That accelerated decline in the wine category, which is down 1.5% in value and 1.9% in volume in the year (IRI, 52 weeks to January 30).
No Old World countries showed growth, with all gains coming from the likes of Chile, New Zealand and Australia.
James Leacy, category and insights controller at Concha y Toro UK, said: “No Old World country is in growth in the past 52 or 12 weeks. In the past 52 weeks the only growing origins are Australia, Chile, Argentina and New Zealand. In the past 12 weeks Australia – the biggest origin in the market – is in decline by 0.5%.
“Part of this is due to Dry January, but this is a significant ‘watch out’ for the market as a whole. The other origins have to work hard to offset the decline of Australia.”
Brands are driving growth, with the top 10 – Hardys, Echo Falls, Blossom Hill, McGuigan, Gallo, Casillero del Diablo, Jacob’s Creek, Isla Negra, Barefoot and Yellow Tail – up 3.5% in value and 3% in volume in the past year (IRI), with an average price of £5.31. Own-label was down 1.1% in value and 0.5% in volume.
Leacy said: “I have never known a category as fragmented as the wine market. The number one is Accolade with 13% share. That’s very low versus most markets. The top 10 have 27% share of overall sales. But there is some consolidation going on. The top 10 companies are becoming bigger as there is more investment in them.”
Having analysed recent sales data, Leacy’s team has projected that South America – essentially Chile and Argentina, where CyT has its leading brands – will deliver £85 million growth to the market over the next two years, while £78 million will come from New Zealand and £95 million from Australia. But the combined effect will not offset the £297 million decline we will see from the rest of the market.
“This would make South America worth £620 million, and that would make it the number two origin as a whole,” Leacy said. “At Tesco South America is already the number three origin and contributing more growth than any other. If it can happen at the biggest retailer in the UK it can happen in the rest of the market.”
CyT’s brands have performed strongly of late: Casillero del Diablo is up 24.7% in value, has the highest average price point in the top 10 brands at £6.16 and has the UK’s bestselling Cabernet Sauvignon; Cono Sur is up 31.9% and has the UK’s top Pinot Noir; and Trivento is up 133% and has the UK’s leading Malbec.
Simon Doyle, UK general manager for CyT, said: “I have been quite intimidated by some of the changes the industry has had to face over the past few years, but very positive about our response as a brand, and our retailers’ responses, and there are some other suppliers out there also doing very well.