The sparkling wine market - UK

1.2 World production of sparkling wine is concentrated

After a bad year in ****, world wine production is estimated to have increased by **% to *** million hectolitres, according to the International Organisation of Vine and Wine. [***] This production should make it possible to satisfy particularly demanding demand, whose consumption remained relatively stable between **** and ****.

Source: ****

According to data from France Agrimer dating back to ****, * countries controlled **% of the world production of sparkling wine.

Source: ****

However, international trade in sparkling wine (***), or $***.* million. Conversely, imports are more diverse, with the United States accounting for only **% of the total.

Source: ****

1.3 The effervescent wine market in full swing

Alcohol sales in the United Kingdom amounted to £**.* billion in ****, of which £**.* billion came from the sale of wines and spirits. As shown in the graph below, the sale on trade (***) represented *** million pounds, for a total market of *,*** billion pounds. [***]

Source: ****

In ****, the British bought *** million bottles of sparkling wine, a quarter of which was drunk during the Christmas and New Year holidays. This represents an increase of **% over the previous year, and more than **.*% over ****. [***]

In ****, national production represented only * million bottles, or *.*% of the country's consumption, which means that the rest of the consumption is imported.

1.4 The importance of sparkling wine imports

Since the United Kingdom produces only *.*% of its sparkling wine consumption, the rest of the production is imported from abroad. In ****, this flow represented an amount of €***.** million. Italy alone accounts for **.*% of sparkling wine exports to the United Kingdom. Spain stands out only for its exports of Cava (***). [***]

Source: ****

There is therefore a real dependence of the country on Europe for sparkling wine, since the European Union represents **.*% of the United Kingdom's imports.

Prosecco and, more generally, PDO wines are particularly in demand: Prosecco represents about a third of the country's sparkling wine imports.

2.1 Profile of alcohol consumers in the United Kingdom

 Alcohol consumption in the United Kingdom has decreased in recent years, from an average of **.* litres per year in **** to *.* litres in ****.

A report published by Accolade Wines one of the most important players in the sector, gives the distribution of consumer spending according to the price of a ** cl bottle of wine in supermarkets. Wines whose price is less than £* are less attractive than in ****, in favour of more expensive wines with a price higher than £*. This trend can be attributed to a move upmarket of the offer, accepted by consumers.

Source: ****

This report also identifies * specific profiles of wine consumers:

Novices generally know little about wine and buy it for important or informal occasions. Occasional buyers know a little more about it, know how to correctly match the wine with the meal that will be served, while buying wine most often for special occasions. High hopes are interested in wine and the acquisition of knowledge in this field. The invested explorers have a certain knowledge of wine and are eager to learn more via expert advice and regular consumption.

Regular customers have little interest in the quality of the wine, which they drink regularly, and often buy bottles at ...

2.2 Focus on Prosecco consumption

The consumption of sparkling wine increased by only *% between **** and ****, reaching ***.* million litres sold. This growth is the lowest in a decade, as noted by the consulting firm UHY Hacker Young .

The latter explains this slowdown by an overexposure of the Prosecco, which is trying to preserve its luxurious image while becoming affordable. This could encourage sales of other brands that maintain their brand image, such as French Champagne and Spanish Cava.

After increasing sharply between **** and ****, at an average annual rate of **.*%, sparkling wine is indeed slowing down in terms of consumption.

Source: ****

A study by Kantar Worldpanel identifies some of the characteristics of heavy sparkling wine drinkers in the United Kingdom (***):

**% of them are more likely than the British average never to go out without make-up. **% of them say they like going out to drink and eat in trendy places. More than **% of them are willing to pay to access content on online newspapers.

The graph below represents the proportion of searches for a given keyword in a region and for a specific time period, compared to when the rate of use of that keyword was highest (***).

Thus, a value of ** means that the keyword has been used ...

