Engaging younger drinkers in the wine market could prove key for the future success of the industry, new figures released by Mintel reveal.
The research company’s new consumer research reveals after years of impressive growth, the total UK wine market saw a 2% decline in volume sales in 2008 the first negative growth in years. In addition, the value of the market also dropped 1% year-on-year in 2008 to £9.6bn.
The effects of concern over binge drinking, a trend towards healthy lifestyles and heavy Government taxation have all had an impact on the market, says Mintel.
In 2008 duty on wine increased by 17%, meaning the British are now among the most heavily taxed wine drinkers in Europe. Combined with rising production and manufacturing costs and the strength of the Euro against Sterling, wine manufacturers are facing added pressure, it says.
As a result, Mintel forecasts the wine market will not recover in volume terms until 2011, but will increase by 4% up to 2014 to reach 1.18bn litres.
According to Mintel, it is crucial the wine industry engages more with younger consumers – 25 to 34-year olds in particular – to gain market share and loyalty for future consumption.
Wine drinking amongst this age group has declined more than any other over the past five years, it says.
Jonny Forsyth, senior drinks analyst at Mintel, said: “In contrast to the majority of alcoholic drinks, people gravitate towards wine as they become older. This means usage starts to take-off amongst the over 35s, with people continuing into their retirement. The majority of drinks, such as lager and vodka, see an opposite trend with people starting young but cutting back as they get older.”
The research shows the 25 to 34-year old age group is most likely to be influenced by what wines they have drunk before when purchasing wine. Mintel says this suggests they do not have the knowledge or confidence to experiment further. This group is also more likely to find the choice in wines confusing.
“Once people join the ‘wine club’ they tend to stay in it for life,” said Forsyth. “The problem for industry is getting people to join earlier. Despite being big drinkers generally, 25-34- year olds are below average drinkers of wine. With wine seeing its first decline in volume and value for some time in 2008, it is increasingly important to target younger consumers effectively, and 25-34s are forecast to see double digit growth over the next five years."
Despite the overall downturn in wine, the research reveals Rosé has bucked the trend and has recorded strong growth, increasing its market value from just £110m in 2004 to £527m in 2008. Rose now accounts for 6% of the wine market in value terms and Mintel forecasts it will continue to grow over the next five years, reaching £742m by 2014.