Red, white or green?

Organic wines now account for 1% of the UK wine market and further growth is predicted. But, asks Kate Ennis, is it better to promote a brand’s premium qualities first and any organic credentials second?

Is it made from carrots? Has it got alcohol in it? When Neil Palmer, director of Vintage Roots first started up his business as an organic wine merchant 20 years ago, these were the questions he was most frequently asked.

“Back in 1987 the organic concept was barely on the radar, but in just two decades we’ve seen a huge ground shift in public perception as organic sales have soared,” says Palmer.

Now organic has moved into the mainstream and it means big business. Recent figures from the Soil Association’s annual audit show that the overall organic market has surged well past £1 billion a year, with sales reaching £1.2bn in 2004, up 11% on the previous year.

The growth of the organic drinks sector has been off the back of growth in organic foods, and retailers, restaurateurs and consumers have increasingly seen the logic in adding wine to their organic jigsaw.

The sector experienced its fastest growth period from the late 1990s to 2002, and, although that phenomenal growth has slowed to a steadier pace, consumer demand is still rising. Importer, Bottle Green, estimates current sales in the UK to be somewhere between 500,000 and 1 million cases, around 1% market share of all wine sold. That may sound niche right now but forecasts show continued expansion, with the organic revolution moving across socio-economic boundaries. If growth continues as predicted, it will soon be a sector the whole wine trade cannot afford to ignore.

Several factors have helped to drive growth with major food scares having the biggest impact, prompting people to look more closely at what they eat and drink. There are less obvious direct health benefits from organic drinks but the claim that lower sulphite levels eradicate hangovers has motivated people to drink organic. Yet the fact that many consumers still see wine as a totally natural product shows more needs to be done to convey the organic message. “It doesn’t even cross their minds that heavy sprays and additives are used,” says Palmer.

There are now over 500 vineyards worldwide cultivating vines free from artificial fertilizers or synthetic chemicals. France and Italy lead the way in terms of numbers yet Australia has few organic winemakers considering the size of its industry.

Currently, only the growing part of the winemaking process is certifiable, although there are moves afoot by various groups to agree a set of regulations for winery practices too. All wine labels must now declare “this wine contains sulphites”, which may be a move towards ingredient listings in the future. Some believe organic accreditation and stricter rules are vital in building consumer confidence and maintaining the sector’s integrity.

Currently rules vary between countries with different organic certifiers so some indicators get lost in translation. Many consumers won’t recognise Ecocert stamps or the words “agriculture biologique”. The trade should also be wary of diluting the meaning of organic with the introduction of ambiguous phrases as seen in the food sector.

Going organic is a tough decision for any winemaker and it’s less viable in climates susceptible to mildew and pests. The costs of the three-year transition to detoxify the vineyards, labour-intensive farming and lower yields are also disincentives. Organic exponents say costs are lower long-term and the superior quality of organic grapes can compensate for disadvantages. Yet, as consumers have found out, organic doesn’t necessarily mean better quality. In the past, quality has proved patchy, particularly at the lowest price points.

Many consumers are concerned about paying a premium for organic wine, but this preconception is slowly diminishing. “It is a struggle to hit that £3.99 mark as the economies of scale are not there,” admits Palmer. “Our cheapest wine is £4.25 and I’d say you pay 10% to 15% more at that lowest end, but once above £5 there’s no discernible cost difference. Price isn’t an issue at the higher end because of the perceived quality,” he adds.

Fear of association
That’s why many top-end producers don’t give away the fact they are organic at all. They don’t need to market themselves under an organic banner to sell their wine. They also don’t want to be associated with lesser quality wines or be bound by restrictive rules.

Some of these top winemakers are also biodynamic, a philosophy that takes organic farming principles one step further, with the vineyard being a holistic system influenced by cosmic and lunar rhythms.
There are 120 biodynamic winegrowers worldwide but the concept is only now starting to take off. It’s where organic winemaking was about 15 years ago, but convincing drinkers this isn’t new age mumbo-jumbo will prove a much bigger challenge.

Consumer education and awareness is what will drive the organic category forward and branded wines have a central role to play in this; labels such as Brown-Forman’s Bonterra from California. “Bonterra has acted as a superpremium benchmark brand for the category,” says Simon Legge, Bonterra’s European marketing director. “We are one of the few brands to consistently undertake significant promotion in and out of store,” he points out. Successful organic food brands such as Duchy’s Originals and Green & Black’s chocolate, have proved particularly inspirational. Simon describes Green & Black’s as the marketing man’s “pin up”. No wonder; sales of this organic chocolate have been phenomenal, growing at an annual rate of 50%. Five years ago, turnover was just £4m but the figure will hit £40m this year. “Green & Black’s has demonstrated that by positioning itself as a premium product first and foremost, underpinned by organic credentials, the appeal goes far beyond committed organic customers to more mainstream consumers,” says Legge. He also commends how G&B has developed its product range. With this in mind, Bonterra will shortly be adding an entry-level wine priced at £6.99 to its portfolio. 

