History of British wine

Wine growing in Britain began in Roman times between the first and third centuries. However, production was of little importance until the second half of the twentieth century. Commercial wine-growers first began production after the Second World War, with significant development taking place during the sixties. This was made possible due to modern vinification techniques and the use of hybrid grape varieties. From 1970 onwards, new vineyards sprung up using these new techniques resulting in the production of unique and characteristic white wines. In the last twenty years the growth of wine production in Great Britain has led to the creation of 350 vineyards.

British wine-growing

In 2004 there were 722 hectares of vines in production, representing 339 commercial vineyards and 106 wineries. Total production in 2004 was 19,071 hectolitres; 16,140 hectolitres of white wine (85% of production) and 2931 hectolitres of red (15%). However, these figures were much higher than average production figures. In 2005, total production was 12,806 hectolitres, whilst the average for the past five years is 14,598 hectolitres.

UK wine production 1990 - 2004

Source: English Wine Producers

Nearly all of the vineyards are located in southern England and Wales and the majority are small-scale operations, that is to say, less than two acres in size.

Few of the vineyards are greater than ten or twenty hectares, although the biggest is eighty hectares in size. Modern wine-growing techniques and hybrid grape varieties have allowed the creation today of many wines equal to those found in other parts of the world, especially the sparkling variety. At first, the grape varieties planted in British vineyards were principally from Germany. However, British and German wines are not the same style due to differences in the terroir and climate.

Today, as part of the EU, UK vineyards are regulated by the European Commission which specifies which grape varieties may or may not be planted. On average, 86% of British production is made up of white wine and 14% is red. Some vineyards produce rosé wines too.

In recent years the most successful British wines have been sparkling varieties, generally produced following traditional “champenoise” methods. Some of these wines (for example Nyetimber, from the West Sussex region) were very well received in blind tastings. More recently there has been a growth in the popularity of red wines too.

The grape varieties

The EU has recommended six grape varieties for the UK, of which, the “Bacchus” variety represents more than 70% of the total surface area of vine plantations. These grape varieties are made from the following hybrids : - Bacchus – (Silvaner x Riesling) x Müller-Thurgau - Huxelrebe – Getedel x Courtillier - Müller-Thurgau (also known as Rivaner) - Riesling x Silvaner - Madeleine Angevine – hybrid unknown, but French! - Reichensteiner – Müller-Thurgau x (Madeleine Angevine x Calabrese Frohlich- Schönerburger – Pinot Noir x (Chasselas Rosé x Muscat from Hamburg) - and finally, Seyval Blanc

Principal actors in the field

The administrative council in the British wine industry is the United Kingdom Vineyards Association (UKVA). This is the official organisation that represents the activities of wine-growers and producers at a national and international level. It speaks in Brussels, in discussions concerning the legislation of wine.

The English Wine Producers is an organisation composed of the principle independent wine-makers in the UK, with the objective of promoting their wines to the media, the commercial sector and the consumer.
English Wine Producers,
P.O Box 5729 Market Harborough, LE16 8WX
Tel : +44 (0) 1536 772264 Fax : +44 (0) 1536 772263
Email : info@englishwineproducers.com

The Wine Standards Board is an organisation which, since 01/07/2006 has been assimilated into the Food Standards Agency (FSA). Its mission is the application of EU rulings within the UK.
Wine Standards Branch, Room 315B, Food Standards Agency, Aviation House, 125 Kingsway, London WC2B 6NH
Tel/Email: Alan Curran +44 (0) 20 7276 8361
alan.curran@foodstandards.gsi.gov.uk
John Boodle +44 (0) 20 7276 8351
john.boodle@foodstandards.gsi.gov.uk

The UK is above all a country of consumers and its market is very important strategically for the entire wine producing world.

“The UK wine market is one of the fiercest and one of the most competitive, therefore market research is difficult.” (Source : Inside Export 2002).

The British Wine Market

In 2004 the British market for still wine increased by 10% in volume and 19% in value (Source : USDA Foreign Agricultural Service). English consumer spending in 2004 on alcoholic drinks was £40.8 billion (€60.5 billion), representing 5.6% of their total spending. £13.5 billion (€20 billion) or 33% of this sum was spent on wine. The volume of wine sold in the British market in 2004 was 26.2 litres per head (Source: wsta.co.uk). The UK is a nation of wine consumers; among British adults, wine is drunk most frequently of all drinks.

A study carried out by “Alcovision” in the UK, interviewed adults to find out which drinks were consumed and how frequently, the results were as follows:

Frequency of consumption by category of drink among British adults

(Source: Waverley Group avec Alcovision, 2002)

28.6% of the adults interviewed said that they drank wine at least each week, 19.7% said that they drank wine at least every month. The UK wine market is divided in two: wine sold for home consumption (that is to say, wine which in not consumed on site but sold in shops, supermarkets etc.) and wine which is consumed outside of the home (i.e. in bars, restaurants, hotels, cafes, etc.).

