By: Aroq Limited
Sparkling wine may suffer from the the view held by many that Champagne is seen as the only drink to choose for true celebration, but the findings of a new IWSR/just-drinks report suggest the playing-field evens up somewhat when there is rather less celebrating to be done. Non-Champagne sparkling wine volumes fell by 1.2% last year to 194.43m cases, while Champagne sales shrank by 3.6%, according to the IWSR/just-drinks Global Market Review of Sparkling Wine – Forecasts to 2015. Furthermore, the report goes on to point out that the global sales figure was pulled down by a particularly poor performance in Eastern and Southern European markets. Overall, the non-Champagne sparkling category continued to perform well in most Western markets in 2009, IWSR found. Germany, for example, saw volumes rise by 0.9% to 40.93m cases, while sales in France rose by 1.0% to 31.93m cases. Sales in the US, meanwhile, grew by 1.8% to 14.71m cases. The UK managed a small increase of 0.4% to 8.88m cases while volumes in Australia grew by a healthy 8.3% to 5.43m cases. Moreover, IWSR is forecasting that global volumes will grow slightly in 2010. The report sheds some light on why sparkling wine sales have been more resilient during the downturn. Clearly, trading down has played a part with products such as Cava and Prosecco finding favour with cash-strapped consumers, while the downturn has also increased home consumption, furthermore leading to sparkling wine being favoured over Champagne. The growth in sparkling wine over the last five years or so - the category achieved a compound annual growth (CAGR) of 2.3% between 2004 and 2009 - has been built in part on encouraging everyday consumption. This factor has also played a key part in sparkling wine's comparatively robust performance over the past couple of years. Sparkling wine's popularity as an aperitif, both in the on- and off-trade markets, continues to increase, notably in Australia and the UK. In addition, like still wine producers, sparkling wine companies have tapped into the consumer interest for specific varietals or wine styles. Sparkling rosé has been a growth area in many markets, being targeted mainly at female drinkers. Sparkling wine producers have also innovated by focusing on less traditional formats, particularly in the on-trade, such as single-serve sizes which helps promote trial. The growth in sales has also been underpinned by an improvement in the quality of sparkling wine further advancing what many producers already feel is a favourable price/quality ratio over Champagne. But, in spite of those improvements, the report points out that challenges remain. "Although sparkling wine is associated with special occasions, in many markets it still holds a relatively poor image by consumers who view it as a lower-price, poorer-quality imitation of the real thing – Champagne," the report states. The report also points out that there is still relatively little understanding among the majority of consumers about the various types of sparkling wine such as cremants, Cavas or sekts outside of their home markets. In fact, while sparkling wine is growing across a broad spectrum of markets, it remains one of the least internationalised wine and spirit categories. There are a number of reasons for this. Suppliers based in large sparkling wine markets, such as Germany, Russia or the US, have little incentive to develop an export presence. These companies can sell most of their production at home. In addition, consumption in many markets, Russia being a notable example, is dominated by sweet and often low-quality sparkling wines which are mostly very inexpensive. These offer very little international appeal, particularly as much of it is poorly branded. Indeed, the lack of strong brands, in comparison with other major wines and spirits categories, is another factor which holds the sparkling wine category back. "If sparkling wine has a weakness," the report says, "it is the relative dearth of strong non-Champagne sparkling wine brands. It is an unusual feature of sparkling wine that, compared to other categories ,the sector has not really developed any globally recognised category champions. Almost all other major categories such as Scotch, vodka, gin, liqueurs and even still light wine are dominated by a handful of export-driven brands." The only brands that have achieved that sort of international status, according to IWSR, are Freixenet and Martini. IWSR suggests most sparkling wine producers have been fairly unimaginative with their branding, imitating the style of the medium or cheaper Champagne houses and co-ops. "Virtually none have tried to create a recognisable identity," the report states. "Freixenet has, and now outsells every Champagne house." One trend which could improve the quality of branding in the sector is the extension of strong still wine brands, marketed by the likes of Pernod Ricard,Constellation, Gallo and Foster's, into the sparkling arena. "Most of these companies have extended their leading brands into the sparkling wine area," according to the report, "some with real success." The report goes on to suggest that "virtually any strong consumer still wine brand" has the potential to be extended into the sparkling sector and forecasts that this trend will accelerate in the coming years. Further details of just-auto's research report, Global market review of sparkling wine – forecasts to 2015 are available by following this link http://www.just-drinks.com/market-research/global-market-review-of-sparkling-wine-forecasts-to-2015_id95472.aspx?lk=pr About just-drinks Since 1999, just-drinks.com has provided the global automotive industry with the latest news, insight and intelligence. The just-drinks.com research store (http://www.just-drinks.com/market-research/) provides the latest market research across drinks industry sectors. Including market reviews, forecast data, market trends, new product developments, latest technology and much more. The team of industry experts, analysts and journalists provide real-time news and comment on the latest industry developments.