32 per cent sales by value to December.
Foster's November revamp of the brand was too late in the year to impact sufficiently on 2006 figures. Just before the re launch, the group's European managing director, Peter Foster, told OLN the brand needed to stand out again and he wanted to see it back in the top 10, making distribution gains.
The European contingent in this New World-dominated chart is represented by Chenet and Piat d'Or, although only Chenet has grown its market share.
Tim North, UK director of Chenet supplier Les Grands Chais de France, says: "The brand sells well off promotion and it's down to the quality of the product. We've been doing less deep promotional activity over the past 12 months."
With European producers increasingly realising the value of strong brands, perhaps next year's top 20 will be a more cosmopolitan offering.
Brand Phoenix range FirstCape is a newcomer to the top 20 and has enjoyed a spectacular sales boost of 131 per cent by value on 2005. Its three-figure rise makes it the second best-selling Cape wine in the UK market, overtaking Raisin Social's Namaqua and gaining on Constellation's Kumala. Brand Phoenix director Steve Barton says sales were boosted by range extensions last year. Supermarkets have been the major growth area, but a push into other sectors is planned.
Top 20 wines
Brand Supplier Sales £m % Change
1 Hardys Constellation 233.6 -5
2 Gallo E&J Gallo 231.9 22
3 Blossom Hill Percy Fox 226.0 6
4 Jacob's Creek Pernod Ricard 149.7 -3
5 Stowells of Chelsea Constellation 102.2 -7
6 Wolf Blass Foster's EMEA 91.3 27
7 Kumala Constellation 88.3 -25
8 Lindemans Foster's EMEA 79.1 15
9 Banrock Station Constellation 67.4 -10
10 Echo Falls Constellation 55.9 34
11 JP Chenet Les Grands Chais 50.5 30
12 Montana Pernod Ricard 32.9 21
13 Concha & Toro Concha & Toro 32.5 -1
14 Piat d'Or Percy Fox 30.6 -12
15 FirstCape Brand Phoenix 29.2 131
16 Namaqua Raisin Social 27.7 11
17 Rosemount Foster's EMEA 26.2 -32
18 Oxford Landing Negociants 25.4 11
19 Calloway Crossing McGuigan Simeon 23.1 60
20 Isla Negra Concha & Toro 21.6 -2
Nielsen MAT to Dec 30 2006, GB off-trade