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Still, Sparkling and Fortified Wine - UK - October 2016

“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.”

– Amy Price, Senior Food and Drink Analyst

This report looks at the following areas:

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

This Report analyses the UK market for still, sparkling and fortified wines, including sales through both the off- and on-trade. Coverage in the Report is restricted to wine of fresh grape, produced from the naturally fermented juice of the grape and includes low and non-alcoholic varieties.

The on-trade includes premises with a licence to serve alcohol for consumption on the premise, mainly pubs/bars but also nightclubs, hotels and the hospitality sector.

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Table of contents

  1. 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

                                                                                                                                                                          Companies Covered

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

                                                                                                                                                                          Still, Sparkling and Fortified Wine - UK - October 2016

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