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Still, Sparkling and Fortified Wine - UK - September 2013

INTRODUCTION
Definition
Still wines
Sparkling wines
Fortified wines
Excluded
Abbreviations
EXECUTIVE SUMMARY
The market
Figure 1: Forecast of UK value sales of wines, 2008-18
Figure 2: Forecast of UK volume sales of wines, 2008-18
Market factors
Duty rates and a weakened sterling increase prices
Wine’s positioning should help it to remain popular
Population changes entail threats and opportunities
Climate changes also play a role
Companies, brands and innovation
Figure 3: Value sales of top-selling still wine brands in the off-trade, 2012/13
Lower-alcohol wines at the forefront of the innovation landscape
Wine advertising remains steady
The consumer
Still wine remains popular among the majority of adults
Almost half of still wine buyers typically spend £5-7.49 per bottle
Wine knowledge surprisingly high
Positive attitudes prevalent among still wine drinkers
Figure 4: Attitudes towards still wines, July 2013
Sparkling wine reaches new heights of credibility
Figure 5: Attitudes towards Champagne and sparkling wines, July 2013
Fortified wines benefit from associations with being after-dinner drinks
What we think
ISSUES IN THE MARKET
Can wines compete with drinks such as cider?
Who looks set to win in the sparkling wine battleground in the coming years?
How can fortified wines move with the times?
How can operators tap into wine drinkers’ thirst for knowledge?
TREND APPLICATION
FSTR HYPR
Sense of the Intense
Mintel Futures: Old Gold
INTERNAL MARKET ENVIRONMENT
Key points
Taxation on alcoholic drinks on the rise
Figure 6: UK excise duty rates for wines, 2003-13
Figure 7: Annual price index (RPI) of beer and wines and spirits, in the off-trade and on-trade, 2007-12
Figure 8: Taxation on 75cl bottle of table wine from retail outlet, 2000-11
Minimum pricing plans shelved for the foreseeable future
A weakened sterling adds further price pressures
Figure 9: Annual average exchange rates for Sterling, 2007-13
In-home drinking grows in popularity as consumers budget
Bridging the gender divide
Wine well-placed to benefit from associations with relaxing
Figure 10: In-home and out of home drinking occasions, April 2013
BROADER MARKET ENVIRONMENT
Key points
Consumer confidence bouncing back
Figure 11: Household income vs expenditure per head (£), 1997-2012
Figure 12: Consumer Confidence Index, monthly, January 2007-August 2013
Figure 13: Trends in UK per capita consumption of ‘100% alcohol’, 2006-11
Figure 14: Calorie and alcohol unit content of selected types of alcoholic drinks
An aging population set to benefit the wine market
Figure 15: Projected trends in the age structure of the UK population, 2013-18
ABs and C2s will hold the key to growth
Figure 16: Changes in the adult socio-economic structure of the UK population, 2013-18
Climate changes add pressure to wine producers
Hot summer boosts the UK drinks market
Figure 17: Hours of sunshine in the UK, by month, 2008-13
Sugar consumption on the rise
COMPETITIVE CONTEXT
Key points
Consumers cutting back on alcohol consumption
Figure 18: Value sales of selected alcoholic drink categories, 2008-12
STRENGTHS AND WEAKNESSES
Strengths
Weaknesses
WHO’S INNOVATING?
