Posts in the Category: trends

Consumers rightly concerned about lower alcohol wines

New research suggests the wine industry needs to address concerns about the quality and taste of lower alcohol wines if it is to attract more consumers to the category.

According to the study, commissioned by the UK’s Wine and Spirit Trade Association (WSTA), consumers are reticent about buying low alcohol wines, and I can’t say I blame them. The majority of low alcohol wines, German Rieslings excluded, are lacklustre. The consumer wine media has bagged most of them so it’s not surprising drinkers aren’t keen to try them.

The key findings were: 55% of red wine drinkers (51% of white wine drinkers) said they had concerns about the taste of lower alcohol wines while 41% of red wine drinkers (36% of white wine drinkers) had concerns about the product quality of lower alcohol wines

Jeremy Beadles, WSTA chief executive, says “While there’s plenty of evidence to suggest consumers are interested in lower alcohol drinks these findings suggest there’s work to do to convince drinkers about the taste and quality of products coming onto the market.”

I have not yet found one exciting wine that has been through an alcohol reduction process such as spinning cone or reverse osmosis and, winemakers need to address this problem. I suggest you either drink one glass fewer or drink Moscato d’Asti, German Riesling, Hunter Valley Semillon or Vinho Verde if you want to reduce your alcohol consumption.

Unfortunately, these wines are deeply unfashionable, and not particularly easy to understand for the average wine drinker. Residual sugar (Asti, German Riesling) or searing acid (Hunter Valley) makes most gluggers turn their nose up at them. But until the standard of the ‘low alcohol’ products coming on to the market improves, that’s the best low alcohol solution.

The findings emerge from the YouGov Omnibus Panel (August 2011) and are based on a sample of 1,693 British adult drinkers.

Posted in - Blog Posts & low alcohol & Research & Riesling & trends on September 14th 2011 0 Comments

Are UK consumers finally trading up?

The latest figures from the UK show the average price of a bottle of wine from its 10 major wine supplying-countries has risen across the board. Shock horror, even unfashionable Germany has managed a price increase!

Cause for celebration? On the surface, yes. It suggests the consumer is trading up, willing to spend more but look deeper and things aren’t as rosy as they first appear.

The average bottle price of a New Zealand wine is up from £6.01 to £6.07 per bottle in the UK off-trade, Australia has seen a 13 pence increase to £4.72 while the average price of a South African wine is up 40 pence to £4.39.

However, increased duty charges and a weak British pound vs. most currencies suggest that the increased costs in the value chain are not being passed on in full. Customers are paying a bit more for wine but it appears that it is suppliers that have to absorb most of the cost increases. This is a problem for profitability.

In South Africa, Australian and New Zealand, strengthening currencies and duty rises meant existing prices were unsustainable.  In some instances average bottle prices have increased but total sales have fallen. South African sales have dropped by 15% in value in the past 12 months and 22% by volume.

Australia and New Zealand have increased sales volumes but how much of that is sold at huge discount, bulk shipped and made into supermarket brands? According to Wine Australia, in the past year 47% of all wine shipments from Australia were bulk not bottled. Is this a sign of Australia’s economic credentials (bulk shipping has a lower carbon footprint than shipping in bottle) or is it a consequence of its massive oversupply problems?

What is clear is that consumers are being forced to pay more for their wine in the UK, producer margins continue to be nibbled away. Profitability has to come before volume sales if wineries are to survive. But, as South Africa has witnessed, there’s only so much people are willing to pay.

Posted in - Australia & Blog Posts & New Zealand & South Africa & trends & wine on July 11th 2011 0 Comments

More to Marlborough than Sauvignon Blanc?

Consumers know Marlborough makes high quality, easy to drink Sauvignon Blanc but if you asked consumers to point to it on a map, it would be a pin the tail on the donkey exercise.

The latest research on the significance of region of origin by Wine Intelligence shows that at mainstream price points (£4 to £4.99) Marlborough, the Barossa Valley and Napa all feature in the top five regions from which UK consumers say they are likely to buy wine. Marlborough and the Barossa are still among the top choices when the same question is posed for purchases of £8 and above. So far so good.

Although prompted awareness of Marlborough is relatively low, consumers have a favourable view of New Zealand and say Marlborough wines are high quality, easy to drink and often recommended by friends. They are also more likely to be available in casual restaurants.

Research director Jean Philippe Perrouty said:  “Bordeaux and Burgundy are known by 90% of UK consumers but only one in four or less say they would buy it. UK consumers say they are more willing to buy Marlborough, Rioja or Barossa – if they have heard of them – than Bordeaux or Burgundy. These wines have been able to create the perception of affordable quality.”

Still so far so good.

