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Wine - UK - June 2009

In 2008, wine suffered its first volume and value decrease following several years of growth. Whilst the economic downturn has impacted on wine, Mintel believes it has accelerated the problems for wine, rather than being the root cause. A number of factors are working against wine. The market is increasingly reliant on supermarkets but their long-term strategy of discounting wine has intensified as a result of the recession, undermining the industry goal of getting people to trade up. Wine must also perform in the context of: a population that is drinking less; an increasing interest in healthy living; government and media-fuelled warnings about excessive drinking and obesity; high levels of duty; and rising manufacturing and raw material costs.

An opportunity to reverse the tide lies in addressing the confusion surrounding wine, as this acts as a barrier to entry for younger consumers, as well as discouraging more experienced drinkers from trading up. Rosé is the one wine segment that is forecast to grow over the next five years, and is a particularly accessible way to attract younger drinkers into the category.

Mintel previously examined the wine market in May 2007 and wine retailing in June 2007.

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Table of contents

  1. Issues in the Market

      • Definition
      • Future Opportunities

        • De-mystifying wine
          • Moving towards premiumisation
            • Being the acceptable face of drinking
            • Market in Brief

              • 2008, the year that the wine market declined…
                • Long-term trends undermining the market
                  • Impact of the recession
                    • Rosé continues to shine
                      • Consumer confusion reigns, especially amongst the young
                        • What the future holds
                        • Internal Market Environment

                          • Key points
                            • Discounting in multiples
                              • British drinking culture in slow decline
                                • Figure 1: Trends in alcohol consumption, 2004-08
                              • A greater association with binge drinking
                                • Shift towards home drinking
                                  • Figure 2: Trends in alcohol consumption in and out of home, 2004-08
                                • Calorie counts in wine’s favour
                                  • Figure 3: Calories contained in typical serves of different alcohol types, 2009
                                • Drive towards healthier living
                                  • Figure 4: Trends in attitudes towards health, 2004-08
                                • Contradictory health messages
                                  • Making home advantage count
                                  • Broader Market Environment

                                    • Key points
                                      • The impact of the recession
                                        • Figure 5: Trends in PDI and consumer expenditure, 2004-14
                                      • Spiralling wine duty
                                        • Figure 6: Trends in excise duty rates for wine, April 2000-March 2009
                                      • A strong Euro
                                        • The advantage of an ageing population
                                          • Figure 7: Structure of the UK 18+ population, by age, 2004-14
                                        • The opportunity of educating 25-34s
                                          • Benefiting from a rise in ABC1s
                                            • Figure 8: Changes in social grade amongst the UK 18+ population, 2004-09 and 2009-14
                                          • Summer benefits
                                            • Figure 9: Average sunshine hours and wine volume sales in UK, 2004-08
                                        • Competitive Context

                                          • Key points
                                            • Wine growing its share of the alcohol market
                                              • Figure 10: UK value sales of alcoholic drinks, by type, 1998-2008
                                              • Figure 11: UK value sales of alcoholic drinks, % by type, 1998-2008
                                            • Wine benefits from a broad appeal
                                              • Figure 12: Index of wine penetration, by gender, age and socio-economic group versus other types of alcohol, 2008*
                                          • Strengths and Weaknesses

                                            • Strengths
                                              • Weaknesses
                                              • Who’s Innovating?

                                                • Key points
                                                  • Alternative packaging and presentation
                                                    • Packaging for the environment
                                                      • The cork versus screw-top debate
                                                        • Low calorie wines
                                                          • Do it yourself
                                                          • Market Size and Forecast

                                                            • Key points
                                                              • The end of an era
                                                                • Figure 13: UK volume and value sales forecast of wine, 2004-14
                                                                • Figure 14: UK volume and value sales of wine, on- and off-trade, 2004-14
                                                              • On and off-trade split
                                                                • Figure 15: UK value sales of wine in the on-trade, 2004-14
                                                                • Figure 16: UK value sales of wine in the off-trade, 2004-14
                                                                • Figure 17: UK volume and value sales of wine, by type, on- and off-trade, 2004-09
                                                            • Segment Performance

                                                              • Key points
                                                                • Red wine
                                                                  • Figure 18: UK volume and value sales of red wine, on- and off-trade, 2004-14
                                                                • White wine
                                                                  • Figure 19: UK volume and value sales of white wine, on- and off-trade, 2004-14
                                                                • Rosé
                                                                  • Figure 20: UK volume and value sales of rosé wine, on- and off-trade, 2004-14
                                                                • Rosé legislation
                                                                • Market Share

                                                                  • Key points
                                                                    • Trouble down under?
                                                                      • Figure 21: Top 10 wine producing countries in the UK off-trade, 2008
                                                                    • Brand review
                                                                      • Figure 22: Brands’ value shares in UK retail (off-trade) sales of wine, 2008
                                                                    • Own-label
                                                                    • Companies and Products

