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Still, Sparkling and Fortified Wine - UK - October 2016

Published By :

Mintel

Published Date : Nov 2016

Category :

Wine

No. of Pages : N/A

Seen to offer value for money by just one in four UK adults, still wine could come under fire if household incomes are squeezed following the UK’s vote to exit the EU. Indeed, the drop in the strength of the Pound and the UK’s reliance on imported wine are set to result in rising prices, further undermining its value image.

Table of contents

OVERVIEW
What you need to know
Products covered in this Report
Still wines
Sparkling wines
Fortified wines
Excluded from the Report

EXECUTIVE SUMMARY
Sales expected to dip in 2016
Figure 1: Forecast of UK value sales of wine, 2011-21
Companies and brands
Hardys maintains still wine lead, despite sales dip
Adspend falls in 2015
Innovation looks to fruit flavours, alcohol content and craft cues
The consumer
Still wines remain the most popular but sparkling sees significant growth
Figure 2: Purchase of wines, by type, July 2015 and August 2016
Favourite brand and grape are top factors
Figure 3: Factors influencing choice of wine, August 2016
Cutting back on wine is seen as an easy way to save
Figure 4: Attitudes towards wine, August 2016
Just 35% feel knowledgeable about wine
Figure 5: Further attitudes towards wine, August 2016
Still wine seen to offer greatest versatility
Figure 6: Correspondence analysis of qualities associated with different types of alcoholic drinks, August 2016
What we think

ISSUES AND INSIGHTS
Lower/no-alcohol and smaller bottles offer a way to appeal to health-conscious wine drinkers
The facts
The implications
Wine should do more to leverage the wealth of inherent craft cues
The facts
The implications
Marketing wine as more ‘fun’ would help to deconstruct traditional notions of the category
The facts
The implications

THE MARKET – WHAT YOU NEED TO KNOW
Sales expected to dip in 2016
Still wine sees a sluggish performance
Success of sparkling wine is set to continue; albeit at a slower rate
Champagne sees return to volume growth
Fortified wine sees limited growth
The off-trade continues to outperform the on-trade

MARKET SIZE AND FORECAST
Sales expected to dip in 2016
Figure 7: Total value and volume sales of wine, at current and constant prices, 2011-21
The future
Figure 8: Forecast of UK value sales of wine, 2011-21
Figure 9: Forecast of UK volume sales of wine, 2011-21
The impact of the EU referendum vote
Figure 10: Alternative scenarios for the wine market, 2016-21
Figure 11: Alternative scenarios for the wine market, at current prices, 2016-21
Brexit vote has limited impact on consumers’ finances
Rising prices are imminent
The market in 2008-09
Savvy habits are already established

MARKET SEGMENTATION
Still wine sees a sluggish performance
Figure 12: Total value and volume sales of still wine, at current and constant prices, 2011-21
Figure 13: Forecast of UK value sales of still wine, 2011-21
Success of sparkling wine is set to continue; albeit at a slower rate
Figure 14: Total value and volume sales of sparkling wine, at current and constant prices, 2011-21
Figure 15: Forecast of UK value sales of sparkling wine, 2011-21
Champagne sees return to volume growth
Figure 16: Total value and volume sales of Champagne, at current and constant prices, 2011-21
Figure 17: Forecast of UK value sales of Champagne, 2011-21
Fortified wine sees limited growth
Figure 18: Total value and volume sales of fortified wine, at current and constant prices, 2011-21
Figure 19: Forecast of UK value sales of fortified wine, 2011-21

CHANNELS TO MARKET
The off-trade continues to outperform the on-trade
Figure 20: UK value and volume sales of wine in the on- and off-trade, by type, 2014-16

MARKET DRIVERS
Wine duty rises slightly
Figure 21: UK excise duty rates for wines, 2006-16
Brexit to push up prices for imports
Figure 22: Consumer price indices for all items, wine, beer and spirits (2006=100), 2006-16
Consumer caution could hit discretionary spending
New guidelines put the spotlight on alcohol consumption
New opportunities for lower/no-alcohol drinks
Demographic changes impact the market

KEY PLAYERS – WHAT YOU NEED TO KNOW
Hardys maintains still wine lead, despite sales dip
Prosecco brands dominate sparkling wine
LVMH leads Champagne, outpacing growth in the market
Buckfast holds onto lead in fortified wine
Adspend falls in 2015
Innovation looks to fruit flavours, alcohol content and craft cues

MARKET SHARE
Hardys maintains lead in still wine, despite a dip in sales
Figure 23: UK retail value and volume sales of the leading still wine brands, 2014/15 and 2015/16
Barefoot and Casillero del Diablo perform strongly
Prosecco brands dominate sparkling wine
Figure 24: UK retail value and volume sales of the leading sparkling wine brands, 2014/15 and 2015/16
LVMH leads Champagne, outpacing growth in the market
Figure 25: UK retail value and volume sales of the leading Champagne brands, 2014/15 and 2015/16
Buckfast holds onto lead in fortified wine
Figure 26: UK retail value and volume sales of the leading fortified wine brands, 2014/15 and 2015/16

LAUNCH ACTIVITY AND INNOVATION
E&J Gallo launches a Prosecco
Fruit-flavoured trend continues in still wines
Brands expand lower/no-alcohol wine ranges
New colours appeal to drinkers’ senses
Over-ice trend gains in popularity among consumers
Retailers look to exclusivity to drive premiumisation
Retailer exclusives
Aldi channels craft trend with craft wine launch
Retailers look to new channels
Pop-ups provide another route to market
Aldi looks to the online channel
Vinomofo eyes UK launch
Smaller formats appeal

