Light wine leads recovery

14 August, 2009

The light wine market may be showing its first signs of recovery as volumes climbed 2% after flatlining in November last year, according to the latest Nielsen figures.

Value sales have remained in growth as successive duty hikes and exchange-rate fluctuations have forced up bottle prices, and in the year to July 11 sales climbed 6% to just over £5 billion.

Overall, wine volumes grew more slowly, at just 1%, notably dragged down by Champagne, which dipped 14% by volume and 9% by value. Sparkling wine, which has held up better than its more prestigious competitor, also saw volumes slide 1% –but value grew by 7%.

Meanwhile, beer continued to suffer, with volumes down 1% and value up 4%, driven by duty hikes, while spirits, which have weathered the economic downturn better than many other categories, grew 2% by volume and 7% by value.

Cider continues to do well – volumes grew 12% in the year to July 11 while value rose 17%.

The improved figures come amid signs that the economic slump may, at last, be bottoming out, with house prices appearing to stabilise and the pound recovering some of its value against the dollar and the euro earlier this month. UK retail sales

figures rose by 1.8% during July, on

a like-for-like basis against the same month in 2008, according to the latest figures from the British Retail Consortium.

Total retail sales were 3.6% up on July 2008, and food and drink stores led the rally, with like-for-like sales up 4.2% and total sales ahead by 5.5%.

BRC director general Stephen Robinson said: “July showed us both sides of the British summer and gave some parts of retailing a much-needed boost.

“There is a sense among some consumers that the beginning of the end of the recession is here, but rising unemployment and job-loss fears will continue to hold back the widespread return of consumer confidence for some time yet.”

Nielsen consultant Graham Page told OLN the good weather in June and early July helped boost wine sales. “Rosé is still pushing the market on. There is some suggestion of a slight switch away from red to white, but that might be because people are going for chilled products due to the summer and warmer weather,” he said.

Page spoke of a general move towards lower abvs, although cautioned it was still early days. “Quite a number of ranges at 8-10% abv have been launched in supermarkets. A lot of the reds don’t qualify but some whites and rosés do. Perhaps consumers just want to be more careful with the amount of alcohol they are consuming while still being allowed to have a glass of wine.”

But Page added: “If you look at wine over the past 15-25 years, it is still nowhere near the levels of growth we have been used to seeing over recent years.”

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