Freixenet (DWS) Ltd Freixenet House Wellington Business Park Dukes Ride Crowthorne Berkshire RG45 6LS Tel: 01344 758500 Fax: 01344 758509 E-mail: enquires@freixenet.co.uk Website: www.freixenet.com KEY contacts Managing director Graham Fortune Marketing & sales director Robin Campbell Trade sector controller ­ off-trade Andy Balic Trade sector controller ­ off-trade Guy Smith National accounts Greg Blesson Peter Thomas Stuart Bowman-Hood key BRANDS · Freixenet Cordon Negro Brut · Freixenet Cordon Negro Medium Dry · Freixenet Rosado Brut · Freixenet Monastrell Xarel.lo · Freixenet Brut Nature · Freixenet Cuvèe DS The cork isn't back in the bottle Australian wine producers might be riding high on a New World wave of optimism, but sooner or later their bubble will burst­ sour grapes or an accurate take on the market from Spanish producer Freixenet? "There is no doubt that the Australians have been smart. But I think you can expect to see a fight back ­ from Spain, France and Italy, in particular ­ to regain lost territory, and whilst Australian wines might still grow next year, the rate will slow down," says Freixenet's marketing and sales director Robin Campbell. "The trade will also be questioning where extra space can come from, as they need to offer their consumers real choice from all the major wine producing countries and not just yet another Aussie Chardonnay in a different dress'. "Sooner or later there will be a backlash." But meanwhile, the market for still and sparkling wines have a long way to go yet, particularly in the over £5/bottle sector. "Home shopping and delivery will probably be a key factor in accelerating that growth," says Campbell. He predicts as much as 10% of Freixenet sales will be over the net in the near future, either through existing customers' websites, dedicated e-commerce sites and other direct to consumer routes ­ especially once Open and the other TV home shopping channels are established. "Once consumers get more confident about credit card security, delivery guarantees and product quality, then it is bound to grow," says Campbell. Changing market Different pack sizes and formats will also stimulate growth in the still and sparkling white wine sector as the number of single/small households grows and the incidence of wanting a fresh glass of wine with a meal several times a week grows. "Too much pressure on margins could restrict the wine companies' ability to fully develop strong brands, warns Campbell. "But it's an exciting time for the market with some great initiatives coming from the major retailers which will keep the growth going, such as cross-merchandising into the food areas." Campbell points out that off-take of liquor sales in general, and wine in particular, have been showing year-on-year growth since the millennium bash, proving that the cork isn't back in the bottle yet. "What is clear, is that more people are drinking, on more occasions and Cava in particular has seen spectacular growth in off-take as it meets an increasing consumer need for affordable luxuries'." But sales in to the trade are a different matter as retailers who had their fingers burned with overstocks after the Y2K countdown strive to minimise stocks coming out of the next festive period. "Clearly the trade will be focused on those brands which offer a good margin and rate of sale, driven by significant levels of advertising and promotional support," says Campbell. "Freixenet Cordon Negro will be one of those brands with new TV and press advertising breaking at the end of November." Innovate to appreciate Elsewhere in the alcoholic drinks market, he sees manufacturers such as UDV and Bacardi, who have made significant investments behind well differentiated, consumer driven propositions in the premium packaged spirits sector, reaping the benefits for years to come. But he's critical of others in the more established categories. "Beer is still a massive category, but you get the feeling that the brands ­ with a few exceptions, such as Guinness ­ have become a little directionless, relying on the superficial, such as changes to pack graphics and the like, rather than fundamentally understanding their consumer ­ as Guinness have done with their draught in a bottle innovation. "Foster's seems to have lost the spark that existed around the Paul Hogan days and Budweiser's Whassup' is a hit in the playground but I'm not sure about anyone else." Wine tastings: · Premium brands have held on to millennium advantage · Well supported wines have most appeal to trade keen to minimise stocks · Home shopping will have significant impact · Turf war between New and Old World brands {{Z SUPPLEMENTS }}