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Retailers and suppliers yet to crack low-alcohol wine, says Harpers report

Published:  09 July, 2014

Try as it might, the UK wine trade has yet to crack the low-alcohol wine category, according to a new Harpers report published today.

Despite increased shelf space and apparent consumer demand, sales are disappointing. Harpers' new Low-Alcohol Wine report, written by acclaimed drinks journalist, Nigel Huddleston, looks at how the trade can grow the category in the future.

The industry appears to be at a crossroads when it comes to low-alcohol wines. The desire, motivation and need are all there to produce wines that not only meet all the health requirements of the drinks industry, but appear to be in step with consumer demand for healthier, lighter drinks products. Never mind the considerable tax and cost benefits associated with producing wines at less than 5.5% abv.

Yet despite all the efforts of major suppliers and retailers alike, the category is still only worth 0.7% of the total value of the UK off-trade wine market (Nielsen year to December 7, 2013).

But this is a category that is not going away.The same health, political, consumer and tax reasons for the considerable interest in lighter style alcohol products will be as relevant in five or 10 years' time as they are now. Today Harpers publishes its overview and insights of the low-alcohol wine market. It is designed to allow the trade to step back and assess exactly how this potentially burgeoning category is likely to mature and develop in the months and years to come.

This is the latest category report to be published as part of Harpers' commitment to offer exclusive insights and research into key areas of the drinks industry. The report is available free as part of the Harpers subscription package, but non-subscribers are also able to order it separately for £99 plus VAT.

The Low-Alcohol Wine report looks in detail at the reasons why the category has become so important to retailers and suppliers alike, and why it enjoyed strong initial success.

But, crucially, it goes on to explore the challenges it now faces into the future.

Harpers' new Low-Alcohol Wine report looks at consumer trends driving lower alcohol and lighter style wine

? The contributing factors for consumers looking to lower alcohol wines or not

? The 5.5% abv tax break and how duty levels affect sales of wine across different price points

? How suppliers and producers are addressing the quality issue and perceptions around low-alcohol wine

? How suppliers, producers and merchants view low-alcohol wine. Does the category make commercial sense to the industry?

? Industry data including latest Nielsen and Wine Intelligence research

? Catalysts for growth: which factors are going to get the low-alcohol category to grow to the next stage?

The report comes in the week that leading low-alcohol player, Brand Phoenix, is cutting back on its lower-alcohol First Cape Wine range as it concedes it is not easy to make wines with the "mouth feel" that consumers are used to.

Julian Dyer, general manager for UK and Europe at Australian Vintage, is one of many senior trade figures quoted at length in the report. He discusses the ways in which his company is trying to stretch the low-alcohol category out of products below 5.5% abv. By way of example, he cites how Australian Vintage's Vinni Moscato brand is now more targeted at cider drinkers than the traditional wine consumer.

Noticeably Dyer claims that if another tax band for wine was introduced at around 10% or 10.5% abv that "within two or three years at least a third of all wine on supermarket shelves would be at that level". He added: "As an industry we would be able to deliver quality in a way that remains true to wine.

You can access the Harpers Low-alcohol Wine report for free as a Harpers subscriber here. Non-subscribers can purchase the report for £99 plus VAT through the Harpers shop section hosted on the William Reed Business Media site. Full details to follow.

Click here to buy the report.