Let battle commence

22 November, 2013

"Wine has been and will continue to be one of our hero categories. I can’t dispute its growth and it shows no real sign of letting up,” says Simon Cairns, wine trading manager at the Co- operative Group.

With a shop in every major postcode, the Co-op wants to become the hub of local communities and step into the gap left by now defunct off-licence chains.

“Last year was our biggest ever for wine sales, our 10th consecutive year of growth in terms of the wine business,” says Cairns. “This year we look like we are going to smash last year’s target – we are 5%-7% up week on week versus last year – which would be a phenomenal result.”

The Co-op is competing against the other supermarket groups moving into convenience – especially Sainsbury’s and Morrisons – but hopes its eclectic, 440-strong wine range and ethical reputation will help it to win out.

With this in mind, it recently released a premium tier of Truly Irresistible own- label wines, including a Pays d’Oc Viognier, a Loire Chinon and a Galician Godello.

Cairns hopes the strength of the Co-op brand – along with an increase in consumer confidence – means the range will draw consumers to buy wines they wouldn’t have dared to try in the past.

“People are less cautious about what they spend compared with a year ago when things were really tough, and customers are prepared to take more of a risk. Last year people played it safe and went for tried-and-tested wines such as brands, Pinot Grigio and New Zealand Sauvignon Blanc, because they knew what they were getting.

“This coming year I hope customers will feel they have the discretion to say ‘I like Pinot Grigio, but I will try a bottle of Gavi or Godello’ — as long as there is something that encourages them to see that stylisti- cally it is the type of wine they like to drink, and not a complete leap of faith.”

RANGE STRATEGY

Wine buyer Ben Cahill explains the thinking behind the range. “We wanted to stray off the beaten track,” he says. “There are so many wines we think will be suitable for the vast majority of wine drinkers, but because people are a bit frightened of wine we make it easy for them by piggy-backing on the Truly Irresistible range we have had in stores for a long time now, so people know the brand.”

Cairns adds: “We are waiting with bated breath to see how well they are received.” Own-label makes up around 41% of the

Co-op’s wine range and Cairns is looking into bulk shipping to cut costs while keeping quality high.

He is also running a project to cut the weight in the Co-op’s glass bottles to save CO2 and packaging costs.

The Co-op’s own vineyard has just released its first commercial vintage. Just 3,000 bottles are going on sale in shops near the vineyard in Down Ampney, on the edge of the Cotswolds, and Cairns is planning a sparkler at some point in the future.

A range review is coming up in February and Cairns plans to change the way wine is merchandised. At the moment countries are grouped together and bottles range from low to high price. He plans to put lowest-priced wines on the bottom shelves, promoted lines on the shelves above, with higher-priced wines moving up the shelves. The new Truly Irresistible lines will be merchandised together, as will Fairtrade wines.

Cairns is working on getting more information on to shelf-edge barkers without obscuring prices. The new-look tags show a sliding scale, for example of dryness to fruitiness, or light to full- bodied, to give consumers a visual clue to wine style.

Hallmark has created a box to hold gift bags, so the Co-op can stock them on shelves next to fine wines rather than on a hanging strip. “We are trying to make the fixture more occasion-focused, around gifting for example,” says Cairns.

In shops that already have the new look, that should come into its own this Christmas when the Co-op is planning a massive push on sparkling wines.

While the Co-op has around 9.4% share of the UK wine market, according

to Nielsen, it has just a 3.7% share of Champagne.

This Christmas all grande marque Champagnes will go into gift boxes, after sales data revealed that nearly all customers who bought Champagne also bought a card.

“If you can almost pre-pack in a gift box it sells the occasion to the customer,” Cairns says.

OPPORTUNITIES

Prosecco is also a massive seller for the chain. “Our sparkling sales are up 60% year on year, and if you think about the weather and the time of year there is no real logic behind it,” Cairns says. “In the past sparkling has been seen as a drink for special occasions so it has always under-traded in convenience. Now Prosecco is becoming more of a weekly drink, and that success is starting to filter back into convenience, where people will pop in and buy a bottle of Prosecco for a midweek drink.”

Cairns predicts a big opportunity for smaller bottles. The Co-op currently has some 18.7cl bottles, but he wants to look at half-bottles and 50cl aimed at two people sharing midweek.

But he warns the trade not to push artificial, self-serving, so-called trends – such as 5.5%-abv wines, which cashed in on a tax break. “There are trends that are industry pushes rather than customer pulls. If you go back a year or two 5.5%- abv wine was a big industry push, but customers didn’t pull it through because they didn’t understand what it gave them, other than a bottle of wine that contained less alcohol.

“The customer should direct which course the industry should take and not vice versa. We should be more responsive to what customers are telling us they want, rather than trying to force things upon them.”

Cairns is keen to emphasise that the Co-op has a store in every postal district — 2,800 owned by the Co-op and a further 1,000 run by independent co-operative societies – so his biggest challenge looking to the festive season is to keep all of those stocked, and to make sure that when the chain runs national ads for its wine promotions, customers can indeed buy them in every postcode.

“For me it is making sure the offer is available in-store. The plan is strong, it is now all about getting stock to the right place at the right time. We don’t want to disappoint people.”




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