On-Premise Opportunity

Each year, WBS conducts research into the On-Premise in the UK and other markets.

This year, as you would expect, the price of wine on UK wine lists has dropped. The average listed price for a bottle of wine is now below £40, down around 10% on a year ago.

There are, however, some huge opportunities in this, the world’s largest On-Premise market. Identifying them is all about segmenting the marketing, looking at who’s succeeding and why.

If we look at Beverage Wine (the wine used for conference functions and by the glass pouring in lower end restaurants etc), Chile has made huge inroads there, mainly at the expense of wines branded South Eastern Australia. In doing so however, Chile has all but given up on trying to position itself as a premium producer and locked itself in as the worlds lowest price supplier, a position it will struggle to maintain if exchange rates move against it.

For the Brand Wines, this year really has been a disaster. The public listed companies have virtually no listings of their major brands in the UK On-Trade reflecting both a will by On-Premise accounts to steer away from supermarket brands and moves by listed companies to move away from doing business with the On-Premise sector. The accountants concerned clearly do not understand the critical nature of On-Premise brand building.

For smart marketers selling to the Aspirational wine consumer, this year has been a bit of a bonanza. Some of you may have seen this press release in TizWine Cloudy Bay the UK’s most listed wine brand On-Premise.

Second placed Alpha Zeta also has a Kiwi connection with winemaker Matt Thompson helping importer Liberty to make Italian wines under an easy to remember brand name. A number of these distributor led projects did well in 2010.

Were the New World (Australia and South Africa in particular) are missing out is in catching the trends that are driving sales to this market segment. Rose has increased its share of listings significantly in the last 12 months as has Pinot Grigio. Prosecco has also become hugely popular. As you would expect, Italy has been the biggest here. Most medium sized Australian and South African wine producers dabble with these styles but are not focusing on creating brands and wine styles for this consumer as a core business strategy.

For the Wine Appreciator segment, many you will have read this story in Daily Wine News Regional Heroes campaign and First Families initiatives get traction in the UK on-premise. For people that want to succeed in any market through promoting their commitment and passion for wine, this is clearly a story that has a willing audience.

For the collector Connoisseur, drinking good wine in a UK restaurant is not only a very expensive way to do it, it’s becoming practically impossible as high priced wines disappear from lists. Listings of wines costing more than £100 per bottle per bottle decreased by over 20% during the last year. Bordeaux First Growth wines on UK wine lists at stratospheric prices are close to being a thing of the past.

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