Wine Report 2007: Innovation is favourite to grow sector

13 July, 2007

What suppliers and retailers really want is something that will draw in new consumers, and discounting gets a thumbs down.

What suppliers and retailers really want is something that will draw in new consumers, and discounting gets a thumbs down

More innovation and less discounting are the keys to getting the wine market growing again.

We asked more than 40 wine suppliers and retailers what it will take to get the wine market - which climbed 4 per cent, a little ahead of inflation, last year - back into serious growth.

Innovation and drawing new drinkers into the market got 32 per cent of the vote, coupled for many with less discounting , which got 21 per cent of votes.

Some people are more specific about innovation than others - it's hard to know if those who stress the need for "genuine innovation" and "more new ideas" have any idea what they are looking for.

But others have clear thoughts on what will drive the market forward.

Keith Lay, of Ehrmanns, is among those who think new packaging - such as Arniston Bay's "grab and go" pack - is the key to drawing new types of wine drinker.

For others a new take on marketing - especially targeting ex-RTD drinkers and the over-50s - and education with a view to trading up are what is needed.

Rosé is seen as a big driver for the market, as well as an important entry point. Food is seen as being another important factor. Castel's Anne Burchett wants to see wine become a bigger part of everyday meals, and much of Sainsbury's POS focuses on giving customers food matches for its wines.

What will it take to get the wine market back into growth?

"It will take some real innovation to encourage new consumers into the wine market. We can't continue to rely on existing consumer groups drinking more and more. We need to get new drinkers in. That could mean more developments which will be anathema to the traditionalists - championing more neutral grape varieties, sugar additions, new packaging formats etc."

Andrew Lamberth, Waverley TBS

"Pressure groups ceasing to blame the wine industry for binge-drinking and major alcohol-related social and physical ills would help. The problem is a cultural one - a topic more worthy of official bodies' attention perhaps? From our side, as an industry we need to deliver more innovation to attract new consumers and keep alive the interest of current converts." Louise Hill, Stratford's Wine Agencies

"The wine market needs to find ways to encourage diversity without trying to make people into wine experts - to try to get across the availability of new, exciting, diverse varietal wines as well as the enjoyment factor of experimenting with wine." Keith Lay, Ehrmanns

"The market needs to make a move away from selling on price. The kind of consumer who shops in Starbucks and goes to the cinema is happy to pay a premium for these experiences, and yet still expects to buy their wine on discount. As long as this model persists, the market will struggle for growth."

Anonymous supplier

"Rosé wines are the perfect vehicle to bring new customers into the market and, as part of the growing trend for drinking rosé wine, we should see more new consumers entering the category."

Mark Tinsley, Gallo

"As an industry, we need to be more emotional in our approach to communications, it's no good just spouting the same old dry wine speak. We have to know what consumers want and work out how to get them properly engaged, whether that is through innovative packaging design, NPD, PR, advertising, web presence or sponsorship. And the retailers have to work effectively with their suppliers to effect real change and growth."

Anonymous supplier

"Wine has to compete with other alcoholic beverages and needs to appeal to a younger, emerging market - the next generation of wine drinkers. Spirits, beer and RTDs have huge budgets and wine companies need to market their products effectively to gain a greater share of the consumers' attention."

Christopher Payne, Moreno Wines

"Now that there is an increasing likelihood of more control, whether voluntary or legislative, over the consumption of alcohol in the UK, it seems unlikely that alcohol consumption in total is likely to rise. Therefore for the wine off-trade market to grow, it will have to steal share from both the on-trade and from other alcohol categories. Demographic factors may render this unneccessary as the wine-drinking socio-economic classes and age-groups are set to grow faster than those that are less disposed to wine consumption."

Justin Howard-Sneyd, Waitrose

"A sensible approach to duty increases from the chancellor, preferably going back to where we were five or 10 years ago."

Fiona Barlow, Bottle Green

"Any growth needs to be managed responsibly and the current plethora of half-price promotions is not a responsible way to grow the category in the current climate."

Lynn Murray, Hatch Mansfield

Nick Leonard, Chalié Richards: "Persuade multiples to offer a larger variety of more interesting wines rather than mostly big brands that offer little differentiation."

Nick Leonard, Chalié Richards

"More interesting wines and passionate people selling them."

Philip Addis, Great Western Wine

Other ideas

- Use good PR and press endorsements on neck tags and shelf barkers

- Recognise the important over-50s sector and encourage them to trade up

- Produce wines that will appeal to people in their 20s

- Convert uninvolved drinkers into wine-lovers.




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