Consumers need a French connection
With sales of French wine still sliding, retailers are looking to demystify a complicated category for consumers. Christine Boggis reports
The credit crunch
and looming recession have finally brought about a moment in French wine's history that has looked inevitable for some time - its sales have been overtaken by the US ,
pushing the country into third place.
French wine sales slipped 3% to £780 million in the year to Nov 1, while the
US grew sales 5% to
£781 million. Its volume sales have also eclipsed its European rival, with France slumping 7% to 14.5 million 9-litre cases .
On the plus side, the average bottle price is up 4% to £4.47, from £4.28 in November 2007, and in the over-£5 sector France is doing fairly well, leading the pack in the multiple grocers and in second place behind Australia in the off-trade as a whole.
But Nielsen analyst Stewart Blunt says other countries are growing their over-£5 volumes faster than France . " France has traditionally had a lot in
the under-£3 sector with vins de pays and cheapest-on-display Bordeaux. That chunk of the market has lost quite heavily over the past six months," he says.
Those shoppers have not migrated to the £3-4 price bracket, as might have been expected, but have simply dropped off the map, giving up
wine in the face of mounting mortgage, power and tax bills, according to Blunt.
" Ninety per cent of that loss is vins de table and vins de pays, which had shortages last year," says Dominique Vrigneau of Thierry's. "There was price pressure so they couldn't be promoted as heavily as in the past, and that is where most of the volume has gone down."
Vins de table and vins de pays had another short harvest this year - so Vrigneau does not expect to see that part of the market improve in 2009.
"I won't mention duty as that is the same problem the world over, but because of the short harvest France will find it difficult to have the capacity to do the three-for-£10 promotions that the retailers love just now," he says.
Despite the tough times, retailers
fairly pleased with
French wine sales.
"Recent performance has shown signs of encouragement against a challenging year . But new vintage volume constraints and, in some cases, requests for unrealistic cost increases at a time when consumers are looking for greater value than ever, point to an ongoing decline," says Tesco buyer Graham Nash.
"France remains for many the most important wine-producing country in the world and, due to heritage and provenance, it is often the default choice when a special occasion demands a higher than normal spend," he adds.
Asda buyer Michelle King says: "French wine sales are up 24% year on year in 2008, with white wine up 41% . This has been driven by
promotions including three-for-£10, but also trading customers up through market-leading deals on Sancerre, Pouilly-Fumé and Chablis.
"These are from iconic producers and appeal to our new, more affluent customers - we have 20% more AB customers shopping our wine aisle than this time last year. We have increased the space allocated to French wine
allocated more marketing support
in TV and press ads."
Sainsbury's French wine sales are strong,
says buyer Melissa Draycott - who sees
opportunities for the country in own-label.
"The strong euro has been a real challenge and deals done last year are delivering several margin points lower now, so promotions are not as viable compared
with other countries," she adds.
"Short vintages in 2007 and now
2008 are not going to help the country sell more volume and grow . However, there is lots of scope to sell wines that over-deliver in taste and style at fair prices. The white 2008s I have tasted from France are looking good."
Meanwhile, Berry Bros & Rudd's French sales are doing "extremely well", according to buyer Simon Field MW.
"It is pretty much holding steady at between 80% and 85% of our entire turnover. We are
focused on selling Bordeaux and particularly en primeur, therefore we are slightly vulnerable not only to exchange rate fluctuations but
the vagaries of the weather," he says, adding: "The difficult Bordeaux vintages, allied to the exchange rate problems, allied to a potential lack of funds in some of our potentially good customers means that, in theory, we have got to diversify a bit, which gives a chance for other areas."
The ace up France's sleeve is its diversity - even though sales are sliding, there still seems to be something
Oddbins' new French buyer Richard Verney has been travelling around France with the chain's new owner Simon Baile to find the right suppliers and producers to revamp Oddbins' French offering.
"There are a lot of producers in France making some really interesting wines, which is just what we are looking for. Now that our new ranges are hitting the shelves, we have been very impressed with the response from
customers and our staff in the stores," he says.
"France's main advantage is that it is a place of real opportunity. We know lots of winemakers who are the next generation,
have taken over from their fathers and are more dynamic and
producing some really exciting styles of wines, especially in regional France and the south west, but also in the more classic areas.
"French brands are definitely getting better at understanding the UK market and what our consumers want. We work very closely with the brands
we sell in order to develop them so that they understand UK palates and reflect what people are looking for.
"However, we are really looking to diversify away from brands and give the British public a really exciting unbranded offering that is exciting
and doesn't just conform to a perceived wish list of what is correct," he adds.
The flip side of diversity is that France continues to be complex, involved and difficult for consumers to understand - and there are still plenty of calls for a unified generic marketing plan.
"It is still an area where many consumers continue to be perplexed,
so keeping their loyalty to the category, let alone attracting new consumers, is probably the biggest single challenge
still faces," says Bottle Green operations and marketing manager Richard Hitchcock.
"In a situation where high profile New World propositions make consumer decisions easier and quicker, and where the Old World order is being significantly challenged by Italy and, to a lesser degree, Spain, France has its work cut out.
