Large-scale wine suppliers to the UK need more than just a strong brand to shift significant volumes in the supermarket sector.
Supermarkets account for 80% of UK off-trade wine sales
To gain a major foothold in the market, suppliers must be able to serve the major multiples’ need for private and exclusive labels, as well as provide branded offerings at a competitive price.
“You have to be a full service provider to remain successful in this market,” said Julian Dyer, general manager for the UK and Europe at Australian Vintage during a discussion with the drinks business about the UK wine trade last week.
Similarly, Paul Schaafsma, UK general manager for Accolade Wines, commented in an interview with db last month, “There is definitely a need for own-label and exclusive label in the marketplace.”
This has required Accolade, which owns the Hardy’s wine brand, to adapt.
“We are now helping in the sourcing, developing and packing of supermarket own and exclusive labels – the days of being just a branded wine supplier are over for Accolade,” he stated.
Nevertheless, Dyer recorded a better balance between retailer own-label, supermarket exclusives and brands in the wine aisle. “Two to three years ago everyone was talking about exclusives, and what drove those were half-price Pinot Grigio and Marlborough Sauvignon Blanc, but what works now is a balance between own-label, exclusives and brands.”
Speaking further about exclusives, he said, “Exclusives, or tertiary brands, have reached their peak, because they tend only to work in regional- or varietal-led areas.” On the other hand, own-label is “very important” according to Dyer because it allows retailers to achieve a point of difference and the range can be “aligned to their overall brand strategy”.
Finally, for traditional wine brands, the UK market is harder than ever according to Dyer. “Retailers expect higher standards of brand success, so more pull on the shelf, and weaker brands are being found out.”
To attract customers to Australian Vintage’s brands Dyer said the producer’s awards successes were “critical”.
The group’s tie-in with celebrity chef John Torode in the UK is also important. “If you don’t invest with tailored marketing you will be under pressure,” he concluded.
Own-label wines account for as much as 19% of the UK off-trade, compared to around 16% in Australia and just 4% in the much more branded US market.
More analysis on wine retailing in the UK market will appear in the upcoming August edition of the drinks business.