2.3 Anti-alcohol health campaigns in the United Kingdom

Media campaigns have been launched in recent years to encourage adults to reduce their alcohol consumption Drinkware is one of those associations that are fighting for this, with campaigns aimed at both adults and teenagers. « Have a little less, feel a lot better "was launched in January **** and focused on adults aged ** to ** using an application to calculate the benefits of reducing alcohol consumption.

However, a scientific study published by Ben Young questioned the influence of such campaigns on actual alcohol consumption. [***] The results show, however, that campaigns improve the greater knowledge of the risks associated with excessive consumption.

2.4 A growing consumption of sparkling wine

An everyday drink

The interest in sparkling wine is strongly linked to the time of year, as indicated by the Google Trends graph associated with the word Prosecco Beverage Dynamics notes, however, that sparkling wine is increasingly being consumed as an "everyday drink".

Prosecco, thanks to a relatively low price, compared to champagne, and similar to that of still wine

Moderate consumption that translates into a move upmarket

The **** report of Accolade Wines notes that consumers showed more moderation in **** in their purchases of wine bottles, with the exception of sparkling wine, which grew by *.*% in volume over the period (***)..

Today, about **% of adults in the United Kingdom are abstinent, a proportion that increases by *.*% each year. Moderation is increasing, linked to people's desire to preserve their health and spend less. However, sparkling wine seems to be escaping this trend with a growth in value of **.*% in ****.

Consumers tend to select their wine more carefully for special occasions, being able to spend a little more. Accolade Wines notes the importance of guiding them to find the right wine quickly to ensure that they become repeat consumers.

3.1 A highly concentrated market

 WSTA counted *** vineyards in **** in the United Kingdom and *** wineries. These farms are still small. In most cases, they are less than * hectares. Farms of more than ** hectares represent only *% of the total. [***]

Source: ****

However, these large farms of more than * ha concentrate **% of the areas cultivated by the winegrowers. On the one hand, this shows a local market fragmented into a large number of players, but concentrated in terms of production

However, the production of sparkling wine in the United Kingdom represents only *.*% of the total, which implies that importers are of immense importance in the sector

The distribution market is nevertheless relatively concentrated, with **.*% of the market off trade in value is controlled by ** brands. On the on trade this proportion drops to *.*%. This suggests that brands are important in the mass retail sector since they are more quickly identified by consumers. [***]

Source: ****

Among wine producers, * groups stand out and concentrate **.*% of the market share.  

Source: ****

3.2 A production that is developing in the South of England

The production of sparkling wine from fresh grapes is associated with the Prodcom code **.**.**.** and makes it possible to identify the European regions where the production of sparkling wine is the most important, when the data is provided.

Source: ****

The Italian and Spanish productions are the most important in Europe. The United Kingdom is very poorly represented in this ranking with sparkling wine production representing only *.*% of that of Italy, for example. However, it represents *.*% of wine sales in the United Kingdom. [***]

Source: ****

However, this production has not stopped growing since ****, with an average annual increase in value of **.*%. This increase is linked to the British interest in sparkling wine, as described above, which encourages vineyards to convert their production, helped by global warming.

English sparkling wines do not pose a direct threat to Spanish, Italian or French sparkling wine producers: their production is still too marginal.

The area under cultivation increased sharply between **** and ****, with a growth of **%, reaching *,*** hectares in ****. These areas are concentrated, however, since farms of more than * hectares (***) control **% of the cultivated area. [***]

Geographically, these areas are also concentrated, with **% of them located in the South-East, where the climate remains relatively milder than in the rest ...

3.3 Sales in supermarkets and vineyards

The distribution of wines is nowadays mainly done by via traditional channels, on the domestic market or directly on the vineyard.

Source: ****

However, it appears that the traditional distribution channels (***). Thus, **% of the wines sold in the United Kingdom by English winegrowers are not from very large estates. [***]

The two main markets for wine are the off trade (***). The latter concern respectively mass distribution channels and bars and restaurants.