"But let us never forget that French wine sells nearly half a million bottles every day in the UK off-trade,
so it is still superbly placed to take advantage of its diversity and uniqueness," he adds.
For Richard Evans, of Dedicated Wines, the very complexity that drove a lot of consumers away from France to the simpler, branded offerings of the New World, is now drawing them back in.
He says: "There is a raft of people saying they're fed up with yet another Aussie wine on promotion, and they are looking for something different. They don't quite know what - they are not experts.
"Our view is that all those New World drinkers who left the Old World are now much more comfortable with wine, and they are looking back at the Old World and notably France."
French wine in figures
Value year to Nov 1 2008: £780 million
Value year to Nov 3 2007: £802 million
Volume year to Nov 1 2008: 14.5 million 9-litre cases
Volume year to Nov 3 2007: 15.6 million 9-litre cases
Average bottle price 2008: £4.47
Average bottle price 2007: £4.28
Source: Nielsen, GB off-trade
Top 10 brands
Blason de Bourgogne
Caves St Pierre
La Châsse du Pape
Source: Nielsen, GB off-trade year to Nov 1 2008
Indie tip: serve up the whole French experience
Handford Wines in South Kensington has a comprehensive French range and owner James Handford MW says sales are steady. Sales of fine Bordeaux, Burgundy and Rhône wines are growing and haven't yet been hit by the downturn of the past three months - although Champagne sales are suffering.
Handford's biggest problem is the strength of the euro against the pound - and his response has been to stop buying French wine, even though sales are not suffering.
"We are doing lots of Rhône, Burgundy, lots of cheaper Bordeaux now where we have got 2005 in. People are less interested in Sauvignon Blanc - I would say the summer would probably have a lot to do with that," he says.
"Rosé is another thing that didn't sell, it was a bit like Beaujolais Nouveau this year, just nothing."
Handford adds: "The secret to selling French wine is definitely to give the customer the whole piece - traditions, customs, food - put them there. We have always said our aim is to be the man who connects the grower to the customer.
"But you can add to that the fact that you are not just connecting the grower, you are connecting the whole ethos of the region."
The key trends to watch
The Rhône - consistent, reliable, good value for money, suits the UK palate. Buyers and suppliers alike sing the praises of its wines, particularly the reds, and its marketing campaign
Over £5 - although France lags just behind Australia in the over-£5 league table, sales are growing and in multiple grocers it is the top-selling country
Bordeaux - doing well in Tesco and Asda thanks to strong promotional activity and new listings, but also in Berry Bros & Rudd, where it can do no wrong, according to buyer Simon Field MW
Lower-alcohol wines - now that laws on techniques such as spinning cone and reverse osmosis have been relaxed, suppliers such as Bottle Green and Guy Anderson Wines are looking into lower-abv alternatives
Pan-French offerings - new appellation Vin des Vignobles de France comes into force next year and pan-
French producers such as Chamarré are keen to take advantage of it. Meanwhile, Bottle Green's French Connection Classics range is set to be completed with a Bordeaux, which it says makes it the
off-trade's "only truly cross-regional French brand".
Rosé - the great pink hope was hit hard by the summer that never happened, with volumes down 9% and value down 5% - worse slumps than for red or white French wines, despite a lower average bottle price of £3.99
Chardonnay - an increasingly difficult sell, according to Nadine McCallion of Guy Anderson Wines
Sauvignon Blanc - Kensington independent Handford Wines is seeing Loire sales slip, along with those of New Zealand
The euro - its strength against the pound is making life tough for everyone in the French wine trade
Old-fashioned packaging - suppliers and retailers alike are calling for modern labels and lightweight bottles
Bad marketing - "With the domestic market in decline, the French will have to consider shifting their focus to export markets, but there is a lack of understanding about how those markets might operate," says Tesco's Graham Nash. "I have had more 'generic' emails and phone calls in the past few months from producers than the previous few years, and the approach has been no more involved than 'Here is our wine. Are you interested in buying it?'."
on the street
Xavier Fernandez, 45, company director
"There is too much snobbery around wine in general, but the French have been producing wine for a long time so they should know what they are doing.
I would rather drink Spanish wine than French - French is over-priced, but there is a lot of good quality French wine. If you had a bottle of the best wines of any country then the French would probably be the best of the bunch, but they are too expensive."
Nick Wiseman, 48, computer manager
"There is too much snobbery about French wine. The world is full of people who think they know wine, and it's always French wine they rant about.
wine I particularly enjoy is Cahors, it is greatly underrated. I don't think you get better value from New World wines. They are expensive, not to mention the carbon footprint."
Chris Dolloway, 45, self-employed
"I think there is too much snobbery about French wine .
In terms of French wine regions, I wouldn't pretend I'm an expert, but I know about the more obvious ones. There is a lot to know, so only a real expert or fan would have a good knowledge. New World wines are cheaper, but that's not the same as value. You can get value from both."
Survey conducted by IM Reports on behalf
of Brothers Drinks for OLN. Survey based on 100 consumers - 50
in urban areas and 50