It’s bad news for the big boys. Hardys, Blossom Hill, Echo Falls and Jacob’s Creek have haemorrhaged a combined £71.6m. Of those, Jacob’s Creek suffered the worst, falling £34.1m (33.8%) to £66.7m - that’s the greatest loss of any booze brand.
This was “driven by FX rates, Brexit and cost of goods increases,” says owner Pernod Ricard UK’s commercial director, Chris Ellis. “These have impacted profitability of Jacob’s Creek and therefore, for accounts where profitability could not be maintained, we have made the decision to delist.”
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Top 15 Wine
There’s also that Brits are, as a rule, drinking less wine. We may have splashed out an extra £88.8m on wine this year, but we consumed 14.9 million fewer litres and are generally shopping above the £6 mark [Nielsen]. Hence Ellis says Pernod is eyeing “a premiumisation strategy” for Jacob’s Creek.
Posher brands are lining up to replace the old guard. Barefoot added a cool £28m to its value - a 20.8% increase, making it the UK’s second-biggest wine brand, overtaking Echo Falls and McGuigan. Yellow Tail grew £32.5m - the largest gain of any wine.
“The brands that are doing well are the ones with very clear positioning and a very distinctive brand proposition,” says Simon Lawson, general manager of Yellow Tail owner Casella Family Brands Europe.
Fierce competition is just one of many challenges facing wine brands. For one, there is increased competition from own label. Secondly, October’s Budget saw a duty hike of 3.1%, adding further cost pressures. But arguably the biggest challenge is the rise of craft gin, to which drinkers are flocking in droves.
“Look at spirits and beer and there is just more edginess and risk-taking,” says Kingsland Drinks marketing director Neil Anderson. “Wine needs to be a bit ballsier.”
One sector holding its own is sparkling wine, but that comes at the expense of champers. In fact, with value down £16.4m (5.3%), champagne is the worst-performing food & drink category in this entire report as shoppers opt for more affordable prosecco and alternative sparkling wines. It’s enough to make anyone reach for the bottle.
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1,000 Stories Concha y Toro
This posh (£18/70cl) Californian zinfandel by Casillero del Diablo owner Concha is aged in bourbon barrels and designed to tap the current vogue for aged drinks and American whiskey. It’s aimed squarely at “urban male wine drinkers”, according to the brand, which recommends drinking it from a stemless glass like you would whisky, rather than a traditional wine glass. A bold proposition that shows Concha y Toro knows which way the tide is turning.
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