ADVERTISING AND MARKETING ACTIVITY
Advertisers cut back in 2015
Figure 27: Total above-the-line, online display and direct mail advertising expenditure on still, sparkling and fortified wine, 2012-16
Figure 28: Total above-the-line, online display and direct mail advertising expenditure on still, sparkling and fortified wine, by category, 2012-16
Lidl leads advertiser spend
Figure 29: Total above-the-line, online display and direct mail advertising expenditure on still, sparkling and fortified wine, by top 10 advertisers (sorted by 2015), 2012-16
Brands look to alternative marketing support
Sponsorship provides an outlet
Festivals and experiential campaigns
Veuve Clicquot pays homage to founder through art exhibitions
Nielsen Ad Intel coverage

THE CONSUMER – WHAT YOU NEED TO KNOW
Still wines remain the most popular but sparkling sees significant growth
Only a fifth of people drink just one glass of wine per occasion
Favourite brand and grape are top factors
Cutting back on wine is seen as an easy way to save
Just 35% feel knowledgeable about wine
Still wine seen to offer greatest versatility and value for money

PURCHASE OF WINES
Still wines remain the most popular but sparkling sees significant growth
Newer formats gain in popularity
Figure 30: Purchase of wines, by type, July 2015 and August 2016
Still wine buying peaks among over-65s; sparkling wine among under-45s
Figure 31: Purchase of still and sparkling wines, by age, August 2016
In-home bias apparent for all wines
Figure 32: Purchase of wines, by type and location, August 2016

VOLUMES OF WINE CONSUMED
Only a fifth of people drink just one glass of wine per occasion
Figure 33: Volumes of wine consumed on a typical occasion, August 2016
Over-55s limit their intake to 250ml or less
Figure 34: Volumes of wine consumed on a typical occasion, by age, August 2016

FACTORS INFLUENCING CHOICE OF WINE
Favourite brand and grape are top factors
Figure 35: Factors influencing choice of wine, August 2016
Potential for unique and intense flavours

ATTITUDES TOWARDS WINE
Cutting back on wine is seen as an easy way to save
Figure 36: Attitudes towards wine, August 2016
Coloured wine appeals particularly to younger drinkers
Figure 37: Agreement with the statement ‘I would be interested in orange wine (ie white wine where the grape skins are left in for a time during fermentation, giving an orange colour and extra aromas and flavours)’, by age, August 2016
On-tap wine is well placed to grow

FURTHER ATTITUDES TOWARDS WINE
Just 35% feel knowledgeable about wine
Figure 38: Further attitudes towards wine, August 2016
Consumers opt for convenience, preferring screw caps to corks
Young sparkling wine buyers are most open to smaller formats
Figure 39: Still, sparkling and fortified Wine – CHAID – Tree output, August 2016
Uncertainty over natural wine

QUALITIES ASSOCIATED WITH ALCOHOLIC DRINKS
Still wine seen to offer greatest versatility and value for money
Champagne fails to deliver value for money
Figure 40: Correspondence analysis of qualities associated with different types of alcoholic drinks, August 2016
Figure 41: Qualities associated with different types of alcoholic drinks, August 2016
Sparkling varieties are seen to be most ‘fun’
Methodology

APPENDIX – DATA SOURCES, ABBREVIATIONS AND SUPPORTING INFORMATION
Abbreviations
Forecast Methodology
Consumer research methodology
CHAID – Methodology
Figure 42: Still, sparkling and fortified wine – CHAID – Table output, August 2016

APPENDIX – MARKET SIZE AND FORECAST
Figure 43: Best- and worst-case forecasts for the total wine market, by value, 2016-21
Figure 44: Best- and worst-case forecasts for the total wine market, by volume, 2016-21
Figure 45: Best- and worst-case forecasts for the still wine market, by value, 2016-21
Figure 46: Best- and worst-case forecasts for the still wine market, by volume, 2016-21
Figure 47: Forecast of UK volume sales of still wine, 2011-21
Figure 48: Best- and worst-case forecasts for the sparkling wine market, by value, 2016-21
Figure 49: Best- and worst-case forecasts for the sparkling wine market, by volume, 2016-21
Figure 50: Forecast of UK volume sales of sparkling wine, 2011-21
Figure 51: Best- and worst-case forecasts for the Champagne market, by value, 2016-21
Figure 52: Best- and worst-case forecasts for the Champagne market, by volume, 2016-21
Figure 53: Forecast of UK volume sales of Champagne, 2011-21
Figure 54: Best- and worst-case forecasts for the fortified wine market, by value, 2016-21
Figure 55: Best- and worst-case forecasts for the fortified wine market, by volume, 2016-21
Figure 56: Forecast of UK volume sales of fortified wine, 2011-21

APPENDIX – MARKET DRIVERS
Figure 57: Trends in the age structure of the UK population, 2011-21
APPENDIX – MARKET SHARE
Figure 58: UK retail value and volume sales of the leading still winemakers, 2014/15 and 2015/16
Figure 59: UK retail value and volume sales of the leading sparkling winemakers, 2014/15 and 2015/16
Figure 59: UK retail value and volume sales of the leading Champagne makers, 2014/15 and 2015/16
Figure 60: UK retail value and volume sales of the leading fortified winemakers, 2014/15 and 2015/16

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