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Still, Sparkling and Fortified Wine - UK - October 2017

“There is clear consumer interest in seeing more wines from regions such as Eastern Europe and Asia. Operators may also benefit by tapping into interest in other formats like cans and pouches which are becoming more credible alternatives to bottles.”

– Kiti Soininen, Category Director, Food and Drink

This report looks at the following areas:

  • A role for pricing transparency to convince consumers to trade up to higher priced wines
  • Embracing packaging formats other than bottle
  • Exploring new regions

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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

                  • The market
                    • The wine market is expected to return to growth in 2017
                      • Figure 1: Forecast of total UK value sales of wine, 2012-22
                    • Still wine volumes continue to slide
                      • Off-trade outperforms the struggling on-trade
                        • Wine prices continue to rise
                          • Companies and brands
                            • Accolade Wines leads a highly fragmented market
                              • Figure 2: UK retail value sales of the top 10 wine brands, 2016/17*
                            • Leading Prosecco brands enjoy dynamic growth
                              • Retailers focus on top-tier NPD
                                • Lidl continues to lead the way for wine adspend
                                  • The consumer
                                    • Almost two thirds of adults buy wine
                                      • Figure 3: Purchase of types of wines, August 2017
                                    • Four in five wine buyers purchase from supermarkets
                                      • 71% of still wine buyers will not exceed £10 per bottle for still wines
                                        • Figure 4: How much buyers are willing to spend on a bottle of still wine, sparkling wine and Champagne for drinking at home, August 2017
                                      • Almost half of wine buyers are interested in English wines
                                        • Figure 5: Interest in different types of wines, August 2017
                                      • Wine buyers struggle to navigate choice
                                        • Figure 6: Attitudes towards wines, August 2017
                                      • What we think
                                      • Issues and Insights

                                        • A role for pricing transparency to convince consumers to trade up to higher priced wines
                                          • The facts
                                            • The implications
                                              • Embracing packaging formats other than bottle
                                                • The facts
                                                  • The implications
                                                    • Exploring new regions
                                                      • The facts
                                                        • The implications
                                                        • The Market – What You Need to Know

                                                          • The wine market is expected to return to growth in 2017
                                                            • Growth of 12% expected by 2022
                                                              • Still wine volumes continue to slide
                                                                • Off-trade outperforms the struggling on-trade
                                                                  • Wine prices continue to rise
                                                                  • Market Size and Forecast

                                                                    • Wine volumes dipped in 2016
                                                                      • Still wine dominates, sparkling enjoys strongest growth
                                                                        • Return to growth expected in 2017 with uncertainty over price trends ahead
                                                                            • Figure 7: Total value and volume sales of wine, at current and constant prices, 2012-22
                                                                            • Figure 8: Forecast of total UK value sales of wine, 2012-22
                                                                            • Figure 9: Forecast of total UK volume sales of wine, 2012-22
                                                                          • Forecast methodology
                                                                          • Market Segmentation

                                                                            • Still wine values and volumes expected to return to growth in 2017
                                                                              • Discounters help boost sales, rosé continues to fall
                                                                                • On-trade still wine sales struggle
                                                                                  • Flat volumes predicted
                                                                                    • Figure 10: Total value and volume sales of still wines, at current and constant prices, 2012-22
                                                                                    • Figure 11: Forecast of UK value sales of still wines, 2012-22
                                                                                  • Prosecco drives sparkling wine growth
                                                                                    • Good value image has benefited sparkling and should continue to support growth
                                                                                      • Finite Prosecco supply points to need to look further
                                                                                        • Figure 12: Total value and volume sales of sparkling wines, at current and constant prices, 2012-22
                                                                                        • Figure 13: Forecast of UK value sales of sparkling wines, 2012-22
                                                                                      • Champagne sales hit by the Prosecco boom
                                                                                        • Rising confidence and incomes boost Champagne in 2014 and 2015
                                                                                          • Deep cut promotions dampen value sales
                                                                                            • Subdued outlook
                                                                                              • Figure 14: Total value and volume sales of Champagne, at current and constant prices, 2012-22
                                                                                              • Figure 15: Forecast of UK value sales of Champagne, 2012-22
                                                                                            • Fortified wine sales continue to slide
                                                                                              • Figure 16: Total value and volume sales of fortified wines, at current and constant prices, 2012-22
                                                                                              • Figure 17: Forecast of UK value sales of fortified wines, 2012-22
                                                                                          • Channels to Market

