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Co-op's major wine revamp yields strong results

Published:  02 June, 2014

The Co-operative has seen sparkling wine, smaller serve bottles and Argentinian wine sales soar since it revamped its range in recent months.

The Co-operative has seen sparkling wine, smaller serve bottles and Argentinian wine sales soar since it revamped its range in recent months.

One of the first things head of wine trading Simon Cairns did after coming on board just over a year ago was to cut the number of wine skus from 444 to 345.

"There's been quite a clear-out of products," he added. It has focused its attention on maximising the two bays available to it in stores. "We don't want to lose breadth in the range, but we can't afford to have depth or duplicates." Part of the aim was also to make it easier for stores to display stock, by making all wines double facing - therefore getting a whole case on shelf at a time - and lessen inventory problems.

"The fixture is a lot less cluttered," Cairns said, and is arranged by price hierarchy from lowest on the bottom shelf to highest on top. It also tried to group countries together and blocks its Fairtrade and Truly Irresistible ranges side by side too.

The Co-operativeThe Co-operativeThe Co-operative has seen sales of sparkling wine, smaller serve bottles and Argentinian brands soar since it revamped its range.

Speaking exclusively to he said: "It's been interesting - there's been a  lot going on at the Co-operative itself," said Cairns, "but we've kept ourselves very busy and focused on what we can control and what we can improve in our area."

Own-brand wines  account for 40% of sales, compared to 27% for the rest of the market. "That's been a strength," Cairns said, "It's allowed us to bring together some reasonably eclectic wines but under a trusted umbrella," he added.

Sparkling wine has put in a stellar performance at the convenience retailer, with sales up 31% by value and 24% by volume in the year-to-date, with the bulk accounted for by Prosecco. The sparkling category has grown 17% by value to the end of April, according to Nielsen MAT figures, but Co-op is outpacing that at 27.8%. By volume the total market has grown by 9.9%, compared to 23.4% at Co-op. Cairns said offering chilled sparkling wine had boosted the category, but that consumers now also viewed sparkling wine as an "affordable treat".

Champagne has also seen growth of 16.9% by value and 8.4% by volume for the year to date, boosted by Co-op's decision to sell it in gift boxes after analysing its membership data. "We were seeing that customers were buying a bottle of Champagne with a gift bag and a card, so it was very much a gift opportunity - putting it into a gift box stimulated a strong rate of sale. It's still our biggest seller by a considerable way."

Its top-performing wines include 18.7cl bottles, which when given more shelf space have grown 53% by volume year-on-year. Argentina is the other "massive stand-out" performer, with sales up 54% by volume and value. "Argentina is starting to gain some serious momentum. It struggled a lot a few years ago with availability, and fluctuation in quality, but they're starting to resolve those issues."It's not just Malbec, but Syrah, Pinot Grigio and Tempranillo/Malbec blends." Cairns said there was increasing confidence from consumers in Argentinian wines, that he "can't see slowing down". Add to that the country's modern and "on-trend" labels, and the category has real stand-pout on shelf, Cairns maintained.

California has struggled, on the other hand, thanks mainly to pricing. But the US category could also learn from its craft beer counterparts, who have "captured younger buyers", according to Cairns. The wines need to do the same and become "more exciting", he added.

The group's average price is £5.62, compared to the market average of £5.56, which is right where Cairns expects it. "We want to get frequency of purchase, so we've got to be in line with what people expect to pay."

To find out more about the Co-operative's wine plans, read our in-depth Q&A with wine category trading manager Simon Cairns, out soon.