UK: Off-trade wine market up but on-trade suffering

09 July, 2009

UK: The off-trade wine market is showing ‘green shoots’ of recovery – but it’s not looking so good for the on-trade, according to new research.

Wine Intelligence research shows modest confidence increase among at-home drinkers. But there is still no sign of respite for the on-trade, where consumer wine spending remains “in the doldrums”.

Wine Intelligence has been monitoring consumer confidence in the UK wine market since late 2008 as part of its regular Vinitrac survey of 1,000 regular wine drinkers.

It has added two questions to its survey: “how has your spending on wine changed in the past three months?” and “how has your frequency of consumption changed in the past three months?” 

These questions have now been asked on three occasions, for both on and off-trade behaviour.

Analysts at the London-based research organisation have combined the responses to create a Confidence Index.

An index of 50 indicates static consumer spending. An index figure above this means a net increase in spending. The off-trade Confidence Index stood at 37 in December, falling to 36 in February and rising to 40 in June. 

Although the sector is still in negative territory, some confidence has returned despite the price increases that the take-home market has experienced as a result of the April duty rise.

The continued drift from on-trade to off, and the good spring weather, have, according to Wine Intelligence, influenced consumer behaviour.

The on-trade Confidence Index shows a small bounce between February and June, but the increase remains minuscule – up from an average of 14 in February, to 15.5 in June.   

Lulie Halstead, chief executive of Wine Intelligence, said: “The state of play in the wine market is often distorted and disguised by things like duty increases, which can exaggerate sales growth, or volume increases which outpace the categorys financial performance.

“The Confidence Index cuts through this by communicating directly with consumers – not just those who spend huge amounts on wine, but those who perhaps only drink a few times a month.

“The trade can draw some positives from the modest increase in confidence in the off-trade, where 64% of sales value and 86% of volumes are achieved. But we as an industry clearly have a lot of hard work ahead of us to get consumers spending more on wine and drinking it more regularly.

“It has never been more crucial for the trade to understand consumer behaviour, and to find new ways of engaging and inspiring the wine-drinking public.”  

 





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Dominic Roskrow

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