Key points
Wine innovation continues to fall behind pre-recessionary levels
Figure 19: New product launches within the UK still/sparkling/fortified wine market, by category, 2008-13
Figure 20: Share of branded and own-label new product launches within the UK still/sparkling/fortified wine market, 2008-13
The rise of low-alcohol wine
Limited editions
Wine packaging continues to evolve
Appealing to younger wine drinkers
Selected examples of other innovation
MARKET SIZE AND SEGMENT PERFORMANCE
Key points
Steady value growth driven by inflation expected in the years ahead
Figure 21: UK value and volume sales of wines, at current and constant prices, 2008-18
Figure 22: Forecast of UK value sales of wines, 2008-18
Figure 23: Forecast of UK volume sales of wines, 2008-18
Forecast methodology
Segment performance: Still wine
Figure 24: UK value and volume sales of still wines, at current and constant prices, 2008-18
Figure 25: Forecast of UK value sales of still wines, 2008-18
Segment performance: Champagne and sparkling wine
Figure 26: UK value and volume sales of Champagne, at current and constant prices, 2008-18
Figure 27: Forecast of UK value sales of Champagne, 2008-18
Sparkling wines’ fortunes bubbling up
Figure 28: UK value and volume sales of sparkling wines, at current and constant prices, 2008-18
Figure 29: Forecast of UK value sales of sparkling wines, 2008-18
Figure 30: Sparkling wine and Champagne value sales in the UK, 2008-18
Segment performance: Fortified wines
Figure 31: UK value and volume sales of fortified wines, at current and constant prices, 2008-18
Figure 32: Forecast of UK value sales of fortified wines, 2008-18
The on-trade outperforms the off-trade in 2013
Figure 33: UK value sales of wines in the on- and off-trade, 2010-13
Still wines drive on- and off-trade sales
Champagne and other sparkling wines see contrasting fortunes
Fortified wine sales rely on the off-trade
CHANNELS TO MARKET
Key points
Grocery multiples are a key driver of wine sales
Figure 34: Value sales within the off- and on-trade channels for the total wine market, 2010-12
On-trade sales prove resilient
MARKET SHARE
Key points
Accolade Wines takes the accolades
Figure 35: Value sales of selected top-selling still wine brands in the off-trade, 2011/12-2012/13
Downhill for Blossom Hill
Up the Creek
Wolf Blass outperforms its stablemate
Isla Negra leads the new wave
Yellow Tail leads the long tail of up and coming other brands
Own-label and retailer exclusive wines
Moët & Chandon leads the way among brands among ‘sparklers’
Figure 36: Value sales of top-selling sparkling wine/Champagne brands in the off-trade, 2011/12-2012/13
COMPANIES AND PRODUCTS
Accolade Wines
E&J Gallo
Freixenet
Moët Hennessy (Moët Hennessy Diageo)
Percy Fox (Diageo)
Pernod Ricard
Symington Family Estates
Treasury Wine Estates (TWE)
BRAND COMMUNICATION AND PROMOTION
Key points
Adpsend dominated by still wine
Figure 37: Total adspend for wines, 2009-13
Still wine advertising dominated by multi-product
Figure 38: Adspend for still wines dedicated to one colour, 2009-13
Figure 39: Leading advertisers in the UK wine market, 2009-13
Flat annual Champagne/sparkling wine advertising
Figure 40: Leading advertisers in the champagne and sparkling wine market, 2009-13
BRAND RESEARCH
Brand map
Figure 41: Attitudes towards and usage of brands in the wine sector, June 2013
Correspondence analysis
Brand attitudes
Figure 42: Attitudes, by wine brand, June 2013
Brand personality
Figure 43: Wine brand personality – macro image, June 2013
Figure 44: Wine brand personality – micro image, June 2013
Brand experience
Figure 45: Wine brand usage, June 2013
Figure 46: Satisfaction with various wine brands, June 2013
Figure 47: Consideration of wine brands, June 2013
Figure 48: Consumer perceptions of current wine brand performance, June 2013
Brand index
Figure 49: Wine brand index, June 2013
Target group analysis
Figure 50: Target groups, June 2013
Figure 51: Wine brand usage, by target groups, June 2013
Group One – Conformists
Group Two – Simply the Best
Group Three – Shelf Stalkers
Group Four – Habitual Shoppers
Group Five – Individualists
CONSUMER – PURCHASE OF WINES
Key points
Almost half of adults drink red and white wine
Figure 52: Purchase of still wines in the last six months, July 2013
On-trade purchases lag behind off-trade
White wine holds a slim lead ahead of red by purchases
