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    Days of wine and fizzes

    Photo: iStock

    Booze was on Britons’ mind last year as spirits, lager, wine, sparkling wine and champagne are among the fastest-growing grocery of 2021, highlighting how shoppers’ buying habits are still evolving two years after the pandemic with people gravitating to certain brands and products.

    According to NielsenIQ’s Top Products 2021 survey, sales of wine (+£295.1m) and sparkling wine and champagne (+£227.4m) rose significantly in the year as ‘wine o’clock” has been the standby and saviour of a nation stuck indoors.

    In fact, a recent study by the British Beer & Pub Association (BBPA) has shown that Britons drank more wine than beer in 2020 lockdown. As per BBPA’s latest 2021 Statistical Handbook, the percentage share of alcohol consumed through wine in the UK increased by two percentage points during lockdown 2020, but the corresponding figure for beer decreased by four points.

    It means that during 2020 and the height of the pandemic and lockdowns, Brits consumed 33 per cent of their alcohol through beer and another 33 per cent through wine, compared to 37 per cent for just beer and 31 per cent for just wine in 2019.

    Days of wine and fizzes
    Photo: iStock

    Champagne sales have also reached an all-time high last year, handily beating a previous mark set in 2019.

    While French producers already said last year they expected a sales record, they have now confirmed 2021 sales hit $5.7 billion (£4.12bn), 14 per cent above the pre-pandemic high. Exports to Britain rose 7 per cent on 2019, according to the Union des Maisons de Champagne (UMC).

    In the convenience channel, the spread of Omicron variant has generated an uptick in the sales of beer, wine, and spirits (BWS), when compared with previous months. Still wine is currently worth £1.3 billion within the traditional convenience but is experiencing a slight decline in sales over the past year, after experiencing a boost from last year’s lockdown. However, growth performance of BWS is still up 9 per cent compared to 2019 [Nielsen 52 w/e; Kantar Worldpanel 52 w/e 01.01.02].

    Core and premium

    Tom Smith, marketing director – Europe at Accolade Wines, stresses that the core price range of £6-8, which represents the biggest volume of wine sales within convenience, should be at the heart of any retailer’s wine category, as he makes the case for their leading brand, Hardys.

    “Now in its second decade as the UK’s number one wine brand, Hardys is now worth £295m, delivering £37m more in value to the category than its number two competitor [Nielsen Scantrack data MAT to 06.11.21]. Within convenience, Hardys remains the strongest core brand accounting for £162m in sales last year,” Smith says.

    Hardy’s will be returning to TV in March as part of a £3m marketing campaign. The exclusive ITV partnership will be the brand’s first TV appearance since 2018 and will be supported by further in-store activity, digital advertising, social media, and PR to ensure Hardys is front-of-mind in 2022.

    Days of wine and fizzes

    Globally, Accolade Wines will invest over £6m to further support growth as part of Hardys’ ‘Certainty’ campaign, which champions the brand’s consistency and quality, having crafted quality Australian wine for over 168 years.

    As many consumers look to host celebrations over the summer months with friends and family, retailers also have an ideal opportunity to tap into the trend of premiumisation by ensuring they have a good stock of premium alcohol options, particularly within the wine category.

    Ben Blake, head of marketing – EMEA at Treasury Wine Estates (TWE), notes that there has been growth in wines £8+ in the market as a whole, adding that they are seeing increased sales in wines £7+ at TWE.

    “In light of this, retailers should consider stocking Wolf Blass, an iconic collection of beautifully crafted wines that are famous the world over for quality, character and consistency,” he recommends. “Wolf Blass wines are the perfect option for consumers looking for a premium wine for summer occasions. The brand continues to be one of the world’s most successful and awarded wineries. Last year, Wolf Blass was named Red Winemaker of the Year at the 2021 International Wine Challenge.”

    Days of wine and fizzes

    Last month, Wolf Blass launched a bold and empowering campaign, ‘Why Settle When You Can Soar’, inspiring consumers to refuse to settle for less.

    With the largest ever regional investment and support across ATL, in-store, PR, digital and events, the campaign is expected to reach millions of consumers across the country, through a burst of video-on-demand advertising and a continuation of the brand’s successful partnership with luxury travel deals company, Secret Escapes.

    The promotion will see just under 900,000 bottles across the UK and Northern Ireland tagged with prize-winning QR codes. Entrants will have to scan the QR code on the tagged wine bottles to be in with the chance of winning £100,000s worth of instant prizes and credits. One lucky winner will receive a once-in-a-lifetime holiday to either Thailand or New York, and 4,000 runners up will each receive a £25 voucher, redeemable on the Secret Escapes site with a minimum £125 spend.

