Opportunities in the UK wine market
At the end of a very interesting week taking 1 adidas flux 3 women winemakers around London, in our now fourth annual immersion week!
The winemakers have been to Tesco head office, to the brilliant Sampler wine shop in Islington (soon to open a second store in Kensington), to meet a sommelier organisation, and to meet the press team at Decanter.
One of the most interesting talks has been from Summit, the company responsible for all the promotions of Bordeaux wine across the UK. They gave a snapshot of the UK wine market, and how Bordeaux fits in to it.
Tesco and Sainsburys are 45% of UK market. Supermarkets in total are 70.6% of the market
Mail order and internet now up to 12% of market
Tesco next year are set to overtake Direct Wine in terms of market share with their online wine offering.
Sainsburys in 2010 are also expanding into mail order wine service.
France still dominant in the on trade (the only sector where it is), but lost 2.5million cases last year.
In ontrade, 52.8% white, 12% rose (Doubled in two years) and rest is red.
Consumption 9 litres per capita in 1991 to 27l per capita in 2009 (bdx 1.7% of that) was 3% in 1991. France had 35% of the market in 1991, has 15% today
New World had 5% in 1991, has 59% today. Own labels were 50% then, today are around 15%
Average price in the off trade is 4.32 (up from 4.02 in 2007, but mainy due to VAT increases). France average price is 4.91.
Off licenses down 18% over 2009 mainly because of Threshers.
Under 4, france does very badly and has lost a lot of volume, because other countries do it better. But once you hit over 4, particularly 5plus, it is growing, and has been doing so consistently for the last few years. Bordeaux tends to lose in volume and gain in value.
Bdx 1.3 million cases in the UK total of all the chtx.
Over 5 category for wine has grown by 34% in the last two years (07 09), and by 60% in the last 5 years.
21% of market is premium, over 5 (in UK) and that works f adidas flux or Bordeaux. 21.3 million cases. France is second in this category, and Bdx is 25% of that. Bdx currently has 7% of the over 5 market in the UK.
(Australia is still number one in this +5 category, mainly for wines that are priced between 5 and 6)
Average price of a Bdx wine in the UK is 6.20
The main opportunities identified for Bordeaux were:
Capitalising on its reputation
Converting new consumers who have grown up on New World wine
Breadth of offer/home of varietals
The figures portray an expanding market, but what has really occurred is something more complex: the development of a new market, one where wine is enjoyed for itself and not simply as an accompaniment to a meal. You might describe this type of consumption as drinking ‘standing up’ rather than drinking ‘sitting down’. Drinking standing up includes wine bars, pubs, pre dinner, cocktail style parties and more prosaically just a bottle in the fridge for when a friend pops round. This market is one which until now has hardly existed in France (and Italy and Spain too), where there appears to be an unwritten rule that you don’t touch the adidas flux glass until the first ‘plat’ appears. And in the UK it has been colonised almost entirely by the new world. To grab a slice of this market, producers (and their marketing organisations) are obliged to address what the consumer wants, not simply what they have to give: the palate profile of wines to drink ‘standing up’ are rather different than t adidas flux hose better suited to drinking ‘sitting down’.
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