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?Growth of private label wines overtakes brands in multiples

Published:  04 April, 2014

Growth of private label wines is outpacing branded wines, and now accounts for over one-third of wines on offer across the major retailers.

Exclusive figures from Kantar Worldpanel show that private label wines have grown 12% by value in the past year, accounting for 35.5% of still wine sales. Kantar attributes the rapid growth to New World wines, which are growing at 20% year on year by value, but only account for 24.7% of sales.

Kantar Worldpanel uses data from 30,000 demographically representative individuals across Great Britain.  

Data obtained from Nielsen, which tracks retailer sales, shows the decline of branded wines is speeding up - going from -1.9% to -4.2% by MAT volume to March 2014 versus the same period last year. But own label is bucking that trend, growing at 1.4% in the same period.

Nielsen's Natasha Kendall said: "Italy and South Africa are driving the growth of private label as retailers push trendy Pinot Grigio and continue to benefit from the exchange rate for South Africa."

She added that cost-conscious consumers plump for own label, whose average price is £4.96 versus a branded wine average of £5.37.

One of the major success stories for private label is sparkling wine, which accounts for 45% of volume sales, while Grandes Marques Champagne is the only segment showing growth in the other direction, she said.

The Co-operative has recently shaken up its wine range and upped the own-label to branded wine ratio. Simon Cairns, category trading manager for wine, told Harpers: "Own brand currently accounts for 39.7% of our total wine sales and we have an aspiration to reach a share of around 46%."

Sainsbury's is also forging ahead - its own-brand still wine grew 18% in the past year, with Champagne and sparkling up 12%. Other formats, including bag-in-box and 18.7cl, also grew 23%.

In the past year alone it has launched over 80 own-brand SKUs in wine, now totalling 267 SKUs. Andy Phelps, head of BWS, said: "We know that when customers are hard pressed, they are more open to trialling own label over branded goods."

What the brands say

Dan Townsend, general manager for the UK, Ireland and western Europe for Treasury Wine Estates, told Harpers that brands offer reassurance and consumer connection, "be that through heritage, history and provenance with a brand like Penfolds, or through marketing investment, like 2013's digital 'Sunshine' campaign with Lindeman's or the Sky Sports Ashes partnership last year with Wolf Blass".

Quoting Nielsen MAT to March 1, he said Lindeman's has grown 22% by volume in the past quarter and 18% year on year, while Wolf Blass has shown 15% growth over the past year - with a 31% increase in the past quarter. The value return is strong too - with Lindeman's up 18% year on year and Wolf Blass up by 16%.

"Brands bring something more to the table than just packaging and price. A brand should be greater than the sum of its parts."

Simon Doyle, general manager of Concha y Toro (UK), said the company hasn't seen its shelf space eroded, and has several brands in "very positive growth". Casillero del Diablo has grown at 16.8% year on year to March 2014, versus growth for the Chilean category of 1.9%, while Cono Sur is up 42.2% year on year.

"In many cases own label has a complementary role to play with brands - inviting the consumer into a particular category from which point they can branch out," said Doyle.

More and more it's about retailers "challenging suppliers to be clear about the role their products play in the wine portfolio and as a category partner being aligned with the retailer's strategic aims", he added.

Meanwhile, Robin Copestick, managing director of Copestick Murray, owner of the I Heart brand, which has just hit 1 million case sales in the UK, said brands are having to work harder to "justify their shelf space".

He echoed Townsend's sentiment about connecting with consumers, which it has tried to do through sponsoring music festivals. Being nimble enough to produce sub-brands to tie in with major events such as I heart GB, I Heart You and I Heart Brasil special editions has helped appeal to consumers and keep the brand stay "fresh and vibrant", he added.