                                                                                            • Off-trade sales outperform the struggling on-trade
                                                                                              • Online sales on the rise to boost off-trade numbers
                                                                                                • Figure 18: UK value and volume sales of wine in the on- and off-trade, by type, 2015-17
                                                                                                • Figure 19: Estimated share of total UK value and volume sales of wine, by type and channel, 2017
                                                                                            • Market Drivers

                                                                                              • Wine duty continues to rise
                                                                                                • Unseasonal weather affects Champagne and English wines
                                                                                                  • Low-alcohol variants continue to attract lower tax
                                                                                                    • Figure 20: UK excise duty rates for wines, 2007-17
                                                                                                  • Weakening of the pound has caused wine prices to increase
                                                                                                    • Figure 21: Annual exchange rates for Sterling, 2012-17
                                                                                                    • Figure 22: Trends in consumer price indices for all items, wine, beer and spirits 2006-17
                                                                                                  • Weakening consumer confidence poses a threat to wine
                                                                                                    • Many people are cutting back on alcohol
                                                                                                      • The on-trade remains under pressure
                                                                                                        • Demographic changes impact the market
                                                                                                          • Wines remain popular among older drinkers
                                                                                                            • Wine needs to appeal to growing C1C2s
                                                                                                            • Companies and Brands – What You Need to Know

                                                                                                              • Accolade Wines leads a highly fragmented market
                                                                                                                • Leading Prosecco brands enjoy dynamic growth
                                                                                                                  • Still wine innovation revolves around established trends
                                                                                                                    • Retailers focus on top-tier NPD
                                                                                                                      • Lidl continues to lead the way for wine adspend
                                                                                                                      • Market Share

                                                                                                                        • Accolade Wines leads a highly fragmented market
                                                                                                                          • Figure 23: Estimated leading manufacturers’ shares of total wine sales in the UK off-trade, 2016/17*
                                                                                                                        • Hardys and Blossom Hill continue to see sales slide in 2016/17
                                                                                                                          • Figure 24: UK retail value and volume sales of the leading still wine brands, 2014/15-2016/17
                                                                                                                        • McGuigan and Barefoot continue to rise up the ranks
                                                                                                                          • Gallo recovers, Concha y Toro stagnates
                                                                                                                            • Several other brands also grow as wine aisles are streamlined
                                                                                                                              • Leading Prosecco brands enjoy dynamic growth
                                                                                                                                  • Figure 25: UK retail value and volume sales of the leading sparkling wine brands, 2014/15-2016/17
                                                                                                                                • Leading brands manage flat sales in falling Champagne market
                                                                                                                                  • Figure 26: UK retail value and volume sales of the leading Champagne brands, 2014/15-2016/17
                                                                                                                                • The Buckfast revival continues apace
                                                                                                                                  • Figure 27: UK retail value and volume sales of the leading fortified wine brands, 2014/15-2016/17
                                                                                                                              • Launch Activity and Innovation

                                                                                                                                • Still wine
                                                                                                                                  • Oxford Landing launches fist new variants in nearly 30 years
                                                                                                                                    • Blossom Hill sparkling adopts Spritz label
                                                                                                                                      • Sparkling wine and Champagne
                                                                                                                                        • Freixenet looks to rosés
                                                                                                                                          • Concha y Toro and Gallo look to millennials
                                                                                                                                            • Blossom Hill and Veuve Clicquot target gifting
                                                                                                                                              • Own-label NPD looks to English and hybrid sparkling
                                                                                                                                                • Selected retailer initiatives
                                                                                                                                                  • Majestic launches next-day delivery
                                                                                                                                                    • Asda revamps range, Aldi looks to premium and new wines
                                                                                                                                                      • Waitrose looks to premiumise
                                                                                                                                                        • Morrisons and Aldi hope to tap into the popularity of craft
                                                                                                                                                          • Lower-alcohol wine launches on the up
                                                                                                                                                            • Lidl and Tesco explore new wine regions
                                                                                                                                                              • The Co-op ramps up its wine innovation with pouches, Fairtrade and Member Voice
                                                                                                                                                              • Advertising and Marketing Activity

                                                                                                                                                                • Advertisers increase spend slightly in 2016
                                                                                                                                                                  • Figure 28: Total above-the line, online display and direct mail advertising expenditure on wine, 2013-2017*
                                                                                                                                                                  • Figure 29: Total above-the line, online display and direct mail advertising expenditure on wine, by quarterly share of annual total, 2013-16
                                                                                                                                                                • Lidl continues to lead the way for wine adspend
                                                                                                                                                                  • Figure 30: Total above-the-line, online display and direct mail advertising expenditure on still, sparkling and fortified wine, by top 10 advertisers (sorted by total spend over period), 2013-17*
                                                                                                                                                                • Selected campaigns and activity in still wine
                                                                                                                                                                  • McGuigan and Trivento look to food tie-ups
                                                                                                                                                                    • Brancott Estate highlights innovative winemaking
                                                                                                                                                                      • Isla Negra and TWE link with leisure activities
                                                                                                                                                                        • Selected campaigns and activity in sparkling wine and Champagne
                                                                                                                                                                          • Nielsen Ad Intel coverage
                                                                                                                                                                          • The Consumer – What You Need to Know

