Wine Market

Published: January 2010

Publisher: Key Note

Product ref: 83808

Pages: 103

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Report description

It's estimated that the UK consumer spent a record amount on wine in 2009, an amount that accounts for 20% of all household spending on drinks and 28% of the alcohol market. The market experienced a steady year-on-year growth rate over the review period with a peak of 5.6% growth in 2007 and 1.3% growth in 2009 despite the recession. While beer is still the larger market, the long-term trend is towards drinking wine, almost all of which has to be imported.

The UK is one of the world's largest markets for imported wine and all major producing countries compete here, divided broadly between the Old World (European countries such as France and Italy) and the New World (led by Australia, Chile and South Africa). The market, therefore, divides along national lines, but although almost a quarter of consumers choose wine by country — according to a 2009 NEMS Market Research survey commissioned by Key Note — similar numbers of adults choose by type of grape (e.g. Pinot Grigio, Merlot) or by brand (e.g. Blossom Hill, Jacob's Creek).

For the purpose of statistical analysis this report is divided into two divisions: still wine and sparkling wine. Still wine is subdivided by colour, with white having the largest share of the market (48%) over red (41%), and rosé showing a large increase in sales over the review period (111.4%).

Around 25% of consumers choose own-label wines, and this reflects the major role played by the supermarkets, where over 50% of wine is bought. This success is reflected in the demise in this decade of several off-licence chains. Wine is also of growing importance in pubs and restaurants where fashionable wines include sparkling rosé and white wine made from the Pinot Grigio grape.

No single company dominates the fragmented wine market, but several major players have emerged including Constellation Brands of the US, Foster's Group of Australia and Pernod Ricard of France. The main British importer is Diageo, with the Blossom Hill brand.

Prospects for future value growth remain reasonably good with wine increasingly seen as the most civilised way of drinking alcohol, and a trend to buying more expensive wines. Key Note predicts a double-digit increase in the market by value between 2010 and 2014.

Executive Summary

1. Market Definition
REPORT COVERAGE
MARKET SECTORS
MARKET TRENDS
An Historical Perspective
Trends in the 2000s
ECONOMIC TRENDS
Population

Table 1.1: UK Resident Population Estimates by Sex (000), Mid-Years 2004-2008

Gross Domestic Product

Table 1.2: UK Gross Domestic Product at Current and Annual Chain-Linked Prices (£m), 2004-2008

Inflation

Table 1.3: UK Rate of Inflation (%), 2004-2008

Unemployment

Table 1.4: Actual Number of Unemployed Persons in the UK (million), 2004-2008

Household Disposable Income

Table 1.5: UK Household Disposable Income Per Capita (£), 2004-2008

MARKET POSITION
UK

Table 1.6: Wine in the Total UK Drinks Market by Value (£m at rsp), 2009
Table 1.7: Favourite Alcoholic Drinks of Adults (% of adults), 2009

Overseas

2. Market Size
THE TOTAL MARKET

Table 2.1: The Total UK Wine Market by Value at Current Prices and Volume (£m at rsp, million litres and £), 2005-2009
Figure 2.1: The Total UK Wine Market by Value at Current Prices and Volume (£m at rsp, million litres and £), 2005-2009

BY MARKET SECTOR

Table 2.2: Types of Wine Bought (% of adults), 2009

By ‘Colour’

Table 2.3: The Market for Wine by Colour by Value at Current Prices (£m at rsp and %), 2005-2009
Table 2.2: The Market for Wine by Colour by Value at Current Prices (£m at rsp and %), 2005-2009

By Still/Sparkling

Table 2.4: The Market for Wine by Still/Sparkling by Value at Current Prices (£m at rsp and %), 2005-2009
Table 2.3: The Market for Wine by Still/Sparkling by Value at Current Prices (£m at rsp and %), 2005-2009

