On-trade losing thousands of pounds in wine sales says new Harpers consumer report

By Richard Siddle

Published: 08 August, 2014

The UK on-trade is potentially losing out on thousands of pounds of trade a day because of its inability to sell wine effectively, according to a new exclusive report publsihed today by Harpers Wine & Spirit.

Young people want more wine promotions in the on-trade Young people want more wine promotions in the on-tradeHarpers new on-trade report shines the light on UK consumer drinking trends

It is the stand out conclusion from the latest consumer report produced by Harpers' new Data and Insights division.

After investigating the key consumer trends in the off-trade in an earlier report released in May, this new study turns the spotlight well and truly on the on-trade.

The Demystifying Restaurant & Bar Consumers report, written by respected drinks journalist, Rob Walker, is based on interviews with over 1,000 regular British drinkers, covering all age groups in each region of the country.

It is supported by further interviews with key players across the UK on-trade including suppliers, distributors, and major restaurant and bar groups.

The report's key findings show that the UK on-trade and its suppliers need to:

find more innovative ways to engage with drinkers

match their wine offer to the "occasions" when people are going out to eat and drink

understand the reasons why drinkers are turning to more engaging drinks categories like cider, cocktails and craft beer and away from wine.

If the UK on-trade fails to connect with consumers then it runs the risk of losing more share to supermarkets and specialist stores which continue to set the agenda in terms of pricing and demand.

The report shows how far on-trade consumers are now influenced by price and those looking for offers, discounts and deals as they do not feel engaged enough in the category to trade up.

More than a third of Brits now use vouchers when eating out and almost 20% only eat at high street restaurant chains if there is an attractive promotion.

Nearly half (47%) said there were too few deals on promotions on wine in the on-trade to attract them in to the category. This is particularly the case in the 18-24 year age group with 40% put off by the lack of wine promotions. Nearly a third (31%) think wine in the on-trade is too expensive.

But the report also shows many positive steps forward for the UK on-trade in what it can do with wine in particular. If, for example, it can find ways to truly connect with the average drinker they are open to spending more on wine more regularly.

Wine, for example, is the most popular on-trade drink for the average UK drinker, at 37%, compared to 33% for beer. But the spend on beer is two and a half times that on wine.

Women are the real driving force behind UK wine on-trade sales with 45% saying it is their preferred drink. But noticeably 9% said they now prefer to drink cider, and 14% beer.

Men are still predominantly drinking beer (52%), with 30% choosing wine and 8% cider.

Encouragingly more consumers said they would buy wine by the glass, but were currently put off because 21% felt the offer by the glass was not good enough.

If the UK on-trade fails to connect with consumers then it runs the risk of losing more share to supermarkets and specialist stores which continue to set the agenda in terms of pricing and demand.

The report looks at the growth in importance of both cider, flavoured drinks and craft beer and the potential threat they are to wine sales. Cider, for example, continues to grow at around 5% a year

Key national findings:

* 31% of British drinkers spend between £10 and £15 on a bottle of wine in the on-trade.

The on-trrade needs to better engage with consumers if it is maximise the potental for wine sales

* 44% of British wine drinkers spend less than £20 a month on still wine in the on-trade.

* 31% of Brits say wine in the on-trade is too expensive.

* Nearly half (47%) of wine drinkers say there are too few promotions on wine in restaurants and bars.

* 40% say they only drink one or two glasses in the on-trade in a typical week.

* National spending on beer is around two-and-a-half times higher than wine in the on-trade.

* 23% of wine drinkers normally order 'house' wine in a restaurant or bar

* On-trade wine volume in the UK has dropped more than 10% over the last five years.

* More than a third of Brits use vouchers when eating out and almost 20% only eat at High Street restaurant chains if there is an attractive promotion.

* Only 14% of British wine drinkers say they drink more wine in bars and restaurants than they do at home.

* 23% of wine drinkers say they plan to drink less wine over the year ahead but to spend a bit more by buying better quality brands. That share jumps to as high as 30% among 45-54 year olds, and is 25% among 25-34 year olds.

Regional splits

* Londoners are by far the biggest on-trade wine spenders. Almost a third expect to fork out between £15 and £20 on a bottle, and 14% spend more than £25. By contrast, in the West Midlands and Yorkshire/Humberside, less than 3% spend more than £25.

* In London, 18% spend more than £50 a week on wine, compared with less than 3% in the West Midlands and Wales.

* Over half (56%) of wine drinkers in the North East spend less than £20 a month on still wine in the on-trade.

* 24% of Londoners drink more wine in bars and restaurants than at home, compared with less than 10% in the East Midlands, the North East and Northern Ireland.

Grape trends

* Two thirds of people we interviewed could not name more than three varieties of grape -13% could name six or more.

* 61% of wine drinkers expect to switch regularly between grape varieties this year.

* A third of British wine drinkers say they can tell the difference between Sauvignon Blanc and Chardonnay.

* 52% of British wine drinkers say they know where Rioja is from, but that share drops to 27% among 18-24 year olds.

How to buy the report

Demystifying Restaurant & Bar Consumers: stragetic insight into the UK on-trade still wine market is produced by the Harpers Data & Insights division and is available to purchase through the William Reed shop or through Harpers.co.uk Insights section.

The reports costs £1,250 plus VAT and can be bought along with the Demystifying the Consumer: The UK off-trade report for a combined fee of £2,000 plus VAT. A saving of £500.

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