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Still, Sparkling and Fortified Wine - UK - October 2014

“The scope to increase value sales is limited by the heavy promotional activity that is both accepted and expected by shoppers. Therefore, other avenues such as clearer information about the differences between more and less expensive wines and the opportunity to sample wines before buying may be better placed to help limit the perception of risk and drive uptake.”
– Colette Warren, Food and Drink Analyst

This report looks at the following areas:

  • Brands and retailers need to give people the confidence to trade up
  • Engaging consumers who are conscious about alcohol content
  • How can operators help consumers navigate the wine aisle?

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Table of contents

  1. Introduction

      • Definition
        • Excluded
          • Abbreviations
          • Executive Summary

              • The market
                  • Figure 1: Forecast of UK value retail sales of wines, 2009-19
                  • Figure 2: Forecast of UK volume retail sales of wines, 2009-19
                • Market factors
                  • Inflation keeps wine prices high even as tax escalator is scrapped
                    • Demographic changes present challenges and opportunities
                      • Consumer confidence is starting to recover
                        • Companies, brands and innovation
                          • Figure 3: Value sales of top-selling still wine brands in the off-trade, 2013/14*
                        • Wine packaging continues to evolve
                          • Adspend declines, as big four grocers and leading brands reduce spend
                            • The consumer
                              • Fewer adults are buying wine than in 2013
                                • Sparkling wine continues to appeal in a post-recessionary landscape
                                  • Figure 4: Attitudes towards Champagne and sparkling wine, July 2014
                                • Less than a third find wine easy to choose
                                  • Figure 5: Perception of own-brand and branded still wines, July 2014
                                • Interest in smaller servings, product sampling and fruit-infused wine
                                  • Alcohol content limits intake but interest in low-alcohol wines is low
                                    • Figure 6: Further attitudes towards still wine, July 2014
                                  • What we think
                                  • Issues in the Market

                                      • Brands and retailers need to give people the confidence to trade up
                                        • The facts
                                          • The implications
                                            • Engaging consumers who are conscious about alcohol content
                                              • The facts
                                                • The implications
                                                  • How can operators help consumers navigate the wine aisle?
                                                    • The facts
                                                      • The implications
                                                      • Trend Application

                                                          • Extend my Brand
                                                            • Guiding Choice
                                                              • Mintel Futures: Brand Intervention
                                                              • Market Drivers

                                                                • Key points
                                                                  • Inflation keeps wine prices high even as tax escalator is scrapped
                                                                    • Figure 7: UK excise duty rates for wines, 2004-14
                                                                    • Figure 8: HM Treasury estimated changes in volume consumption of alcohol over 2014-19 following changes to alcohol duty in Budget 2014, April 2014
                                                                  • Wine prices are growing more quickly than the price of beer
                                                                    • Figure 9: Annual price index (RPI) of beer and wines and spirits, in the on-trade and off-trade, 2009-13
                                                                    • Figure 10: Taxation on 75cl bottle of table wine from retail outlet, 2003-12
                                                                  • Ban on below-cost selling replaces minimum pricing plans
                                                                    • The Portman Group Code of Practice on Alcohol Sponsorship
                                                                      • Influence of exchange rates
                                                                        • Figure 11: Annual average exchange rates for Sterling, 2008-14
                                                                      • Consumer confidence is rising
                                                                        • Figure 12: Consumers’ financial health index, January 2009-July 2014
                                                                      • Number of 18-24s set to fall
                                                                        • Figure 13: Trends in the age structure of the UK population, 2009-14 and 2014-19
                                                                      • Accelerating growth predicted for over-55s
                                                                        • Slower growth on the cards for 25-34s
                                                                        • Strengths and Weaknesses

                                                                          • Strengths
                                                                            • Weaknesses
                                                                            • Who’s Innovating?