                                                                                                                                                                            • Almost two thirds of adults buy wine
                                                                                                                                                                              • Four in five wine buyers have purchased from supermarkets
                                                                                                                                                                                • 15% of still wine buyers will exceed £10 per bottle
                                                                                                                                                                                  • Almost half of wine buyers are interested in English wines
                                                                                                                                                                                    • Wine buyers struggle to navigate choice
                                                                                                                                                                                    • Purchase of Wines

                                                                                                                                                                                      • Almost two thirds of adults buy wine
                                                                                                                                                                                        • Figure 31: Profile of still and sparkling wine buyers, by age, August 2017
                                                                                                                                                                                        • Figure 32: Repertoire of types of wines bought, August 2017
                                                                                                                                                                                      • Still white and red remain the most popular types of wine
                                                                                                                                                                                        • Figure 33: Purchase of wine by type, August 2017
                                                                                                                                                                                      • Rosé struggles to keep pace
                                                                                                                                                                                        • Wine boxes/pouches remains rare
                                                                                                                                                                                          • A quarter of adults now buy Prosecco
                                                                                                                                                                                            • Prosecco’s success takes its toll on other sparkling wines
                                                                                                                                                                                            • Locations for Buying Wine

                                                                                                                                                                                              • Four in five buyers purchase wine from supermarkets
                                                                                                                                                                                                • Figure 34: Locations for buying wines, August 2017
                                                                                                                                                                                              • Discount supermarkets steal a march …
                                                                                                                                                                                                • … despite under-indexing on wine
                                                                                                                                                                                                  • Convenience stores are an important off-trade channel
                                                                                                                                                                                                    • The specialists manage only a niche following
                                                                                                                                                                                                      • Stagnating sales in the on-trade
                                                                                                                                                                                                        • Wine lags in pubs/bars
                                                                                                                                                                                                          • Online provides opportunities for the wine industry
                                                                                                                                                                                                          • Spending on Wines

                                                                                                                                                                                                            • Few still wine buyers expect to spend under £5 per bottle
                                                                                                                                                                                                              • Figure 35: How much buyers are willing to spend on a bottle of still wine for drinking at home, August 2017 vs July 2015
                                                                                                                                                                                                            • Nearly two in three still wine buyers would spend £5 to £10
                                                                                                                                                                                                              • Communication is key to encouraging higher spend
                                                                                                                                                                                                                • Figure 36: Estimated proportion of costs of the price of a bottle of wine in the UK at selected prices, September 2017
                                                                                                                                                                                                              • Sparkling wine at risk of commoditisation
                                                                                                                                                                                                                • Figure 37: How much buyers are willing to spend on a bottle of sparkling wine for drinking at home, August 2017 vs July 2015
                                                                                                                                                                                                              • Over-45s and women least willing to spend over £10
                                                                                                                                                                                                                • Under-35s are willing to spend most in sparkling wine
                                                                                                                                                                                                                  • 43% of Champagne buyers are prepared to exceed £20 per bottle
                                                                                                                                                                                                                    • Figure 38: How much buyers are willing to spend on a bottle of Champagne for drinking at home, August 2017 vs July 2015
                                                                                                                                                                                                                  • Willingness to spend £20+ on Champagne falls
                                                                                                                                                                                                                  • Interest in Different Types of Wines

                                                                                                                                                                                                                    • Almost half of wine buyers are interested in English wines
                                                                                                                                                                                                                      • Figure 39: Interest in different types of wines, August 2017
                                                                                                                                                                                                                    • New regions and spirit barrel ageing interest more than one in five
                                                                                                                                                                                                                      • Interest in wines from new regions is welcome news for the trade
                                                                                                                                                                                                                        • Spirit barrel ageing can tap into interest in unique flavours
                                                                                                                                                                                                                          • Wine on tap interests core pub/bar patrons
                                                                                                                                                                                                                            • Wine pouches appeal to one in four 25-34s, falling to one in five for cans
                                                                                                                                                                                                                              • Sparkling wine cocktails’ appeal to under-35s should support margins
                                                                                                                                                                                                                                • Interest in non-grape wines is much higher than uptake
                                                                                                                                                                                                                                  • Lower-alcohol sparkling appeals to the young
                                                                                                                                                                                                                                  • Attitudes towards Wines