                                                                      • Key points
                                                                        • Brown-Forman
                                                                          • Constellation Europe
                                                                            • Diageo
                                                                              • E&J Gallo
                                                                                • Ehrmanns Wines
                                                                                  • First Drinks Brands
                                                                                    • Foster’s
                                                                                      • Halewood International
                                                                                        • John E Fells
                                                                                          • Negociants UK
                                                                                            • Pernod Ricard
                                                                                              • PLB Wines
                                                                                                • Raisin Social
                                                                                                  • The Company of Wine People
                                                                                                    • Waverley TBS
                                                                                                    • Brand Communication and Promotion

                                                                                                      • Key points
                                                                                                        • Market down despite highest adspend
                                                                                                          • Figure 23: Main monitored media advertising expenditure on wine, 2004-08
                                                                                                          • Figure 24: Main monitored media advertising expenditure on wine, by media type, 2006-08
                                                                                                        • Constellation dominating advertising activity
                                                                                                          • Figure 25: Main monitored media advertising expenditure on wine, top ten brands, 2006-08
                                                                                                      • Channels to Market

                                                                                                        • Key points
                                                                                                          • Figure 26: UK retail value sales of wine, by on- and off-trade, 2004-09
                                                                                                        • Off-trade
                                                                                                          • Specialists versus the grocers
                                                                                                            • Off-licences in decline
                                                                                                              • Figure 27: Numbers of supermarkets and off-licences, 2003-07
                                                                                                            • Leading players
                                                                                                                • Figure 28: UK retail (off-trade) volume sales of wine, estimated % share by outlet, 2005-09
                                                                                                                • Figure 29: Leading wine retailers, 2009
                                                                                                              • On-trade
                                                                                                                • A diminishing pool
                                                                                                                  • Figure 30: Number of licensed premises in England & Wales, 1997-2006
                                                                                                              • The Consumer – Usage

                                                                                                                • Key point
                                                                                                                  • Attracting people earlier the key to growth
                                                                                                                      • Figure 31: Volume of wine drinking, by gender, age and socio-economic group, 2008
                                                                                                                      • Figure 32: Trends for volume of wine drinking, by age group, 2004-08
                                                                                                                  • Consumer Attitudes to Wine

                                                                                                                    • Key points
                                                                                                                      • Amidst confusion, there is no substitute for personal experience
                                                                                                                        • Figure 33: Top influencers of wine purchases amongst wine drinkers, February 2009
                                                                                                                        • Figure 34: Attitudes towards wine, February 2009
                                                                                                                      • Are promotions de-valuing consumer perceptions of wine?
                                                                                                                        • Branding affective at targeting young
                                                                                                                          • Food for thought
                                                                                                                            • Offers limit effects of the recession
                                                                                                                              • Brave New World
                                                                                                                                  • Figure 35: Trends for consumption of Old World wine versus New World wine, 2004-08
                                                                                                                                • Mixed messages about health
                                                                                                                                  • Only rosé is growing its penetration
                                                                                                                                    • Figure 36: Trends for type of wine consumed, 2006-08
                                                                                                                                  • Rosé offers a threat to white wine
                                                                                                                                    • Figure 37: Penetration of wine (drunk in last three months), by type, by gender, age and socio-economic group, February 2009
                                                                                                                                  • Unlike red wine and rosé, white lacks differentiation
                                                                                                                                    • Figure 38: Drinkers of wine by type, by factors influencing wine purchase, February 2009
                                                                                                                                • Targeting Opportunities

                                                                                                                                  • Key points
                                                                                                                                    • Identifying targets
                                                                                                                                      • Figure 39: Target groups for wine, February 2009
                                                                                                                                      • Figure 40: Target groups for wine, by factors influencing wine purchase, February 2009
                                                                                                                                    • Connoisseurs (17% of sample)
                                                                                                                                      • Who are they?
                                                                                                                                        • Next steps
                                                                                                                                          • Loyalists (33% of sample)
                                                                                                                                            • Who are they?
                                                                                                                                              • Next steps
                                                                                                                                                • Country bias (21% of sample)
                                                                                                                                                  • Who are they?
                                                                                                                                                    • Next steps
                                                                                                                                                      • Uninitiated (29% of sample)
                                                                                                                                                        • Who are they?
                                                                                                                                                          • Next steps
                                                                                                                                                          • Appendix

                                                                                                                                                            • Consumer research
                                                                                                                                                              • ACORN
                                                                                                                                                                • Advertising data
                                                                                                                                                                  • Abbreviations
                                                                                                                                                                  • Appendix – Internal Market Environment

                                                                                                                                                                      • Figure 41: Trends in % of wine drinkers, drinking in-home and elsewhere, 2004-08
                                                                                                                                                                      • Figure 42: Trends for where adults consume wine, 2007 and 2008
                                                                                                                                                                  • Appendix – Brand Communication and Promotion

                                                                                                                                                                      • Figure 43: Yearly expenditure for wine market, by media type, 2006-08
                                                                                                                                                                      • Figure 44: Spend for top 10 wine advertisers, 2006-08
                                                                                                                                                                  • Appendix – The Consumer – Usage

                                                                                                                                                                      • Figure 45: Wine drinking in last three months, by demographics, February 2009
                                                                                                                                                                  • Appendix – Consumer Attitudes to Wine

