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Grape Expectations – UK Wine Market to be Worth £10.6 Billion in 2012

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Grape Expectations – UK Wine Market to be Worth £10.6 Billion in 2012

Grape Expectations – UK Wine Market to be Worth £10.6 Billion in 2012
September 24
15:44 2012

Previously a no-go for the nation’s wine buffs, latest research from Mintel finds that screw tops, boxes and pouches are being seen as increasingly credible options among Britain’s wine users. Today, as many as four in ten (39%) wine users agree that wine in a box or a pouch is equally as good quality as bottled wine – indeed, just 26% of wine users think that boxed wine is inferior. Meanwhile, screw tops are seen as even less of an issue for wine lovers, with just 17% claiming not to trust “screw cap” quality wine.

Chris Wisson, Senior Drinks Analyst at Mintel, says: “Recent years have seen many wine drinkers reappraising their perceptions and use of wine in differing formats and packaging styles. Boxed wine has the added advantage of the wine keeping for a longer period of time than in a bottle, facilitating more flexible usage and encouraging moderate drinking. Reducing wastage, boxed wine provides an ideal solution in a market which is both environmentally and cost conscious.”

At the top level, all seems well in the UK wine market as, apart from in 2009, value sales have increased annually every year. Currently valued at £10.4 billion in 2011, the year ahead is estimated to see a continuation of this trend, with sales increasing by 2.4% to reach £10.6 billion in 2012. However, this market is not as healthy as it may initially seem, as volume sales have fallen from 1.26 million litres in 2007 to 1.14 million litres in just five years. Many users have already traded out of buying wine in recent years, driven away from the market by continued pressures on household budgets, with Mintel’s research showing that two in five (39%) wine buyers are now reassessing their purchase of wine.

Reflecting the cost pressures at play in the wine market, the relationship between wine buyers and brands has shifted. While the leading brands in the wine market can take comfort from the fact that they command a high level of trust, with almost three quarters of wine buyers (73%) trusting them to provide a consistently good product, there is a notable dark cloud on the horizon as almost two thirds (63%) of wine buyers claim that they would switch from their favourite brand if another was on promotion.

“With many brands now moving away from unsustainable promotion-heavy models, volume sales look set to continue sliding in the years to come. However, many consumers are likely to be reluctant to stop buying wine altogether and depending on the level of inflation, the price rises may be higher than the fall in volume, with potential for further value growth. Growing segments such as boxed and low-alcohol wine may help to stimulate some growth and represent a cost-effective means of keeping wine drinkers engaged with the market.” Chris Wisson continues.

While price and brand name are predictably high up in wine buyers’ decision-making process, the fact that a majority of 57% list the grape type as one of their main choice factors is a surprising finding, well ahead of the 38% who identify country of origin as a main driver when buying wine. This suggests that many wine drinkers are shopping for wine according to the grape types which they know they like, somewhat circumnavigating in-store layouts based on country of origin.

However, rosé wine has made great strides over the past decade and is now a mainstream segment of the wine market, drunk by 43% of adults. Part of its success can be attributed to the fact that it has broadened its appeal and become a more acceptable drink for all ages but, more importantly, both men and women alike. In 2012, six in ten (60%) wine buyers think that it is a drink which is equally suitable for both genders, with just 15% disagreeing.

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