2014: Seven forecasts for the future
We asked a number of leading figures their predictions on key trends to expect over the next 12 months.
Seven professionals gave us their thoughts on what 2014 might bring for the drinks industry with emerging markets in the Far East, growing support of Brazilian Wines and moves toward lighter, more aromatic wine varieties just some of their forecasts.
Scroll through to read more.
Tom Gibbs, senior manager, Cognosis
“In recent years the drinks industry has seen huge growth in emerging markets. The Far East in particular has seen phenomenal growth in certain drinks categories, such as whisky. In a difficult climate globally these markets have been a bright spot. In return for continued over-investment they have delivered a major source of growth.
“However, we have already begun to seen this emerging market growth levelling off and expect this trend to continue into 2014. The success stories that businesses have come to rely on are unlikely to continue to deliver in the same way over the next 12 months.
“As a result we expect to see a rebalancing of focus among drinks brands. Large, mature, traditionally strong drinks markets that have been somewhat overlooked will come sharply back into focus for the big players.
“As these markets recover and growth becomes tougher to find elsewhere, focus and investment will return. We will also see a change of approach in emerging markets. Expect a moment of reflection as brands step back and assess their position before refocusing their effort and investment to strengthen their positions in those areas that they wish to gain in over the coming years. As a result markets will become less fluid as established brands look to consolidate.”
Abi Hirshfeld, wine director, Laithwaite’s Wine
“In 2014, at Laithwaite’s, we see growth coming from international varieties from Eastern Europe to allow us to continue to provide great value, including some exciting new wines from Transylvania. We will continue to focus on wines from Italy and Spain as we feel there is still real opportunity in these two countries. The coming year will be, more than ever, the year of the
customer. We have a Laithwaite’s customer panel which allows us to get real time, genuine feedback from people across the UK.
“This insight will be essential to our planning throughout 2014 and will help us improve the selection and marketing of our wines. We will continue to improve our website and digital communications to allow people to interact with us in the most convenient way for them. Offers will become more personalised and pricing more simple. We want to give people more choice and make it even easier to buy wine from us.
“We are also really excited to be working hard on improving the ways in which people can buy fine wine from Laithwaite’s, making this a more prominent and core part of what we offer. We continually strive to offer a personal service for everyone who buys wine from us and we have plans in place to expand and promote our Personal Wine Advisor service, which allows people to talk to their own wine advisor for any wine questions or requests. Lastly we are all hoping for an excellent 2014 vintage with plenty of great quality wines!”
Julian Dyer, UK & Europe general manager, Australian Vintage
“Undoubtedly we will continue to see the growth of lighter and more aromatic wine varieties. This trend doesn’t seem to be losing its attractiveness and is becoming more diverse. The emergence of the likes of Picpoul and Arneis into the mainstream alongside the renewed interest in Riesling and Semillon are great to see. Both flavour and lightness are key components in a balanced wine, and this sense of wine as refreshment will grow across different styles as well as across different format types. From our own personal perspective, we have definitely seen renewed interest in both Riesling and Semillon with our customers. Our McGuigan Classic Riesling, a new edition to our core range, has not only gained new national listings, but also acclaim in the press in recent months.
“Equally our heritage, work and awards success with Semillon is well known. I am not sure it is a trend yet, but I have a hunch that Chardonnay will make a fight back. Lest we forget, it is still the most planted white grape in Australia, and we are now making a beautiful range of styles, from delicately balanced, mineral-edged, cool climate Chardonnay, through to the more traditional oaked styles. It remains one of the world’s classier grapes. 2014 will also be the year of authenticity, provenance and quality. As we move to a landscape where there is a healthier
balance between non promotional and promotional sales, the wines and brands which will continue to do well are those that give customers that bit extra: quality, story, sense of place.
“I like to think we do that well. And lastly, wine will thoroughly embrace social media. It’s becoming the new norm.”
Ana Sapungiu, buyer, Oddbins
“A more obvious trend will be that some of the larger retailers will get behind Brazilian wines. Sparkling wine sales will continue to grow as a category, whereas Champagne is likely to stagnate or even decrease slightly. This year customers have continued to show an interest in lighter, fresher whites with moderate alcohol levels, such as Vinho Verde, Albariño and Picpoul. Although from a smaller base, these styles should continue to grow and potentially take away sales from the more mainstream ones such as, dare I say, Pinot Grigio. Consumers will continue to become more savvy about how they spend their money.