A branded range aiming at lower price points, between £4 and £6, is Eden Collection from Bottle Green. Jerry Lockspeiser, MD at Bottle Green, explains, “The idea was to make a recognisable umbrella for quality organic wines, so consumers can identify a wide variety of styles and choose the one they liked from a clear international range.”

Vintage Roots also has its own-label wines, including a varietally-led selection called Touchstone, and has found that these branded ranges are particularly appealing to those who are new to organic wines. Some mainstream brands have jumped on the bandwagon, adding an organic wine to their range, just as they’ve added a rosé, to capitalise on trends, particularly following the organic wine boom experienced between 2000-2002.

Yet this growth was over-inflated. “Demand was boosted when major retailers saw organic wine as a new trend and broadened their shelf space,” explains Lockspeiser. But many producers were not able to deliver the same profit to retailers as the large brands, so they were delisted.

This attention in the supermarkets, however, did give organic wine more credibility in the mainstream market. Waitrose and Sainsbury’s are the two major players in organics, the former stocking 25 organic wines, with Sainsbury’s close behind having 19 on the shelves. Most other supermarkets carry less than 10.

Sainsbury’s organic buyer, Helen McEvoy affirms that it’s an area that receives a great deal of focus. “Sainsbury’s recently regained number-one position for sales of supermarket organic products and aims to build on this position,” says McEvoy. So why has the number of organic wines decreased? “To provide a more cohesive offering,” she replies. “There was duplication in the range before and not much focus and direction. We have a strong own-label focus with the SO organic brand, launched in 2005, so we can source high quality wines at much more competitive price points.”

How to merchandise the wines in store also needs to be considered. Customers need to locate the wines easily but placing them in a ghetto of “ethical” products reduces exposure. Waitrose has started using dual location displays in flagship branches, grouping organic wines together on a separate unit but also within the range, using shelf-edge ticketing to highlight organic status.

It’s not just retailers who are flagging up their organic wines; bars and restaurants are also curious to explore this option, as Linda Ward, sales manager at Vintage Roots explains, “A majority of my mainstream on-trade clients recognise organic is now a must-have component of any portfolio.” But they are not just taking one or two wines as a token gesture; they are ditching their current list completely for a totally organic selection.

On-trade demand for other drinks has also increased, with organic beers, ciders and spirits being requested as add-ons to organic wine lists. Specialist organic merchant Vinceremos offers a good selection of these but, as its director Jem Gardner reveals, these sub-categories lag some distance behind organic wine growth. “The average organic consumer is a wine drinker first, partly because women are more likely to drink organic than men,” explains Gardner.

Beer is looking the most promising drink. Just as vegetable box schemes promote themselves on reducing food miles, UK beer lovers can drink from their local brewery to reduce drink miles and their impact on the environment. Sadly, this is not something the wine industry will ever be likely to promote.

So is the future bright for organic drinks? Yes, as long as the sector continues to build consumer knowledge while providing more quality wines and in bigger quantities. “The wider the choice trade buyers have to select wines that meet all their normal commercial criteria and are also organic, the more we will see on the shelves and more will be bought,” says Lockspeiser.

Legge thinks organic wines need to put more money behind themselves. This summer Bonterra will be present at the RHS flower shows, to build brand loyalty and awareness to a captive audience. Promotion during the Soil Association’s Organic Week also needs more co-ordinated efforts. “It’s an opportunity for everyone in the industry to really push organic wine and give it some time in the sunshine,” says Legge. Most agree that in-store information, advice and promotion need to continue, and sampling could also prove beneficial. Taste is also critical to proving organic wine’s quality credentials, and the UK’s growing foodie culture means consumers are developing more discerning palates.

Increasing media pressure on society to address environmental issues in general, will certainly help to push organic wine onto the trade’s agenda. “The only genuine barrier I can see against growth is prejudice against the concept; defensiveness of the non-organic majority, innate conservatism in the trade, or scepticism about it being a gimmick, when in fact,” says Gardner, “organic wine is closer to traditional methods than gimmicky modern wines!” he exclaims.  db June 2006

ORGANIC SPIRITS

It’s only natural that spirits have come under the organic spotlight as the use of fertilisers and pesticides is as common in the production of grain as it is with any other agricultural crops.  Organic grain is said to create fine alcohol naturally because it has a better biological cell structure, plus natural micro-organisms aid full and deep fermentation. Any taste and health benefits are hard to discern although there is a claim they have lower methanol levels, which reduces hangovers.

The leading company making organic spirits is London & Scottish under the name of The Organic Spirits Company. It is the producer of Utkins UK5 organic vodka, Juniper Green organic London gin, Papagayo organic rum from Paraguay, Utkins white rum and Highland Harvest, the first whisky to be credited by the Soil Association. There are also a few small organic Cognac and calvados producers in France.

This sector is very much in its infancy so choice is limited to one or two products for each spirit at present, making it difficult for the products to appeal to different palates. There are plenty of organic mixers to choose from though!  db June 2006