Prosecco, vodka and lager drive £284 million growth in BWS

17 April, 2015

Strong performances from Prosecco, vodka, premium lager and craft ale led off-trade value sales to grow 2% to £14.5 billion in 2014, according to IRI.

The market analyst firm hailed Prosecco as the star performer in driving the £284 million growth. Sales of non-Champagne sparkling wine grew 24% to £515 million last year and the category outsells Champagne two to one in value and six to one in volume.

Supermarket private label now accounts for 37% of sparkling wine value sales and 39% of volume.

Toby Magill, head of alcohol at IRI, said: “The fact that private label is delivering the bulk of sparkling wine sales rather than any specific brand highlights the fragmented nature of the market and the range challenges facing the sector. It also suggests that shoppers may not be as brand loyal as they are in other alcohol categories.  

“The British consumer has latched onto Prosecco in the last few years as a fashionable drink that provides a cheaper and good quality alternative to Champagne. As long as quality is not compromised, Prosecco will have another good year in 2015.”

Champagne sales were down 0.4% in value and 1.9% in volume in 2014, and Magill added: “Champagne manufacturers in particular need to focus on helping shoppers see the value of their premium brands if they want to fend off the advances of their glamorous Prosecco cousins as they move into the premium end of this category.”

But Magill said that Moet & Chandon and Lanson, the UK’s top two brands, both enjoyed a strong year and that was indicative of shoppers “turning away from lower tiered products, which don’t have the brand cachet to differentiate them to other competitors in sparkling wine”.

Still wine value sales grew 0.1% but volumes fell by 3.2%, although the top 10 brands grew 2.3% and Magill said it may cause retailers to question the need for such a wide a variety of brands “if only a few are performing well as they continue to simplify ranges to fend off competition from the discounters”.

Standard lager struggled, with value down 1.3%, but premium lager grew 4.6% and IRI expects premium lager brands to continue to do well in 2015.

It added that craft ales had performed strongly, stealing drinkers from standard lager, and it hailed the impact of three-for-£5 promotions.

Vodka led the spirits category, with value sales almost at the £1.2 billion mark after growing 3.4% in 2014. Total spirits sales grew by 2.9% to £3.8 billion.

Imported whiskies were up 11.5% in value and single malts grew 4.8%m but blended whisky – which accounts for the bulk of volume – dropped 0.7%.

IRI also expects more fruit flavours of lager, ale, cider and wine to appear in 2015. “Not all of them will emerge successfully, but there will be a few who create their own sustainable niche in the drinks aisles,” said Magill.

He added: “Cuts in duty on beer and spirits in the March Budget by Chancellor Osbourne will further help premium lager manufacturers.

“Although wine duty was frozen, we don’t expect this to take the fizz out of the growth in sparkling wine, though it may impact still wine sales growth.”

Tim Wilson, managing director of the Wilson Drinks Report, said: “This extract of IRI data for the whole of 2014 clearly shows some significant changes in the consumption habits of British drinkers.

“The evidence is starting to build that many consumers are switching to more premium products to drink at home, driven by pressure on household incomes and general austerity. This is good news for BWS retailers in the off-trade, not so god for pubs, bars and restaurants.”

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