Dan Jago pointed to cider and spirits in particular as doing more to capture drinkers’ imaginations and added: “It’s less scary to choose a bottle of cider than a bottle of wine.”
He believes the ongoing battle with the health lobby and tough economic conditions are the other greatest challenges the wine industry faces.
Jago told OLN: “Wine remains for most people a luxury and when economic conditions are tighter it becomes an unaffordable luxury. We have seen a large number of consumers leaving the wine category – not always to go somewhere else but because they can’t afford to consume wine like they used to.
“Moderation has become more prevalent. Less volume was sold in the last year and people are becoming more aware of what moderation means.”
But he added: “If people are willing to drink less but drink better then that’s good for all of us.”
A new batch of Tesco Finest wine has just been launched, and Jago said: “It’s extraordinary – after seven years at this job I am still as excited by the new range of Finest released as I was seven years ago.”
Tesco has also recently relaunched its entire Finest range and Jago said wine is “incredibly important part of that relaunch” because wine makes customers become “very emotionally attached to the business”.
He believes the past year has seen the entire trade – from producers to suppliers to retailers – “reviewing their raison d’etre” and figuring out which consumers they are trying to sell.
“You look at the activity going on out there and if you say imitation is the greatest form of flattery then I think we have been very flattered this year,” said Jago.
“I think it’s been a year where Tesco has continued to lead the industry. We have been stretching boundaries.”
Jago, who said he “doesn’t want to be second at anything”, added: “We are pleased with the progress we are making in the wine category.
“It’s been a complicated year for the customer. Prices are rising through increased taxation, lower availability and exchange rates, and we have seen the customer having to pay more for the same wine. I don’t think that’s fair.
“We have made sure we have a fantastic entry level from £3.19 right through to Finest, continuing to set the benchmark for premium own-label.”
One of Dan Jago’s biggest bugbears is the lack of innovation in the wine market and he said Tesco is now taking a more proactive stance to drive creativity.
He said it had decided it “would be better if we led it” rather than waited for happen, because after inviting the trade to pitch ideas to the team at successive London Wine Fair events had proved innovative ideas are few and far between.
“There’s a lot of innovation going on but it’s refinement rather than revolution,” he said.
He pointed to the Tesco Wine Community – which now has more than 20,000 online members – along with co-buys and inciting Facebook fans to design a new Tesco South African wine as recent innovations, while pointing to additions of varieties like Pecorino to the Finest range as evidence of its willingness to take risks.
“It doesn’t always work, but we love trying new stuff and experimenting with it,” he said.