In value or in volume, wine sold for consumption in the home represents 80% of the British market. The other sector represents just 20% of the market and in addition, is a very difficult sector to penetrate due to its fragmented nature.

Nevertheless, consumption outside of the home strongly influences the behaviour of home consumers as buying wine in other premises provides an opportunity to taste new wines before buying a whole bottle. Therefore, consumption outside of the home is an advert for consumption in the home. (Source: Inside-Export, 2002)

Concerning the colour of the wines consumed, the British market has witnessed an increase in red wine sales in the past three years. In 2004, red wine represented 56% of the market, a growth of 6% since 2001. Sales of rosé wine have also increased a little recently; up from 3% in 2001 to 5% in 2004. 

(Source : USDA Foreign Agricultural Service)

Sales of white wines however, have decreased from 47% to 39%. This increase in the consumption of red wine follows global trends.

Origins and types of wine imported to the UK

France and Australia are the two principal importers of wine to the UK. France was previously always the premier exporter, but in recent years the Australian share of the market has rapidly grown. Concerning volume, French wines have always had the bigger share of the British market.

However in 2004, for the first time, Australian wines surpassed French wines in volume and in value on the British market. In the same year, six out of ten of the best selling wines in the UK were Australian whilst French and Italian wines did not even appear in the top ten.

According to the agricultural service in the US, there are several reasons for this growth of Australian wines: - The marketing of Australian wines is better suited to British market demands. - Australian wine sales are represented by a small number of big-selling wines such as “Hardys”, which explains their success in British supermarkets which prefer to buy in bulk. - Large imports have allowed low prices.

  (Source : USDA Foreign Agricultural Service)

In 2005 the volume of French imports to the UK was 226 million litres, representing 17.3% of the British market. In the same year, the volume of Australian imports reached 274 million litres, 21% of the market. French wines are in decline; in 1999 they represented a 28.8% sector of the market in volume. In contrast, Australian wines are on the rise from 12.9% of the market in 1999, to 21% in 2005. (Source: HM Revenue and Customs)

(Source : USDA Foreign Agricultural Service)

In 2005, the value of still French wines imported to the UK was £475,783,341, or 24.2% of the market, down from 34.3% in 1999. During the same year, the value of Australian wines was £464,772,116, representing a 23.7% share of the market. In short, an appreciable increase for Australian wine which enjoyed just a 15.2% share of the market in 1999.

At the end of 2001, Australia surpassed France to become the most popular producer of wine in the UK. This revealed a general tendency in the UK where new world wines have become more popular. This illustration is a part of the wider group of new world wines which, along with Australia, originate in Argentina, Chile, California, South Africa and New Zealand. Wines sales from these countries have increased at the expense of those wines from Europe, particularly Germany and Italy. The wines, made with unique and classic grape varieties such as Cabernet Sauvignon, Chardonnay, Merlot and Sauvignon Blanc are in the process of becoming labels themselves. They are produced in the southern hemisphere and sell at less than £5 a bottle. Australian wines push the prices lower, maintaining their top place in value in the British market.

(Source: USDA Foreign Agricultural Service - figures for Nov/Dec 2004)

Imports of still wine from France and Australia by value and volume 1999 - 2005

(Source: HM Revenue and Customs)

Despite this decline in European sales, there are some indications that the French share of the British market is not dead. This is especially the case in sales of sparkling wines which in 2005 represented just 15.4% of French wine exports in volume, but 38.4% in total value. It is a paradox that the most popular French wines in the UK are Champagne and Vin de Pays. In general, despite a decline in import figures in terms of volume, the figures in terms of value are not as worrying.

In fact, following 2004, the total value of French imports in 2005 was £475,783,341, greater than the Australian figures of £464,772,116. Consequently, the UK market is not necessarily about quantity, but quality.

There several other reasons for this position of French wines in the British market:

- An agreement by the French government in 2005 to increase the marketing budgets for wine producers by 40%.

- A change in French marketing strategies towards Anglo-Saxon techniques, for example, advertising tactics have often become less pretentious but also more aggressive.

- Better cooperation between French wine-makers.

Pricing

In England, price is a very important subject due to excise tax and Value Added Tax (VAT). In the UK a bottle of wine costs more than in other EU countries due to excise tax of £1.26 per bottle (2005) and also 17.5% VAT which is added to the final price of each bottle.

Average price of a bottle of wine in the UK by country

(Source: Waverley Group avec Alcovision, 2002)

In the UK, 80% of wine bottles are sold at under £5. The average price for a new world bottle of wine is £4.46 instead of £3.36 for a European bottle.

