The next big thing for the wine trade

29 May, 2015

Innovation, economic recovery and education have beaten lower duty to become the top tips from suppliers looking at what could bring the UK wine market back into growth.

Sixty-two per cent of wine suppliers polled for OLN's Wine Report said product innovation was the key, up from 44% last year, and another 31% tipped packaging innovation.

Suppliers insist that communication about wine must move away from price.

Mark Wilson, business development manager for De Bortoli, says: “It’s about making wine interesting and engaging the consumer. If we tell them wine is cheap, they will buy cheap.

And Liberty Wines managing director David Gleave MW says: "We need to find the right language to engage with consumers. For example, educating wine drinkers and encouraging them to experiment."

Doug Wregg, sales and marketing director for Les Caves de Pyrène, adds: “Education can come from independent retailers and restaurants through wine clubs and proactive selling of more interesting wine. Newspapers and magazines could up their coverage and cover the issues more intelligently rather than just featuring wines they think consumers will buy.”

One supplier warns: “It will be challenging to stimulate growth. Consumers continue to watch expenditure and are more conscious of health and lifestyle issues.”

But Alpine Wines owner Joelle Nebbe-Mornod takes a different view: “There’s plenty of growth left. We’re still measly wine drinkers in the UK,” she says.

In terms of styles, suppliers are tipping fruit-flavoured wine infusions as the best bet for growth, followed by sparkling wines.

One says: “Lower-abv, fruit- blended wine-based drinks and cocktails are gateway drinks that will attract younger consumers.”

Wine-based cocktails also gained popularity, growing from 18% last year to 26%, and one supplier tips rosé as a gateway category.

Sparklers overtook premium wines and brands into second place.

Outgoing Pol Roger managing director Nick James says: “Prosecco will get people on the sparkling wine ladder, but varietal wines – which to many people are brands in their own right – will also draw in new consumers.”

Sweeter styles were seen as less important – down to 22% from 31% last year – but suppliers still argue that they are the entry point to wine for new consumers.

“Always were, always will be,” says Oakley Wine Agencies managing director Nick Oakley. “Then they work their way up the price ladder and towards drier and red wines. It’s the natural progression of the human palate.”

And De Bortoli’s Wilson adds: “It is generally thought that consumer tastes change from sweet to dry, but most people prefer a sweeter style to that offered.”

Spain is the country most likely to produce significant growth in the coming year, followed by Italy, South Africa and France.

“With the weakening euro, any wines from the eurozone are going to fall in price,” says Martin Chapman, director of Peter Osborne Fine Wines. “Italy continues to grow, as do French and Portuguese wines.”

Argentina remains a strong contender with 33% tipping it for growth, followed by Australia with 31%.

Marc Patch, managing director of GM Drinks, says: “Argentinian wines are continually achieving traction with the consumer, the majority of it being led by Malbec. English wines are being discussed more than ever, however premium prices will keep the volumes small.”

Another supplier says: “Australia’s time will come back. The quality has never been better, there is innovation and it can tell its stories to consumers like no other nation.

“The exchange rate is starting to swing back in Australia too, meaning more potential for export.”

English wines saw a big leap in popularity – from 2% last year to 16% this year – and central and eastern European wines’ perceived potential grew from 7% to 16%.

Pol Roger's James says: “English sparkling wine will continue to grow and become an acceptable alternative to Champagne.”

And Fran Draper, wine controller at Halewood International, says: “The barriers to wines from eastern European countries have been broken down over the past few years, with the quality of the wine speaking for itself and wineries from countries such as Romania working hard to keep pricing competitive.

“Not only are we building sales of international grape varieties, but also of indigenous grapes, where there is something new for UK consumers to discover.”

Austria jumped from 2% last year to 12% this year, while the US dropped from 16% to 2%.

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