                                                                                                                                                                      • Figure 46: Top three factors influencing purchases of wine, by demographics, February 2009
                                                                                                                                                                      • Figure 47: Factors influencing buying wine, by demographics, February 2009 (continued)
                                                                                                                                                                      • Figure 48: Statements on wine, by demographics, February 2009
                                                                                                                                                                      • Figure 49: Statements on wine by demographics, February 2009 (continued)
                                                                                                                                                                      • Figure 50: Trends in consumption of wine in home and elsewhere, 2004-08
                                                                                                                                                                      • Figure 51: Trends in consumption of own-label versus branded wine, 2004-08
                                                                                                                                                                      • Figure 52: Trends for volume of wine drinking, 2004-08
                                                                                                                                                                      • Figure 53: Demographics of wine consumers versus other types of alcohol, 2008
                                                                                                                                                                      • Figure 54: Demographics of wine consumers versus other types of alcohol, 2008
                                                                                                                                                                      • Figure 55: How many types of wine people drink in the past three months, February 2009
                                                                                                                                                                      • Figure 56: Statements on buying wine, by which wine people drink, February 2009
                                                                                                                                                                      • Figure 57: General volume of wine drinking, by demographics, 2008
                                                                                                                                                                  • Appendix – Targeting Opportunities

                                                                                                                                                                      • Figure 58: Target groups for wine, by demographics, February 2009
                                                                                                                                                                      • Figure 59: Attitudinal groups by statements about wine, February 2009
                                                                                                                                                                      • Figure 60: Attitudinal groups by what types of alcohol they have drunk in the past three months, February 2009
                                                                                                                                                                      • Figure 61: Attitudinal groups and whether they have changed the amount they have drunk over the past two years

                                                                                                                                                                  Companies Covered

                                                                                                                                                                  • Aldi Stores Ltd (UK & Ireland)
                                                                                                                                                                  • Asda Group Ltd
                                                                                                                                                                  • Banrock Station
                                                                                                                                                                  • Bargain Booze Ltd
                                                                                                                                                                  • Beringer Vineyards
                                                                                                                                                                  • British Airways Plc
                                                                                                                                                                  • British Beer and Pub Association
                                                                                                                                                                  • British Market Research Bureau (BMRB)
                                                                                                                                                                  • British Medical Association (BMA)
                                                                                                                                                                  • British Sky Broadcasting Group plc (BSkyB)
                                                                                                                                                                  • Brown-Forman
                                                                                                                                                                  • Chartreuse
                                                                                                                                                                  • Co-operative Group
                                                                                                                                                                  • Constellation Europe Ltd
                                                                                                                                                                  • Constellation Wines
                                                                                                                                                                  • Coors Brewers Ltd (UK)
                                                                                                                                                                  • Diageo UK
                                                                                                                                                                  • Direct Wines Ltd
                                                                                                                                                                  • E.&J. Gallo Winery
                                                                                                                                                                  • Ehrmanns Ltd
                                                                                                                                                                  • Ernest & Julio Gallo
                                                                                                                                                                  • First Drinks
                                                                                                                                                                  • First Quench Retailing
                                                                                                                                                                  • Foster's Wine Estates Americas
                                                                                                                                                                  • Halewood International Ltd
                                                                                                                                                                  • Hotel Chocolat Ltd
                                                                                                                                                                  • Innocent Drinks Ltd
                                                                                                                                                                  • ITV plc
                                                                                                                                                                  • J. Sainsbury
                                                                                                                                                                  • John E Fells & Sons Ltd
                                                                                                                                                                  • Lidl (UK)
                                                                                                                                                                  • Majestic Wine Warehouse Ltd
                                                                                                                                                                  • Marks & Spencer
                                                                                                                                                                  • Montana Wines Ltd
                                                                                                                                                                  • National Cancer Institute (NCI)
                                                                                                                                                                  • Negociants UK Ltd
                                                                                                                                                                  • Netto Foodstores Ltd
                                                                                                                                                                  • Oddbins Ltd
                                                                                                                                                                  • Office for National Statistics
                                                                                                                                                                  • Outdoor Advertising Association of Great Britain
                                                                                                                                                                  • Pernod Ricard
                                                                                                                                                                  • PLB Group Ltd
                                                                                                                                                                  • Raisin Social
                                                                                                                                                                  • Robert Mondavi Corporation, The
                                                                                                                                                                  • Safeway Stores
                                                                                                                                                                  • Somerfield
                                                                                                                                                                  • Tesco Plc
                                                                                                                                                                  • Unwins Ltd
                                                                                                                                                                  • Virgin Wine Online Ltd
                                                                                                                                                                  • Waitrose
                                                                                                                                                                  • Waverley Group
                                                                                                                                                                  • Waverley TBS
                                                                                                                                                                  • William Grant and Sons Distillers Ltd
                                                                                                                                                                  • Wine and Spirit Association (The)
                                                                                                                                                                  • Wine Cellar
                                                                                                                                                                  • Wine Market Council (The)
                                                                                                                                                                  • Wm Morrison Supermarkets

                                                                                                                                                                  Wine - UK - June 2009

                                                                                                                                                                  US $2,478.79 (Excl.Tax)