As history starts to repeat itself, Martin Green looks at the potential for the burgeoning bulk wine market
In 1863, president Abraham Lincoln officially abolished slavery in the United States by issuing the Emancipation Proclamation. On this side of the pond, Queen Victoria was at the height of her reign and chancellor William Ewart Gladstone was busy overhauling the tax system. The Football Association was founded that year, and the very first London Underground tube embarked upon its maiden voyage between Paddington and Farringdon. Just south of Farringdon, the Bow Lane printing presses were whirring to ink another historical first, as this fine publication was born.
Back then, British wine importers thought nothing of shipping wine to our shores in bulk and then bottling in the UK. The earliest editions of this magazine highlighted prices for First Growth claret from Lafi te, Latour and Margaux, which had been transported to the UK in cask and bottled in warehouses before being distributed to wine retailers across the country.
Trends eventually shifted, and bottling at source became the norm. Retailers and consumers alike would look out for the phrase “mis en bouteille au château” as a stamp of quality. Bulk shipping dwindled, and it eventually became known simply as a cost-effective way to move low-priced wine around the world. However, the pendulum has started to shift back in bulk wine’s favour.
Richard Lloyd, managing director at Encirc – which acquired bulk wine importer The Park from Accolade Wines last year – says: “A decade ago, many within the trade looked down upon wines that were shipped in bulk, but they are now starting to realise that the process can actually lead to superior quality and freshness.”
It is also significantly better for the planet. Bulk wine’s sustainability credentials are now well-established, so we will not dwell too long upon its environmental benefits. Suffice to say it can deliver CO2 savings of up to 40%, according to Greencroft Bottling, a division of Lanchester Group.
While UK retailers are naturally keen to reduce their collective carbon footprint, they may be even more excited by the commercial benefits that bulk wine offers right now. For example, the latest report from global broker Ciatti shows that Australian bulk prices for major red wine varieties have declined from around A$1.64 (88p) per litre in October 2019 to just A$0.62 (33p) in October 2023. They may rebound, as Australian wine could soon return to the Chinese market following a thawing of relations between Beijing and Canberra, but it highlights the opportunity that bulk wine provides.
Over the next five years, retailers will need to display agility to provide shoppers with decent wine at affordable prices. After all, the latest data from IWSR shows that consumers are cutting back on alcohol spending as financial concerns grow. It coined the phrase “economic moderation” to describe the trend, and reported that “UK market performance is trending negative overall” in this regard. In plain English, it means cash-strapped consumers are shunning expensive wine during the current cost of living crisis.
The industry’s favourite buzzword in recent years has been “premiumisation”, but that may no longer be appropriate as financial concerns grow. Inflation is falling and wages are catching up, but the economic outlook is not exactly rosy. The International Monetary Fund expects the UK to have the weakest growth among the G7 in 2024, while the National Institute of Economic & Social Research (NIESR) calls the outlook “bleak for the foreseeable future”.
“Real incomes are currently below where they were before the Covid-19 pandemic and for a large segment of the population will remain below this level for the next three years,” says Stephen Millard, deputy director at the NIESR. Fortunately, bulk wine offers a compelling solution.
Andrew Porton, wine division managing director at Lanchester Wine, says: “Aside from the much-discussed sustainability benefits, the bulk wine model affords flexibility over supply, curbs excess stockholding and enables unrivalled control over the appearance and overall quality of products.”
The company plans to open a £21 million sustainable wine bottling facility called Greencroft Two this year. It will more than double Greencroft’s capacity to 400 million litres per year, which is equivalent to around a quarter of all the wine sold in the UK. “This is our biggest investment in UK bottling to date,” says Porton. “We believe in this model and are happy to put our money where our mouth is.”
Barry Dick MW, Waitrose’s global bulk wine sourcing manager, and Simon Mason, head of wine sustainability at The Wine Society, were among the leading retailers that discussed the quality, sustainability and commercial benefits of bulk wine at the World Bulk Wine Exhibition in Amsterdam in November.
Andrew Ingham, the former wine category manager at Morrisons, was also at the show to discuss the advantages of bulk wine. “It gives buyers options and flexibility,” he tells Drinks Retailing.
“As a retail buyer, you would once look to bulk for the cheapest of the cheap to service those wines where customers are more loyal to the price point than any brand or even quality. However, in recent times, the quality, style and price of bulk wine have drastically improved. On top of this, wineries appear to have excess wines, and that was certainly noticeable at the Bulk Wine Expo. Consumption is down, and harvests are still rolling in, so there is a surplus of wine and deals to be done.”
Ingham now focuses on his own wine brand, Interpunkt, which started out by selling wine sourced from Journey’s End in South Africa. He is now looking to other countries of origin in order to grow the business. “As we bring Malbec, Chardonnay and White Zinfandel to the market in 2024, we look to the bulk market as the quality and price is there,” he says. “This offers us the flexibility and options that retail buyers can now enjoy.
“I am hopeful that new wine entrepreneurs can look to the bulk market to help create new and interesting products. Bulk wine is the answer for entrepreneurs to bring about the changes I believe the wine industry needs.
“Massive wine companies are risk-averse and need bankable ideas for their shareholders, while family-owned wineries have a ‘don’t mess it up’ mentality, as they are a few generations in and don’t want to be the ones that ruin a good thing. Meaningful change in packaging, wine styles, branding and improved communication with wine drinkers is going to come from outside. I hope they bring in new ideas and I believe the bulk wine market can enable this.”