Profile of UK consumers

Although the British market is dynamic, before approaching, it is important to understand the habits of wine consumers in this country. The following information is the result of work done by “Alcovision” and “The Waverly Group” in May 2002 in the UK, involving a study of around 20,000 British adults carried out over a year.

The demographic data of the wine market in the UK shows that wine is more important or more popular with women than with men, and that it becomes more popular with age. 39.5% of men and 60.5% of women consume wine in the UK with the majority of these being over 25 years of age.

Consumption in the home represents 80% of the market. British adults drink wine on special occasions, parties, evenings out with friends or with the family. In 70% of cases, these occasions involve food, therefore, most of the time, wine is drunk with meals. The situation is similar for wine drunk out of the home.

Wine is especially popular in restaurants (59.5%), pubs or either as a drink in a bar or café. Wines that are sold in such establishments tend to be more traditional, generally European wines. In contrast, wines sold for home-consumption (and therefore purchased in a supermarket), tend to be new world wines.

Studies have shown the Australian and French wines, for example, are not preferred by the same segment of the market, rather the opposite in fact. Australian wines tend to be drunk by the general public, where the market is modern and growing. Whereas French wines are preferred by more traditional or specialised segments of the market. For the English, wine is a sophisticated drink and difficult to understand, reserved for the more affluent or more cultured in society. Other times, wine is seen as a pretentious drink.

However, these preconceptions have started to change thanks to a broadening market appeal that wine is starting to enjoy.

Australian wines are notably benefiting from these changing perceptions. Through using new packaging and new tastes, they are in the process of making wine more accessible, less pretentious and more contemporary to the majority of consumers. They thus render wine less complicated, and reassure the consumers by clearly indicating the label. Studies have also shown that there is a difference between the perception of wines from the new world and those from Europe.

New world wines are associated with values such as honesty, freshness, energy and youth. For the general public, they are the incarnation of “me” and are more in tune with a more relaxed and modern life. Meanwhile, for the connoisseurs they can be seen as vulgar and crass. For the general public, European wines are judged to be a little snobby, arrogant, lacking flexibility and expensive. However, for the connoisseurs they represent true wine. But of course, the market of the general public is much more important that that of the connoisseurs! Amongst those asked, the preferred grape varieties were; Chardonnay (27%), Sauvignon (13%), Riesling (5%), Merlot (20%), Cabernet Sauvignon (15%) and Shiraz (14%). Concerning colour, the market was close to being equally split with 45% of consumers preferring white grape varieties and 49% having a preference for a red variety.

Preferred grape varieties in the UK in 2002

Despite this, the consumers did not generally know, what the grape variety was, where the wine came from, from what region, etc. On average, 43.5% of those interviewed drunk wine without knowing the grape variety, the region of origin, etc. It is possible that these figures explain in part the success of labels in the UK, especially for the companies from Australia, South Africa, Chile, New Zealand and the United States. In these tests, the different brands were appreciated by the younger individuals more notably, who tended to like the familiarity of the brands. “Blossom Hill” was particularly popular with the young women, and “Jacob’s Creek” with the general public as a whole.

The main labels

Brands most popular in the UK, at the end of 2004 were the following:
1) Hardys - Australia
2) Blossom Hill – USA
3) Jacobs Creek – Australia
4) E & J Gallo – USA
5) Stowells – Various
6) Kumala – South Africa
7) Lindemans – Australia
8) Banrock Station – Australia
9) Rosemount – Australia
10) Wolf Blass – Australia

(Source: ACNielsen)

The price of wine is important because it gives an indication as to the level of quality of the wine. British consumers don't trust prices which are too low. However, the acceptable price for the buyer depends on the occasion or event and therefore varies a lot. The prices of wines are higher in specialist shops (i.e. wine shops) than in supermarkets. Promotions are a good opportunity to try wines which are normally more expensive for the general public.

Opportunities to develop the potential of the market in the United Kingdom

The research carried out by the “Waverly Group” and “Nielsen” identifies the following opportunities:
- Work on consumer knowledge.
- Concentrate on sales for consumption in licensed premises in order to improve knowledge and appreciation.
- Create and use the labels. This study also identified the next platforms for developing the market:
- The clear link between consumption of wine and food.
- Association with the idea of relaxing, pleasure.
- Association with parties, social occasions, conviviality etc., especially targeting the young and females.

Obstacles to consumption:
- The younger market.
- The male market.
- The lack of knowledge among consumers.
- Poorly targeted actions.
- Excessive promotions.

The study also allowed insight into the following threats:
- Alternative fashions
- The consumer zapper
- Labels and their popularity peak.