                                                                              • Key points
                                                                                • Packaging revamps and special editions boost fortified wine’s share of launches
                                                                                  • Figure 14: New product launches within the UK still/sparkling/fortified wine market, by category, 2009-14
                                                                                • Branded NPD continues to lead the UK wine market, in line with the dominance of brands in sales
                                                                                  • Figure 15: Share of branded and own-label new product launches within the UK still/sparkling/fortified wine market, 2009-14
                                                                                • Wine packaging continues to evolve
                                                                                  • More operators launch smaller-format wines
                                                                                    • Eco-friendly packaging continues to attract attention
                                                                                      • Low-calorie wines remain niche
                                                                                        • Appealing to younger wine drinkers – Fruit-flavoured wines
                                                                                          • Tesco goes premium with bag-in-box wine
                                                                                            • Wine producers get creative with helping consumers navigate the wine aisle
                                                                                              • Social commerce for the empowered customer
                                                                                                • Refillable wine
                                                                                                • Market Size and Segment Performance

                                                                                                  • Key points
                                                                                                    • Wine’s value growth masks a decline in volumes
                                                                                                      • Figure 16: UK value and volume sales of wines, at current and constant prices, 2009-19
                                                                                                      • Figure 17: Forecast of UK value sales of wines, 2009-19
                                                                                                      • Figure 18: Forecast of UK volume sales of wines, 2009-19
                                                                                                    • Segment performance: Still wine
                                                                                                      • Figure 19: UK value and volume sales of still wines, at current and constant prices, 2009-19
                                                                                                      • Figure 20: Forecast of UK value sales of still wines, 2009-19
                                                                                                    • Segment performance: Champagne and sparkling wine
                                                                                                      • Figure 21: UK value and volume sales of Champagne, at current and constant prices, 2009-19
                                                                                                      • Figure 22: Forecast of UK value sales of Champagne, 2009-19
                                                                                                    • Sparkling wine remains popular in a post-recessionary landscape
                                                                                                      • Figure 23: UK value and volume sales of sparkling wines, at current and constant prices, 2009-19
                                                                                                      • Figure 24: Forecast of UK value sales of sparkling wines, 2009-19
                                                                                                    • Segment performance: Fortified wine
                                                                                                      • Figure 25: UK value and volume sales of fortified wines, at current and constant prices, 2009-19
                                                                                                      • Figure 26: Forecast of UK value sales of fortified wines, 2009-19
                                                                                                    • The on-trade again outperforms the off-trade
                                                                                                      • Figure 27: UK value sales of wines in the on- and off-trade, 2012-2014
                                                                                                    • Sparkling wine sales increase by a fifth in just two years
                                                                                                      • Forecast methodology
                                                                                                      • Market Share

                                                                                                        • Key points
                                                                                                          • Hardys revamp helps it to retain top spot
                                                                                                            • Figure 28: Value and volume sales of top-selling still wine brands in the off-trade, 2012/13 and 2013/14
                                                                                                          • Mixed performances for other leading brands
                                                                                                            • Own-label drives the bulk of the growth in sparkling
                                                                                                              • Figure 29: Value and volume sales of top-selling sparkling wine/Champagne brands in the off-trade, 2012/13 and 2013/14
                                                                                                              • Figure 30: Value and volume sales of top-selling fortified wine brands in the off-trade, 2012/13 and 2013/14
                                                                                                          • Companies and Products