    Flavours for summer

    Blake notes that lighter and more refreshing options will also be on demand as we approach the summer occasion moments, with the longer evenings extending the outdoor drinking period.

    Days of wine and fizzes“This is a perfect opportunity for retailers to create an offering to match the change in seasons,” he suggests, adding that Blossom Hill is a must when consumers begin to look out for more refreshing options.

    “As the No.1 wine choice for refreshment, retailers should look to stock Blossom Hill Gin Fizz (8.5% ABV) which was first introduced to consumers in 2019. The sub-brand category product is made up of a sparkling blend of crisp white wine, botanical infused water, and a dash of gin – the two flavours include Rhubarb and Blood Orange,” he explains.

    “Gin Fizz not only responds to increasing consumer demand for new and exciting products in the wine space, it is also essential for retailers to cater to the occasion moments ahead of upcoming calendar dates in the warmer months.”

    Leading flavoured wine brand Echo Falls, which unveiled a brand-new look for its entire Fruit Fusions 5.5% and 9.0% portfolio last year, continues to be a key brand for the impulse channel and an important signpost for the category, Smith of Accolade Wines adds.

    “New consumers who entered the wine category previously were younger and less affluent, so it’s important to continue to appeal to this demographic. Fruit flavours and sparkling options are popular, especially at celebratory and social occasions, and particularly refreshing in warmer weather,” he says.

    Echo Falls sparkling Fruit Fusion range

    Share of fruit flavoured wine is also up by 19 per cent in volume, compared to last year [Nielsen], as shoppers become more adventurous and look to expand their wine repertoire. To tap into this growth, Echo Falls extended its Fruit Fusion Sparkling range with the new Passion Fruit and Sicilian Lemon Sparkling Fruit Fusion, which Smith said has already performed well in taste tests.

    The brand will be celebrating female friendships this year with a new £1 million marketing campaign to encourage consumers to get together and share a bottle of Echo Falls.

    The ‘Phone on Silent, Girls on Loud’ activation, first launched in February, will return for the summer months, with adverts on major shopping centre billboards across the nation, as the brand looks to increase awareness and drive purchase across all channels.

    Wine countries

    Smith says the New Zealand wine category continues to show strong performance in the UK, but notes that “we are starting to see the impact of a poorer vintage coming through in the market data.”

    He says their Mud House brand is “already the most recommended” New Zealand wine in the UK and has seen strong year on year growth.

    Days of wine and fizzesLast year, the brand unveiled its new ‘Taste the Adventure’ marketing campaign as it looked to increase its share of the market.

    “Alongside this, we also refreshed its packaging to reflect this ‘adventurous’ positioning and improve stand out on shelf. We have new varietal NPD due to launch this autumn to further support brand growth. Earlier this year we expanded our Mud House brand into new origins with the launch of two new refreshing Chilean varietals, Sauvignon Blanc, and Rosé,” Smith explains.

     

    South Africa as a country of origin has underperformed in the past year, and as a result has contributed to sales declines. Smith said Accolade Wines, which houses the Kumala brand in the category, will work with retailers ensure that the South African category bounces back in-store.

    “A strong Kumala brand leads to a growing South African category, and we are refreshing the brand in 2022,” he reveals.

    Eastern European wines are also becoming much more prevalent in the UK, and Kingsland Drinks hopes to make it big in the category with its new partnership with The Iconic Estate, the second largest and one of the most awarded Romanian wine producers.

    Romania comes in fifth position for areas under vine in the EU, after Spain, France, Italy and Portugal.

    The Salford-based wine importer and distributor has added a comprehensive Romanian range to the portfolio at three price points – entry, mid and premium – available to UK independent and convenience retailers under clearly defined brands.

    Four entry level wines in the Rhea range (Feteasca Neagra blend, Sauvignon Blanc, Pinot Grigio and Pinot Noir) – the name is inspired by the mother of Zeus, who personified the earth – will be available from £7.99 RRP.

    In the mid-range varietal tier, the Prahova Valley collection joins the portfolio displaying Dealu Mare regionality – along with Blanc, Rosé and Rosso as tri-varietal blends from the Byzantium branded range.

    The Hyperion range enters at the higher end of the price bracket. This collection is expected to foster interest from consumers and help to prove Romanian wine’s credentials especially at the top end of the wine fixture. The Hyperion Feteasca Neagra won the Grand Gold Medal at the Concours Mondial de Bruxelles 2021.

