Premium sales success bucks the trend

27 March, 2009

Despite the recession, the fastest-growing segments of the wine market are at the premium end. According to recent Nielsen figures, volumes of £10-plus wine have rocketed by 29%, and wines priced between £8.01 and £9 by 30%.

It's still a tiny part of the market - less than 2% of wine in Britain is sold in the off-trade for more than £8. But it's the part of the market where the specialist independent merchants tend to play, and any signs of growth - especially strong growth - are reassuring.

OLN's latest poll of independents shows that average prices are now £8.72. The figure has been pushed upwards by factors such as duty and exchange rates, but also pulled by the trend towards at-home consumption by people who are cutting back on dining out.

Thomas Peatling Fine Wines in Bury St Edmunds, Suffolk, devotes more than half of its shelf space to wines priced more than £10 - and its customers seem to like it that way. "People are quite surprised that we have wines at £4.99," says manager Christopher Batten. "We have stuff right across the board."

How would Batten convince a nervous customer to part with £10 instead of the usual £5 or £6? "We have a very good Pinot Noir Reserva from Chile, Terra Noble, probably one of the best examples of the variety I've tasted around that price," he says. "That's how I would introduce people to the price bracket.

We've only just put it up to £10.99."

Batten also confirms the trend towards entertaining at home. "A good example was Valentine's Day. I had at least half a dozen saying that was exactly what they were doing, without prompting: they were buying a really nice bottle of wine and having that instead of going out. The spend went up considerably.

"People are saying 'let's not drink during the week but have something that little bit nicer at the weekend'. If they spend that extra money they want to know they're spending it wisely, which is where we come in."

At the recent judging of Benchmark wines in California Wines' annual competition, a new category was created for wines from £10 to £15. "This was partly to take into account the higher prices that independents achieve, so we've introduced a £10-to-£15 bracket - and obviously there was some pressure from wineries which couldn't take part originally," explains UK director John McLaren.

"Also some people were saying that up to £10 was great, but it didn't really express some of the individuality of California that you get over £10 but don't get from other New World countries.

"It works well for independents because the research shows their average price is still going up and at the same time they're still looking for points of difference. This makes them wary about the commercial end of the New World and particularly nervous about California, because some of the biggest brands of all tend to be Californian.

"But some of the wines that emerge at these kind of prices are still commercially attractive and made in reasonable quantities by commercially savvy wineries who are quite happy to be supportive. So we haven't gone into the hoity-toity end of things."


admits California

has become more expensive thanks to the pound's weakness, pushing more wines over the £10 threshold. But he says that the £10-plus market is experiencing natural growth regardless of exchange rates.

"It's not just coming from independents," he says, "and maybe it is coming from people who are not eating out as much and staying in. If so, there will be more people discovering more character in their wines.

"It might be an opportunity for the independent. The supermarkets have got themselves into a spiral with the consumer. The supermarkets

try to second-guess what the consumer wants and then puts it on the shelves.

"If it's cheap, the consumer will start buying it. The supermarkets then think they have got it right and goes back to the supplier and says 'this is what consumers want'.

"I think we're spiralling down prices unnecessarily."

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