English fizz sets sights on export push

21st October, 2014 by Gabriel Stone

Export markets are becoming an increasingly important focus for the English sparkling wine industry as its profile and production soar.

Rathfinny

Rathfinny, one of the English wine producers taking exports seriously

As English winemakers welcome a good harvest at a time when more and more new vineyards are coming onstream, one of the largest new arrivals on the scene is clear that exports will need to form a major part of its business model.

“I would hope that 50% of it is going to be export,” outlined Mark Driver, owner of Rathfinny Estate in East Sussex, which opened its winery this year and is aiming for an annual production of one million bottles by 2010.

“One million bottles is nothing on a global scale,” insisted Driver. “The problem with English wine isn’t the quality – we’ve proved with all our international awards that we can make consistent quality year and year – but what we don’t have is quantity.”

Reporting “tremendous demand for English sparkling wine, not just in the UK but around the world,” he told the drinks business: “You’ve got to get to a scale where you’re competing with the major names of Champagne – they have such an advantage over us.”

However, despite the strong overall growth of sparkling wine sales in the UK, trade commentators have warned that this market alone cannot absorb the growing quantities of English sparkling wine, especially as its prices tend to be aligned with powerful and well-established Champagne brands.

They’ve got to be very careful,” observed Simon Jerrome, wine purchasing director at UK on-trade supplier Matthew Clark. “Sales are growing and they need to look to export markets.”

Rebecca Palmer, associate director and buyer at merchant Corney & Barrow, told db that the merchant is already selling “small volumes” of West Sussex-based Wiston Estate through its Hong Kong outpost and is currently “in talks” with the US.

For all the interest surrounding this category, she cautioned: “You need to have an awful lot of brand savvy and guidance in order to be able to navigate these waters. Champagne is an established brand with extremely savvy marketing – it’s much more akin to the way spirits are marketed.”

Although production at his own estate remains small for now, Driver is already planning visits next year to potential distributors in the US and Australia with a view to having the right deals in place by the time volumes start to reach significant levels in two or three years time.

Without underestimating the “fantastic brand” built by Champagne, Driver is confident that English sparkling wine can carve itself a niche. “A group from one of the monopoly nations wanted 10,000 cases,” he revealed. “No one in the UK currently can supply that quantity. That’s the level of demand we have to be able to supply in future.”

For Simon Robinson, owner of Hattingley Valley Wines in Hampshire, early exposure in foreign markets has demonstrated both the scale of opportunity and communication challenge that must first be tackled.

“Knowledge of the product outside the UK is almost nil but when buyers try it at the big trade fairs, such as Prowein and Vinexpo HK, they are almost invariably very impressed – and surprised!”, he remarked.

Confirming that exports represent “an important component” of the brand’s sales strategy, Robinson nevertheless stressed the value of its domestic market for English sparkling wine.

“It is the second largest market for Champagne in the world, which is exactly the sector of the market we are all aiming at,” he noted. “But exports will help us achieve our pricing aims in the UK; they are not just about increased sales.”

As the pressures of matching supply with demand in a profitable manner continue to mount, Driver believes that the shape of the English wine industry will inevitably change.

“The big are becoming bigger and the smaller are not really expanding,” he observed. “In all honesty I hope that there’ll be some consolidation with the smaller producers.”

Looking ahead to evolution of this category, Driver concluded: “To me England is where New Zealand was 25-30 years ago – just at the beginning of something extremely exciting.”

An in-depth look at the sparkling wine market will appear in November’s issue of the drinks business.

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