IWSR research shows that still UK wine volume sales have fallen 6.3% since 2011, and it anticipates they will fall another 1.6% by 2020.
But that loss of 1.9 million cases will be compensated by sparkling wine sales growing by 2.4 million cases, with Prosecco in the driving seat.
Guillaume Deglise, chief executive at Vinexpo, which commissioned the research, said: “The sparkling category will benefit from expanding the consumption occasion. Prosecco is already huge in the UK and took over from discounted Champagne.
“It is perceived as less serious than Champagne in the UK. Cava’s image is not as positive. It is not seen as an everyday luxury. It doesn’t have a glamorous effect.
“Prosecco hits a price point, which is very important, but more than that the Prosecco people have managed to create a brand. Prosecco is seen as an affordable, everyday luxury. There is a spectacular drive for Prosecco.”
IWSR also believes spirits sales will soar between now and 2020, with gin, rum and US whiskey leading the way. It predicts sales of spirits will rise 8.6% by volume, with gin up 23.8%, rum up 22.8% and US whiskey up 26.7%.
Millennial Brits are increasingly lured by the charms of craft spirits, which will cause those categories to come to the fore, said IWSR, while it also warned that fruit cider poses a huge threat to wine, particularly rosé wine.
The researchers expect the off-trade to continue to flourish at the expense of the on-trade, which has been hit by stricter drink driving laws.
IWSR chief executive Mark Meek told OLN: “A key trend is convenience.
“Staying in is the new going out, and you see home delivery mechanisms such as Deliveroo making it much easier to have high-quality meals and your alcoholic drink of choice delivered at the same time.
“Wine has some way to go, because already the spirits guys have moved into that space. Diageo has linked up with Deliveroo and Heineken has linked up with Deliveroo. The UK wine trade hasn’t really taken advantage at this stage of that home delivery mechanism, whereas other countries have.”
Between now and 2020, IWSR predicts that UK white wine sales will drop 0.6%, red wine by 1.5% and rosé by 4.4%. Rosé makes up 11.4% of the UK wine market, more than the global average of 10%, but the emergence of fruit cider is damaging the category in Britain, as is Prosecco.
Meek said: “For a lot of younger consumers rosé was a nice, easy, approachable drink, and there has been quite a bit of switching from that to Prosecco and to flavoured ciders.”
Prosecco and rosé are competing for the “aperitif moment” and Prosecco is winning. It is worth noting, however, that pale French rosé sales are soaring, while sales from other countries are in trouble.
IWSR forecasts that Australia will consolidate its position as the UK’s number one country of origin for still wine by 2020, with sales growing 0.6% to 25.2 million cases. It has great confidence in the US and expects volume sales to grow 7% by 2020 on this side of the pond.
Chile, New Zealand and Argentina are all forecast to post strong growth, and Old World countries are all predicted to continue haemorrhaging sales.
IWSR believes the sub-£5 wine category will decline by 17% by 2020 as those prices will be difficult to maintain in the wake of exchange rate volatility post-Brexit and rising duty.
It believes the £5-£7.99 category will grow 2%, the £8-£15 category will be up 4.7% and the £15-plus segment of the market will decline 0.9%.
Deglise said: “We expect the market to be affected by the results of the EU referendum. There is economic uncertainty now. Also some price increases. This is a very price sensitive market.
“We expect the category of £5 per bottle to experience significant decline, as this price will be difficult to maintain in future. A lot will depend on the results of the Brexit trade negotiations.
“Other reasons to explain the decline in the UK are on-trade sales declining, probably due to drink-driving limits, for instance in Scotland.
“But there are lots of positive trends in the UK, which we should not forget. The level of knowledge in the UK is very strong compared to other European countries. The younger consumers especially know much more about wines than previous generations. They know more about grape varieties and can name them rather than just asking for a red wine and a white wine.
“Also in the UK internet sales are picking up fast. Operators such as Naked Wine and Amazon are playing a significant role. London is a key driver of trends in the UK, but also in the world. What happens in London often happens a bit later in other capital cities of Europe.”