Majestic: Top wine and spirits trends for 2018

It’s that time of year – when the trade peers into the future and suggests what we might be raising our glasses with in the coming year.

While the drinks business will be putting forth its own predictions for 2018 in the coming weeks, UK wine retailer Majestic also has some ideas on what will be driving the industry in 2018.

We have picked through their predictions to see if they stack up, from the impact of El Nino on the bulk wine market, a rising trend for magnums, why gin and Prosecco aren’t losing their appeal any time soon, and why Sherry might just be on the up.

Click through for a roundup on Majestic Wine’s predictions for 2018…

Bigger = better

“Magnums are big news. In 2017 already, we’ve seen a 378% increase in year-on-year sales of super-sized bottles under £20. Rosés and house reds in 1.5 litre measures are proving particularly popular for weddings and parties, where a big celebration warrants big bottles! Wines in magnums also take longer to reach their optimum drinking age, this adds to the intensity, making them the connoisseur’s choice for premium wines. So expect BIG things for 2018. ‘It’s is all about socialising around a bottle,’ explains Richard Weaver, Buying Director at Majestic. ‘Magnums create brilliant centrepieces for dinner parties and events – particularly if you’re cutting back on your eating-out spend’.”

An appreciation for bigger format wines has been growing for several years now, but it has only been in the past year or so that the big retailers and supermarkets have jumped onto the trend, driven by demand for Prosecco. This year Aldi has added its first Jeroboam of Prosecco for Christmas, which will retail for under £39.99 for 3 litres, and follows the launch of the UK discounters first magnum of Prosecco two years ago. It has also added a new gifting box for its Malbec magnum which was available for the first time last year.

At the time, Aldi buyer Mike James said although the larger bottle format seemed “counter-intuitive” given the increased price point, people were increasingly using these formats to add theatre at larger scale celebrations and parties. While Christmas is the perfect time for large format wines, rosé has also been a key driver of the trend, with a pretty in pink magnum of rosé an increasingly popular table piece.

El Niño hits South American wines

“Abnormal weather in South America has resulted in low yields that have dismayed winemakers on both sides of the Andes, so Chile and Argentina may no longer be safe bets for wines at the £6 or under price point. In the immediate future, the emphasis for these regions is likely to shift from quantity to quality.”

El Nino is an abnormal climate pattern caused by the warming of surface waters in the eastern tropical Pacific Ocean, which affects sprouting, flowering and subsequently the fruit set of bunches –

It has been a defining factor of the harvest in south America in 2016, with the phenomenon bringing with it a cool and rainy vintage and significantly lower crops.

Argentina’s grape harvest dropped 25% by volume in 2016 in what was described as a “very different” but “very good” year, with delayed maturity resulting in fresher wines with less alcohol. It was a similar story in Chile, with heavy heavy rains wiping out a large chunk of the grape crop.

While the impact of El Nino lessened with 2017, the year brought with its smaller crops for many producers throughout South America, with quality, nonetheless, remaining high.

As Laura Catena explained: “In 2017 we had another year of small yields—especially in the UCO Valley where most of our family’s vineyards are located. Spring frosts brought on by dryer and slightly cooler weather resulted in lower yields, and the UCO Valley Malbec was down 55%. Our delicate Malbec responds to changes in the weather by dramatically reducing yields. We could easily understand why late-19th-century Bordelais decided to replace the Malbec in their Grand Cru vineyards with hardier Cabernet Sauvignon and Merlot.”

With volumes at a low, the impact on the bulk wine market in particular has been swift, with prices steadily rising over the past year. As Majestic suggests, an emphasis on quality over quantity will help these regions ride out the impact of El Nino, but could impact the availability of cheaper wines from this part of the world over the coming year.

Eastern Europe makes a brilliant bet to beat harvest blues

“Eastern European wines have been steady ships on the choppy waters of dismal European harvests and Brexit-related supply blues. Sales were up +1365% year-on-year in the £5-£10 price band at Majestic in 2017. Initial reports suggest Hungary’s harvest is down only 3% (compared to an EU-wide average drop of 14%), whilst Romania is looking at a 60% harvest increase. Your mid-week bottle may increasingly originate from Hungary’s Central Valley – rather than Chile’s.”

It might not have the clout of other European favourites like Spain and France, but Eastern Europe is home to some of the world’s oldest winemaking regions, from Georgia to Hungary and Romania. Bucking the European trend this year by maintaining or, in Romania’s case, vastly increasing its harvest volumes – while those around them have taken a tumble – 2018 could be the year that these regions become more attractive to wine buyers looking for a well-priced bottle of something ‘a bit different’ for adventurous consumers.

Beyond the pale

“It may well be time for pale ale, the star of the craft beer movement, to leave the limelight – according to Majestic. A recent survey of buying habits across all of Majestic’s 210 stores suggests customers are increasingly interested in local red ales or stouts, with only 8% choosing pale as their beer of choice.”

This one remains to be seen. While stouts and red ales have a strong a loyal following, that at least in Majestic seems to be growing, the power of pale ales as a bridge to such beers remains strong.