By Varietal

Table 2.5: Varietals of Wine 'Ever Drunk' (% of adults), 2008

Other Market Sectors

Table 2.6: Wines Bought by Country (% of adults), 2007-2009

3. Industry Background
RECENT HISTORY
NUMBER OF COMPANIES AND EMPLOYMENT
REGIONAL VARIATIONS IN THE MARKETPLACE
DISTRIBUTION
Off-Trade
On-Trade
HOW ROBUST IS THE MARKET?
LEGISLATION
KEY TRADE ASSOCIATIONS
Wine & Spirit Trade Association
Other Associations

4. Competitor Analysis
THE MARKETPLACE
MARKET LEADERS: COUNTRIES

Table 4.1: Principal Origins of UK Wine Imports by Value (%), 2008 and 2009

‘Old World’ Wines
France
Italy
Spain
Other Old World
‘New World’ Wines
Australia
US
Other New World
MARKET LEADERS: COMPANIES

Table 4.2: ‘Big Five’ UK Wine Suppliers, 2009

Constellation Brands
Diageo PLC
E&J Gallo Winery
Foster’s EMEA Ltd
Pernod Ricard UK Ltd
Other Companies
OUTSIDE SUPPLIERS

5. Brand Strategy
INTRODUCTION
COLOUR AND COUNTRY
REGIONS AND VINEYARDS
VARIETALS
‘BRANDS’ AND OWN LABEL

Table 5.1: Selected Leading Wine Brands in the UK, 2009

MARKETING ACTIVITY
Main Media Advertising Expenditure

Table 5.2: Main Media Advertising Expenditure on Wine (£000), Year Ending September 2009

Other Marketing

6. Strengths, Weaknesses, Opportunities and Threats
STRENGTHS
WEAKNESSES
OPPORTUNITIES
THREATS

7. Buying Behaviour
CONSUMER PENETRATION

Table 7.1: Drinkers of Bottled Table Wine by Amount Consumed (% of all adults), 2004, 2006, 2008 and 2009

METHODS OF CHOOSING WINE

Table 7.2: Types of Wine Bought (% of adults), 2007 and 2009

DEMOGRAPHIC DIFFERENCES IN CHOOSING WINE

Table 7.3: Main Types of Wine Ever Bought by Sex, Age and Social Grade (% of adults), 2009
Table 7.4: Choosing Wine by Varietal, Brand, Country or Region by Sex, Age and Social Grade (% of adults), 2009
Table 7.5: Other Patterns When Buying Wines by Sex, Age and Social Grade (% of adults), 2009

8. Current Issues
IMPACT OF RECESSION
ALCOHOL, HEALTH AND LEGISLATION
OTHER ISSUES

9. The Global Market
OVERVIEW
Old World Versus New World
Wine and Agriculture
EU Harmonisation
Export Markets
Global Wine Companies

10. Forecasts
INTRODUCTION
Forecast Economic Trends
Population

Table 10.1: Forecast UK Resident Population by Sex (000), Mid-Years 2009-2013

Gross Domestic Product

Table 10.2: Forecast UK Growth in Gross Domestic Product in Real Terms (%), 2009-2013

Inflation

Table 10.3: Forecast UK Rate of Inflation (%), 2009-2013

Unemployment

Table 10.4: Forecast Actual Number of Unemployed Persons in the UK (million), 2009-2013

FORECASTS 2010 TO 2014

Table 10.5: The Forecast UK Market for Wine by Value at Current Prices (£m at rsp), 2010-2014

MARKET GROWTH

Table 10.1: Total Growth in the UK Market for Wine by Value at Current Prices (£m at rsp), 2005-2014

FUTURE TRENDS
Volume Versus Value
End of Recession?
Potential Problems
Simplifying the Choice
Retailing Changes

11. Company Profiles
Constellation Europe Ltd
Diageo PLC
Foster's EMEA Ltd
Majestic Wine PLC
Pernod Ricard UK Ltd

12. Company Financials

13. Further Sources
Associations
Publications
General Sources
Government Publications
Other Sources
Key Note Sources
Understanding TGI Data
Number, Profile, Penetration
Social Grade
Standard Region
Key Note Research
The Key Note Range of Reports