However, when it comes to knowing where Marlborough is or what the region is like, you’ll get a blank look. Many US consumers associate cigarettes with the region. How positive.  Nevertheless it’s a similar story for Chianti, which conjures up images of Italy, red and Hannibal Lector.

Beyond country of origin, it seems most regions are failing to portray an effective image.

So where now?

Tourism is key. If you can get people to visit, they become ambassadors for the region. And it just so happens 85,000 people are heading this way for a few rugby matches in September.

Longer term, Marlborough should be shouting to the rooftops about tourism and food. The Marlborough Sounds are breathtaking, tell people about them. There’s great walking, mountain biking, and fishing on your doorstep. Plus, there are a wealth of artisan producers, from oyster farms, to pine nut orchards and cheese makers.

The Barossa has employed the skills of Paul Henry, ex general manager Wine Australia, to educate consumers that there’s more to the South Australian region than burly Shiraz. Perhaps Marlborough should be doing the same.

Posted in - Blog Posts & Marlborough & New Zealand & Research & Sauvignon Blanc & trends on May 19th 2011 0 Comments

Unfiltered Pinot Noir with Matt Thomson

Matt Thomson, globe trotting winemaker, joins me to discuss New Zealand wine, his love of kayaking and who he would go gay for. Plus a funny out-take at the end…

I heard the name Matt Thomson everywhere but he’s a difficult man to pin down, taking 170 flights a year.

Being a consultant winemaker in Marlborough, I was keen to pick his brain on its Pinot Noir, as I’ve been largely unimpressed with the region’s offerings thus far.

He is quick to defend Pinot Noir in Marlborough. “I find it really frustrating. If you look historically at what the region has won in terms of trophies for our Pinot Noirs, we have done better than other regions.”

But what about structure? Isn’t the region lacking a bit in its Pinots? “I think New Zealand Pinot Noir lacks structure,” he admits.

Perhaps it’s a soil thing, or maybe it’s vine age or climate…

Stem trials
Here’s where I get technical…Some winemakers are getting more structure by adding stems to the ferment. I like this. It adds a bit of chew and a linear finish, plus gives the wine more longevity. “As a component, get the level right and the wine sings,” says Thomson.

Not that everyone can do this successfully, however. Add too many stems, or if they aren’t ripe, you’ll get a green, sappy character in the wine. If you’ve ever chewed on a grape stem, you’ll know what I mean. It’s pretty unpleasant.

The problem is stems in Pinot Noir struggle to get ripe – what’s called lignification. By the time your stems lignify in Pinot, your fruit is overripe and knackered. Throughout New Zealand, there appears to be a struggle to get stems ripe. Some say it is a climate thing, others think it is clonal thing, while there’s the argument it could be a vine age thing. Which, leaves me very confused. But then again, there’s very rarely a definitive answer in the wine industry.

If anyone would like to offer their views, I’d be interested…

Posted in - Blog Posts & Central Otago & Marlborough & New Zealand & Pinot Noir & trends & wine on March 6th 2011 0 Comments

Retail gets ethical

Corporate social responsibility is becoming one of the buzzwords that we’ll be hearing a lot more about in the wine industry.

Producers and retailers are now feeling the pressure to improve their environmental and ethical credentials, and thus help customers be greener and healthier.

With the major multiples selling eight out of every 10 bottles of wine in the UK, the grocery sector is thus expected to lead the wine industry’s adoption of corporate social responsibility.

Today, the Co-operative Group launched a three-year Ethical Operating Plan, which sets a new benchmark for other retailers. It has reduced its own operational carbon emissions by 20% since 2006, the target will now increase to 35% by 2017. In addition to a 15% weight reduction achieved in packaging, it will reduce this by a further 10% by 2012 and increase its carrier bag reduction target to 75% by 2013.

It also aims to increase its Fairtrade range as well as make its healthier option range the same price as its ‘normal’ range.

Challenges to corporate social responsibility
What difference will you make if you buy a Fairtrade wine or a lightweight bottle? Isn’t it a drop in the ocean when you consider BP’s Gulf of Mexico leak and China’s profusion of coal-fired power stations?

Producers and retailers have to make consumers think that they can make a difference buying ethically and/or environmentally. That choice must not be more expensive than a less ethical option. And customers who shop on price or promotional offer need to be given an incentive to shop ethically or environmentally, through reward points, which we have seen when reusing carrier bags.

Without consumer support, corporate social responsbility will fail before it even gets going.

Posted in - Blog Posts & Organic & Retail & trends on February 18th 2011 0 Comments

Consumers reject corks

Bordeaux producer Chateau Bauduc looks set to dump corks in favour of screwcaps for its white and rose wines.

