A major player in the UK wine market recently released a 2018 UK wine report, detailing insights into the nation's wine drinkers and what it sees as opportunities for developing the market.
Wine volume sales are down, but the value of spending is up. The report attributes this 'premiumisation' trend (in which quality is increasingly prized over quantity) to more health conscious consumers. However, the majority of off-trade wine is still sold for under £6 per bottle, and the largest 'segment' of wine drinkers are identified as 'newbies': those who 'know very little about wine and want to be guided when they shop'.
According to the report, 'the challenge is clearly to encourage Newbies’ embryonic interest in wine and develop them into more confident, regular wine consumers'. This is likely to be viewed by some as in conflict to public health goals around alcohol. Wine now makes up a larger than ever proportion of alcohol consumption as the UK's most popular alcoholic drink and is regularly consumed by 60% of adults. Indeed the 'democratisation' of wine, particularly amongst women, has been the key driver for rising consumption in the decades leading to peak booze in around 2004. Whilst significant declines in consumption by younger people has since pushed overall consumption down, there has been increasing concern over older adults drinking more and falls in alcohol-related hospital admissions are yet to materialise.
Indeed the wine report acknowledges many of these changes, describing a 'gradual social shift that sees consumers growing increasingly mindful of their alcohol consumption' with 'a general trend towards moderation in both frequency and quantity, driven by concerns over health, cost and personal image'. A fifth of UK adults are identified as teetotal, rising by 0.2% a year, according to the report, which highlights the importance of the growth in low and no alcohol wine markets alongside the potential for sales of new lower alcohol products or smaller bottle sizes. Tesco have since launched more smaller sized wine bottles with other supermarkets expected to follow suit, reported in The Independent as 'inspired by health conscious millennials'.
Wider factors influencing consumer behaviours are also mentioned, with references to the significance of price and value for many consumers. The report notes Scotland's minimum unit pricing, which came into effect this month, and the continued financial pressure on most households. Tax on a 75cl bottle of wine is now £2.16, and the report highlights a new high for the average price of a bottle of wine at £5.50 - though this is mainly due to the impact of Brexit. However, it remains the case that few outside the UK are likely to see it as a nation of wine aficionados, with Britain previously described as 'a great market if you want to get rid of bin ends' or a market dominated by 'cheap, crappy wine'.
Eight types of wine drinker - shaping demand?
Based on a survey of 8,000 people, the report provides details eight 'segments' of wine drinkers. The largest segment - 'Newbies' – who make up nearly a quarter of all wine drinkers (though their net spend is amongst the lowest in market value) – are 77% female, mostly younger, and prefer white wine. In contrast, 'Experts' make up just 4% of wine drinkers but are one of the 'most valuable' segments, accounting for 23% of the off-trade's value.
The report suggests the goal should be to seek to convert Newbies into other segments such as 'the more high-spending Strong Prospects, Routiners, Engaged Explorers, Confident Enthusiasts and Experts'.
'Routiners' are a category, from a health perspective, whose behaviours may be of particular interest. For them, 'wine is a staple', though it is not regarded 'with any great reverence' and they target low-cost products. For off-trade consumers, the report suggests 'an enormous opportunity' exists through the ‘food for tonight’ shopping mission, through which 'shoppers can be persuaded to buy a bottle of wine as they choose their ingredients for the evening meal'. It states 'by placing favourite brands by the ready meals and promoting food matching, there is a good opportunity to catch shoppers with tonight’s meal and relaxation in mind'.
Drinking motives & nudges?
Seeking to 'pinpoint the most effective sales strategy for each wine-drinking occasion', the report defines eight drinking 'occasions, motivations and missions'. For those in the 'drink at the end of the day' group, relaxation and winding down are key motives, with the hot drinks category identified as competition. To target this group, the report suggests retailers should 'position wines near ready meals' and display ‘signage to catch shoppers just before they enter the store.' For other occasions, 'top tips' include to 'promote deals at front of store' and 'on aisle ends', whilst when considering the role of wine for gift purchasing, 'prestigious and trusted recommendations count for a lot, but promotions will still sway the final choice'.
This close attention to product positioning, marketing and pricing will come as no surprise to those familiar with alcohol policy or consumer behaviour. University of Cambridge research found end of aisle displays increased sales of wine by 34%, whilst Alcohol Concern have previously called for supermarkets and off-licenses to confine displays of alcohol to a single area of their premises, claiming the widespread promotion of alcohol helped fuel a harmful drinking culture. During the former Responsibility Deal, Asda pulled its pledge to stop promoting alcohol in its foyers after other supermarkets had not followed suit, whilst labelling pledges were also a subject of controversy.
Most health advocates favour policy levers to both limit the wider influences on consumption and individual level interventions to help at-risk drinkers recognise and change their drinking. Indeed many examples of 'segmentation' have been seen in the alcohol field, including former national 'social marketing' programmes built on the principles of understanding consumer insights as developed by business marketeers. However in 2014 Public Health England (PHE) stated alcohol health risk communications were a low priority due to budget limitations and recognition of the limited evidence base for alcohol campaigns in changing behaviour. Health-risk communication though has been a much higher profile topic since the revision to the recommended guidelines, with further calls for action on labelling and more nuanced messaging.
Recent segmentation reports have included the industry-funded Charity Drinkaware's Monitor reports and campaigns, which have recognised home drinking as accounting for the most common drinking situations amongst all ages, broadly consistent with Sheffield University research on drinking cultures. Monitor highlights the main self-reported motivations for drinking as social reasons and mood enhancement (having fun and liking the feeling), but with coping reasons such as de-stressing or feeling better also important.
Where next for 'wine nation'?
The wine report states 'the job is to democratise wine, helping young consumers to find what they like quickly and easily and to ease them towards choosing wine more frequently as their knowledge and interest grow'. The extent to which doing so may impact on public health goals on alcohol harms raises some interesting questions. Certainly, wine looks set to continue to be a major part of the UK's drinking culture, which is indeed made up by many varied and shifting groups of 'moderate' and 'heavy' drinkers. The University of Sheffield has recently announced a new study into changes in the British drinking culture using market research data, likely to reveal more into how wine was 'democratised', how the possible impacts of Brexit play out, and indeed the potential implications for the UK's health.
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