In the past that could have summed up the supermarkets’ attitude to fortified wine, as sharp price cuts on ports were the signal they had taken their gloves off for the festive season. But so far this year discounts such as 33% off Croft Extravagance port (now £6.65 in Sainsbury’s) and half price on Croft Purple Velvet (now £7 in Tesco) look pretty measured – especially compared to some of the eye-catching deals on sparkling wines we have become used to in recent years.
The change is a sign of the split taking place, most noticeably in the sherry market but, to some extent, in port too.
Regular reports in the mainstream media remind us that sherry is no longer just a drink for maiden aunts and vicars, but has won a whole new following thanks to the rise of Spanish gastronomy in the UK and sherry bars springing up.
But, as González Byass UK marketing director Jeremy Rockett points out, the traditional, unfashionable consumer still makes up a significant chunk of the market. They might only buy one bottle of sherry a year, and that is likely to be at Christmas – but when they do, they would love to have it on discount.
Rockett says: “A discount flags up on the shelf the fact that the product is there. We have found in the past that deep discounting – unless it is a silly price – doesn’t drive more additional volume than a shallow discount.”
He notes the cost of making fortified wines has risen sharply, partly because of rising duty on the spirits used to fortify the wines. So, while shoppers are eyeing the deals, importers are driving up average prices by bringing in super-premium offerings.
Graham Hines, UK director of the Sherry Institute, says: “Prices in the list for the Great Sherry Tasting this month include several wines at £60 a bottle, which you would never have seen some years ago.”
Rockett says: “Everybody has realised we have bodegas full of interesting stuff out in Jerez, which they could bring to market at good value for money. There is rising interest among independents who are saying: bring me interesting stuff – and so are consumers. It is an easier way to promote the industry than spending lots of money on advertising.”
Port is seeing a similar trend towards more premium but lower-volume products.
Mentzendorff managing director Andrew Hawes says: “There is evidence of a slow decline in the total volume of fortified wine sold in the UK, but this has been the case for more than a decade and is clearly driven by underlying demographic factors, as an ageing population of heavy users of the cheaper, sweeter fortified wines naturally declines.
“In marked contrast to this trend is the counter-balancing increase in sales of quality fortified wines such as port, which we have been experiencing for some time.”
Strong premium sales have helped Sandeman grow port sales by 39% so far this year. UK marketing manager Anthony Habert, at Stevens Garnier, says discounting isn’t necessarily a bad thing. “No-one can resist a bargain – the power of the discount is greater than the power of the price itself. Deep discounts can only be achieved by inflating the standard retail prices, which offer terrible value to the consumer. The net effect is that they drive consumers down the value ladder and offer fewer possibilities in terms of variety and quality.”
For Hawes, discounts can be a useful stepping stone to more premium wines.
“We often find consumers have been introduced to a category by promotions and have then moved on to a wider repertoire of styles,” he says. “We have also seen regular consumers being stimulated to not only purchase the product on promotion but also more premium styles – the so-called halo effect.”
So who will be the winner this festive season – sherry or port?
“At Mentzendorff we perceive port and sherry to be more complementary than competitive,” says Hawes. “What better way to begin the Christmas celebrations than with a glass of chilled La Gitana manzanilla, while Taylor’s LBV port is surely now as much a part of Christmas as Quality Street.”
And Stevens Garnier’s Habert sums it up: “Fortified wine.”