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Consumer confidence rises despite drop in wine and spirits sales says WSTA

Published:  16 September, 2014

There are further signs that the economy is recovering and consumer confidence is returning despite a fall in wine and spirits sales, according to the latest market report issued by the Wine & Spirit Trade Association.

The report is the first to be issued since the Chancellor scrapped the duty escalator in the 2014 budget and the initial signs are that it will take time for the real benefits of that to be seen in the overall wine and spirits industry.

There was better news for the industry's desire to get shoppers to trade up to more premium products with sales for both Champagne and sparkling wine both in strong growth over the last 12 weeks that the report is based on.

The WSTA's research found that sparkling wine was "once again the standout category performer" over the last quarter, as it was able to trade off a good summer to see an uplift in sales of 24% in the off-trade and 20% in the on-trade.

Champagne also enjoyed a strong summer with sales up 9% in the on-trade and 6% in the off-trade. The WSTA said this shows the 'premiumisation' trend amongst consumers is continuing.

But the overall picture for wine and spirits is less encouraging with a drop in sales across the two sectors.

Miles Beale, the WSTA's chief executive, said of the report:  "Despite disappointing volume growth, the trend towards higher value products in some categories and the growth in premium products like Champagne is an encouraging sign."

He added: "While we are starting to see some benefit from the scrapping of the alcohol duty escalator, it will take time and require sustained support to reverse the impact of six years of duty hikes on the wine and spirit industry, especially on pubs, bars and restaurants. Given the growing importance of wine and spirits to the on trade, further duty relief for all products would provide a significant boost for struggling pubs."

The report found that for the off-trade:

* volume and value growth was up 1% over the quarter, but this was down to the impressive rise in sparkling and Champagne sales.

* rum was the stand out spirits performer up 8%, driven by sales of flavoured/spiced rum which went up 34% over the summer.

* beer sales were up 3% helped by the World Cup in Brazil and duty cut.

* within wine Argentina performed well with a 26% over the last 12 months, while South Africa was the only other top 10 wine country to increase yearly sales, up by 5%.   

* Overall sales fell by 3% in the last 12 months, and despite a good summer the last quarter was flat with volume sales of beer, wine and spirits all down over the short and long term.

* But value was up by 2% over the same period.

* Gin sales are up 5% over the year and 10% in the latest 12 weeks.


Consumer trends:

* WSTA research found that 31% had drunk red wine at home in the last four weeks and 30% had drunk white wine, the two most popular drink types.

* Pinot Grigio, Merlot and Sauvignon Blanc were consumers' top three wine varietals.

* Vodka, gin and whisky/whiskey were the three most popular spirits types.     

The WSTA's market report is compiled from figures provided by Nielsen, CGA Strategy, YouGov and its own WSTA analysis.

The WSTA report also includes for the first time consumer research their favourite wine and spirits varietals to track changes in consumer preferences.

  • If you are interested in more consumer data and research on the on and off-trades then you can buy Harpers specially commissioned Demystifying the Consumer reports based on exclusive interviews with over 1,000 consumers.