    “This part of the world is often overlooked when it comes to wine production but huge strides have been made among winemakers striving to elevate the quality credentials of their wines and become internationally recognised, appreciated and celebrated,” Kathryn Glass, wine buyer and educator at Kingsland Drinks, said.

    “Wines from The Iconic Estate have achieved international status, won awards and accolades globally, offer a great price to quality ratio and we know there’s a real appetite for these wines right now.”

    Days of wine and fizzes

    Meanwhile, the popularity of UK-produced sparkling wine has also been on the rise, with some experts even comparing it to Champagne in taste and quality, highlighting how English sparkling wine has been gaining prestige in recent years,

    According to IWSR Drinks Market Analysis, English sparkling wine volume rose by almost 11 per cent from 2015-2020.

    The Yorkshire-based Continental Wine and Food is tapping into this trend, with an on-pack promotion for its British wine brand Silver Bay Point.

    Launched in February, the ‘Win Every Day with Silver Bay’ campaign offers the chance to win a £50 cash prize every single day throughout the promotional period and an ultimate grand prize of £1500 in the final draw, which every entrant is in with the chance of winning.

    The consumer favourite British wine, with an ABV of 8%, offers easy drinking styles to suit everyone. The range is accessible to all, vegan friendly and comprises Red, White and Rosé providing fabulously light, refreshing and fruity serves perfect for every taste and occasion.

    Varietal wins

    Looking at varietal performance, Sauvignon Blanc continues to be the anchor for white wine varietals in the convenience sector. For red wine, Malbec and Tempranillo show the strongest growth of top red wine varietals and now accounts for 10 per cent of the total 40 per cent value share of red wine in convenience [Nielsen, 52 w/e 01.01.22]. Obviously, these would remain as must stock for 2022.

    The B.Ink range from Grant Burge Wines, launched last month, taps into the impressive growth of red blend varietals with its first product, the South Australian Red Blend.

    Capitalising on the healthy growth of Australian wines (+17 per cent in value in the last two years) in the UK off-trade, the B.Ink Red Blend (RRP: £9) channels rich full-bodied flavours from the region, with flavours of dark chocolate, coated raspberries and gentle supporting oak.

    A full 360 campaign will support the launch throughout 2022, using the tagline ‘Leave Your Mark’, to generate brand awareness and drive purchase across all channels. The brand is also introducing a Rosé and Chardonnay varietal to the collection later this summer.

    “The striking, disruptive design and vibrant taste of B.Ink will appeal to new audiences, as we look to drive further excitement in the wine category. The Red Blend personifies big Australian flavours, with a full bodied, bold palate that is easy to drink, at a price point that will drive trade up and increase category value,” Smith said.

    Having seen phenomenal success since its first Shiraz SKU launched in 2017, Jam Shed launched its Malbec and Chilean Merlot varietals last year. The brand is now worth £57.5m and is one of the fastest growing brands in convenience [Nielsen, Data to 01.01.22].

    “The brand has shown it resonates with consumers, especially the loyal ‘Shed Heads’ who have embraced the new varietals – it is also bringing in a new, younger type of wine drinker, which is important to further grow the category,” Smith says.

    The brand now includes five wines in its expanding portfolio: Shiraz, Malbec, Chardonnay, Rosé and the newly launched Chilean Merlot.

    Inflation woes

    A major pain point for shoppers at present is the inflationary pressures, coupled with the cost of living crisis, which impacts their purchasing decisions. The latest Opinions and Lifestyle Survey by the Office for National Statistics (ONS), covering the period 16 to 27 February found that 81 per cent of adults reported that their cost of living had increased over the last month.

    This was 12 percentage points higher than the 69 per cent in January, with the most frequent reported reason being rising food shop prices (92%). Of the actions taken because of an increase in the cost of living, 30 per cent reported spending less on food shopping and essentials.

    Adding to the woes, wine prices are increasing faster than any other alcoholic beverage, according to separate ONS data.

    The figures show the price of wine has seen a 3.3 per cent increase in the 12 months to January 2022 as compared to 0.8 percent rise in beer prices and just 0.2 percent rise in prices of spirits.

    Smith agrees that inflation is contributing to squeezed budgets with 44 per cent of all sales in convenience focused in the £4-7 price range [Nielsen, 52 w/e 22.05.21].

    Days of wine and fizzes
    This aerial photograph taken on July 19, 2021 shows a man drinving a leaf removal machinery at ‘Le Château de Vaux’ domain, Molozay vineyards, in Ancy-sur-Moselle, eastern France. (Photo by JEAN-CHRISTOPHE VERHAEGEN/AFP via Getty Images)

    Earlier this year, reports have indicated that champagne and wine prices might shoot up this year, as the International Organisation of Vine and Wine (OIV) has warned that world wine production could fall in 2021 to one of its lowest levels on record due to harsh weather in Europe.