Following the Drinks Business Beer Masters 2017, it was the Pale Ales and IPA category that attracted the highest-scores of the day. “The beers that achieved exceedingly well were those that reined in the bitterness to match the fullness of the flavour in the beer yet provide a bounty of hops in the aroma,” noted Shane McNamara, a Beer Sommelier and senior technical officer of the Institute of Brewing & Distilling (IBD).

Prosecco isn’t going anywhere… yet

“Write off Prosecco at your peril! Sales of this light sparkling style is still booming despite warnings from dentists that the bubbles and sweetness can be a challenge for your gnashers. However, with another difficult harvest in Northern Italy (where some yields are down as much as 30%), sparkling wines from Sicily or Central Italy will be good value alternatives to stave off price increase pains and bring some sparkle back to your wine bill.”

It’s the juggernaut that keeps on rolling. As Majestic points out, while a lower harvest in the Veneto might present producers with a bit of a challenge to Prosecco’s volume growth, which could serve to drive up its price, its biggest problem will be keeping up with demand, not drumming it up.

Forget gin, Brits are favouring a new tipple for 2018

“Majestic have recorded a 25% increase year-on-year in sales of sherry in 2017. What used to be Granny’s favourite has dropped its age appeal by 50 years, with it being entirely acceptable for those in their 20s and 30s to be seen with a sherry glass in hand. And it’s not just sherry that’s undergoing a renaissance. Other fortified friends are making a comeback with port sales seeing an 18% volume increase in 2017 and the unsung Madeira currently up 224%, versus the same period in 2016.”

As Sherry lover myself, my heart does a leap when the fortunes of Sherry look set to improve. Alas, this has been a recurring trend for many years, with the trade willing consumers to embrace Sherry with the love it deserves. This year, there is once again hope for Sherry, and it isn’t completely hopeful.

Premium Sherry in particular is helping to revive the market, believes Gonzalez Byass, with the IWSR predicting sales of premium Sherry to grow 18% by 2021, helped by a boom in premium Spanish restaurants and interest by younger consumers.

Speaking at a seminar in ProWein this week, Gonzalez Byass’ chairman Mauricio González Gordon declared that “volume is dead” when it comes to Sherry, believing that producers should instead focus on increasing value sales by pushing its higher value offer.

“We are quite excited about the latest numbers on Sherry,” Gordon. “We feel that consumers attitudes are changing. We are seeing a lot of younger consumers coming into the category and there is a lot of activity at the top end, talking about Sherry by the press and sommeliers.

Further hope comes in the form of top winemaker Peter Sisseck, of Spain’s Pingus, who this year confirmed that he had bought the small  but famous Sherry solera Camborio with the aim of making a top fino – Spain’s “greatest white wine”. The involvement of such a well-respected winemaker can only serve to further Sherry’s cause, and almost certainly at the higher end of the market.

The craft whisky scene is about to discover brandy

“Brandy looks set to be the next spirit to receive the ‘craft’ treatment, following in the footsteps of whisk(e)y. Iconic brandy branding, a focus on provenance and increasing appearances in the ingredients lists of top cocktail experts has led to a new experimental take on the spirit. Majestic points to Armagnac as heir-apparent to flashy whisky brands. Try it in cocktails.”

This seems plausible, and entirely welcome. It only seems fair that brandy should share in the craft spirits movement, which seems to have somewhat passed the brandy category by.

In terms of Cognac, exports increased for the third consecutive year in 2017, reaching record levels for both volume and value, the Bureau National Interprofessionnel du Cognac (BNIC) reported in August. Export figures for 2016/2017, covering 1 August 2016 – 31 July 2017, show that Cognac exports achieved overall growth of 10.2% in volume and 15.2% in value, with nearly 190.2 million bottles exported totalling €3 billion in value.

Globally, exports of Cognac to all markets reported growth, with the far east market proving particularly buoyant. A total of 53.7 million bottles were shipped to this region – an increase of 10.6% in volume and 19.4% value compared with the same period the previous year – the highest increase in value of any market indicating a level of premiumisation among consumers. Of this total, China made up the majority of exports, accounting for nearly half at 22.6 million bottles.

Honey gin

“Experimenting with different botanicals and flavours has made gin the success story of 2017, with sales up 110% vs last year at Majestic with over 120 new lines added throughout the year. Some may feel that gin hype is a load of rhubarb – but rhubarb itself has been key in driving the trend, with rhubarb gin sales up 170% year to date. Expect more flavours in 2018, like the newly launched honey gin, which is set to hit the shelves in the New Year.”

With gin at the centre of a renaissance for the past few years, 2018 could be the year that the market evolves to include flavoured-variants, much like the vodka market. Honey has already proved its muster in the whiskey category, with Jack Daniel’s J&B, Wild Turkey and Jim Beam among those to have launched successful variants. It makes sense that the success of honey could also be replicated in the gin category.

For one, it carries with it credentials as a natural ingredient (millennials hate artificial flavourings), but also the potential for producers to turn their distillation into a chance to help support the dwindling bee population, offering an ethically-minded product to socially aware consumers.