                                                                                                                                                                                                                                    • Wine buyers look for help navigating choice
                                                                                                                                                                                                                                      • Figure 40: Attitudes towards buying wines in supermarkets, August 2017
                                                                                                                                                                                                                                    • Grape trumps region for one in three
                                                                                                                                                                                                                                      • Over half of wine buyers want clearer guidance on calorie content
                                                                                                                                                                                                                                        • Minority of wine buyers are more interested in learning about other drinks
                                                                                                                                                                                                                                          • Figure 41: Attitudes towards calories and packaging of wines, August 2017
                                                                                                                                                                                                                                        • Opportunities for English wines …
                                                                                                                                                                                                                                          • … and premium wines
                                                                                                                                                                                                                                            • Figure 42: Attitudes towards premium and English wines, August 2017
                                                                                                                                                                                                                                        • Appendix – Data Sources, Abbreviations and Supporting Information

                                                                                                                                                                                                                                            • Abbreviations
                                                                                                                                                                                                                                              • Consumer research methodology
                                                                                                                                                                                                                                              • Appendix – Market Size and Forecast

                                                                                                                                                                                                                                                • Forecast methodology
                                                                                                                                                                                                                                                  • Best and worst-case forecast data
                                                                                                                                                                                                                                                    • Figure 43: Total UK value sales of wines, best- and worst-case forecast, 2017-22
                                                                                                                                                                                                                                                    • Figure 44: Total UK volume sales of wines, best- and worst-case forecast, 2017-22
                                                                                                                                                                                                                                                • Appendix – Market Segmentation

                                                                                                                                                                                                                                                  • Still wines
                                                                                                                                                                                                                                                    • Figure 45: Total UK value sales of still wines, best- and worst-case forecast, 2017-22
                                                                                                                                                                                                                                                    • Figure 46: Total UK volume sales of still wines, best- and worst-case forecast, 2017-22
                                                                                                                                                                                                                                                    • Figure 47: Forecast of UK volume sales of still wines, 2012-22
                                                                                                                                                                                                                                                  • Sparkling wines
                                                                                                                                                                                                                                                    • Figure 48: Total UK value sales of sparkling wines, best- and worst-case forecast, 2017-22
                                                                                                                                                                                                                                                    • Figure 49: Total UK volume sales of sparkling wines, best- and worst-case forecast, 2017-22
                                                                                                                                                                                                                                                    • Figure 50: Forecast of UK volume sales of sparkling wines, 2012-22
                                                                                                                                                                                                                                                  • Champagne
                                                                                                                                                                                                                                                    • Figure 51: Total UK value sales of Champagne, best- and worst-case forecast, 2017-22
                                                                                                                                                                                                                                                    • Figure 52: Total UK volume sales of Champagne, best- and worst-case forecast, 2017-22
                                                                                                                                                                                                                                                    • Figure 53: Forecast of UK volume sales of Champagne, 2012-22
                                                                                                                                                                                                                                                  • Fortified wines
                                                                                                                                                                                                                                                    • Figure 54: Total UK value sales of fortified wines, best- and worst-case forecast, 2017-22
                                                                                                                                                                                                                                                    • Figure 55: Total UK volume sales of fortified wines, best- and worst-case forecast, 2017-22
                                                                                                                                                                                                                                                    • Figure 56: Forecast of UK volume sales of fortified wines, 2012-22
                                                                                                                                                                                                                                                • Appendix – Market Share

                                                                                                                                                                                                                                                    • Figure 57: UK retail volume sales of the leading sparkling wine, Champagne and fortified wine brands, 2014/15-2016/17
                                                                                                                                                                                                                                                    • Figure 58: UK retail value and volume sales of the leading still wine manufacturers, 2014/15-2016/17
                                                                                                                                                                                                                                                    • Figure 59: UK retail value and volume sales of the leading sparkling wine manufacturers, 2014/15-2016/17
                                                                                                                                                                                                                                                    • Figure 60: UK retail value and volume sales of the leading Champagne manufacturers, 2014/15-2016/17
                                                                                                                                                                                                                                                    • Figure 61: UK retail value and volume sales of the leading fortified wine manufacturers, 2014/15-2016/17

                                                                                                                                                                                                                                                Companies Covered

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

                                                                                                                                                                                                                                                Still, Sparkling and Fortified Wine - UK - October 2017

                                                                                                                                                                                                                                                US $2,648.76 (Excl.Tax)