In Bloom

As rosé wines move into the mainstream the category is dominated by Californian blush Zin. However, drier styles are expanding the market beyond its young, female, core audience, says Julie Sheppard

It was the big story of last summer. The pink revolution rolled into town and suddenly rosé wine was everywhere you looked. In pubs, bars and restaurants, not to mention at thousands of picnics and barbecues across the land, pink was the drink du jour.

During the 18-week summer sales period from May to August, ACNielsen recorded an enormous 32% volume off-trade growth in the category. Compare this with 3% growth for red wines, 4% for whites and 5% for total wine and you get the picture. In the week ending July 16, 2005, rosé’s market share almost doubled, accounting for 9.4% of all still light wine value sales in the off-trade.

Rosé volume by outlet style

Of course the rosé revolution hasn’t happened overnight. At the end of 2002 the category was worth £106 million and it accounted for around 3% of total still wine sales. But by the end of 2005 it was worth over twice that amount at £266m and, according to ACNielsen, it now accounts for 5.6% of total wine value and 5.5% of volume.

The driving factors behind this growth are easily identifiable. Since 2003 a series of good summers created an ideal climate for rosé consumption and, importantly, retailers were quick to react to increased demand. “In September 2004 we gave rosé its own bay in the supermarket aisles,” says Asda’s marketing manager Caroline Bartrop, “which prompted a significant sales uplift.”

Further up the chain, producers reacted to demands from retailers wanting to expand the volume and variety of their ranges. Some simply added a rosé to their range to grab a slice of the action, while others focused on expanding their existing ranges. Rosé specialist Mateus, for example, launched a Tempranillo rosé – its first new variant in 60 years. Those with the capacity upped their production. “Our first year of rosé production was 2000, when we sold a total of 3,000 (9-litre) cases, all of which was shipped to the UK,” says Raúl Katz, commercial manager for Chilean producer Viña La Rosa. “By 2005, this figure had risen to 33,187 cases, representing 7% of our

total sales, 62% of which were shipped to the UK.”

Brand wagon
Obviously, there are now many more rosés available in the UK market as a result and brands are leading the charge. As Carmel Kilkline MW, wine development manager at Percy Fox, pointed out at the recent Rosé Forum organised by the drinks business and Sopexa (see pages 28-30), there has been 38% growth in branded rosés over the last year. “Branded wine propositions have driven the market,” believes Paul Evans, senior product manager at First Drinks Brands, “both in terms of offering the right style, but also through appealing and relevant packaging wrapped up in strong brand propositions.” He points out that, consequently, own-label wines have lost presence in the rosé category over the last three years, decreasing from a 24% share in 2002 to a 16% share in 2005. 

As always, some brands are bigger players than others. ACNielsen statistics show that the category is dominated by rosé from the US, represented by sales of over one million 9-litre cases in the 18-week period to September 3, 2005, far outstripping all other countries (see table page 26). The majority of this is branded wine in sweet “blush” styles, in particular White Zinfandel. “The blush wine category has experienced unprecedented off-trade volume growth of 150% over the past five years,” says Jane Hunter, Ernest & Julio Gallo’s marketing director for Western Europe. “These sweeter styles are definitely driving growth in the category,” agrees Helen Wright, senior brand manager for Blossom Hill.

Consumer profile
Wright believes that Blossom Hill is bringing new consumers into the wine category. “The sweeter style is suited to younger consumers who are switching from FABs and RTDs to wine as they get older,” she explains, adding that Blossom Hill’s core consumers are females in their 20s. This supports research findings by First Drinks Brands which show that over half of all rosé drinkers are females aged 20-35. But an increasingly broad range of consumers are also discovering pink wines, another key factor in the rosé revolution. “Rosé has become more widely acceptable,” says Tim North, UK director of Les Grands Chais de France Groupe, suppliers of the leading French rosé brand JP Chenet. “Our consumer research shows that while very few men would have contemplated drinking rosé a few years ago, today they are happy to admit to drinking it at home – and even in a pub,” he adds.

There are also clear signs that the rosé category is deseasonalising. “Rosé is no longer just a summer drink,” believes Nick Dymoke-Marr, managing director of Orbital Wines. Consumers are increasingly willing to drink rosé whatever the weather, which is reflected by the fact that more retailers are listing it throughout the year. “The category has shown consistent sales month on month and not just around predictable calendar dates or seasons,” confirms Hunter. In part this is due to the fact that more styles of rosé are becoming available in the UK market – the final key reason for growth in the category. “Winemakers are taking rosé more seriously,” believes Nick Room, rosé wine buyer at Waitrose. “As a result the wines are now appealing to a more mainstream audience.” Dry, food-friendly styles in particular have added value to the category, pulling in drinkers who wouldn’t have previously considered drinking rosé with a meal.

What next?
Importantly, research commissioned by Drinks Insight shows that 96% of the trade believes that style will also be the main driving factor for continued category growth, ahead of price (58%), grape variety (54%) and country of origin (50%). All of those surveyed agreed that the rosé category will continue to grow over the next five years. But Simon Legge, marketing director of Brown-Forman wines, which introduced Fetzer Syrah rosé to the UK six years ago in time to capitalise on the rosé boom, is more cautious. “Rosé will continue to grow, but probably not at the strong rates of the last few years,” he says. Legge estimates a growth rate of over 10% per annum and believes that ultimately rosé has the potential to account for 7%-8% of the total wine market.

The Drinks Insight research also reveals that 54% of the trade believes that the rosé category offers some potential for new product development, while 33% think it offers huge potential and only 13% think it offers limited potential.
But which new products are most likely to succeed? The popularity of US brands has certainly paved the way for other New World producers. Currently South Africa is the second largest supplier of New World rosé to the UK, followed by Australia and Chile. But the volumes are small enough to suggest potential for considerable growth (see table). Room at Waitrose thinks that New World brands will lead volume growth, “but the good news is that there will be a place for some smaller producers with individual wines, as a point of difference to broaden the market. Wines such as Tavel and Rosé de Provence could do well,” he believes. Several believe that varietal rosés will have most potential. “There’s an opportunity for Pinot Grigio ‘blush’ to grow bigger,” says Simon Bradbury, account director at Waverley. “2006 will be the first
year when all the major retailers have one in stock.”

Whether or not pink Pinot Grigio becomes the next big thing, there is an opportunity for all rosé producers to make gains in the category if they focus on pricing. The average off-trade price per bottle for still rosé wine is £3.87 and in one respect retailers’ hands are tied. “The values of this market are associated with informality, which does not lend itself to the development of super-premium wines,” explains North.

But because rosé is so fashionable at the moment, it offers the best potential of any wine category for persuading consumers to trade up to mid-level products.

And the big brands are already leading the way. “Premium rosés are already entering the market with SKUs like Ernest & Julio Gallo’s Turning Leaf Syrah Rosé at £5.99, along with other examples from the US, New Zealand and
Australia,” says Hunter. If enough producers follow suit, the value of the category could start to rise exponentially to its size, meaning that the future could be even more rosy for rosé.  db  April 2006