Still wine is down 2.1% in volume and 1.8% in value to just over £5 billion in the off-trade (IRI, year to March 26, 2016).
Toby Magill, head of BWS at IRI, told OLN: “Wine faced a difficult time in late 2015 as the major multiples made range reductions to simplify the shopping experience for customers. This made life much harder for the market as it went into the key Christmas period.”
But sparkling wine sales continue to soar, with volume sales up 18% and value growing 15.4%. Champagne and other sparkling wines saw modest growth in the past year, but Prosecco skyrocketed, leaving the overall wine category in slight growth.
“Total wine performance is virtually static, with value growing 0.5% year on year,” said Magill. “However, this masks the fact that sparkling wine is growing at 15%, and still wine is down 1.8%.”
White wine is still the UK’s number one choice in terms of still wine, representing 47% of value sales, but sales are declining faster than red and Magill warned that if this continues we may see white lose its position of dominance in the next few years. White was down 1.8% to £2.3 billion, while red fell 1.1% to £2.1 billion and rosé fell 5.2% to £565 million.
Australia is still enjoying strong growth, consolidating its position as the leading country of origin by upping value sales 2.1% to £1.2 billion.
The Old World is struggling, with Italy, France, Germany and Portugal all in decline, along with the US and South Africa, according to IRI.
Growth is coming from the New World, with Chile up 3.3% to £430 million, which sees it leapfrog Spain into sixth place, with fifth-placed South Africa in its sights. New Zealand is up 10% to £306 million and Argentina up 29.5% to £112 million.
Sauvignon Blanc is the number one grape variety in terms of value sales and it is also bucking the stagnant market with growth of 8% year on year.
Next come Pinot Grigio and Chardonnay and in fourth is the top red grape, Shiraz, which has seen sales grow 5.2% to £323 million, while Malbec is a star performer, up by nearly 50% in the past year.
Own-label has a 20.8% share of the wine category, with sales down 1.6% to just over £1 billion.
Hardys holds its position as the leading brand, although according to IRI sales have fallen by £20 million over the past year to £307 million.
Magill said: “Hardys is the number one still brand in the UK, however it only has 6% market share. This demonstrates the fragmented nature of the wine market, meaning shoppers have lots of choice – maybe too much – but also that wine will continue to struggle to fight for space versus other sectors in store as it doesn’t have the dominant players that can offer a clear category vision that beer and spirits do.”
That is a challenge for the likes of Accolade, Treasury Wine Estates, Concha y Toro, Gallo and Pernod Ricard.
Blossom Hill, Echo Falls, McGuigan and Casillero del Diablo complete the top five brands, followed by Gallo, Jacob’s Creek, Barefoot and Isla Negra. The star of that group appears to be Casillero del Diablo, which has grown sales by 23% over the past year, but Echo Falls, McGuigan, Jacob’s Creek, Barefoot and Isla Negra are also in growth.
Own-label dominates the sparkling and Champagne category, with a 29% share of the market and sales up £38 million in the past year.
Magill said: “Sparkling wine performance is being driven by Prosecco. Not only is this the most valuable sparkling wine sector in the UK, it is also posting growth of 35% year on year, far outshining rivals. Current growth rates will have been helped by an earlier Easter this year but Prosecco’s growth rates have been at similar levels for a while now.
“The number one in sparkling wine is own-label, showing that brand cachet isn’t what is driving sales. Rather it will be the ability to buy a highly drinkable celebration tipple at a reasonable price.”
The top brand in sparkling and Champagne is now Prosecco brand Plaza Centro, a brand sold at Tesco for £6.50, which grew sales by 57% to £54 million.
Next come Moët & Chandon and Lanson, both of which are in slight growth. Top cava Freixenetwas virtually flat over the year, with sales totalling £24 million.