To some extent, the growth of this category is driven more by government’s policies to reduce alcohol consumption than it is by consumer demand.
In the Nordic countries there’s a demand for products at 4.5% or lower, because these can then be sold through supermarkets rather than being restricted to the alcohol monopoly shops.
Significant player
Australian Vintage is one of the most significant wine companies which have been active in this category. “We have big expertise in it,” says Julian Dyer, GM of UK/Europe. “We have quite a decent low alcohol and concentrate business.”
In addition to its own lighter wine brands, it also makes reduced alcohol wines under contract for other wineries.
“It is an innovative category,” says Dyer. “There is a consumer need here for a lighter style that has less alcohol. We are taking a long-term view, and we will keep innovating in this category, across the spectrum of 0%–10% alcohol.”
He adds: “Unquestionably the UK is one of the best world markets for lighter-style wines. There’s a big demand for 4.5% alcohol and below in the Nordic countries.”
But he says not much interest is being seen in the American domestic market, or in Asia. Dyer is slightly frustrated by the UK tax regime, which he says is too clunky for wine with a single tax break at 5.5%. “Beer and cider have a progressive tax, and sparkling wine has a step at 8.5%,” he points out. “In the 5.5% market, some wines are clearly there to take advantage of the tax break, but some companies have the intention to make low-alcohol wines with good flavour. People expect low alcohol wines to be cheaper, but alcohol reduction adds costs.” Successful lighter-wine brands from Australian Vintage include Summer Light and Vinni, both of which are at the 5.5% alcohol level.
Another large company, Accolade Wines, is also taking these wines seriously. “Accolade Wines continues to be committed to the category,” says Amy White, marketing controller, “and already has an established portfolio including Banrock Station Light wine, which is the 5th largest low-alcohol brand in the UK, as well as Echo Falls Spritz.” She adds: “In the UK no and low-alcohol penetration is marginally up over the long-term sitting at just below 1.5%, according to Nielsen.”
Spanish company Torres has had success with Natureo, a 0.5% alcohol product made using a spinning cone column that it has in its winery (more on this technology later). There is a Natureo White made with Moscatel, Natureo Red made with Syrah and Natureo Rosé made with Syrah/Cabernet Sauvignon.
These are remarkably wine-like products when compared with their no-alcohol peer group. “Natureo is doing really well,” says Miguel Torres, “especially in the more mature markets – mostly northern Europe – where we had seen a trend for responsible drinking and health-related reasons such as lower calories. Moreover, these consumers probably think that wine is the perfect companion for food and don’t want to give up on that.”
Torres hasn’t got any immediate plans to make a 5.5% or 8% lighter-style wine, though. “Maybe someday we have to make that type of wine, because the market is asking for it,” says Torres. “But my impression is that it is not really the consumer who is asking for this type of wine; it is more the governments in certain markets who make supermarkets chains and monopolies ask for it. In the UK, for example, the government has increased the alcohol tax in the past years.”
