Last monthís OLN Wine Report highlighted some of the most prominent issues currently facing the off-trade. Taken in isolation, the reportís findings make gloomy reading Ė shrinking product ranges, supermarket turmoil, lack of innovation and a decline in overall wine sales across the country.
But if you look closer at that half-empty glass, youíll see itís also half-full. Letís not forget our wine trade is still one of the most vibrant, diverse and exciting in the world. So rather than bemoaning our problems, letís think about how to solve them.†
Punitive duty was voted the single biggest threat to wine in the off-trade. The Wine & Spirit Trade Association and others have been campaigning against high duty, but the most recent Budget continued to penalise wine. Expecting the duty burden to be cut might be a pipe dream, but maintaining pressure to prevent it from increasing is important.†
The solution? Having a unified voice for this cause is vital. Surely itís in every independentís interest to engage with this issue. Write to your local MP, sign petitions, listen to the WSTA and tell your customers.
Supermarket discounting and price competition were another issue of concern, and this relates closely to the duty question. With profitability constricted by high taxation and low margins, the rise of the discounters and consequent downward pressure on prices is worrisome. For most independents, competing on price would be fatal.†
The solution? Clever buying is crucial. Stocking the bestselling brands is no longer imperative Ė after all, most supermarkets are veering towards private labels. You need to source familiar names (Chablis, Rioja et al) with a strong story and attractive packaging, as well as interesting, lesser-known wines you really believe in. That way, you are providing reassuring choices for casual drinkers as well as some obscure options for more engaged customers. Itís not an easy task, but an appealing range is crucial to combating the threat from supermarkets.
Strong sales from other alcohol categories have been a growing threat to wine, both in terms of sales and image. Craft beers and spirits have enjoyed huge sales growth and captured the imagination of consumers and retailers in a way that has left wine behind.
The solution? Not easy. Wine canít successfully imitate the likes of craft beer because they are different drinks with differing types of appeal. Some more innovation in wine might help, but from the perspective of an off-licence, emphasising the fundamental USPs of wine is a good option. That means communicating heritage, diversity, food matching and quality Ė as well as any personal stories you might have.
Like every sector of retail, wine faces challenges. Overcoming them is the responsibility of all employed within wine. Surely working together is the best way to solve our problems and keep that glass half-full.