Put wine in the frame

With much of the younger generation of drinkers obsessing over cocktails and craft beers, or abstaining from alcohol altogether, wine demographics are changing rapidly and the wine market is in volume decline.

Currently, 81% of total wine spend is from over-45s, up from 77% in 2015, and alcohol penetration is in decline, with younger consumers’ weekly consumption dropping from 71% in 2002 to 44% in 2014 (Kantar World Panel Jan 2017).

Despite this, the market is still in value growth (at £10.8bn, Nielsen/CGA) thanks to the inflation of wine prices which has seen the average yearly price of wine rise in the off trade to £5.64, up 8p on the past quarter (Wine and Spirits Trade Association Market Report 2018).

The value growth has also been influenced by a shift among consumers towards choosing quality over quantity, according to the Accolade Wine report 2018. That report shows that wines above £6 a bottle have seen value increase, most notably in the £7-£9.99 band.

Londis retailer Raj Chandegra says shoppers at his Barnes store in West London are happy to pay more for good wine. “People are definitely spending more than in the past. In the past they could get three bottles for £10, but those sorts of promotions have diminished and people expect to have to pay £5 to £5.50 for a bottle now.”

Raj adds that discerning wine drinkers are likely to want interesting wines that will impress their dinner party guests, while someone who is not a connoisseur might just opt for a big brand they trust.

Jerry Tweney, owner of Budgens Prestbury in Gloucestershire, says his shoppers, too, are much less driven by promotions than they used to be. He says: “I think the days of picking up whatever’s on offer are over. It doesn’t matter if a still wine is on promotion; people want to buy what they want to drink in Prestbury.”

However, Amy Giacobbi, marketing manager for Continental Wine & Food (CWF), says that providing some promotions won’t go amiss in this value-driven day and age. “2018 looks to be a more positive year economically and while many consumers will make the most of this upturn in fortunes and start to spend more, shopping habits built up over the past five years or so are deeply ingrained – value for money will continue to be important.”

Chris Pollard, of Barlby Village Stores in North Yorkshire, can certainly see this argument. He says his shoppers tend to opt for whatever’s on promotion, especially if it’s prosecco.

Chris says prosecco on promotion is like gold dust and he always stocks up when he can buy it on a special offer. He adds: “At the moment I have the ‘I Heart Prosecco’ on offer at £6.99 and I’m pretty sure that’s £9 in other shops.

“Shoppers will happily pick that up if they spot it on offer.”

The sparkling wine category is the only part of the wine sector in growth at the moment, at +10% (IRI Top Categories Special Report 2017), driven largely by prosecco.

Jo Taylorson, marketing controller for Kingsland Drinks, says the growth in popularity of prosecco can be attributed to the fact the quality of many proseccos can hold their own against Champagne, and the lower price point makes it accessible to a wider group of shoppers.

“In the UK, people are starting to drink prosecco as a week-day wine, rather than only a special occasion drink,” adds Taylorson, “The growth of prosecco has lifted all sparkling wine sales. It now acts as an entry point for consumers into the category, then allowing them to explore other sub-categories such as British sparkling wine and cava.”

 

Gaining new recruits

Andrew Nunney, category, shopper and insights director for Accolade Wines, explains that as well as finding the category too complicated, a main issue in still wine penetration is the lack of formats to meet the needs of younger drinkers, aka ‘new recruits’.

“For new recruits it’s an intimidating category that’s hard to navigate. They tend to do lots of small and impulse shops and do not stock up on wine as they don’t want to have to carry it all home and they don’t usually have enough space in their homes to store it. They will usually be influenced greatly by price as they have little knowledge of the types of wines and want to be given direction as to what to buy for their occasion.”

He says the opportunity to capture new wine drinkers and help them develop into more confident, regular wine buyers will be realised by positioning wine as the perfect accompaniment for the evening meal and stocking pack formats to play a part in convenience options for in-home and outdoor occasions.

In a bid to pull the new generation of drinkers into the wine category, Treasury Wine Estates has created a brand called 19 Crimes. The craft-like wine range has quirky packaging which comes to life via smart phone and app.

Meanwhile, the New Zealand wine brand Shorn has introduced some BBQ and festival-ready pouch formats named ‘Shorn on Tour’ (1.5ltr pouches, rrp £11). This development comes after Kingsland Drinks’ WinePRO research, in collaboration with YouGov, showed that the pouch format is especially appealing to younger consumers, under 35 years old.

This NPD is following a similar tack to Echo Falls’ recent ‘Festi Falls’ double tap fruity Echo Falls bag in box, which was also launched earlier this year with the aim to appeal to millennials.

CWF’s Giacobbi says that millennnials’ interest in craft drinks could certainly be spilling into the wine category. “Wine labelling is always changing and it is certainly true that the craft influence coming from beers and gins is having some impact on wine branding.”

Angela Prescott, store manager of Spar Roe Lane, in Southport, says that Spar’s own-brand wines have been extremely popular with her shoppers as the labels are kept ultra-simple and concise.

“The wines look really good on shelf. They are all blocked together and their labels are clear and uncomplicated. If a shopper is relatively new to wine drinking they’re not going to know exactly what they like other than perhaps the type of grape, so these keep the shopping experience easy.”

But Angela doesn’t think these simple designs have gone quite far enough to pull in the younger generation.

“I do still think that the majority of wine buyers are over 25,” she says. “The under-25s tend to stick to the fruity ciders and beer.”

 

Meal for tonight

Raj points out that wine can be a cheap option for a couple to share with a meal at home and he believes wine is popular with “settled couples” for this reason.

Nunney says a big opportunity for wine sales is the food for tonight mission, but younger, more health-conscious shoppers tend not to want to drink an entire bottle in one night. It’s for this reason that Accolade recently launched a new 50cl wine format.

The aim of the range is to boost the number of mid-week drinking occasions as the bottles allow people to have just two large glasses of wine, helping moderate consumption. The wines, from some of the company’s more premium brands – Kamala, Hardys and Mud House – also aim to encourage shoppers to try new wines and to trade up.

Angela agrees that shoppers tend to buy wine as part of a meal. That’s why Spar Roe Lane merchandises its meal-for-tonight range next to wine and uses POS reminding shoppers to pick up some wine.

The main challenge for wine is perception, with a younger generation of drinkers seeing it as an outdated and complicated category with few formats that meet their needs. But keep an eye out for NPD which is knocking this on the head with new formats and clear labels.