Retail / Red Wine: Red wine alert

With buyer numbers decreasing, the value of red wine is following suit. Notable growth has been achieved by the 3-litre box format, however

The value of red wine has declined over the past year, primarily because of a decrease in the number of buyers from all
the top three countries of origin, ahead of the market decline.

The top three red-wine countries of origin are not only in growth for average volume of sales per buyer, but they are also growing remarkably ahead of the total red-wine market. Despite this, a reduction in buyers of red wine has occurred, with a loss of 0.4 million households. Slight price increases for Californian and French could have contributed to this, as well as the loss in interest for private labels. Private label Californian experienced a loss of 30% in buyer numbers, while French lost 17%, both in spite of an average price decrease.

Notable growth has been experienced by the 3-litre box format, with the top three countries overtrading to a great extent. The 3-litre box of Australian red has encountered dramatic growth in buyers, while all the top three went through an enticing price decrease, encouraging greater volume sales.  However, 75cl bottles are in value decline, through a decrease in promotional activity resulting in a loss of buyers. Although they have maintained the majority share of pack format sales, there is concern over the decline due to the majority of buyers remaining promotionally focused.

Tesco and Sainsbury’s are the most successful retailers for red wine, managing to dominate over half of sales in the last year. Both these retailers were overtrading in Australian, while Californian was especially popular in Asda and Somerfield. Waitrose and Tesco were the only two overtrading in French wine.

Blossom Hill has performed particularly well over the past year to obtain the number-one brand spot, with 10% of households buying. However, a noticeable improvement occurred for E&J Gallo, with its outstanding movement from ninth to second place, growing by 51%.

TNS is a leading global provider of market information. We provide research, advice and insight on market segmentation, advertising and communications, new product development and brand performance. The TNS data is based on our continuous panel of 15,000 households. TNS tracks the alcohol purchases across all major grocery multiples and co-ops. For further information, please contact David Buckley, business director for TNS Superpanel on 020 8967 1513

© db September 2006