Figure 53: Purchase of red, white and rosé wine, by gender and age, July 2013
Rosé’s traditional appeal to women and younger age groups holds firm
Boxes/pouches remain niche but an important segment for wines
Cava now as popular as Champagne, with Prosecco close behind
Figure 54: Purchase of sparkling wines in the last six months, July 2013
Figure 55: Purchase of Champagne/sparkling wines, by gender and socio-economic group, July 2013
Fortified wines remain a relatively niche interest
Figure 56: Purchase of fortified and lower-alcohol wines, July 2013
Lower-alcohol wines still only bought by 14% of adults
40% of adults drink 1-3 types of wine at home
Figure 57: Repertoire of types of wines purchased for in-home drinking, July 2013
Repertoires shrink out of home
Figure 58: Repertoire of types of wines purchased for out-of-home drinking, July 2013
CONSUMER – SPEND ON WINES
Key points
Almost half of still wine buyers spend £5-7.49 for day-to-day drinking
Figure 59: Spend on any still wine for day-to-day and special occasions, July 2013
44% of sparkling wine buyers spend over £10 for special occasions
Figure 60: Spend on sparkling wines for day-to-day and special occasions, July 2013
Champagne reliant on the £15+ price bracket
Figure 61: Spend on Champagne for day-to-day and special occasions, July 2013
Men are the most likely to spend more on fortified wines
Figure 62: Spend on fortified wines for day-to-day and special occasions, July 2013
Premiumisation and trading up on wines
CONSUMER – GRAPE TYPES PURCHASED
Key points
Merlot and Pinot are the most popular grape types in the UK
Figure 63: Purchase of different grape types, July 2013
Four other grape types also enjoy widespread use
Other grape types garner lower levels of usage
UK wine drinkers know their grapes
CONSUMER – ATTITUDES TOWARDS STILL WINES
Key points
Positive attitudes prevalent among still wine drinkers
Figure 64: Attitudes towards still wines, July 2013
Strong willingness to pay more for better quality
Figure 65: Attitudes relating to the cost/size of still wines, July 2013
Knowledge can drive willingness to spend on wine
Scope for smaller bottles to keep price points accessible
How high can lower-alcohol wines go?
Figure 66: Attitudes relating to lower-alcohol/calorie wines, July 2013
Can a new name or focus support interest on lower-alcohol variants?
Strong, fruity flavours appeal to the majority of still wine buyers
Figure 67: Attitudes relating to the taste/flavour of still wines, July 2013
Quality perceptions are changing
More than half of wine drinkers see screw caps and corks on a par
Own-label is deemed an equal for brands by nearly half of drinkers
Grape type is an important consideration for still wine buyers
New wine regions spark most interest among younger drinkers
CONSUMER – ATTITUDES TOWARDS CHAMPAGNE AND SPARKLING WINES
Key points
Figure 68: Attitudes towards Champagne and sparkling wines, July 2013
Two thirds of users are prepared to celebrate special occasions with sparkling wines
Figure 69: Attitudes towards the taste and quality of Champagne and sparkling wine, July 2013
A third of buyers see little difference between Champagne and sparkling wine
English wine reaches mainstream credibility
Figure 70: Attitudes towards the drinking of sparkling wine with meals, July 2013
A promotion-led strategy may harm Champagne in the long term
Figure 71: Attitudes towards the price of Champagne and sparkling wine, July 2013
Scope to add value with packaging and promotional gifts
Education could help consumers with navigating sparkling wines
Figure 72: Attitudes towards the understanding of Champagne and sparkling wine, July 2013
CONSUMER – ATTITUDES TOWARDS FORTIFIED WINES
Key points
Fortified wines thrive in the after-dinner occasion
Figure 73: Attitudes towards fortified wines, July 2013
The changing face of fortified wines
CONSUMER – TARGET GROUPS
Key points
 THREE TARGET GROUPS
Figure 74: Target groups for still wines, July 2013
Adventurers (42%)
Traditionalists (34%)
Price-driven (24%)
APPENDIX – MARKET SIZE AND SEGMENT PERFORMANCE
Figure 75: Best and worst case forecasts for the wines market, by value, 2013-18
Figure 76: Best and worst case forecasts for the wines market, by volume, 2013-18
Figure 77: Best and worst case forecasts for the still wine market, by value, 2013-18