    A drop in production in Italy, Spain and France, the world’s largest wine producers, would outweigh what is forecast to be the highest-ever volume in the southern hemisphere, the OIV said. Vineyards in Western Europe were hit by spring frosts, while French producers also endured heavy rain, hail and mildew disease.

    “We still expect the global consumption to increase compared to 2020,” Pau Roca, the OIV’s director general, said, noting first-half trade data for 2021 showed volumes above pre-pandemic levels.

    And, there is the added worry of Chancellor Rishi Sunak’s new tax regime to ‘simplify’ the alcohol duty system that is set to make bottles of wines more expensive.

    Under the new system, the super-tax that applies to sparkling wine, prosecco and champagne will be abolished, and the 15 bands of taxation for beer, cider, wine and spirits will be reduced to just six.

    However, experts are claiming that the changes come with a ‘sting in the tail’ for those who enjoy wine with a high alcohol level above 11.5 per cent. Research by Wine Drinkers UK found 95 percent of the most popular wines will suffer a hike in prices as a result of the change, affecting drinks with an ABV above 11.5 per cent.

    The Wine and Spirit Trade Association anticipates that implementing the change, which is expected to come into force from February 1, 2023, would cost the wine trade £250 million per year.

    Australian wine producers have already called on the UK government to scrap the proposals, arguing that the reforms would wipe out the benefits of UK-Australian free trade agreement.

    Concha y Toro, the largest producer and exporter of wines from Latin America, has also voiced its concern on the tax increases.

    “As a leading wine importer in the UK, we know it is essential that the government understands the full impact of the proposed changes to alcohol duty on the wine industry,” Simon Doyle, general manager at Concha y Toro UK, has said.

    He explained that the firm’s 96 million bottles of wine sold in the UK each year have an average ABV of 12.9 per cent, with most of the other leading still wine brands in the market at similar or higher average ABVs. Under these current proposals, he said their wines would incur at least an extra £28 million in duty levied on consumers each year, which is equivalent to +29p per bottle of wine, an increase of 13 per cent versus current duty, plus the additional 20 per cent VAT.

    “This is a regressive step versus consumer expectations of a lower-tax economy post Brexit. The Chancellor is proposing that we use Brexit freedoms to tax consumers’ favourite alcoholic beverage even more. These proposals are both unfair on consumers and unworkable for the trade,” he added.

    Inspire shoppers

    In this background, it is important for retailers to inspire shoppers with mission and occasion-based POS, Accolade’s Smith argues.

    “Products should be tiered by price from the bottom up, with entry level on the bottom and then those priced £6-£8 at eye level. Space should be made in the chiller section for key whites and rosé,” he suggests. “Convenience retailers should also make the most of their position within the community and get to know their shoppers and their preferences to ensure their ranges are right for the local area.”

    With the average time spent in a convenience store is just 4.12 minutes, he notes that the wine category “must be clear and easy to navigate for consumers,” with key brands and origins that will catch the eye of consumers and bring them into the category.

    “Making sure that wine is easy to find and the fixture is easy to shop is key. Retailers should ensure the range is fit for purpose with key brands and covering top trends, then use merchandising and communication to inspire discovery and education,” he adds.

    “And, as at-home occasions may continue into the year ahead, stores should also ensure they are stocking a full range to suit every need.”

    Identifying the trends that retailers could make use of to drive sales, Smith says mindful drinking is a continuing trend, from both health – with an increase in demand for low/no offerings – and  sustainability perspectives, as consumers look for products which have less of an impact on the planet.

    He also expects to see a growth in wine on tap (bag in box) options in 2022, driven by the combination of increased at-home demand.

    “Accolade debuted its latest wine on tap brand, Vino Società in December with two SKUs, Sauvignon Blanc and Rosato, and will be followed by a Malbec in 2022. With Vino Società we are focused on transforming consumer perceptions around the quality of Wine On Tap wines and introducing new shoppers to category – and it’s the perfect format for a night in,” he explains.

    Vino Società targets under 35s who currently under index on boxed wine spend, but value stylish products which are less damaging to the environment. Smith claims that the brand offers the perfect opportunity to premiumise the category, saying that consumer testing showed that over half of respondents would purchase Vino Società in addition to the alcohol they already buy, whilst Vino Società has the highest purchase intent amongst 20–34-year-olds.

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