In the ‘Golden age of Gin’, how to recover your wine sales


Ordering the ‘right’ wine in a restaurant or bar is a real challenge for many consumers, and this difficulty of choosing from an extensive list of unfamiliar flavours can be enough to put some people off choosing wine altogether.

This decline in wine sales is likely further compounded by general downward trend in alcohol consumption in the UK. This trend has pushed ‘low and no’ alcoholic spirits to the mainstream, a move which would have been inconceivable a mere 10 years ago.

On the surface, the current landscape and the immediate future for the wine industry looks bleak – with IWSR analysts predicting the trade will see sales dropping by almost 11% over the next five years. The CGA agree with this pessimistic assesment, as they found in December 2019 that the on-trade saw wine sales dip by £146m over the previous 12 months.

It’s true that by most measures, wine sales by both volume and value are dropping and there are a multitude of reasons behind that.

  • The craft beer, gin/spirits & cocktails market in recent years has showed a dynamic, innovative focus which growth has stolen both attention and sales from wine. This rise in the popularity of craft spirits such as gin in recent years has been rapid – sales surged by 42% to an all-time high last year, with just flavoured gin alone seeing sales soar by 751%.
  • Overall alcohol consumption has been declining in the UK since the mid 2000s – a record number of almost 1 in 4 do not drink, a trend which peaks in the under 25s – these lost sales have impacted both the on and off trade, with wine as an established category being amongst the hardest hit by this trend.

However, despite this overall decline, the shift in buyer attitudes actually presents an opportunity for certain areas of the wine market. For instance, we’ve seen this ‘buy less but buy better’ trend play out in many other areas of food and drink and whilst it presents a volume challenge it also gives a value opportunity. So, despite the overall decline in wine sales, this is predominantly within the low-price, value segment of the market – and there is therefore still potential for growth within premium wines and other value added products as Brits continue with a ‘less-but-better’ approach to wine purchases. IWSR forecasts growth in ‘premium’ wine volume share from 20% of sales to 25% by 2022.

Interestingly, despite the overall wine market decline as well as the overall decline in alcohol consumption seen particularly in the under 35s category, CGA data actually found the highest level of new entrants to the wine category in this demographic, with 23% saying they have drunk more wine in the last year. As the MCA found that this is the demographic most likely to eat out of home, there are clearly still opportunities for premium wines to grow within this segment.

So how can premium wine producers future-proof themselves within the on trade?

glass of wine

Place an emphasis on Provenance

Provenance in food and drink has been a growing trend for some time, and is a key attribute many consumers look for – particularly within the premium tier of the market. Not only this, it is something wine does extremely well – with supermarkets, off-licenses and wholesalers having been separating wines by origin for many years. This is a key selling point within the on-trade, as international cuisine is hugely popular in the UK – which presents a major opportunity particularly for international wine producers to align themselves with restaurants serving their cuisine within the UK and bolster their FMCG marketing from a provenance perspective.

Use food pairings to market premium wine

One area in which Gin has excelled through marketing is in promoting the different types of tonic and mixers different Gins pair well with, with larger Gin brands even collaborating with the likes of tonic companies such as Fever-Tree and Fentimans. A clear parallel here for wine producers would be to place clear emphasis on the menu items complemented by their specific wines.

This is already done to some extent in both the on-trade and the off-trade, however far more attention could be paid to this beyond simply menu and shelf call-outs – such pairings should be highlighted and well-communicated across the entire FMCG marketing mix.

Focusing on the under 35s

young women drinking wine

With under 35s comprising the largest new entrants into the wine market, restaurants, wine bars and café operators need to think through how to make the on-trade formats more conducive to buying wine. Supporting them, the wine producers need to understand what materials, knowledge and products could be given to operators in the on trade channel to drive sales.

Within the two on trade occasions of wet led and food led, both venues & consumer occasions can be improved for the under 35s. For instance, food led occasions having an established history and of working well with wine, but wet let is more challenging. Everything from the ambience, seating, decoration, menu, payment mechanic, entertainment and emphasis on the liquids should be questioned to see if it can be optimised for the under 35s.

Dealing with the “Fear factor”

Ordering the ‘right’ wine in a restaurant or bar is a real challenge for many consumers, and this difficulty of choosing from an extensive list of unfamiliar flavours can be enough to put some people off choosing wine altogether. To grow sales further, operators need to deal with the ‘fear factor’ that restaurant goers can sometimes suffer from when choosing wine for themselves or recommending it to friends or family though education, point of sales, wine advice and even self service vending options.

Learn from craft gins, craft beer and cocktails on wet led occasions

In a market where flavoured and coloured gin sales are up 750% and craft beer sales continue to rise, an increasing number of consumers are buying into novelty alcoholic drinks where they can seek out new flavours and varieties. In the context of this, it is unsurprising that wine sales have been struggling. Wine is a relatively complex category and one which can be particularly intimidating for younger consumers who are instead drawn to the vibrant colours and familiar flavours of cocktails and flavoured spirits. From the PR savvy positioning of Brewdog to a multitude of local distillers and craft breweries, the sector has created a variety of niche offerings which marry authenticity, localism, interest and flavour.

Many of these occasions are wet led so wine is competing with all other categories for ‘share of throat’. Some of the bright spots in wine have been Sparkling Wine & Rose which have been the only parts of the wine category to enjoy positive sales momentum through product subcategories such as Prosecco, English Sparkling & Provence Rose. These types of platforms have created propositions that are capable of delivering to consumers in the way that cocktails or craft beers and gins do.

HRA Global – On-Trade Specialists

HRA Commercial and Business Consulting – on trade specialists: having worked with clients in gin/tonics, cheese, bakery, desserts and soft drinks categories in foodservice channels, we are familiar with the dark arts of the on-trade channel. As an incredibly diverse and ever-changing channel, comprised of chains and independents, we know foodservice is a market with its own unique features and challenges.

Contact us if you wish to discuss this subject matter in further detail. Our FMCG marketing and consulting team are always happy to help boost sales and market position.

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