Source: ****

Accolade Wines noted in its **** report the potential of fast excursions to local wine shops in the United Kingdom. **% of the average *** in-store visits by UK residents are fast (***), but wine is only purchased in less than **% of cases.

Source: ****

4.1 Sparkling wines on the market

 There is a wide variety of sparkling wines sold on the English market. They can be distinguished by their name: Crémant français, Cava espagnol, Prosecco italien... or by other criteria such as carbon dioxide or sugar content for example. Use the online store of Tesco the largest supermarket chain in the United Kingdom, provides an overview of the sparkling wine offer in the country. [***]

Source: ****

The quantity of Italian wines sold is significant, especially since they are the cheapest bottles on average, which makes them relatively more competitive than French or Spanish bottles.

It is also possible to buy bottles of white or sparkling red wine on Tesco's website. However, this shows that, on the English market, the concept of sparkling wine is often associated with the Italian Prosecco, whether it is frizzante or spumante (***).

However, other types of sparkling wines are also marketed in the United Kingdom. German and Austrian Sekt, Hungarian Pezsgo or Portuguese foaming, but to a lesser extent.

According to the Accolade Wines the average price of a ** cl bottle of wine sold in supermarkets was £*.** in ****. In restaurants, bars... (***), the average price recorded was £*.** for **.* cl.

4.2 Wine tourism allows the English estates to make themselves known

While the brands most purchased in the United Kingdom are imported, English wineries are trying to develop wine tourism in order to:

Develop local consumer interest in English wines Diversify their sources of income

A **** scientific study noted the low involvement of wine estates in attracting tourists, which could help them increase their income. [***]

Thus, the large wineries receive an average of *** visitors each month, a figure that drops to ** visitors for the smallest wineries.

Source: ****

About **% of tourists in **** came from the United Kingdom. [***] The estates nevertheless provide rooms to accommodate these tourists for the night. This is the case with Ancre Hill vines, for example.

5.1 Taxes on sparkling wine

The UK Government summarises the important points that wine producers, importers and sellers in the United Kingdom must respect. [***]

The authorised and mandatory practices during the production of wine are detailed in the european directive ***/**** .

An VI * or VI * is required to transport and store alcohol for commercial purposes within the United Kingdom. [***]

The labelling of a bottle of wine must indicate in particular the origin, type, volume and alcohol content of the wine. In the case of sparkling wine, it is necessary to indicate the type of product (***). [***]

In order to sell wine, stores need a license. A personal licence must be held by the manager (***) of the establishment in order for employees to market alcohol. [***]  

5.2 Brexit: a threat to the wine industry

In ****, the United Kingdom took the decision to leave the European Union, thereby implying an exit from the single market. This allowed duty-free movement between the United Kingdom and the rest of the EU countries. On ** October ****, the country could leave the European Union, as Boris Johnson recently indicated. [***]

In the event that an agreement is reached, the temporary agreement should allow products with a PDO (***) to keep it, both in the United Kingdom and in the European Union. This concerns Champagne and Prosecco in particular. [***]

The WSTA (***) expressed concern about the possible increase in production costs related to Brexit, particularly in the event that no agreement is reached. [***] This increase could be related to:

A customs duty implementation undertaken on the European continent and the United Kingdom. These could affect both the spirits industry, of which the United Kingdom is the largest exporter, and the import of wine, eroding consumers' purchasing power.

A limited or more difficult hiring of qualified personnel, with the end of the free movement in place until then.

In the event that customs duties are reintroduced, they could be similar to those already in place for other non-EU exporting countries to the United Kingdom.

Source: ****

In ...

6.1 Positioning of the actors

• Concha y Toro
• Accolade Wines
• Treasury Wine Estates
• Giffords Hall
• Three Choirs
• Nyetimber
• Antica Fratta
• Freixenet
• Agrovista
• Lallemand
• Wolfberger