“Producers and businesses that do not offer something different are likely to struggle. Price promotions will continue but the days of half price promotions are numbered. This is due to the consumer’s increasing awareness of the lack of transparency on the true value of wine and the increased negative media on these deals. More and more retailers will probably start to engage with customers beyond price, at least this is what us as a company are committed to do.”
James Burston, business development director, PLB Group
“From a trading perspective, consolidation and collaboration will become words we hear more of as all parts of the trade fight to remain relevant – some collaborations may even raise a few eyebrows!
“Unfortunately we are likely to see more casualties as cash flow hits those businesses that didn’t envisage the speed of change within our industry. We will get even closer to the consumer as technology brings us all closer to real time interface at the point of purchase, whether that is online or within a trading outlet. We’ll all strive to understand how we can engage better with the consumer and build up loyalty and intimacy.
“I foresee a blurring of the total drinks category where the boundaries of categories fuse into a potentially new sub-category, where the historic taste parameters and pack formats of wine, long drinks and spirits become less defined. Innovation is definitely back on the agenda but I fear wine buyers may get left behind by short-term thinking rather than longer term consumer driven category focus. Thinking outside of our own bubble – which is now starting to happen at recent trade events – will inevitably bring new ideas to an industry which is in desperate need of a shake up, particularly within the wine sector.”
David Gleave MW, managing director, Liberty Wines
“We are aware of three key trends that will continue to develop throughout 2014. One is the rise of interest in native grape varieties. A decade ago, people said that Italy’s complexity was a problem. Today, its complexity is known as diversity, and this appeals to the more educated and adventurous consumers, sommeliers and merchants. It is also enables sommeliers and merchants to differentiate themselves from the multiple retailers who can’t, due to demands of space, offer the diversity that Italy has to offer. Liberty Wines’ list reflects this diversity, having always focused on native grape varieties. We’ve seen great growth in sales of wines like Corvina, Garganega, Refosco, Negroamaro, Grillo, Cannonau, Vermentino etc. We aim to build on this during the year ahead.
“Another is the growth of English sparkling wine. Despite its heritage, Champagne will have to fight to maintain its position as a “must stock” wine in the on-trade thanks to strong competition from English sparkling wine. Too many Champagne brands are heavily discounted in the off-trade, which is a point of contention for many in the on-trade. They don’t have these problems with most English sparklers, nor with Charles Heidsieck Champagnes.
“Our strategy remains the same: to offer value for money at the shelf price – rather than the promoted price – and hosting a wide range of tasting events to ensure the customer buys on style and quality rather than price. In this way, we don’t need to resort to discounting for either Champagnes or English sparkling wines. The third trend is renewed interest in premium Australian wines. Whereas several years ago many regarded Australia as a producer of “supermarket wine”, today the quality and diversity on offer from the country’s top regions – Clare Valley, Margaret River, Adelaide Hills, McLaren Vale and many others – is exciting. Communicating their point of difference is a key focus for us. As these wines often benefit from being hand sold, they are ideal for the independent on- and off-trade.”
Steve Moody, managing director, John E. Fells
“Despite some slightly more optimistic government figures on the economy as a whole (GDP, growth etc) many surveys continue to show that household incomes are being be squeezed and disposable income reduced as household, especially energy, bills increase. Consumers will therefore continue to seek out value and the wine offering in the major multiple grocers will continue to reflect this. However, as with all recessions, there are still consumers who are less affected by these conditions and who still want to buy premium brands and fine wine.
“This trend too is being reflected in the multiple grocers. Against this background we see the independents taking a cautious approach and hopefully capitalising on the growing number of discerning, wine-educated consumers. To date, the very top end of the on-trade, such as prestige restaurants and hotels, has been fairly robust and resilient and we see this trend continuing, at least in the short term.
“Trading conditions for the mid-quality on-trade, however, will remain challenging as consumers with tight disposable incomes are forced to choose carefully between how often they eat out and where. There is probably an over-supply situation on the distribution side of the business, with too many distributors and wholesalers chasing the same business,so some form of gentle consolidation could be possible.”