Today, as many as four in 10 (39 per cent) wine users agree that wine in a box or a pouch is equally as good quality as bottled wine – indeed, just 26 per cent of wine users think that boxed wine is inferior. Meanwhile screwtops are seen as even less of an issue for wine lovers, with just 17 per cent claiming not to trust ‘screwcap quality’ wine.
Chris Wisson, Senior Drinks Analyst at Mintel, explained, “Recent years have seen many wine drinkers re-appraising their perceptions and use of wine in differing formats and packaging styles. Boxed wine has the added advantage of the wine keeping for a longer period of time than in a bottle, facilitating more flexible usage and encouraging moderate drinking. Reducing wastage, boxed wine provides an ideal solution in a market which is both environmentally- and cost-conscious”.
At the top level, all seems well in the UK wine market as, apart from in 2009, value sales have increased annually every year. Currently valued at £10.4 billion in 2011, the year ahead is estimated to see a continuation of this trend with sales increasing by 2.4 per cent to reach £10.6 billion in 2012. However this market is not as healthy as it may initially seem as volume sales have fallen from 1.26 million litres in 2007 to 1.14 million litres in just five years. Many users have already traded out of wine-buying in recent years, driven away from the market by continued pressures on household budgets, with Mintel’s research showing that two in five (39 per cent) wine buyers are now reassessing their purchase of wine.
Reflecting the cost pressures at play in the wine market, the relationship between wine buyers and brands has shifted. While the leading brands in the wine market can take comfort from the fact that they command a high level of trust (almost three quarters of wine buyers (73 per cent) trust them to provide a consistently good product) there is a notable dark cloud on the horizon as almost two thirds (63 per cent) of wine buyers claim they’d switch from their favourite brand if another was on promotion.
“With many brands now moving away from unsustainable promotion-heavy models, volume sales look set to continue sliding in the years to come,” believes Chris Wisson, “However, many consumers are likely to be reluctant to stop buying wine altogether and depending on the level of inflation the price rises may be higher than the fall in volume, with potential for further value growth. Growing segments such as boxed and low-alcohol wine may help to stimulate some growth and represent a cost-effective means of keeping wine drinkers engaged with the market.”
While price and brand name are predictably high up in wine buyers’ decision-making process, the finding that a majority of 57 per cent list the grape type as one of their main choice factors is surprising. It’s well ahead of the 38 per cent who identify country of origin as a main driver when buying wine. This suggests that many wine drinkers are shopping for wine according to the grape types which they know they like, somewhat circumnavigating in-store layouts based on country of origin.
However, rosé wine has made great strides over the past decade and is now a mainstream segment of the wine market, claims Mintel, drunk by 43 per cent of adults. Part of its success can be attributed to the fact that it has broadened its appeal and become a more acceptable drink for all ages but more importantly for both men and women alike. In 2012, six in 10 wine buyers think that it’s a drink equally suitable for both genders with just 15 per cent disagreeing.
Despite the difficulties and potential extra costs of production, lower-alcohol wines are one of the few segments of the wine market showing robust year-on-year growth with value sales increasing by 40 per cent to around £23 million over 2011/12. The market has benefited from lower duty on wines with an ABV of 5.5 per cent or less and a growing emphasis on healthy lifestyles and lower alcohol consumption although still just one in five wine buyers (19 per cent) claim to be interested in lower-alcohol wines. Taste presents a notable barrier for low alcohol wines with a third (32 per cent) of wine buyers preferring the taste of normal-strength wines. However, on a more positive note, only 27 per cent of wine buyers would expect lower-alcohol wines to taste inferior, suggesting that the majority do not hold such prejudiced views.
“Many wine drinkers are becoming increasingly price-sensitive and unwilling to pay more for their wine,” he concluded, “The opportunity for wines with an ABV of 5.5 per cent or less is that some of the tax savings could be passed onto consumers, encouraging less affluent users in particular to remain engaged with the market. However, the issue for producers of these lower-alcohol wines is that they’re often more difficult and expensive to produce than standard-ABV wines and operators should continue to focus on improving the efficiency of their manufacturing process to be able to compete with standard wines on price profitably.”
Although accounting for a fraction of the total market value, English wines have seen significant growth in recent years with sales estimated to be up to £25 million, an increase of over 50 per cent in value and 25 per cent in volume on the previous year. Today, there’s a high level of enthusiasm among wine buyers to try wines from many different countries (72 per cent) and English wine has been one of the main beneficiaries of this open-mindedness, with 56 per cent of consumers more open to trying English wine than in the past. Improving quality perception has played a role in this, as one in two (52 per cent) agree that English wines have improved in quality.
“English wine looks well placed to continue growing in the coming years, with increasing numbers of vineyard plantings and bottles produced,” stated Chris Wisson, “While growth is rapid, the English wine industry faces some key obstacles including limited mainstream availability.”
Indeed, price is also proving an obstacle for some wine lovers. While half of wine buyers (47 per cent) think that it’s important to buy English wines to support local producers, only 15 per cent are prepared to pay a premium to do so. Other issues include confusion between the significantly different English and British wine markets – over a third of wine drinkers (35 per cent) think that British and English wines are the same.
For the full report: http://store.mintel.com/wine-uk-september-2012.html