UK wine market ‘like musical chairs’
Richard Cochrane, managing director of Félix Solís UK, has described the UK wine market as being like musical chairs due to the current trend for consolidation.
Speaking to the drinks business at ProWein this week, Cochrane said: “It’s an interesting time in the UK wine market – there’s been talk of consolidation and slashing ranges for years but in the last six months it has really started to happen.
“These are the biggest seismic changes in the UK trade I’ve witnessed since I started working in wine in the mid-90s. It’s a bit like musical chairs – every time the music stops there’s one supplier less or one listing less.
“We lost some listings last year, which was annoying, but we’ve gained some too. Our sales grew by 28% last year and we predict more growth this year. It’s been a hard year and we’ve had to fight, but we’re trying to navigate through it and I’m upbeat about things.”
Cochrane thinks it’s “ridiculous” that people have written Tesco off, and predicts that the growth of discount retailers Aldi and Lidl will soon start to slow.
“Everyone has written Tesco off, which is ridiculous. Yes, the discounters will continue to grow but that growth will reach a natural ceiling in a few years’ time,” he said.
While consolidation means fewer opportunities for listings, Cochrane believes a “less is more” approach to wine makes sense in the UK.
“Smaller ranges make it easier for the consumer to shop. It’s sensible to have less and offer more from a smaller platform. The value message is key now – a lot of Rioja and New World wine promotions are switching off.
“We’re riding through it in a reasonably positive way as we can offer a full assortment from Spain. I don’t think consolidation and choice are mutually exclusive – retailers can streamline their ranges and offer the consumer more choice at the same time,” he said.
“Spain’s role in this new retail environment is key as it can offer entry level wines, international varieties and wines made from indigenous grapes so the consumer has lots of options,” he added.
Félix Solís has just invested €30 million in a wine facility in Valdepeñas capable of housing 400m litres of wine and filling 150,000 bottles of wine an hour, making it one of the largest wineries in the world.
“We’ll be buying wine in bulk from Chile, South Africa and California and will bottle it in Valdepeñas, meaning we can fine tune things like sugar levels for different markets,” Cochrane told db.
“We’re also building a winery in Chile due to growing demand for Chilean wines in the UK. We’ll be making wine from all over the country,” he added.
Despite it dwelling in Prosecco’s shadow, Cochrane believes that Spanish sparkler Cava will soon make a comeback at the premium end.
“Cava is going to be on fire soon. It’s being championed by influencers like Richard Bigg at Copa de Cava, and both independent merchants and sommeliers are getting on board,” he said.