A return to good health

11 June, 2010

ny doubts that Chile is one of the rising stars of the wine sector are dispelled by the presence of three of its brands in the top 10 fastest-growing wines – and in the 20 fastest-growing alcoholic drink brands.

Only Stella 4%’s relative youth and small sales base prevents Viña San Pedro from claiming the title of fastest-growing drinks brand of all, and it’s joined in the wine category’s roll of honour by Concha y Toro’s Viña Maipo and Isla Negra.

San Pedro’s success is also part of a double triumph for its supplier, Les Grands Chais de France, whose French brand JP Chenet also makes the list.

Tim North, UK director at Les Grands Chais de France UK, says some “deep-cut promotions” and “greater depth of distribution” in two existing customers’ stores were the drivers of San Pedro’s success.

But he adds: “We’ve also been working on product quality, which is very important. Promotions can get people to try a wine for the first time but quality keeps people coming back again.”?The New World’s other emergent force in the global wine industry, South Africa, is represented by Arniston Bay and First Cape. New Zealand also features strongly, with Villa Maria the seventh fastest-?growing wine brand and Oyster Bay at number 13.

Restored to health?A recovery in consumer confidence has seen wine sales move back into growth, with volumes up 4% in the year to March 20, passing the 1 billion-litre mark. Value sales were 7% ahead over the same period to just under £6.2 billion, according to Nielsen.

With that in mind, it’s little surprise to see some wine brands posting impressive high double-digit – or triple-digit in the case of San Pedro – growth figures.

For several brands the position reflects heavyweight price promotions, either unilaterally by major retailers or by the brand owners in partnership with supermarkets.

But for others, a growth in volumes has also been achieved at higher prices – Australia’s McGuigan being a case in point.

Paul Schaafsma, UK general manager for McGuigan’s supplier Australian Vintage UK, says the company has focused on product quality, marketing that introduces consumers to the wines and adapting wines to changes in the market. The result has been a 65% boost in sales figures.

“We’ve got experience in private-label which means we can fall back on that to satisfy demand for price promotions and protect the McGuigan brand,” says Schaafsma.

The introduction of Sauvignon Blanc and Pinot Grigio has tapped into changing consumer tastes – a trend the company hopes will continue with its forthcoming Semillon Blanc release in Tesco.

“In white, there’s a trend to fresh, aromatic styles and away from the big, buttery, savoury, oaked styles of 10 years ago,” says Schaafsma. “We’re focused on delivering what consumers want.”?Being nimble enough to adapt to changing consumer needs has also helped Arniston Bay, according to Barney Davis, brand and business development manager for the Company of Wine People.

Davis says a distribution deal with Percy Fox, signed last year, had helped Arniston Bay’s sales grow by 48% over the year.

The year also saw the launch of its Lighthouse Collection lower-abv wines and a programme to tailor its wine styles to suit UK palates. “Our strategy has been to focus right in on the consumer and determine exactly what it is they want from a wine brand to inspire loyalty,” says Davis.

Size matters?First Cape is up 47% and Steve Barton, director of supplier Brand Phoenix, says a growing range has helped fuel growth.

“We’ve got the largest portfolio to date,” he says, “with entry-point wines, bag-in-box and now 50cl bottles, which have created a lot of interest in the market. We’ve also had a lot of success with rosé.”?Bottle Green public relations and events director Sarah Thornton says Australian brand Andrew Peace – whose sales are up 45% – has benefited from having a real person behind the brand name.

“We all know that price promotion plays a significant part when you’re gaining distribution,” says Thornton, “but people do respond to having real a personality behind the brand.

“When we do the BBC Good Food Show people can come to meet the real Andrew Peace and taste wine with him.”?The Andrew Peace brand also benefits from having tiers across price points, Thornton says, so the brand filters into mainstream retailers such as Asda and Morrisons, as well as the top-end with the Wine Society.

Effervescent recovery?Arguably the biggest surprise in the list of fastest-growing brands is the presence of a Champagne in second position, at the end of a torrid year for the bubbly category.

Colin Cameron, commercial manager for Champagne at Percy Fox, puts Heidsieck Monopole’s dramatic growth down to a recovery in Champagne sales generally at Christmas, coupled with more frequent price promotions and increased distribution.

“We had more listings and we were in a greater number of stores with existing retailers,” he says.

“We increased our number of promotional spots in the off-trade – not deeper but more frequent so we made sure that if people were buying Champagne then they were buying Heidsieck Monopole.”?Better distribution, improved wine quality, more carefully planned promotions and changing styles have all played their part in the success stories of this year’s fastest-growing brands – and the one thing they have in common is hitting the consumer sweet spot in one way or another.

Schaafsma at McGuigan says: “There’s a lot of complacency out there and wine companies which aren’t delivering what consumers want, just the same thing over and over again.

“If you don’t adapt styles to be appropriate to consumer demand, you can get left behind.”?A look at the growth figures for the ones who clearly aren’t complacent shows just what can be achieved with a flexible and consumer-oriented approach to the market.

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