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What challenges face the lower-abv wine segment? - Comment

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While the efforts of brewers and distillers to create products with lower alcohol content are well-known, the wine industry has garnered far fewer such headlines. This month, category commentator Chris Losh looks at the difficulties affecting not only the production of 'lighter wine' but also the consumers' uptake of the concept - despite their purported interest.

For a small country, New Zealand has a habit of punching above its weight. Marlborough rewrote the flavour rule-book on Sauvignon Blanc, to the extent that hardly a wine list or retailer's shelf fails to stock it. Meanwhile, 18 years ago the country's wholesale move towards screwcaps had a similar impact on the humble closure, forcing wineries the world over to rethink their bottling lines, and complacent cork producers to clean up their act.

Now, it seems, they could be at it again. Launched last year, the country's 'Lighter Wines Primary Growth Partnership' is the result of NZD17m (US$10.9m) of funding and a decade or so of research. Its goal is simple: To find ways of producing wines that are lower in alcohol but still a) drinkable and b) typical of their variety and region.

This is no small challenge. Most of the lower-alcohol wines I've tasted down the years have been somewhere between 'vile' and 'toxic'. Understandably, the segment has struggled to gain traction.

On a visit to London this month, however, Dr John Forrest, who co-founded Forrest Wines just over 30 years ago, was in bullish mood. "In 2025," he told me, "we want to be the dominant player for good wines with 30%-40% less alcohol. It's a repeat of Marlborough 30 years ago."

Forrest's confidence is understandable. He is, after all, right at the forefront of the research and has spent over ten years working on techniques that make 'low and drinkable' possible. His 'The Doctors' label is gaining medals, plaudits and listings at an impressive rate, and his Sauvignon, rosé and (astonishingly) Pinot Noir can happily go toe to toe with 'full fat' versions.

Key to the success is a viticultural technique, honed over the last five years, that slows down sugar accumulation in the grapes, but leaves acidity levels, phenolics and flavour development largely unaffected. Meanwhile, secret (though "standard", apparently) practices in the winery restore texture and mouthfeel. The result is a product that still tastes recognisably like wine, but with an abv of 9% rather than 13.5% and at no extra cost.

"If you can't commercialise it, you might as well go home," says Forrest bluntly. "No-one is going to pay a dollar more for organic or low-alcohol wine."

The shift away from alcohol has been well-documented in this column over the last couple of years, so it's no surprise that the Kiwis have some pretty compelling figures to back up the Lighter Wines programme. Market research group Wine Intelligence says that a third of premium wine drinkers have moderated their alcohol intake in the last quarter. Elsewhere, Vinitrac reckons that over 40% of consumers in key markets such as Australia, Canada, the UK and Sweden are open to the idea of buying lower-alcohol wine. 

Add these two findings together, and it's no surprise that Forrest's proportion of lighter wines has grown steadily. It will make up 75% of his production in 2020, and he expects it to top out around 95% eventually. Indeed, the meetings he had on his visit to London alone would, he says, be enough to massively increase his production, should early interest result in concrete orders.

Certainly, there seems to be plenty of untapped potential even in developed markets. Lighter Wines make up 7% of all Sauvignon Blanc sales in New Zealand, yet elsewhere they are comfortably less than 1%. Add all this together - price parity, consumer acceptance, general trends and proven success elsewhere - and it all amounts to a game-changing, multi-million dollar opportunity.

Or, does it?

There are, I'd say, four issues here that make the lighter wines issue less of a free hit than it seems. Firstly, the Kiwi initiative covers a broad church of production techniques. There are wines made in the Forrest method, where the alcohol is reduced solely using viticulture and typical winemaking techniques. But, others are able to use a certain amount (up to 1% abv) of mechanical reduction - spinning cones, reverse osmosis - to get down below the 10% threshold. This means that there are big stylistic - and, indeed, quality - differences between them. The former are labelled 'naturally lighter' on the logo, but it's safe to say that not many consumers will be looking that closely. Not making the criteria stricter seems like a missed opportunity.

Secondly, it might not be that easy to sell the concept of lighter wines. Consumers may, it's true, be cutting back on their alcohol consumption, but they're mostly doing it by drinking smaller quantities of standard products and seem happy to do so. There's no guarantee that they're particularly clamouring for similar volumes of a reduced-alcohol version.

More worryingly, while the lighter-wine idea might play well in focus groups, it's more nuanced when it comes to the actual marketplace. 'Light' soft drinks reduce sugar, so the idea of 'lighter' equating to 'less alcohol' is a new one and could take some getting used to. Some consumers will doubtless be sceptical that what they're getting is in some way inferior to a 'full-fat' version.

This is one of the reasons why most restaurants I've spoken to about these wines are unconvinced. 'Lightness' is a complicated concept that requires a certain degree of hand-selling. The effort that goes into explaining it could, they argue, be more profitably spent selling something else.

Such complications are highlighted in the third point: Where should these wines be sold? The Kiwis are adamant that they do not belong in the low-alcohol section. This is understandable: After all, they're far from that. Yet, on the standard wine shelves, surrounded by 13% abv bottles, their message can be lost. Worse, consumers might pick them up by mistake and feel cheated rather than virtuous.

The fourth point - and perhaps the most serious one - is that these wines, however well-intentioned and well-made they may be, are not actually addressing the biggest drinks trend, which is towards zero alcohol. The IWSR reports that a third of Millennial consumers do not drink, while many more drink intermittently. The general trend, as far as I understand it, even in older premium wine drinkers, is towards drinking better products but on fewer occasions.

There is, in other words, a big market for zero-abv products, and for 'standard' alcoholic products, but low-alcohol products (as opposed to non-alcoholic) are a niche interest. Their challenge is that they are neither wholly wine nor wholly not wine. 

The New Zealanders themselves seem to acknowledge this, describing lighter wines as being for the "moderation occasion" - presumably, the likes of healthy worktime lunches or (whisper it) for people who are driving. Neither of these, safe to say, is a straightforward sell.

While it's tempting to see the launch of New Zealand's Lighter Wine initiative as another screwcap moment, in fact, it's far from that. Screwcaps addressed a very obvious problem (cork taint) and did so with an irrefutable logic that was easy to promote and easy to accept. Also, crucially, the actual product in the bottle was essentially not changed.

None of these elements are the case for sub-10% abv wine. That's not to say that there isn't serious money to be made in this field, but it's far from a licence to print money. 

The Kiwis' latest initiative is a brave one, a welcome one, and in line with broad consumer trends. But, while it hits the target, it doesn't split the bullseye. Both the trade and consumers will take a fair amount of convincing if it's to have even a fraction of the impact of Marlborough Sauvignon all those years ago.


Sectors: Wine

Expert Analysis

Wine Global Industry Almanac 2013-2022

Wine Global Industry Almanac 2013-2022

Global Wine industry profile provides top-line qualitative and quantitative summary information including: market share, market size (value and volume 2013-17, and forecast to 2022). The profile also ...

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