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Slideshow
How one business dominates the UK’s best-selling grapes
One company is responsible for the UK’s best selling Cabernet Sauvignon, Malbec, Merlot, Pinot Noir and Viognier – and it’s also the biggest supplier of Sauvignon Blanc to the market.
One company is now the biggest supplier of Cabernet, Merlot, Malbec, Pinot Noir, Sauvignon Blanc and Viognier to UK retailers
Not only that, but this single business is becoming increasingly dominant in all six varieties in the UK, and five of them come from the same source country.
The company is Concha y Toro, and the nation is Chile, although the group’s best selling Malbec hails from Argentina, where this wine business owns the Trivento winery and brand.
Although one may not be surprised to read that Concha y Toro is the leader in Cabernet Sauvignon with Casillero del Diablo – a major global brand representing Chile’s leading grape – perhaps unexpected is this company’s strong position in white wine: after all, Chile and Argentina are best known for reds.
Indeed, speaking to the drinks business last week, Simon Doyle, who is the general manager of Concha y Toro UK, said that the company sells almost as much white wine as red from Chile, noting that within the six biggest Sauvignon Blanc brands in the UK off-trade, four are from New Zealand, and the other two are from Chile: Isla Negra and Casillero del Diablo, which are both owned by CYT.
Furthermore, combine the sales by value of these two brands, and Concha y Toro becomes the biggest supplier of Sauvignon to the UK off-trade, with sales of Sauvignon worth £75.6m, more than £20m greater than the biggest Sauvignon brand in Britain: Villa Maria, which is worth £55.2m for this white grape alone (all figures are IRI for the 52 week period ending 22.07.17).
And, in terms of volume sales, Isla Negra is the UK’s biggest Sauvignon brand, selling 690,000 cases annually, which is 50,000 cases more than the second largest in volume, New Zealand’s Wairau Cove – a label exclusively sold in Tesco.
Another remarkable fact about this South American company is its powerful position in Viognier – a grape that may be less commercially significant than the likes of Cabernet and Sauvignon Blanc, but one that has become an important part of Concha y Toro’s UK business.
Under its Cono Sur brand, Concha y Toro sells more Viognier in the UK off-trade than anyone else, and the growth is impressive, with Cono Sur Viognier seeing volume and value increases of 29% and 27% respectively.
But it’s in Pinot Noir where Concha y Toro is yet more dominant, with its Cono Sur label worth twice as much as its nearest rival, Bouchard from France, and more than three times the third biggest branded Pinot in UK retail, Oyster Bay.
As for a further surprise, that is the company’s category-leading position in Merlot, with Isla Negra leading the sales for this grape in the UK off-trade by as much as 140,000 cases, compared to the second best-selling Merlot, which is from Barefoot Cellars, owned by Gallo.
Commenting on the South American company’s strong position in the UK, commercial director at Concha y Toro UK, Clare Griffiths, said that the wine group was “committed to the UK”, and noted that its success with the leading grapes was testament to its investment in this market, which, since 2013, has focused on CYT’s three priority brands: Casillero del Diablo, Cono Sur and Trivento.
Significantly, drawing attention to the increasingly consolidated nature of this market, and therefore the need to place an emphasis on a few key labels, Doyle then told db that 80% of the group’s UK sales come from just nine customers, even though Concha y Toro trades with more than 100 businesses in Britain.
He also said that he expects more consolidation in the UK, mentioning, in particular, the possibility of a Tesco-Booker merger, which as previously reported by db, is being investigated “in depth” by the Competition and Markets Authority.
Finally, for those wondering about Chardonnay sales in UK retail, this is one category where Chile and Concha y Toro are not the leaders – the dominant nation for this grape is Australia, and the leading brand is Hardy’s.
Over the following pages we have looked in detail at Cabernet Sauvignon, Merlot, Malbec, Pinot Noir, Sauvignon Blanc and Viognier, having considered their dynamics in UK retail, and Concha y Toro’s branded wine sales for each one of these varieties.
Cabernet Sauvignon
Concha y Toro’s Casillero del Diablo is the biggest Cabernet Sauvignon brand in the UK, while the company’s Isla Negra label is the third largest, after Wolf Blass – which is owned by Treasury Wine Estates.
The five biggest brands for Cabernet in UK retail are Casillero, Wolf Blass Yellow Label, Isla Negra Seashore, Gallo, and ‘own-label’, according to IRI data for the 52 week period ending 22.07.17.
