SHERRY UPDATE: Quality Treat

Sherry’s fortunes in the UK, its main export market, are very mixed. The supermarket aisles are dominated by own-label Sherries and prices have been spiralling downwards. But turn to the independents and the on-trade and the picture is far brighter, with reports that higher quality Sherries are gradually finding their niche across a variety of styles.

Encouragingly, there are signs that a new generation of Sherry consumers is emerging (though not as fast as those being lost at the older end of the spectrum), particularly for lighter styles such manzanilla and fino. Melissa Draycott, Sherry buyer for Sainsbury’s, notes the emergence of two distinct sets of customers: the “younger set”, who regularly buy wine and head for the manzanilla and fino sherries, and a more traditional consumer who is more likely to buy a cream sherry. Draycott attributes this trend to the popularity of Spanish cuisine and the marketing efforts of brands such as Tio Pepe and the generic campaign to associate dry Sherries with food. At Waitrose, Sherry buyer Nick Room sees a similar trend. He adds, “Drier styles are performing relatively better than the heavier, sweeter wines and pale cream does not seem as popular as it once was.”

News

Acquisitions

In January the Estévez Group acquired the Sanlúcar-based Hijos de Rainera Pérez Marín and Gil Luque, owners of La Guita, the leading manzanilla brand. The acquisition gives José Estevez a powerful position in the manzanilla sector where it is already present with Valdespino’s Deliciosa manzanilla. Meanwhile Sanlúcar company Pedro Romero has acquired Bodegas Gaspar Florido, a small, quality-orientated bodega also located in Sanlúcar.

Take three
Williams & Humbert, represented by Ehrmanns in the UK, is adding three 12 year-old Sherries to the range on offer. They include an amontillado, an oloroso and a Pedro Ximénez and will retail at £9.99 (75cl bottle).

Moving manzanilla
According to Sarah Woodward, fortified brands manager at Mentzendorff, “La Gitana has been performing very well in the UK, up 18% MAT value sales w/e 30.12.06.”

Plans for the brand include promoting “more effective by-the-glass activity taking into consideration measure size, glassware, glass price and wine freshness and serve temperature,” she explains. This will focus on coastal areas “due to the strong link between La Gitana and the sea.”

Independent success
At Ehrmanns, marketing director Keith Lay is encouraged by the progress of the Williams & Humbert Sherries which target the independent sector and the on-trade. He says, “In our experience, the independent specialists seem to be the right way to go. We are seeing a growth by focusing on the niche market.” Ehrmanns is particularly successful with W&H’s Alegria manzanilla and its 20-year-old Pedro Ximénez (both sold in half bottles). Lay points to similar reasons as Draycott for the success of these Sherries but he also believes that sherry is benefiting from the healthy number of British visitors taking city breaks in Spain and the “gourmet Spain” phenomenon.

Eaux de Vie, with a portfolio of premium Sherries and headed up by Neil Mathieson, takes a similar approach to marketing for the Sherries from Argüeso and Sánchez Romate and also reports good progress. He says, “The sales for Argüeso’s manzanilla pasada styles are on a par with the younger styles, and the reserva Sherries from Sánchez Romate are selling well. The look of the bottles also fits the perception of the people who are buying them.”

Moreno Wines has been busy kick-starting distribution for Valdespino (including Deliciosa manzanilla, Inocente fino and Contrabandista amontillado) over the last couple of years. Marketing manager Christopher Payne says, “Sherry should be considered as a different style of wine and we want to see people who buy better wines consider Sherry… the young generation is a blank canvas for Sherry.”

In yet another blow for sherry on the high street, Oddbin’s is de-listing Valdespino, but prospects are far brighter in the hands of independents such as Glasgow’s Alexander Wines and the Spanish on-trade. Payne also adds that showing the wines at smaller, specialist events such as SITT (Specialist Importers Trade Tastings, see www.sittastings.org), gives Valdespino exposure to the right kind of customers.

Major players
On the big brand front there’s been more activity, especially for Harveys. Jim Beam Global Spirits & Wine, the brand’s new parent company, emerged last year as a new force in fortified wine (Cockburn’s Port is also part of the portfolio) and has moved the marketing effort up a gear.

Beam UK launched Harveys fino last year which was closely followed by Harveys Orange, appearing in the same blue bottle as its established Harveys Bristol Cream sibling.

Having achieved distribution in a number of supermarkets and wholesalers for both new offerings, Beam UK is about to roll out a campaign to back the entire Harveys Sherry range. Titled “Harveys: For Chilled Out Occasions”, the campaign is worth £1 million and focuses on below-the-line activity covering both the off- and the on-trade. The main aim is to encourage a younger consumer – primarily 30-plus females – to drink Harveys chilled.

According to Lucy Sewell, Beam UK’s category marketing manager for fortified wines, the on-trade will also be targeted more actively this year as “a contemporary drinking solution”, especially for Harveys fino and the aged speciality Sherries which sit at the top end of the portfolio.

Meanwhile the on-trade will also be a “huge focus” for González Byass this year, according to UK marketing director Jeremy Rockett. With an emphasis on Tio Pepe fino, the overall aim is to increase trial and visibility building in the restaurant trade. “We want to see Tio Pepe at the top of wine lists (in the apéritif section), good visibility behind the bar to prompt trial and the ‘correct serve’ – Tio Pepe should be treated like a white wine,” says Rockett.

Turning to the off-trade, González Byass continues to invest behind Croft and is entering the second year of the “croft spot” advertising, sampling, and PR campaign, which has a £1m plus budget. Tio Pepe will also get “a high spend”, though details have yet to be confirmed. Tio Pepe has previously sponsored ITV’s Hell’s Kitchen.

Many of the best-selling Sherries (and some award-winning wines) can be found within the own-label category – one of the most successful is the Sainsbury’s Taste the Difference Sherry range. However, (cheap) pricing in the own-label category as a whole has become a serious issue. The new quota system for shipments seeks to address this by reducing the excess stocks in the market and the pressure on pricing. If it succeeds in its aims, it will benefit Sherry’s image and pave the way for better prices which are needed in the UK perhaps more than any other export market.