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Sales Surge Likely - Once Stock Is Secured

Published on Jun 5 2020 5:50 AM in Drinks tagged: Featured Post / Wine / Dunnes Stores / O'Briens

Sales Surge Likely - Once Stock Is Secured

Given the current disruption to the supply chain, the surge in wine sales across retailers in recent weeks, and the collapse of on trade sales, what wines can we expect to see on our shelves for summer 2020? Kevin Ecock reports

n a few fortunate cases, the surge in wine sales over the past number of weeks has helped producers to mitigate the effects of a collapse in their on-trade sales.

In many others it has not. To exacerbate this, trade has not been affected evenly across the globe. A good example of how this has impacted the wine trade is that, just as northern hemisphere retailers were looking to restock, countries such as South Africa and Chile closed off exports.

Marius Kotze of Leopard’s Leap and La Motte in South Africa (Classic Drinks) tells us that: “We cannot sell in any channel in the local market and we are not allowed to export at this stage. We hope government can give us relief after the 21 days to at least export. The harvest is in the cellar, so they allowed us to make the wines, but we cannot sell them.”

Stock Levels

Terry Pennington, commercial director at Gilbeys/Bibendum (Santa Rita Estates in Chile) tells a similar story - his difficulty was getting stock out of Chile rather than generating sales in Ireland.

One major supermarket buyer told me recently that his job was no longer a buying role as he spent all his time now trying to find wines that were available to ship.

Commenting on how this scenario is likely to impact drink sales in summer 2020, Gill O’Meara of BWG told Checkout that, “At the moment, our main plan is trying to keep stocks in! We have seen a massive increase in demand for product, with foreign and domestic suppliers all having supply challenges.

We foresee a lot of availability issues with stocks in a couple of months - all South African ports are currently closed, we are expecting our winery in Chile to potentially close in a couple of weeks, some French suppliers closed recently without fulfilling orders in the system and are only just back open with consolidated collection points for production, plus we are expecting glass suppliers to close, which will further impact on the supply chain. Any plans we currently have are being changed by the minute, depending on stock availability, so it is really difficult to plan.”

The ‘New Normal’

Taking these difficulties into account, what wines can we expect to see on our shelves for summer 2020? Before supply became a difficulty, Wine Intelligence released its publication, Ireland Wine Landscapes 2020.

The preamble tells us that the report, ‘reveals several wine consumer shifts in the Irish wine market, revealing an evolving wine consumer who is increasingly involved in and confident about the category, along with having more established wine preferences.’

At about the same time, the inaugural Vinexpo international wine fair was held in Paris. Reports from the fair indicate that it was a success and that a lot of good business was conducted.

Doing good business at an international wine fair early in the year tends to put structure into the wine calendar. This, in turn, is based on market insight, trends and fashion, as well as a successful trading history.

Taking each of these into account, we have a good idea of what was planned for summer 2020. Within reason, and taking current constraints

into consideration, this is what the trade will continue to attempt to deliver. Whether it can, is another question altogether. For instance, South Africa relaxed export restrictions in mid-April, but then there was a severe shortage of space on board the ships that were available.

When China re- opened its market to wine imports in mid-April, the wine trade was pleasantly surprised to find a renewed demand for high end products.

The suggestion is that those capable of purchasing premium wines were not affected by the crisis. It will, however, be a completely different situation for the majority. David Gleave, managing director of Liberty Wines, recently predicted in a Harper’s Bazaar UK column that, “...the ‘normal’ of the UK wine scene prior to coronavirus (Covid-19) will not be the ‘normal’ that greets us when the current necessary restrictions are
relaxed. We will be stepping into a brutal recession”.

Great expectations

We now know that restaurants, followed by pubs, will be among the last businesses to re-open post-Covid. Within this scenario, retailers will attempt to fill the void left behind by an absent on-trade and beat a recession by sourcing good quality, well priced wines of the type that consumers expect to see for summer 2020. But what do they expect to see, and is this what will be in the pipeline?

Coming up Rosé

The essential point to take from the Wine Intelligence report is that wine drinking in Ireland has changed over the past few years. For instance, most retailers have recognised the need to stock a selection of Rosé wines when, until quite recently, just a bottle or two was enough.

O’Briens Wines make a feature of this and have gone so far as to work with the Tandem winery in Navarra to make their own very well reviewed ‘Rós’ label.