Key stats: Casillero del Diablo Cabernet Sauvignon
• No. 1 Cabernet brand in UK retail by value and volume
• Value sales: £43.6m (-2% year-on-year)
• Volume sales: 587,000 cases (-5.8% year-on-year)
Merlot
In contrast to Concha y Toro’s position in Cabernet, Isla Negra is the biggest Merlot brand in the UK, while the company’s Casillero del Diablo is the third largest, after Barefoot.
Following the two Chilean brands and the Gallo-owned Barefoot from California, the next five biggest brands in Cabernet are all from Australia – in order, they are: Hardy’s, Jacob’s Creek, Yellow Tail, McGuigan, and Oxford Landing.
Key stats: Isla Negra Seashore Merlot
• No. 1 Merlot in UK retail by value and volume
• Value sales: £29.3m (+12.2% year-on-year)
• Volume sales: 502,000 cases (+18.2% year-on-year)
Malbec
Concha y Toro’s Trivento brand from Argentina is the UK’s best-selling Malbec by some margin, selling more than double the number of cases of the nearest branded Malbec in retail, which is Tesco private label Parra Alta – which, in any case, hails from the Trivento winery.
Significantly, sales of Malbec in UK retail are, aside from Trivento, mostly made up of own-label wines, highlighting the power of brand Malbec in the market.
Furthermore, although Malbec is most closely associated with Argentina, the 5th and 6th biggest Malbec brands in the UK off-trade are from Australia and the US – Yellow Tail and Barefoot respectively.
Key stats: Trivento Reserve Malbec
• No. 1 Malbec in UK retail by value and volume
• Value sales: £23.8m (+40.5% year-on-year)
• Volume sales: 324,000 cases (+47.1% year-on-year)
Pinot Noir
Taking top spot in UK off-trade sales of Pinot Noir is Concha y Toro’s Cono Sur ‘Bicicleta’ Pinot Noir, which shifts more than twice as much of the grape variety through the retail sector than nearest rival, Bouchard.
Chile is increasingly strong in Pinot Noir sales in the UK, not just through Cono Sur, but also with own-label offerings from the major supermarkets, which, if they were combined, would make total own-label Chilean Pinot Noir the third biggest ‘brand’ in Britain, more than double the size of Oyster Bay, which sits at number three, shifting 25,000 cases annually.
Key stats: Cono Sur Bicicleta Pinot Noir
• No. 1 Pinot Noir in UK retail by value and volume
• Value sales: £10m (+11.1% year-on-year)
• Volume sales: 141,000 cases (+8.2% year-on-year)
Sauvignon Blanc
Although Concha y Toro brands don’t occupy the number one slot for Sauvignon Blanc sales in UK retail by value, if one were to combine the sales of Sauvignon under its Isla Negra and Casillero del Diablo labels, it becomes Britain’s biggest for this grape.
Indeed, together, these brands are worth £75.6m in terms of Sauvignon sales, more than £20m greater than the biggest Sauvignon brand in Britain: Villa Maria, which is worth £55.2m for this white grape alone.
However, in terms of volume sales, Isla Negra is in fact the UK’s biggest Sauvignon brand, selling 690,000 cases annually, 50,000 cases more than the second largest in volume, New Zealand’s Wairau Cove – a label exclusively sold in Tesco.
The top 10 best-selling Sauvignons in the UK off-trade by value are, currently, in order: Villa Maria, Brancott Estate, Wairau Cove, Isla Negra, Oyster Bay, Casillero del Diablo, Oxford Landing, Mud House, own-label and finally, The Ned.
Key stats: Isla Negra Seashore Sauvignon Blanc
• No. 1 Sauvignon Blanc in UK retail by volume
• Value sales: £40.7m (+7.4% year-on-year)
• Volume sales: 690,000 cases (+11.7% year-on-year)
Key stats: Villa Maria Sauvignon Blanc
• No. 1 Sauvignon Blanc in UK retail by value
• Value sales: £55.2m (+11.1% year-on-year)
• Volume sales: 602,000 cases (+11.1% year-on-year)
Viognier
Finally, Concha y Toro is also the biggest in Viognier in the UK, with its Cono Sur brand selling more of this white grape through British retailers than any other.
Although a relatively small category, the aromatic variety has proved a success for Concha y Toro, with Cono Sur selling almost 50,000 cases of the grape, worth £3.3m.
Other major brands for Viognier, include, in order of size, Les Jamelles, Yalumba Y Series, Laurent Miquel Verité and Elegant Frog.
Key stats: Cono Sur Bicicleta Viognier
• No. 1 Viognier in UK retail by value and volume
• Value sales: £3.3m (+27.4% year-on-year)
• Volume sales: 49,000 cases (+29.2% year-on-year)