Global trends will impact on Ireland

Wine producers are wrong to write Ireland off in terms of marketing - Ireland's wine sales growth is relatively impressive given the overall economic climate

wine1As noted last month, Irish wine sales grew by around 4% in 2010 which, even against a backdrop of falling cross-border sales, still wasn’t bad, given that global economic growth for 2010 was only around 2%. It’s something that our importers need to stress to suppliers because it’s clear that some wine producers, just for the moment, have written Ireland off in terms of marketing. That can make it difficult for retailers to learn about new products in the pipeline and also to strike the best deals when buying.

Customers have most emphatically been trading down but outside Ireland, there’s been a rise in sales of premium bottles. A lot of that has been driven by markets in Asia – Hong Kong is now top market for investment category Bordeaux and Burgundy.

Champagnes sales rose during 2010, after a difficult 2009, but there has been a lot of discounting at retail chains in the UK and Europe. And although Asia tends to pay top dollar for its champagne it’s also important to remember that China, for example, only buys around half a million bottles of the bubbly per year, whereas in Holland it’s over 700,000.  However, most markets showed growth, with Champagne sales rising by almost three quarters in the USA, and by well over 60% in Japan, although that may falter after the earthquake disaster. This means, that by the end of 2011, there probably won’t be too many Champagne bargains for the Irish market.

New Zealand Sauvignon Blanc good value

Irish customers have noticed the softening in price of New Zealand sauvignon blanc. That’s been due partly to the financial crisis but also to the over supply of the grape after a couple of bountiful harvests. In the UK, this brought the average bottle price down to around £6 at retailers. Thanks to the Irish tax and cost situation, there are very few Kiwi sauvignons available at that price here, but some of the brands are offering very decent wines at good value and independent off licence owners shouldn’t be shy about asking for keen deals. There’s some evidence that Irish and British consumers are beginning to express a preference for sauvignon blanc over pinot grigio, so if the pinot thing is really beginning to run out of steam, you can expect more customers to move in the sauvignon blanc direction.

In terms of red wines, Argentina has been a bit of a dark horse in Europe and in 2010 it grew by over 50% on the British market. Price value ratio has been the key to this without a doubt, with labels like Dona Paula (Dillons) and Alamos (Cassidys) tending to overdeliver at their price points. That’s something retailers find invaluable at the moment and it’s worth drawing attention to Argentina when customers come in search of a bargain. Meantime VAT in both Britain and Ireland looks set to rise in the short term; expect yet another increase in home wine consumption.

Sign Up for Drinks Industry Ireland

Get a free weekly update on Drinks Industry trade news, direct to your inbox. Sign up now, it's free