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New World wine producers who overlook the private-label market are missing out on a golden opportunity

New World wine dominates the UK wine market, with over 55% market share. Australian, Californian and South African wines alone account for 46%. But New World wine performs poorly in the private-label (PL) market, with a severe undertrade. This is mainly due to the large brands, which are far more dominant than in European wine. The gap demonstrates that there is a large opportunity for PL wine to grow within the New World sector.

The current performance of wine is strong, as the market performs well against competing alcohol sectors. However, private-label wine growth currently lags at only 2%. This can be attributed to European wines’ increasing brand strength in order to compete with the New World. Considering the low PL wine growth, it is important to note that New World PL is growing at a much faster rate of 14%. This remains behind total New World growth, which means the under-trade is increasing. New World privatelabel growth is driven by Australia, New Zealand and California. The major drivers of the growth are penetration and frequency, which increase as the products reach wider audiences. The key origin is South Africa which demonstrates PL decline, and under-trades. Only Chilean wine over-trades in New World PL, but growth there is slowing. 

In-store, there are also growth opportunities. New World PL wine over-trades in Asda and CoOp only. This leaves possibilities for growth in Sainsbury’s and Tesco in particular, as between them they hold 50% of the PL wine market. With the declining PL market of Europe and increased share from key origins there is a clear path for development and growth in private label New World wine.

TNS is a leading global provider of market information. We provide research, advice and insight on market segmentation, advertising and communications, new product development and brand performance. The TNS data is based on our continuous panel of 15,000 households. TNS tracks the alcohol purchases across all major grocery multiples and coops. For further information, please contact David Buckley, business director for TNS Superpanel on 020 8967 1513

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