Off-trade holds steady

05 March, 2010

Despite the heavy blows the off-trade has taken over the past 12 months, most notably First Quench’s collapse, the drinks trade appears remarkably resilient despite the recession.

When we consider the major drinks categories by value, all are showing growth. Only beer and fortified wine are seeing volumes decline – by 1% and 6% respectively. The volumes for RTDs are static.

So where is that extra cash going? Nielsen’s Graham Page points straight to the Treasury’s coffers.

“There’s been a 20% hike in duty over the past 15 months for all the drinks categories except spirits, which is around 17%. VAT went down from 17.5% to 15%

until December 31 but now that’s gone back up.

“If you look at the profile of the off-trade we get these positive? value numbers because of duty hikes.

“But really the off-trade has held up well given the problems it faces, like alcohol being the new tobacco, the duty issues and grocers’ high levels of discounting.”?The big news has to be that the spark­ling wine market has overtaken Champagne and is now worth £325 million. Offerings from the New World are jockeying for position in the top 10 against their big-volume cava and Prosecco counterparts. It’s clear that keen prices from sparklers have made consumers happier to pop a cork for lower-key occasions – and more often.

Meanwhile, despite some gloomy predictions, Champagne reported respectable figures last year thanks to a pick-up in Christmas sales?. It is now worth £324 million, up 4% in both value and volume.

Page says the still?

wine category, which is now worth £5.2 billion, has been largely buoyed up by rosé.

“The wine companies are having it really tough. Had it not been for rosé – especially Californian rosé – the figures for wine would have been far worse.

“The low acidity in the Californian pinks make them very easy to drink. Lots of people have moved over to drinking rosé who might have traditionally drunk cider and RTDs.”?Despite this, the cider category remains strong, reporting double-digit growth, yet again, up 16% in value and 13% in volume.

The trade broadly reported a successful Christmas but all hopes are once again pinned on a hot summer for 2010, to really make the sales figures shine.

In beer?, Page expects there to be more focus put on the 4% abv-strength sector rather than a push coming from brewers for premium lagers, while the recession continues.

Spirits have again been given a clean bill of health by the latest Nielsen figures, with sales up 6% from last year. Volumes are also up 3% and continuing investment by all the major players, including First Drinks’ £40 million package last year, will help keep the category buoyant.

After years of decline, the fortified wine sector has managed to pick up in value terms and grown by 2% over the past year.

Continued innovation and marketing support for RTDs – most notably Beverage Brands’ WKD TV campaign aimed squarely at its target market of 18 to 25-year-old? men – has resulted in a turnaround from the declines witnessed this time last year.

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English wine: a happy harvest for Christmas

All across England and Wales, vineyards are being harvested. Down winding country lanes come armies of welly-wearing conscripts wielding secateurs and buckets, ready to reap the rewards of our vines. Happily they come, their cheeks ruddy with pride. Half an hour later they’re crawling over muddy clods with lacerated hands, drenched in claggy juice and cold sweat, as if ploughing through an endurance race.

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