Figure 78: Best and worst case forecasts for the still wine market, by volume, 2013-18
Figure 79: Forecast for volume sales of still wine, 2008-18
Figure 80: Best and worst case forecasts for the Champagne market, by value, 2013-18
Figure 81: Best and worst case forecasts for the Champagne market, by volume, 2013-18
Figure 82: Forecast for volume sales of Champagne, 2008-18
Figure 83: Best and worst case forecasts for the sparkling wine market, by value, 2013-18
Figure 84: Best and worst case forecasts for the sparkling wine market, by volume, 2013-18
Figure 85: Forecast for volume sales of sparkling wine, 2008-18
Figure 86: Best and worst case forecasts for the fortified wine market, by value, 2013-18
Figure 87: Best and worst case forecasts for the fortified wine market, by volume, 2013-18
Figure 88: Forecast for volume sales of fortified wine, 2008-18
Segment performance (Volume)
Figure 89: UK volume sales of wines in the on- and off-trade, 2011-13
APPENDIX – BRAND COMMUNICATION AND PROMOTION
Figure 90: Leading brands advertised in the UK still wine market, 2009-13
Figure 91: Main monitored media advertising spend on still wine, by media type, 2009-13
Figure 92: Leading brands advertised in the UK Champagne and sparkling wine market, 2009-13
Figure 93: Main monitored media advertising spend on Champagne and sparkling wine, by media type, 2009-13
Figure 94: Adspend in the UK fortified wine market, 2009-13
APPENDIX – BRAND RESEARCH
Figure 95: Brand usage, June 2013
Figure 96: Brand commitment, June 2013
Figure 97: Brand momentum, June 2013
Figure 98: Brand diversity, June 2013
Figure 99: Brand satisfaction, June 2013
Figure 100: Brand attitude, June 2013
Figure 101: Brand image – macro image, June 2013
Figure 102: Brand image – micro image, June 2013
Figure 103: Profile of target groups, by demographics, June 2013
Figure 104: Psychographic segmentation by target groups, June 2013
Figure 105: Brand usage, by target groups, June 2013
Brand index
Figure 106: Brand index, June 2013
APPENDIX – CONSUMER – PURCHASE OF WINES
Figure 107: Purchase of wines, July 2013
Figure 108: Purchase of any still wine (net), by demographics, July 2013
Figure 109: Purchase of any sparkling wine (net), by demographics, July 2013
Figure 110: Purchase of red wine, by demographics, July 2013
Figure 111: Purchase of white wine, by demographics, July 2013
Figure 112: Purchase of rosé wine, by demographics, July 2013
Figure 113: Purchase of Champagne, by demographics, July 2013
Figure 114: Purchase of Prosecco, by demographics, July 2013
Figure 115: Purchase of Cava, by demographics, July 2013
Figure 116: Purchase of English/any other sparkling wine (eg Moscato), by demographics, July 2013
Figure 117: Purchase of any fortified wine (eg Port/Sherry/Vermouth), by demographics, July 2013
Figure 118: Purchase of any dessert wine, by demographics, July 2013
Figure 119: Purchase of any wine in a box/pouch, by demographics, July 2013
Figure 120: Purchase of any low-alcohol wine, by demographics, July 2013
Figure 121: Repertoire for purchase of wines for drinking at home in the last six months, July 2013
Figure 122: Repertoire for purchase of wines for drinking at home in the last six months, by demographics, July 2013
Figure 123: Repertoire for purchase of wines in pubs/restaurants in the last six months, July 2013
Figure 124: Repertoire for purchase of wines in pubs/restaurants in the last six months, by demographics, July 2013
APPENDIX – CONSUMER – SPEND ON WINES
Figure 125: Spending on wine for day-to-day drinking, July 2013
Figure 126: Spend on still wine for day-to-day drinking, by demographics, July 2013
Figure 127: Spend on Champagne for day-to-day drinking, by demographics, July 2013
Figure 128: Spend on sparkling wine for day-to-day drinking, by demographics, July 2013
Figure 129: Spend on fortified wine for day-to-day drinking, by demographics, July 2013
Figure 130: Spend on wine in a box/pouch for day-to-day drinking, by demographics, July 2013
Figure 131: Spending on wine for special occasions, July 2013
Figure 132: Spend on still wine for special occasions, by demographics, July 2013
Figure 133: Spend on Champagne for special occasions, by demographics, July 2013
Figure 134: Spend on sparkling wine for special occasions, by demographics, July 2013
Figure 135: Spend on fortified wines for special occasions, by demographics, July 2013
