wine focus: analyst predicts boom in value and volume sales ahead
THE next five years are set to see increasingly strong growth for wine, according to analyst Key Note.
In its latest Wine market update it says that the UK wine market has exhibited ongoing declines in terms of volume sales in recent years. This is attributed to the impact of the economic recession and the resulting squeeze on consumer expenditure, combined with price increases under the alcohol duty escalator.
However, the market was estimated to have grown by 1.9% last year, driven by a combination of price increases and recovering consumer demand.
With consumer expenditure on the rise, the abolition of the duty escalator and a predicted recovery in volume, Key Note is forecasting healthy year-on-year growth in the next few years.
Delving further into the market, the report highlights the importance of certain wine products, which have proved resilient to recessionary pressures. They include sparkling wine, which has seen its share of the market rise from 11.5% in 2010 to an estimated 13.2% by 2014.
The report said: “Sparkling wine has proven particularly popular owing to its similarity to the premium beverage Champagne, but with its significantly lower price point. Not only are consumers increasingly replacing Champagne with other, more cost-effective sparkling wines, but they are also drinking these wines more regularly in favour of still white wines.”
Key Note says growth in the sparkling wine market has been driven by significant demand for the Italian sparkling wine Prosecco, although Cava (from Spain) and English sparkling wine, among other variants, have also seen strong demand in recent years.
It says: “Prosecco has increasingly represented a cost-effective alternative to premium Champagne products.
“The luxury nature of Prosecco, combined with its relatively reasonable price tag, has seen it emerge as an increasingly popular drink.”
• Sparkling wines with sweeter, fruitier flavours are proving especially effective at bringing new and younger wine drinkers into the market, according to Accolade Wines, which also highlighted the importance of big nights in to wine sales.
Amy White, marketing director, said: “For the younger, new-to-wine drinker the big night in is the biggest reason for buying wine to drink at home with 42% of their wine drinking for this reason.
“Because these consumers are new to wine their knowledge and confidence at choosing a wine is low, so they are therefore heavily reliant on brands they know. USA and rosé over indexes with the ‘newbies’ so brands like Echo Falls and Echo Falls Fruit Fusions are a good fit.”
White said that since its launch last year, Echo Falls Fruit Fusions had sold over 7m bottles in less than a year, proving the appeal of sparkling wine and fruit flavours. The fruit-flavoured wines include a rosé with summer berries (9.5% abv); red wine with raspberry and cassis (11% abv); and white wine with white peach and mango (9.5% abv).
Key Note Wine Market Report 2015 £575 www.keynote.co.uk