The wine category has been an unlikely success story of the UK’s Covid-afflicted year, but long-term issues remain
If the Covid era has proved anything, it is that wine still has a place in UK consumer hearts. Faced with an unprecedented disruption to daily life, wine consumption in the UK in 2020 remained strong, with volumes through off-trade making up for the loss of on-trade business and spend per bottle growing.
Before we declare a renaissance, it may be worth looking at the longer-term picture, which is not so encouraging. Five-year sales trends remain negative. The wine drinking population continues to decline – the UK has lost nearly 4 million monthly drinkers since 2015, even as the total adult population of the nation has grown. Younger people are exiting the wine category as competition from gin, craft beer and cocktails nibbles away at wine’s franchise.
And so here is the puzzle: the UK remains a very interesting and diverse market, with niche and mainstream opportunities, but one where wine businesses often face their toughest tests. The UK wine drinking population may be shrinking, but it is getting more engaged in wine and more confident about experimenting. The retailers that service this market are tough on their suppliers because they must deliver amid a highly competitive environment, where good value wines are easy to come by.
As has been widely reported in the media, 2020 was a strong year for wine e-commerce, with a growing proportion of the population shopping for wine through supermarket websites, and one in seven drinkers using a specialist online wine retail site.
It was also a year of reversion to that which is tried, trusted and local. Traditional choice cues of varietal and country of origin are becoming dominant again, with recommendation becoming less of a driver. Our brand health data suggests that the biggest brands did well in the pandemic era, while less widely distributed brands struggled. And it was a strong year for domestic (English) wines, as UK consumers seek to buy local, in line with trends in other markets.
Two Covid trends that will also be apparent in the data are the growing interest in alternative packaging types, with smaller bag in box (2.25L), single serve and 500ml bottles all gaining awareness. And of course, the on-trade saw declining usage in 2020, thanks to being shuttered for several months.
However, there is some hope here for beleaguered bars and restaurants: despite the access difficulties, consumer-recalled wine purchase in on-trade did not decline by that much, according to our data. It might have been the successful government ‘Eat Out To Help Out’ scheme launched in August, between Lockdowns 1 and 2. Or it may be that consumers still see themselves enjoying a glass or two in their favourite pub or restaurant – and are just waiting for the Covid storm to blow itself out.