Figure 136: Spend on wine in a box/pouch for special occasions, by demographics, July 2013
APPENDIX – CONSUMER – GRAPE TYPES PURCHASED
Figure 137: Use of different grape types, July 2013
Figure 138: Most popular use of different grape types, by demographics, July 2013
Figure 139: Next most popular use of different grape types, by demographics, July 2013
Figure 140: Use of other grape types, by demographics, July 2013
APPENDIX – CONSUMER – ATTITUDES TOWARDS STILL WINES
Figure 141: Attitudes towards still wines, July 2013
Figure 142: Agreement with the statements ‘I prefer wines with stronger fruity flavours’ and ‘I am prepared to pay more for better quality wine’, by demographics, July 2013
Figure 143: Agreement with the statements ‘There is no difference in quality between wines with a screw cap and wines with cork closures’ and ‘I would be interested in drinking limited edition wines (eg seasonal versions)’, by demographics, July 2013
Figure 144: Agreement with the statements ‘I would expect lower-alcohol wines to not taste as good as standard wines’ and ‘I think that supermarket own-label wines are as good as branded varieties’, by demographics, July 2013
Figure 145: Agreement with the statements ‘I would be prepared to spend more on wines if I understood more about them’ and ‘I am interested in wines from newer wine-producing countries’, by demographics, July 2013
Figure 146: Agreement with the statements ‘Grape type is more important to me than country of origin’ and ‘I am interested in lower calorie wines as a healthier alternative’, by demographics, July 2013
Figure 147: Agreement with the statements ‘I think that sweeter wines are better quality than drier ones’ and ‘I am interested in smaller (ie 375-500ml) bottles of wine (instead of the usual 750ml)’, by demographics, July 2013
Figure 148: Attitudes towards still wines, by spending on still wine for day-to-day drinking, July 2013
Figure 149: Attitudes towards still wines, by spending on still wine for special occasions, July 2013
APPENDIX – CONSUMER – ATTITUDES TOWARDS CHAMPAGNE AND SPARKLING WINES
Figure 150: Attitudes towards Champagne and sparkling wines, July 2013
Figure 151: Attitudes towards Champagne and sparkling wines, July 2013
Figure 152: Agreement with the statements ‘Sparkling wines are as suitable as Champagne for special occasions/celebrations’ and ‘Sparkling wines are as suitable as still wines for drinking with meals’, by demographics, July 2013
Figure 153: Agreement with the statements ‘I expect English sparkling wines to be of a high quality’ and ‘I am only interested in buying Champagne when it is on promotion’, by demographics, July 2013
Figure 154: Agreement with the statements ‘Supermarket own-label Champagnes are as good as branded varieties’ and ‘I would like more information/help when buying champagne/sparkling wine’, by demographics, July 2013
Figure 155: Agreement with the statements ‘I am interested in drinking sparkling wines from specific regions’ and ‘I am not sure what terms such as brut and cuvée mean’, by demographics, July 2013
Figure 156: Agreement with the statements ‘I prefer the taste of Prosecco to Champagne’ and ‘I would pay more for Champagne if it came with gift packaging and/or glassware’, by demographics, July 2013
Figure 157: Agreement with the statement ‘There is little difference between Champagne and sparkling wine’ and ‘Champagnes offer better value for money than sparkling wine’, by demographics, July 2013
Figure 158: Attitudes towards Champagne and sparkling wines, by purchase of any Champagne/sparkling wine, July 2013
APPENDIX – CONSUMER – ATTITUDES TOWARDS FORTIFIED WINES
Figure 159: Attitudes towards fortified wines, July 2013
Figure 160: Most popular attitudes towards fortified wines, by demographics, July 2013
Figure 161: Attitudes towards fortified wines, by purchase of fortified wines, July 2013
APPENDIX – CONSUMER – TARGET GROUPS
Figure 162: Target groups, by demographics, July 2013
Figure 163: Purchase of wines, by target group, July 2013
Figure 164: Spending on wine for day-to-day drinking, by target group, July 2013
Figure 165: Spending on wine for special occasions, by target group, July 2013
Figure 166: Use of different grape types, by target group, July 2013
Figure 167: Attitudes towards still wines, by target group, July 2013

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