In this article from the August issue of National Liquor News, IRI’s Kim Yuan details the main factors driving shoppers to purchase red wine.
Australians continue to gravitate towards red bottled wine during the colder months, with a third of 2020’s red bottled sales occurring in the winter period. Last winter, shoppers brought home an extra 432 million litres of red wine (+14.7 per cent), equating to an incremental of $78.2 million compared to only $23.0 million the year prior.
As demonstrated during winter 2020, brands that outperform are those capturing the experimental shopper through unique experiences or by aligning with their current flavour and wellbeing affinities.
Classics versus new varietals
Shiraz, Pinot Noir and Cabernet Sauvignon were the top three performing varietals last winter, in terms of actual dollar growth generated. The three classics contributed over three times more growth than the other varietals combined, generating incremental revenues of $26.9M, $18.9M and $13.5M, respectively.
While dominating sales of bottled reds for this period (with 71 per cent combined share), other challengers are emerging. After all, 2020 saw an adoption of different lifestyles and that change also translated into our consumption habits. As we were restricted in exploring different environments, we did so with our tastebuds. The experimentation movement is particularly evident when looking at the rapid acceleration of smaller varietals like Tempranillo and blends, Grenache, Sangiovese and Nebbiolo – all of which are delivering growth close to, or over, 50 per cent.
Love for local
Last year reinforced the importance of supporting domestic brands and products, with the ‘love for local’ campaign gaining greater traction through the pandemic. This shift positively impacted smaller, Australian brands. Four of the top 10 largest growing brands posted over a million dollars growth which is over five times more than the year prior.
Their notable rise can also be attributed to their alignment in key sustainability and wellbeing trends. For example, Tread Softly is targeting a new generation of health-conscious drinkers with its lower ABV wines and plants a tree for every twelve bottles sold.
Brands doing things differently
The importance of innovation has become more apparent in the last 12 months. This is evident in the creation of new products and the manner brands engage with consumers. Brands that executed this mix successfully reaped large sales growth, particularly during the winter period.
An example of this is 19 Crimes. When 19 Crimes launched in 2017, the brand was able to create a point of difference in the market with its virtual reality label. By offering shoppers a unique brand experience, it brought something new and exciting to what is typically perceived as a formal category that is bound by tradition. The recent arrival of the Snoop Dogg series has the potential to extend the brand’s popularity further.
A different example is how Penfolds recognised the demand to experiment, launching an interactive masterclass experience in their Barossa Valley HQ. During the 45 minute masterclass, attendees simultaneously learn about the Penfolds history and processes whilst mixing their own red blend which they get to take home at the end of the session.
Another brand adapting to the times is St Hugo. Propelled by the closure of on-premise and travel restrictions, St Hugo expanded their Cellaring Concierge beyond the Barossa winery into the virtual world. Through the platform, club members are privy to bespoke wine tasting sessions, private consultations with the Chief Winemaker and the ability to create personalised cellaring plans.
With international travel likely off-limits for another year, Australians may look to transport themselves by recreating popular destination drinks locally.
Mulled wine could be the new winter warmer for Australia as it has long been loved internationally. It has already appeared in multiple articles and blogs, with Dan Murphy’s even creating a dedicated landing page on its website.
This winter Jam Shed wines has launched a mulled wine mix and jam jar throughout Australian liquor retailers. The release aims to tap into the growing sweet tooth of consumers and the brand hopes it can emulate its UK success.
Conversely for those wishing they were enjoying the European summer, they may seek lighter, fruitier reds like Sangria and Lambrusco.
Converging of the known and unknown
As consumers have demonstrated an appetite to experiment with different flavours, there may be a wider adoption of brands that combine wine with other liquor categories such as glass spirits. Some have already started, such as Jacobs Creek using Scotch Whisky barrels to put a twist of flavour in its Shiraz or Squealing Pig combining gin and rosé.