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The Big Picture – Marlborough wines in the UK

04 Nov

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Despite all the challenges, the UK is still a very important market for New Zealand and especially Marlborough wines. It holds a reputation as one of the most sophisticated and attractive wine markets in the world and is a hub where many wine trends are pioneered and where both small and large producers can be commercially successful. Despite export market share dropping from first to third place (after Australia and USA), the UK is still worth NZ$318.6 million so it is important not to lose sight of this market.

On one hand, New Zealand proudly shares the premium category with France with average price per bottle growing by 11% in the past year to £7.26. However, the record 2014 harvest (even higher than the oversupplied 2008 vintage) will undoubtedly bring many challenges in order to remain this quality driven growth. The biggest challenge being the enormous volume of low end bulk Sauvignon Blanc flooding the UK market, labelled under mysterious own labels and potentially devaluing the brand Marlborough SB.

The good news is that there is currently a real interest and enthusiasm in wine (and food) in the UK concentrated particularly in London. The explosion of wine bars such as Vinoteca, 28-50, The Remedy, Sager & Wilde is visible proof. On-trade offers customers an opportunity to indulge in a better choice of fine wines while creating a deeper bond with consumers and building their loyalty, lacking in other sectors.   The New Zealand Cellar set up by Melanie Brown encourages wine and food enthusiasts to experience the wide varieties and styles that New Zealand offers by promoting focussed wine talks and dinners.

The wine scene has evolved a lot since my first taste of wine in 2006 while working as an Assistant Manager at Oddbins’ fine wine branch in London. Shops like The Sampler, Bottle Apostle, Vagabond Wines and Hedonism Wines created shopping spaces where people want to be. Using Enomatic machines people can now sample wines before their purchase. By creating relaxing areas with beautiful displays, customers can socialise and be inspired to drink better wines. The most successful retailers don’t just sell wine but offer an experience.

E-commerce has now also become a profitable new route to market. The UK online wine market is worth £800 million and accounts for 11% of total sales with 25% of UK wine drinkers now shopping online. Swig Wines, Naked Wines, Virgin Wines and Direct Wines are just some of the most successful online businesses that offer convenience, personal customer service and an extensive and exciting wine choice.

However, selling wine profitably in the UK is still very much a challenge. Fluctuating exchange rates and the rise of wine duty have pushed prices up and put a strain on consumers’ spending. More than 70% of all wines are sold through supermarkets thanks to on-going promotional activities. Shelves are filled with low priced wine driven by vast competitions amongst the key brands offering miniscule margins for producers and agents and dire selection and no service to consumers.

Directly engaging with consumers through social media has become a fantastic marketing tool especially for wineries that are based many miles from their target market. Being a keen blogger, Facebook and Twitter user myself, I have appreciated the ease with which I can interact instantly with producers from around the world. New World producers such as those from New Zealand and Australia have proved to be natural communicators reflecting their understanding of social media and its value in engaging with consumers and wine trade.

New Zealand wines have successfully penetrated all sectors of the UK market making it accessible to a wide audience, with Marlborough’s Sauvignon Blanc reputation leading the way. Despite its small yet still growing production (producing less than 1% of the world’s crop) it has grown in importance by focusing on value rather than volume. The World Atlas of Wine dedicated just one page to New Zealand in 1985 for its third edition, but by the time of its latest edition, eight full pages were devoted to the country.

Despite its relatively short history in winegrowing and winemaking, and possibly as a result, many producers are in touch with today’s consumer and offer easy to understand wines with great potential. Most recently, Pernod Ricard has cleverly tapped into the latest UK trend in low alcohol wines. Based on their consumer research they launched Brancott Estate Flight style, premium low alcohol wine (RRP £10.49).

Observing UK supermarket shelves, one may jump to the conclusion that the pungent Sauvignon Blanc is Marlborough’s one trick pony. Pony that may be sniffed at by some but the fact that its demand is growing shows its continued importance. Tesco offers 50 New Zealand wines, out of which 40 are from Marlborough and 37 are Sauvignon Blancs. But look further and you will discover pockets of diversity. From rising potential of Marlborough Pinot Noir to aromatic Pinot Gris and Riesling from Awatere Valley. UK consumers can now choose from a number of single vineyard SBs (Ara, Villa Maria), premium oak aged SBs (Cloudy Bay, Dog Point, Jackson Estate), sparkling SBs and organic/biodynamic wines (Seresin Estate, Walnut Block).

All in all, the future for New Zealand wines in the UK is bright. Marlborough, in particular, offers distinctively bright fruit flavours and trademark zestiness which is sought after by the modern UK consumer. But it also manages to attract more discerning wine enthusiasts with its diversity, innovation and premium lead exports and its producers’ willingness to listen to their consumers.

 
1 Comment

Posted by on November 4, 2014 in New Zealand

 

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One response to “The Big Picture – Marlborough wines in the UK

  1. timmilford

    November 4, 2014 at 1:53 pm

    I think that Malborough SB is both a blessing and a curse for NZ. I’m hoping that they move away from the over-ripe style to something with a bit more finesse and promote other varietals a touch more.

     

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