Jo Taylorson, head of marketing and product management at Kingsland Drinks
2019 and waking up to the decline in wine
2019 was the year when the wine industry collectively noted the decline in consumption and started to set the wheels in motion to counteract this negative trend.
Consumers are drinking less overall, and when they do drink, they are becoming more discerning in terms of their repertoire, which has had an effect on penetration in the wine category.
Despite fewer shoppers, and an ongoing battle to attract younger drinkers to the market, those who do continue to buy into the wine category are spending more, so the overall category is in value growth.
With this in mind, Kingsland Drinks looks at the conversation starters for 2020, examining the bigger picture for each and looking at how we can use these trends to leverage an upward incline in the wine category:
Low and no alcohol
Taylorson says: “The consumer trend towards drinking less means that low and no alcohol products are very much on our radar. We’re focused on finding the best quality products within the category, with various projects in the pipeline from zero alcohol to nine per cent.
“Zero alcohol wine is seeing strong growth, however this is from a small base and accounts for just 0.3 per cent and 1.4 per cent volume share for the still and sparkling categories, respectively. In still wines less than 1.2 per cent ABV, we’ve seen growth of 22 per cent, but again, from a very small base. If you look at sparkling in the same segment, there looks to be growth of 38 per cent in volume terms, but this is primarily by one product; Nosecco. Overall, there’s a very clear opportunity, but some caution is recommended.
“The bigger picture is that wine as a category needs to do a much better job when it comes to low and no alcohol. The BWS category as a whole is doing well due to beer brands such as Heineken and spirits like Seedlip, both of which have nailed their offerings, product quality and marketing – and wine needs to follow suit with products that look and taste fantastic to create the same interest and uptake.
“Currently, listings for “low and no” wine in the off-trade are largely from established and mainstream brands, but there is room for a more premium offering that truly delivers on taste if the category is to take advantage of this opportunity.
“Out of home drinking and the on-trade presents another opportunity when it comes to wine. At home, and at social occasions such as parties and barbecues, people are happy to drink premium soft drinks and make their own sparklers out of elderflower pressé, soft drinks and tonic waters, but in pubs and bars, people want to look like they are joining in. This is where excellent quality low alcohol or no alcohol wines could have a real opportunity.”
Taylorson commented: “The vegan industry has excelled in creating noise and raising awareness of animal welfare issues, but in real terms, people who call themselves 100 per cent vegan account for just three per cent of the nation.
“The real opportunity here is flexitarianism. The figures vary from 14 per cent to 91 per cent but in any case, it’s clear that a growing number of people consider themselves flexitarians and have made decisions to eat less meat, or choose vegan options on certain occasions. This is backed up by recent Kantar research which found that an incredible 92 per cent of plant-based meals are eaten by non-vegans.
“The talking point in 2020 for wine and the wider drinks industry will be defining what vegan actually means in terms of products, and so as the industry works through this over time, we can expect a period of transition as everyone seeks to evolve.
“We also expect that while the vegan population will continue to drive conversation around this, the conversation will expand to include retailers, producer and beyond, following the likes of M&S which has pledged to make its entire wine range vegan by 2022.
“From a Kingsland Drinks perspective, the move to more vegan friendly liquids is a fantastic opportunity for the bulk wine category. At present, around 50 per cent of Kingsland’s bulk wines are suitable for vegans, meaning that the liquid is in line with vegan legislation, and doesn’t include any animal products such as eggs, milk or isinglass.
“As the landscape changes and expectations intensify, we need to be mindful of what is feasible in a short space of time and balance this against the true size of the opportunity. After all, winemakers are, quite rightly, reluctant to move away from practices that work to produce consistent quality. Wine is an expensive liquid to produce, so a lot rests on getting it right.”
Sustainability – spotlight on bulk wine
Taylorson commented: “Shipping bulk wine and liquid, especially from the new world, is much more sustainable and eco-friendlier than shipping in bottle.
“Kingsland’s strength and dominant volume for bulk shipment has typically been from the New World, primarily because this is where the most benefits to bulk shipping are realised from an economical and environmental perspective. Our largest volume sources are New Zealand, Australia, Chile, South Africa and the USA.
“We’d argue that there’s a job to be done around buzzwords and a focus sustainability over the idea of eco-friendly owing to the virtues of each and their impact on the long-term outlook.
“The spotlight on plastic packaging has seen huge changes in the way that retailers and suppliers operate, pack and market their products. However, if the entire industry reacts at the same time, and uses cardboard where plastic was used before, this could have a huge impact upon forestry, sourcing and how sustainable this really is in terms of carbon footprint and in turn, climate change.
“From a consumer perspective, younger people – especially Gen Z’s and millennials – are completely tuned into this and it’s affecting purchasing choices across all categories, not just drinks. They’re looking at retailers and suppliers to provide well thought out, long-term solutions rather than short-term or knee-jerk reactions.”
Bulk wines – the perception of quality
Taylorson comments: “Bulk importing is integral to Kingsland Drinks as a company and our key customers. We have seen a reduction in transport costs and CO2 emissions, along with other benefits such as improved shelf-life and fewer breakages compared to wine imported in bottles.
“As a result, it makes commercial and environmental sense for everyone to favour wine shipped in bulk, versus packed at source, particularly for high volume lines, but it can carry the perception of being lower quality, despite this not being the case and consumers showing no real preference as to where wine is bottled.
In 2020, we expect to see the conversation around wine shipped in bulk versus packed at source open up as the industry becomes more aware of its merits and the parity in quality.
“We’re working behind the scenes across the industry to tackle this misperception by demonstrating the sustainability and eco credentials of UK packed wines up to £15, with a view to show industry leaders, writers and sommeliers that the quality of wine is just as good as packed at source products.
“We ship wines and spirits at a wide range of price points, from entry level right up to premium. We’re able to do so because our Irlam site in Manchester achieves incredibly high accreditations on a technical level, so we can be confident that any liquid coming from us will be of a very high standard, while delivering a smaller carbon footprint.
“Our message is clear; bulk shipment does not harm good wine, and packing in the UK is as good as anywhere in the world. Additionally, the CO2 reduction of 15 per cent for UK-packed wine is not insignificant in helping reduce carbon our footprint.”
Taylorson commented: “The big news here is that Prosecco is in decline after years of relentless growth and “other” sparklers are on the up.
The Vuestro Spanish Sparkler, a Kingsland Drinks brand which is sold by Co-op, is a proof point of the shift. It’s a pleasant, tasty and versatile sparkler which has seen excellent growth in 2019. In line with the category, it’s one to watch as we predict continued growth for sparkling wines outside of Prosecco as consumers become more adventurous within the sector and try new varieties.
“We’ve also got our eye on Crémant de Loire. Historically seen as a seasonal festive purchase, we predict it will gain popularity as the “insider’s choice” as it becomes even more known as a French specialty made in the Champagne method at an excellent price point.
Kingsland Drinks – a snapshot
Kingsland Drinks is a premier independent UK supplier of wines and spirits specialising in providing a complete category solution. Based in Irlam, Manchester, the company supplies Kingsland brand, producer brand, exclusive and own label brands to major retailers including Co-op, Tesco, M&S, Waitrose and Ocado.
The firm has been producing wines and spirits on site for over 50 years; Kingsland brands such as Steakmaker and Willow and Stone feature in its portfolio alongside wines from over 100 suppliers covering 15 countries from Andrew Peace Wines, Australia, Baro-n De Ley, Spain and Yali, Chile.
The first UK company to import wine in bulk, Kingsland now produce 130 million litres per year, supplying approximately 10 per cent of all UK wine.