Wine producers are increasing their use of lower abvs and smaller bottles to hit lower price points.

Brand Phoenix is launching First Cape Light - a range of 5.5% abv wines in a 50cl format - to help counter pressure from duty, VAT and unfavourable exchange rates in the wine market, while also addressing changing consumption habits.

The wines, rolling out now to Morrisons, are the company’s first foray into varietal-led 5.5% lines and will be available in New Zealand sauvignon blanc, Italian pinot grigio, and Californian white zinfandel (rsp: £3.49/50cl). They are also launching into Tesco in a 75cl format (rsp: £5.99) and will be backed by £500,000 marketing support as part of a £1.5m brand-wide spend this year.

While the 50cl format was not currently widespread, increases in duty and the threat of a possible minimum price per unit on alcohol had made it harder for retailers to offer three-for-£10 on 75cl bottles. As such, the smaller format could be a natural transition to this promotional price point, said Lindsay Talas, buying director at importer Thierry’s.

Off-trade sales of First Cape’s existing 50cl range, which includes a full-strength red, white and rosé, grew 37% by volume over the past year and 39% by value [Nielsen 52 w/e 24 December 2011]. Off-trade sales of its 5.5% abv Café Collection wines, which features generic blends of white rosé and red, also performed strongly - up 127% by volume and 105% by value to £20m.

Further investment in lower-alcohol and smaller formats were vital to protect wine’s market share in UK retail, said Brand Phoenix director Steve Barton.

“We’re probably the last of the categories to evolve to consumers’ usage patterns and that’s our weakness and opportunity,” he added.

Topics