Wine drinkers will spend more if incentive is right

30 May, 2008

Research shows consumers will trade up, but experts warn UK is 'cheapskate' and price-conscious

Despite the faltering economy, consumers can still be persuaded to trade up

in

wine , according to research unveiled at the London International Wine Fair.

A Wine Intelligence study found that regular wine drinkers would rather ditch sweets and chocolate

as they feel the squeeze. Most wine drinkers believe

prices in the off-trade have not risen as fast over the

past six months as in other categories, including bread, fish, poultry, cheese and coffee.

Neil Barker, UK commercial director for Foster's, said: "There's money out there if you can get the buzz and the excitement. Within the off-trade, without any question, wine is great value."

But the UK is a "cheapskate nation" with the majority of consumers not prepared to spend more than £5 on a bottle of wine, according to Robert Joseph MW.

Speaking at the Wine & Spirit Trade Association's seminar, Joseph said: "When chocolate costs 50p or

£1, it's

easy to pull that out

of your pocket, whereas a £5 bottle of wine is 5% of a £100 basket.

"How are we going to get someone to spend £5 on a bottle of wine when you can fly to Prague for £5?

"The biggest problem in this country is that we've not made wine aspirational. It's down to us to make wine aspirational in the same way that an iPod is more aspirational than a cheap alternative.

"We have a focus here on price rather than quality, with no respect for traditions. We celebrate the cheapness."

Tesco BWS chief Dan Jago warned that consumers were increasingly price-conscious and many would not respond to efforts to justify higher prices through marketing and in-store theatre.

"Consumers like the idea

they can buy wine for a bit less than they were happy to pay ," he said. " The challenge is: how do we persuade them to spend a little bit more?

A lot of people

don't want to be forced to trade up, but that's not to say it's not possible.

"We mustn't forget about consumers for whom price is a very important part of their lives."

Matthew Dickinson, commercial director at Thierry's, called on the industry to unite. "Unless we operate more collectively to get consumers to engage a bit more, we are going to be stuck not making the sort of margins we want to make."




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