The UK wine market

By Chairman of the Institute of Marketing’s Food & Drink Group
The UK wine market has enjoyed significant growth for more than a decade – and it’s now ready for a shakeup. John Giles, Divisional Director of Promar International and current Chairman of the Institute of Marketing’s Food & Drink Group, writes exclusively for WineTrust100.
In our research for wine producers and exporters from the US, Canada, South Africa, New Zealand, Chile and Eastern Europe, we consistently find that most UK shoppers consider buying good wine an unpredictable business.
They are therefore pretty conservative in their choices, typically sticking to a very narrow selection – or even a single wine – with which they feel safe. They are reluctant to change for fear that will end up buying a poor quality product, or simply that they won’t like it.
On the whole, consumers are happy to let someone else – usually a retailer they trust to select wines for them based on their preferred style. Faith in a good third party can be a strong platform from which shoppers can develop their confidence to trade up and expand their buying repertoire into new types of wine.
The growth in sales of rosé – up by more than 100% in the last year alone – certainly suggests consumers are becoming more open to experimentation. According to the Wine & Spirit Trade Association, the UK market is evenly split between red and white with a share of around 45% each, with recent growth coming from rosés building this segment to approximately 10%.
Provenance of both food and drink is increasingly important to consumers in the UK. A growing number of consumers are taking this into account when making their choices. People want to know more about how their wine and other food and drink is produced, by whom and where. However, the burgeoning knowledge about the origin and use of food far outweighs our generally poor knowledge about wine.
Much of the growth in the UK market has in the past been driven by imports from the likes of Australia, Chile, the US and New Zealand. The UK has grown to become the second largest wine importer in the world; and the 6th largest wine consumer, after China, the US and the three other large EU markets of France, Italy and Germany.
Overall demand for wine has started to slow in line with the overall fall in consumption of alcohol – which has fallen by some 13 % over the last seven years. We have seen wine
consumption fall in the UK by around 2 – 3% for each of the last two years (perhaps a welcome indication that, as a nation, we are beginning to choose quality over quantity).
Meanwhile, the UK’s own wine industry is in growth – producing about four million bottles a year now, which gives it an overall market share of around 3% of the total.
Of course, this is still small compared to the likes of Australia, which has a market share of around 20%; Italy and France – both of whom have around 15%; and Chile and the US with
10% apiece. But remember the UK market can change quickly – it was not so long ago that Australian wines being the market leader in the UK would have been unimaginable.
The UK wine market is highly competitive and some 25 million people drink wine on a regular basis either in pubs, bars or other on trade outlets. But as ever, the usual rules of marketing still apply – it is important to tap in to new trends and find new ways to reach consumers.
Online shopping is a growth area in what can be at best a static overall retail food and drink market. It is predicted that on line shopping will grow to around 10% per annum for several years to come. Combining this trend with the appetite for guidance and knowledge when it comes to buying wine may be the perfect formula for breathing new life into the UK wine sector.