                                                                                                              • Accolade Wines
                                                                                                                • Overview
                                                                                                                  • Product range
                                                                                                                    • Recent activity
                                                                                                                      • Product innovation
                                                                                                                        • Brand communication and promotion
                                                                                                                          • E&J Gallo
                                                                                                                            • Overview
                                                                                                                              • Product range
                                                                                                                                • Recent activity and product innovation
                                                                                                                                  • Brand communication and promotion
                                                                                                                                    • Freixenet
                                                                                                                                      • Overview
                                                                                                                                        • Product range
                                                                                                                                          • Recent activity and innovation
                                                                                                                                            • Brand communication and promotion
                                                                                                                                              • Moët Hennessy (Moët Hennessy Diageo)
                                                                                                                                                • Overview
                                                                                                                                                  • Product range
                                                                                                                                                    • Recent activity and innovation
                                                                                                                                                      • Brand communication and promotion
                                                                                                                                                        • Percy Fox (Diageo)
                                                                                                                                                          • Overview
                                                                                                                                                            • Product range
                                                                                                                                                              • Product innovation
                                                                                                                                                                • Brand communication and promotion
                                                                                                                                                                  • Pernod Ricard
                                                                                                                                                                    • Overview
                                                                                                                                                                      • Product range
                                                                                                                                                                        • Recent activity and innovation
                                                                                                                                                                          • Brand communication and promotion
                                                                                                                                                                            • Symington Family Estates
                                                                                                                                                                              • Overview
                                                                                                                                                                                • Product range
                                                                                                                                                                                  • Recent activity and innovation
                                                                                                                                                                                    • Treasury Wine Estates (TWE)
                                                                                                                                                                                      • Overview
                                                                                                                                                                                        • Product range
                                                                                                                                                                                          • Recent activity
                                                                                                                                                                                            • Product innovation
                                                                                                                                                                                              • Brand communication and promotion
                                                                                                                                                                                              • Brand Communication and Promotion

                                                                                                                                                                                                • Key points
                                                                                                                                                                                                  • Adspend declines, as big four grocers and leading brands reduce spend
                                                                                                                                                                                                    • Figure 31: Topline advertising spend in the still, sparkling and fortified wines market, 2010-14
                                                                                                                                                                                                  • Adspend for sparkling wine/Champagne grows in 2013
                                                                                                                                                                                                    • Figure 32: Adspend for still, sparkling and fortified wines, by product category, 2010-14
                                                                                                                                                                                                  • Red wine adspend matches previously leading white in 2013
                                                                                                                                                                                                      • Figure 33: Adspend for still, sparkling and fortified wines, by product category, by individual and multi-product still wines, 2010-13
                                                                                                                                                                                                    • Direct Wines is still the biggest advertiser of still wines
                                                                                                                                                                                                      • Figure 34: Leading advertisers in the still wines market, 2010-14
                                                                                                                                                                                                    • Previously flat Champagne/sparkling wine advertising gets a boost
                                                                                                                                                                                                      • Figure 35: Leading advertisers in the Champagne and sparkling wine market, 2010-14
                                                                                                                                                                                                  • The Consumer – Usage of Wine, Sparkling Wine and Fortified Wine

                                                                                                                                                                                                    • Key points
                                                                                                                                                                                                      • Fewer adults are buying wine than in 2013
                                                                                                                                                                                                        • Figure 36: Purchase of still wines in the last six months, July 2014
                                                                                                                                                                                                      • White and red wine are bought by more than two in five
                                                                                                                                                                                                        • Figure 37: Purchase of red, white and rosé wine, by gender and age, July 2014
                                                                                                                                                                                                      • Boxed wine purchases remain low but the segment has growth potential
                                                                                                                                                                                                        • Prosecco takes top spot in sparkling at cava’s expense
                                                                                                                                                                                                          • Figure 38: Purchase of sparkling wines in the last six months, July 2014
                                                                                                                                                                                                        • Purchases of fortified and low-alcohol wines remain niche
                                                                                                                                                                                                          • Figure 39: Purchase of fortified and lower-alcohol wines, July 2014
                                                                                                                                                                                                        • Purchases of lower-alcohol wines fall
                                                                                                                                                                                                          • Purchase of branded and retailer-exclusive wines
                                                                                                                                                                                                            • Figure 40: Purchase of wines for in-home drinking, by brand type, July 2014
                                                                                                                                                                                                          • One in five have bought retailer-exclusive wines
                                                                                                                                                                                                            • Figure 41: Purchases of retailer-exclusive wines, July 2014
                                                                                                                                                                                                        • The Consumer – Attitudes towards Champagne, Sparkling Wine and Fortified Wine

