Market pressures

Despite a challenging climate for alcohol sales in general, the good news for wines is that sales have now risen to over 23% of the drinks market.

wines6It appears that December wine sales were relatively flat which was possibly the best that could have been hoped for, given the weather. During 2010, wine sales actually rose by almost 4% but this may have been related to a reduction in cross border shopping. In 2009, wine sales fell by about 10% so that overall loss clearly hasn’t been clawed back yet. And as the threat from cross border shopping begins to recede, independents have come under increasing pressure from the big multiples. In 2010, for example, Dunnes Stores joined Superquinn in having a successful autumn wine sale, offering around 60 wines at reductions of between 25% and 50%.

Still, there’s some good news for the wine sector. Alcohol consumption in Ireland has fallen to the 1995 level of 9.9 litres per capita while alcohol consumption is believed to have declined by around 10% in the last 18 months alone. Nevertheless, wine sales have now risen to over 23% of the drinks market, up from 12.3% in 2000. Even better, there is hope for growth in the future. Irish wine drinkers get through 15.4 litres per head annually as against France’s 48 litres and while it’s unlikely we will reach French levels, there’s still scope to switch a significant number of drinkers from beer and spirits to wine.

Meantime, Ireland’s wine affair with the New World has not abated. Since 2008 around 70% of our wine has been New World, with almost 50% of that being from Chile and Australia. When reading labels, grape variety seems to be just as important to Irish consumers as brands; at the moment, of course, price is more important than ever and the e10 threshold only crossed with reluctance. “Cocooning” has become a marketing buzzword and it refers to the growing preference for staying at home rather than dining out or going to pubs. It accounts for the greater resilience shown by wine sales compared with beer and spirits; over 60% of wine is purchased for home drinking.

At the end of 2010 the number of off-licences in Dublin was capped till 2017. Many independents will welcome this development as the number of outlets had become unsustainable in some areas; it’s also been a problem in many country towns.

Another bit of good news for on street retailers is that online wine sales may not be the great threat once thought. A WSTA survey in the UK has found that only 14% of consumers bought wine online and, of those, only half had done so more than four times a year. That is at the end of a year when half of all adults had bought other goods online. Reasons against internet wine buying were price (a lot of online wine stores don’t do much at entry point), delivery charges and the fact that you have to wait. Don’t forget- a huge proportion of wines are drunk within hours of purchase and only your real time store can give you that.  At least the off licences don’t have to worry as much as local booksellers do; so far technology hasn’t brought us the Kindle for wine.

E-drinking seems some way off yet!

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