The UK wine market

By mthomas

I finally got round to reading this report from Just‐drinks a company, with a big client list, that provides ‘Beverage information, insight and intelligence’. Titled “State of the Nation; the UK wine market analysed” it suggests the UK is no longer perceived as the most important and dynamic wine market in the world. This is presented as a sea change from responses in the previous 5 years of the report and at first sight seems not to bode well for UK companies.

The emerging Asian, Scandinavian and South American markets are undoubtedly exciting for producers and retailers as they are frontiers of opportunity, in terms of growth, because of the low baseline from which they are starting. Core and mature markets are ultra saturated and all about small gains so less likely to produce headline news.

The press is constantly full of the price increases in first growths driven by Chinese consumers but this rarefied market is perhaps not the most useful barometer of ‘planetwine’ let alone the UK. Top end consumers and investors are still essentially a minority but like multi‐million pound flats in Chelsea they stimulate growth and provide a knock‐on effect. This is especially true in terms of confidence which is a key factor driving most markets (especially those involving Veblen products). However the vast majority of sales are sub£8 bottles and these are still being consumed in huge volumes despite (because of) the global recession. The problem is that margins and the bloated god known as profitability are wasting away. Profit is seen as the gauge of ‘healthiness’ rather than inclusivity and diversity (which are both increasingly looking good).

Interestingly 42% of the sample (numbers of participants aren’t made clear…) are ‘optimistic about the prospects for the UK wine market over the next 12 months’. 28% are pessimistic and the remaining 24% either ‘don’t know’ or are not given either to pessimism or optimism. Perhaps the structure of this survey is tapping into general ‘wellbeing’ rather than any specific economic belief or effect?

One finding in the report I don’t dispute is the heralded death of newspaper wine columns. I have been enjoying Andrew Neather’s forays into things vinous in the Evening Standard and there are a few other worthies such as the perennially outstanding Jancis Robinson but these are exceptions to the ‘chip paper’ adage. Wine is particularly suited to a ‘long tail’ approach because people want specific information not a scattergun weekly column promoting a bloated hack’s subjective evaluations of a few supermarket wines.

I propose a different barometer which has picked up edgy independent wine retailers opening up across the UK. Younger people are showing engagement with wine in restaurants and there is a slightly ‘rock and roll’ attitude to wine not previously evident. These consumers are the future of wine and they are often adventurous, affluent, informed and international. The UK also provides the training ground for ground breakers exploiting the new markets and imperialism lives on in our exports of upper middle class ‘nice but dims’ looking to make a killing in Hong Kong.

I love the fact that 28% of respondents felt that ‘openness to new ideas’ is a key strength of the UK market. Unsurprisingly 36% thought that ‘excise duty’ is the worst and 80% plus think social media important. It was really good to see the idea of social responsibility cropping up as this will be key to wine flourishing in future. All in all an interesting document but like the accompanying discussion at LIWF a bit of a damp squib in terms of content and impact.

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