UK sees wine decline – and it’s predicted to worsen

The UK drinks market is seeing a fall-off in still wine consumption – and it’s predicted to worsen – although the main area of decline is the lower end of the market, according to the IWSR.

Source: IWSR Drinks Market Analysis

Using data gathered from all areas of the UK drinks market, figures from the IWSR released at a Vinexpo press briefing on Wednesday this week showed that still wine sales have fallen by 3 million nine-litre cases (see bar chart, above).

Such a decline was recorded over a 12-month period from 2016 to 2017, and the decrease comes in marked contrast to the global picture for still wine consumption over the same period, which has risen by almost 12m cases (see bar chart, bottom).

Considering that the UK still wine market is a little over 114 million cases, the decline in sales noted above represents a drop of almost 2%.

Commenting on the development at the event this week, Mark Meek, who is CEO of the drinks market analyst, said that it was the “lower end” of the still wine market that was seeing a decrease, and that this was not being replicated at the higher end of the market.

“The UK is an incredibly price-conscious market, but we are seeing interesting growth around the ‘premium and above’ category,” he commented.

However, while the still wine market has declined in volume terms according to IWSR data from 2016-2017, the analyst showed that sparkling wine consumption in the UK had risen by more than 8% over the same period.

With an additional 582,000 cases, consumption of sparkling wine has offset some of the fall-off in still wine, and is set to continue to grow, driven by Prosecco (plus “a budding” English sparkling wine industry, which Meek said would add “close to 100,000 cases by 2022”).

Speaking generally about the UK drinks market, Meek said that “The global ‘less-but-better’ trend is likely to continue in the UK, with value growth out-pacing volume.”

As a result, he said that “wine will continue to shed volumes at the low-end,” noting that “the still wine market overall will gradually decline towards 2022,” referring to IWSR forecasts for the UK market over a five-year period from 2017.

Indeed, according to figures requested by the drinks business this morning, IWSR data shows a forecasted decline of more than 11% over the next five years, with the still wine market predicted to shed as much as 13m cases, falling from 114.3m cases (2017) to 101.1m in 2022.

Affecting sales of still wine in the UK will be a continued growth of sparkling wine consumption, but also sales of US whiskey, gin and the low and no-alcohol drinks sector, as well as a general trend of moderating consumption, as Brits cut back on alcohol.

Nevertheless, higher priced / higher quality wine is expected to fair better, with IWSR forecasts showing the ‘premium’ wine segment of the still wine market – defined as wine selling in retail for £8 to £14.99 – growing from 20% of sales by volume in 2017 to 25% by 2022.

When asked about the potential impact of Brexit on consumption in the UK, Meek said that it was hard to quantify the impact, but didn’t believe that it would affect any of the trends mentioned above.

“The best guestimate I can make is that it [Brexit] will be such a fudge that nothing will change.”

All data in this article comes from IWSR Drinks Market Analysis, and was shared with db on Wednesday 13 March in London, as part of a Vinexpo press briefing on the state of the global market for alcohol.

Source: IWSR Drinks Market Analysis

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