                                                                                                                                                                                                          • Key points
                                                                                                                                                                                                            • Sweet flavour and lack of sophistication hold back fortified wines
                                                                                                                                                                                                              • Figure 42: Attitudes towards fortified wines, July 2014
                                                                                                                                                                                                            • Smaller formats can combat boredom
                                                                                                                                                                                                              • Fortified wines lag behind dark spirits on perceived sophistication…
                                                                                                                                                                                                                • …and are seen as “old-fashioned” by one in four
                                                                                                                                                                                                                  • Sparkling wine enjoys a strong image as savvy choice
                                                                                                                                                                                                                    • Figure 43: Attitudes towards Champagne and sparkling wine, July 2014
                                                                                                                                                                                                                  • Sparkling wine isn’t just for recessions
                                                                                                                                                                                                                    • Champagne has more of a draw among younger people
                                                                                                                                                                                                                    • The Consumer – Perceptions of Branded and Own-brand Wines

                                                                                                                                                                                                                      • Key points
                                                                                                                                                                                                                        • Branded wine enjoys a strong image for consistent quality and gifting
                                                                                                                                                                                                                          • Figure 44: Perceptions of own-brand and branded still wines, July 2014
                                                                                                                                                                                                                        • Consistent quality is a key benefit in a sometimes confusing category
                                                                                                                                                                                                                          • 54% think standard own-labels offer value for money
                                                                                                                                                                                                                            • Less than a third find wine easy to choose
                                                                                                                                                                                                                            • The Consumer – Attitudes towards Still Wine

                                                                                                                                                                                                                              • Key points
                                                                                                                                                                                                                                • Familiar brands have scope to appeal in bag in box
                                                                                                                                                                                                                                  • Figure 45: Attitudes towards still wine, July 2014
                                                                                                                                                                                                                                • Familiar brands can combat doubts over quality of bag in box
                                                                                                                                                                                                                                  • Smaller boxed formats should appeal to variety seekers
                                                                                                                                                                                                                                    • Price-marked packs spark limited interest – or disinterest
                                                                                                                                                                                                                                      • More scope to explore smaller formats
                                                                                                                                                                                                                                      • The Consumer – Further Attitudes towards Still Wine

                                                                                                                                                                                                                                        • Key points
                                                                                                                                                                                                                                          • Keen interest in product trial
                                                                                                                                                                                                                                            • Figure 46: Further attitudes towards still wine, July 2014
                                                                                                                                                                                                                                          • Alcohol content limits intake but interest in low-alcohol wines is low
                                                                                                                                                                                                                                            • More scope to explore fruit-infused wines
                                                                                                                                                                                                                                            • Appendix – Market Size and Forecast

                                                                                                                                                                                                                                                • Figure 47: Best and worst case forecasts for the still, sparkling and fortified wine market, by value, 2014-19
                                                                                                                                                                                                                                                • Figure 48: Best and worst case forecasts for the still, sparkling and fortified wine market, by volume, 2014-19
                                                                                                                                                                                                                                                • Figure 49: Best and worst case forecasts for the still wine market, by value, 2014-19
                                                                                                                                                                                                                                                • Figure 50: Best and worst case forecasts for the still wine market, by volume, 2014-19
                                                                                                                                                                                                                                                • Figure 51: Best and worst case forecasts for the sparkling wine market, by value, 2014-19
                                                                                                                                                                                                                                                • Figure 52: Best and worst case forecasts for the sparkling wine market, by volume, 2014-19
                                                                                                                                                                                                                                                • Figure 53: Best and worst case forecasts for the Champagne market, by value, 2014-19
                                                                                                                                                                                                                                                • Figure 54: Best and worst case forecasts for the Champagne market, by volume, 2014-19
                                                                                                                                                                                                                                                • Figure 55: Best and worst case forecasts for the fortified wine market, by value, 2014-19
                                                                                                                                                                                                                                                • Figure 56: Best and worst case forecasts for the fortified wine market, by volume, 2014-19
                                                                                                                                                                                                                                                • Figure 57: UK volume sales of wines in the on- and off-trade, 2012-14

                                                                                                                                                                                                                                            Companies Covered

                                                                                                                                                                                                                                            To learn more about the companies covered in this report please contact us.

                                                                                                                                                                                                                                            Still, Sparkling and Fortified Wine - UK - October 2014

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