Last summer, SuperValu surprised the market by featuring a half-price sale of Whispering Angel - the world’s ‘most sought after’ premium Rosé label. Dunnes Stores have introduced the excellent ‘Solas Rosé’ from Laurent Miquel in the Languedoc to its top class range.

Sparkling Success

There has been a distinct shift in Ireland’s approach to sparkling wine. This is entirely due to the fabulous success that Prosecco has enjoyed. Before frizzante styles (excise duty half that of fully sparkling styles) became popular, Cava was the dropdown sparkling wine from Champagne.

Both Freixenet and Codorniu were visibly important brands. While it is just not possible to get a ‘frizzante Cava,’ consumers are now accustomed to buying into the sparkling category which, in turn, has made it possible to sell styles other than Prosecco.

Aldi has consistently promoted the truly interesting Philippe Michel Crémant de Jura, while brand leaders McGuigan entered the market with a McGuigan Extra Dry Frizzante. Prosecco, of course, has not gone away and this summer we will continue to enjoy a wide selection in all retailers.

Spanish Sellers

Spain has been consistently raising its wine profile across Ireland in recent years. Some of this is to do with good marketing on behalf of Spain, but there has also been a strong showing of well-priced quality Spanish wines.

Brands such as Paco and Lola Albariño and Martin Codax are no longer fringe white wines. Coupled with this is the consistent success of the wines of Rioja, a region that counts Ireland among its top ten destinations in the world.

Of course, behind Ireland’s success with Spain is its openness to try new styles and regions. Thus, Aldi might bring us the very interesting ‘Toro Loco’ from Valencia, but this summer be equally happy to sit it beside the ‘Mad from Mad Dry Tokaji’ from Hungary and the ‘Forza Della Natura Unfiltered Sicilian Catarratto’.

Many argue that this acceptance of new styles was forged by our exposure to New World wines from an early stage in our relatively short history as a wine drinking nation.

The brand leader in Ireland, Santa Rita has helped this by its consistent introduction and championing of new varietals. How else can our experts explain the reasons behind the phenomenal success of the Laurent Miquel Albariño in Dunnes Stores or the equally brilliant sales of DADÁ from Argentina?

Global Exploration

This summer we will most likely see a continuation of Irish consumers’ desire to explore the world of wine. This, of course, can be from the ‘old’ as well as the ‘new’ world countries. Exploration does not necessarily imply a higher spend. Lidl shows us that they can bring their Saint Emilion Grand Cru to us at €14.99 and a Rioja Reserva at €8.49.

Even if these are entry level taste profiles (and they are not, as Richard Bampfield MW rates them highly), they might be the very wines that introduce a region, a style, or a new idea into the marketplace.

Christmas 2019 saw a small but distinct upward spend per bottle of wine. This was expected to continue into 2020 as the economy was stable and employment was healthy. While this is now an unlikely scenario, it is equally unlikely that the surge in Covid-related retail wine sales will turn off as quickly as it began.

What Customers Want

Wine Intelligence reports that 52% of our wine drinkers are female, while other reports show us that most supermarket shopping during the Covid-19 restrictions has been carried out by females.

This suggests that more white wine will be purchased, which bucks the trend that had recently seen sales of red wine catch up with those of white. A store without Pinot Grigio will disappoint, but one without alternatives such as Sauvignon Blanc, Verdejo, Albarino and crisp Chardonnays will be out of fashion very quickly.

Equally important is the perception of a store’s ability to cope with change. Is there a delivery facility, or a new and interesting online presence? Many independent stores have continued to develop their social media presence during this crisis. This may well stand to them in the ‘new future’. Multiples have upped their game also.

Neasa Miquel was very quick to promote the Laurent Miquel wines in both Dunnes Stores and O’Briens through podcasts and other media. Dunnes then followed this up with a new offering to the range for summer 2020 – a Languedoc Syrah Grenache at €10.00 and a Laurent Miquel Rosé at €12.00.

Summer 2020 will be a summer of change for wine. While many developments will be unplanned, there will also be success stories from the most unlikely and unexpected sources - and that is what the trade needs to be ready for.

© 2020 Checkout – your source for the latest Irish retail news. Article by Kevin Ecock.  Click sign-up to subscribe to Checkout.

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