UK and Europe set for sparkling growth
The UK premium sparkling wine market is set for further growth, with a number of notable brands looking to capitalise. But, according to Euromonitor International, there is also strong growth potential for premium sparkling wine brands across a number of other European markets.
The combination of high and growing consumer spending and rising demand for quality products make for fertile growth conditions for premium sparkling wine in the UK, according to market analyst Euromonitor International. Moreover, while the UK's annual disposable income is among the highest in Europe - GBP761.6bn in 2005 and forecast to grow by 10.3% by 2010 - Euromonitor also forecasts growth in sparkling wine in a number of other European countries.
In the UK, demographic factors are also favourable for sparkling wine, with the population of young people aged 20-24 predicted to grow by 6.9% between now and 2010, and the 25-29 age group set to swell by 8%. Building a brand franchise among younger and affluent consumers is key to establishing a sparkling wine brand in an ever more brand-focused society, says Euromonitor.
Looking forward, a number of sparkling wine brands are likely to come to the fore. Having acquired Australian wine company Southcorp, Foster's is in a good position to attack the premium sparkling wine price point with a number of strong brands. In purchasing Southcorp, Foster's has added the likes of Rosemount Estate, Penfolds and Lindemans to a wine portfolio that already includes Beringer and Wolf Blass.
Another brand to look out for is E&J Gallo, which has a strong presence in still wine in the UK, ranked in the top five, with 2.7m cases in 2004. Euromonitor International believes E&J Gallo can use its strength in still wine to good effect in the premium sparkling price point.
Indeed, brand extension from still to sparkling has proved a successful strategy for wine companies in the UK. Arguably the most successful example has been the extension of the Pernod Ricard-owned still wine brand Jacob's Creek into the sparkling arena. Diageo has subsequently followed the same path with the launch of Blossom Hill Sparkling Rosé and Blossom Hill Sparkling White in September 2005.
The UK is not the only market of opportunity for sparkling wine producers in Europe. Belgium and Switzerland offer similar potential to the UK, particularly in the premium segment. While the outlook for the sparkling wine sector (excluding Champagne) as a whole is healthy for these two markets, with growth of 14.6% and 16.0% respectively forecast between now and 2010, Euromonitor believes that there is also considerable potential for strong premium growth.
As with the UK, high levels of consumer spending and growth in key younger population groups are seen as the primary positive factors. In Switzerland, disposable income (CHF287.6bn in 2005) is forecast to rise by 8.8% in the period up to 2010, while in Belgium, spending is set to increase by as much as 12.8% to EUR194.9bn.
With regard to population growth, the 20-24 age group in Switzerland is expected to grow by 3.2% between now and 2010, while the same age group in Belgium is set to grow by 0.8%. Similarly, the 25-29 age group is forecast to grow by 5.4% by 2010 in Switzerland, and by 1.8% in Belgium.
Furthermore, there are no really strong sparkling brands in either the Swiss or the Belgian markets, with the leading players in each case holding a market share of no more than 1% to 2%. In Switzerland, the market leader is Freixenet (1.3% in 2004), while in Belgium the biggest brand is Fourcoy Renglet (2% in 2004). The potential for new players is clear.
Sparkling wine producers may also do well to focus some attention on Scandinavia. Sparkling wine is a newer phenomenon in this region, with a notable lack of traditional preconceptions. Hence, growth forecasts for the other sparkling wine sector as a whole are generally stronger, at 32.7% in Norway and 62.8% in Finland for example. Given the high levels of existing consumer spending and some of the strongest forecast growth rates to 2010, combined with growth in key consumer groups, market conditions look stellar for premium sparkling wine.
Again, in these markets, disposable income levels are considerable, at EUR82.9bn in Finland and NKr749.3bn in Norway, and key population groups are set to show significant growth, with the 20-24 age group forecast to expand by 8% in Norway and 25-29 age group by 1.3% in Finland. In addition, no one brand is dominant in sparkling wine at present, with shares all below 1%, opening up the opportunity for a new player to make its mark.
Denmark, in terms of overall sparkling wine market performance, is something of an anomaly among Scandinavian countries, with forecasts growth of 0.1% in the overall market. However, in common with those markets already mentioned, a high level of disposable income (DKr723.5 bn in 2005), which is forecast to grow strongly in the short term (12% to 2010), suggests ideal conditions for strong premium sales. Again, the target younger population group is set to grow notably in the short term, with the 20-24 age group forecast to expand by 8.7% to 2010 according to Euromonitor International.
In spite of the dominance of local producers, Euromonitor International believes that even France may hold some potential for new entrants to the premium sparkling wine market. While the competitive environment is a lot tougher than many other European markets, with some big names already established in sparkling wine, Australian producers have shown that penetration is possible in still wine, and Euromonitor International believes there is no reason why the sparkling wine market should not be equally as receptive to new players.
For more information on Euromonitor country and company reports, click here.
The UK premium sparkling wine market is set for further growth, with a number of notable brands looking to capitalise. But, according to Euromonitor International, there is also strong growth potentia...
The need for a united front within the whisk(e)y industry on issues like responsible drinking is hitting home but, writes Chris Brook Carter, it is imperative that the industry works together on promo...
The first day at the inaugural World Whiskies Conference in Scotland confronted some of the major issues and problems facing the industry, in particular the threat of increased alcohol legislation aro...
E&J Gallo has completed a brand overhaul. The family-owned company today (4 May) unveiled a new name and logo which will be rolled out across its core portfolio and around the world....
Diageo has insisted that the new mid-strength Guinness has "exceeded expectations" in the six weeks since its launch in Ireland....
The first Chivas cocktail bar and gentlemen's lounge has opened in Moscow through a joint venture between Pernod Ricard whisky arm Chivas Brothers and Russian entrepreneur Stepan Mikhalkov....
Pernod Ricard USA has won a trademark battle which had threatened its Kentucky Bourbon brand Wild Turkey....
Pernod Ricard is updating the design of its New Zealand wine brand Framingham in the UK....
- Whatever happened to binge Britain? - comment
- The dangers of squaring up to your competitor
- The US beer market - A level playing field for all
- How to turn a domestic spirit into a global brand
- Remy Cointreau's Q2 and H1 - preview
- Sidney Frank CEO to head Clooney's import co
- Diageo sells off United Spirits' Bouvet Ladubay
- Captain Morgan distillation trial queried by USVI
- Irish whiskey brands could fail without bulk
- Sazerac sues Brown-Forman over Tennessee Fire
- Global Beer Trends 2015 : Global Beer Trends and Long-term Forecasts
- Global sparkling wine insights - market forecasts, product innovation and consumer trends research
- Future growth opportunities for global spirits
- Global Scotch whisky insights - market forecasts, product innovation and consumer trends research
- Global Wine Market to 2019 - Market Size, Development, and Forecasts