Two of the UK’s best-performing wine suppliers will officially merge on January 1 to create a new company called Freixenet-Copestick.

It will become the largest supplier of sparkling wine to the off-trade, ahead of Moët Hennessy, and the eighth largest wine supplier overall.

The combined group’s annual off-trade sales currently stand at £114 million (IRI, year to September 2018). That leaves it behind only Accolade, Treasury Wine Estates, Gallo, Pernod Ricard, Australian Vintage, Casella and Concha y Toro, and it is growing a lot faster than any of its rivals, so it will soon be challenging the top five if it maintains that rate.

Robin Copestick and Paul Murray founded Copestick Murray in 2005 and it is now fully owned by German firm Henkell. In the past year, it has enjoyed off-trade sales growth of 44% to reach £73 million, making it the 10th largest branded wine supplier in the UK. Freixenet UK’s sales have grown 42% in the past year to hit £41 million.

Henkell purchased a controlling stake in Freixenet earlier this year, creating the world’s largest sparkling wine producer when the deal was finalised on August 1. Freixenet UK and Copestick Murray have since worked on a merger and they will move into a new office in Newbury, Berkshire. Freixenet-Copestick will open a separate company in the Republic of Ireland to manage its rapidly growing business in both Northern Ireland and the Republic.

Copestick and Freixenet UK managing director Damian Clarke will serve as joint managing directors at the combined group, which is abbreviated to FXC Brands. Clarke will be in charge of marketing and finance, while Copestick will look after supplier relationships, future acquisitions, creating new brands and rolling the popular I Heart brand out across the globe. “We are very lucky,” says Clarke. “Because of the growth both businesses are showing, we have been able to offer everyone a role, which is quite unusual when you go through a merger.

“It’s great to have this opportunity to join with another rapidly growing UK wine business. Copestick Murray has complementary skills to Freixenet, but shares our approach of putting the consumer at the heart of what we do. Our combined business will be a leader in the sparkling wine category and with the resources and backing of Henkell and Freixenet we are well placed to continue driving category growth.

“It’s exciting times, coming into this with both businesses growing so rapidly. Carrying a lot of momentum into a merger is a great thing – 2019 will be collectively and for all the brands the biggest year of marketing investment ever. We are increasing the resources on a global basis too.”

The core of the business will be its three flagship sparkling wine brands: Freixenet, I Heart and Mionetto, the world’s bestselling Prosecco.

Freixenet was originally a cava producer but it moved into Prosecco in May 2017 and it has enjoyed great success in the category. Freixenet is now the UK off-trade’s largest sparkling brand, with sales up 49% in the past year (IRI), putting it ahead of Moët & Chandon and Canti. I Heart is fourth in the chart and Mionetto is 14th, sandwiched between Laurent-Perrier and Tesco’s Louis Delaunay Champagne. I Heart wine, including still and sparkling, is now worth £75 million in the off-trade, making it the 13th largest brand, in between Jacob’s Creek and Lindemans. Sales are up 42% year on year, making it the fastest-growing brand in the top 20.

Copestick began his career in the wine trade selling Freixenet Cordon Negro for Moreno Wines in the 1980s. “My life has now gone full circle,” he says. “Freixenet is a strong brand, and people have got to know Copestick Murray in the past 13 years as an innovative supplier, so the feeling was to keep the two strong brands in the name.”

He and Clarke have a shared responsibility for the group and he believes the division of labour will suit both their skill sets. On a global basis, half of Freixenet’s wine is still as it has 18 wineries spread across Priorat, Rioja, Ribero del Duero, Argentina, California, France and Australia. Copestick will work on bringing more of them into the UK, with a particular focus on independent wine merchants.

“The core of the business is growing, but we are also becoming a more diverse company,” he says. “It will be my job to integrate the higher-value wines, find more wineries to work with and create new brands.

“We don’t want to be a one-dimensional, supermarket-led wine company. We have got some really good brands, but also some fantastic small-volume wines to sell.”

In recent times Copestick Murray purchased the likes of distributor Free Run Wines and online retailer Slurp in an effort to diversify its offering. Sales are growing rapidly and turnover for Copestick Murray is forecast to hit £70 million in 2018. It will merge with Freixenet UK on the first day of 2019 and the combined group is expected to enjoy a turnover of £100 million next year.

“Prosecco is slowing down, but I Heart and Freixenet don’t show any signs of slowing down,” says Copestick. “We have the three strongest Prosecco brands on the market, and Prosecco will stay really popular. Cava could compete really well on price and quality. It’s just a different style.”

A lot of Freixenet UK’s growth has come from Prosecco, but Clarke also believes cava can play an important role for the group going forward. “I would hope cava forms a part of people’s repertoire,” he says.

New product development has been key to both firms’ growth recently, with recent innovations including Freixenet Prosecco and Italian sparkling rosé, plus I Heart Champagne and wine in cans. The group has promised a continued pipeline of NPD and says that 2019 looks set to be an exciting year.

“The Freixenet brand and the excellence of the Freixenet team will be a great addition to what we have achieved at Copestick Murray,” says Copestick. “The future is looking very bright.”