After consulting more than 1000 of its customers in an online survey, 65% of respondents voted in favour of screwcaps for white wines and pinks.

For Bordeaux reds, screwcaps were not the flavour of the day with 77% voting for cork or saying they didn’t mind; just 23% were pro screwcap for reds. While it seems a little hypocritical not to be consistent with your closures across your range, the survey feedback found consumers still enjoyed pulling the cork and believed it was more suitable for wines destined for ageing.

10,000 cases of Bauduc are due to be bottled this month destined for outlets including Gordon Ramsay and Rick Stein restaurants. If it decides to do what its consumers say they want it to do, it looks like it’s hello to aluminium for Bauduc.  The corks have been granted a reprieve by the red drinkers and manage to hang on for a while longer.

(It’s worth remembering that Bauduc has a strong presence in the UK where screwcaps have a high level of acceptance. If the US and Asian markets were surveyed, the results would likely be very different…)

Posted in - Blog Posts & Bordeaux & closures & trends & wine on February 7th 2011 0 Comments

Constellation’s Christmas cracker

When the google wine alert dropped into my inbox on Christmas Eve, I wasn’t expecting anything significant to happen. Then came news that Constellation, one of the world’s biggest beverage companies, has sold off its Australian and UK division.

There’s nothing quite like announcing an AU $290 million deal when everyone’s left the office for a week or two and have mince pies rather than pie charts on their mind. Of course, you can’t brush this one under the carpet but it has happened without too much fuss.

An Australian private equity fund, CHAMP, has bought the businesses and the deal is expected to be complete by the end of January. It includes the transfer of Constellation’s Australian, UK, and South African brands, wineries, facilities, vineyards, and the company’s 50% interest in Matthew Clark, the UK wholesaler. All CWAE employees will transfer with the business but there is uncertainty for those staff who will be unsure as to the future holds in 2011.

Constellation’s CEO Rob Sands said Australian wine no longer offered the profit margins it expected as part of its premiumisation strategy.  “Constellation has implemented a strategy focused on driving profitable organic growth through premiumizing its world class brand portfolio and improving margins, return on invested capital and free cash flow,” he said. “The CWAE business sells quality wines from the important Australian appellation and has significant scale, but continues to be faced with challenging market conditions. Therefore, the business is no longer consistent with Constellation’s strategy.”

How did Constellation get into this sticky wicket? It paid US$1.1 billion for BRL Hardy in 2003. It was part of an acquisition trail, which included buying Zinfandel producer Ravenswood for close to $150m and Mondavi for more than $1bn. The debt soon piled up, the global economic crisis hit, Australian wine slumped and other wine producing countries got their act together. Not a recipe for success.

So, Hardy’s is off to pastures new at a fraction of the price paid in 2003 and Constellation has thrown plenty of extras in as part of the deal. They must have been feeling in the Christmas spirit.

Posted in - Australia & Blog Posts & California & New Zealand & trends on December 30th 2010 0 Comments

Sauternes survival

Following the demise of Sauternes property Chateau Broustet and its sale to an Italian buyer in late September, it’s all guns blazing for the family’s other property Chateau Saint-Marc.

Export and marketing manager, Guillaume Forcade had fought valiantly to save his family’s chateau with savvy marketing and sales.  He had packaged some of the estate’s wines in test tubes and the brand had become involved in Vogue and Mercedes parties but it was too little too late and he is now concentrating his efforts on Saint-Marc.

The wine will be available in tubes during French Tuesdays in San Francisco. Whether you drink it “from the tube or slipped inside a handbag”, it’s certainly a different approach for a very traditional appellation.  No glass; no foie gras? God forbid, the wrinklies won’t like it.

However, the whole sweet wine market faces an uphill battle with sales in freefall. The French have cut their Sauternes consumption from 83,536hl in 1999/2000, to 54,477hl in 2008/09. The appellation’s vineyard area has fallen from 4139ha to 3773ha in the same period. At the very least, it’s going to take young blood with new ideas to stem the tide. Good luck to them, they are going to need it.

Posted in - Blog Posts & Bordeaux & Sauternes & Sauvignon Blanc & trends on December 14th 2010 0 Comments

Unfiltered with Phil Laffer of Jacob’s Creek

Phil Laffer is retiring after 50 years in the wine biz and handing over the Jacob’s Creek reins to Bernard Hickin (this episode’s cameraman – cheers, Bernie!). At the changing of the guard, Phil gets his 60 seconds (well, a bit more actually) to talk about where who’s going to win the Ashes and where he’s off next…

Posted in - Australia & Blog Posts & New Zealand & Syrah & trends & wine on December 6th 2010 0 Comments