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Q2 2018 | Issue 8

The Alternative Edition Global opportunities for sustainable, organic and lower-alcohol

Natural wines in Brazil 6

The Canadian choice 8

The SOLA universe: Sustainable, organic 10 and lower-alcohol wines

Sustainability, Sonoma style: 14 Interview with Karissa Kruse, President of Sonoma County Winegrowers

The ‘perfect storm’ in the UK on-trade 18

Italy’s sustainable advantage 20

Reports shop Intelligence published and upcoming reports 2018

Australia & New Zealand South America New Zealand Landscapes 2018 Q2 Online Retail & Communications in the Contents Comment and Pink Moscato in the Australian Brazilian Market 2018 Q1 News and events The latest dispatches Perhaps it is as obvious as it is profound, but human Wine Market 2018 Q2 Brazil Routes to Market 2018 Q2 from the Wine Intelligence Global Team culture on planet Earth is changing at an extraordinary and Australia Landscapes 2018 Q3 Brazil Landscapes 2018 Q4 4 unprecedented pace. The effect of frictionless and powerful Stats of the quarter Our stats of the communications technology has given universal access to in the Australian Market 2018 Q3 South Asia quarter hail from all corners of the globe, with the latest in consumer insight from encyclopaedic information. The same technology has also Australia Portraits 2018 Q4 India Landscapes 2018 Q3 5 Brazil and the UK allowed stubborn and committed minorities to express China & East Asia UK themselves to the mainstream on everything from politics Natural wines in Brazil Alternative wines and social values, to the environment and consumer culture. Sparkling Wine in the Chinese Market 2018 Q1 UK Label Design 2018 Q1 have only appeared in the Brazilian market within the last decade, but are China Landscapes 2018 Q3 On-Trade Trends in the UK Market 2018 Q2 6 already gaining in popularity Wine is finding its way in this fundamentally disrupted China Label Design & Branding 2018 Q3 UK Portraits 2018 Q3 world. Specifically, this issue considers the parts of the The Canadian choice Legislative Japan Landscapes 2018 Q3 Sparkling Wine in the UK Market 2018 Q3 wine sector that are producing products that reflect long- changes in alcohol and cannabis run consumer trends of Exclude (less alcohol or additives), Continental Europe Flavour & Preference in the UK are likely to shape the wine industry in Reduce (lower environmental impact), Control (needing Wine Market 2018 Q4 8 Canada in the coming year as much as Germany Label Design 2018 (DE & EN) Q1 long-run consumer trends to police what we’re putting in our bodies), and Obsession The Netherlands Landscapes 2018 Q2 UK Landscapes 2018 Q4 (wanting to be an expert on something). The SOLA universe Sustainable, organic Belgium Landscapes 2018 Q2 and lower-alcohol wine products are Portugal Landscapes 2018 (PT) Q4 a growing force within the global Clearly there’s more to the sustainable, organic and lower- 10 wine industry, though consumer alcohol (SOLA) sector than simply 21st century consumer Switzerland Landscapes 2018 Q4 understanding remains patchy needs. ‘Modern’ organic and biodynamic practices date back Multi-market decades. Their proponents are often driven by far more Sustainability, Sonoma style We talk Global Consumer Trends 2018 Q1 Visit the Wine Intelligence Reports Shop online to Karissa Kruse, president of Sonoma ideological commitments to environment or production Global Wine Brand Power Index 2018 Q1 County Winegrowers, on what best practice than simply fulfilling a supermarket listing at www.wineintelligence.com/reports-shop for 14 sustainability means and why it is so requirement, but their cause has been fuelled by growing Global Wine SOLA Report: Sustainable, details of all current and archived reports. important consumer awareness, wider acceptance and understanding Organic and Lower-alcohol Wine of the environmental and health impact of agricultural Opportunities 2018 Q2 Please note that the publishing schedule is What is Vinitrac? What makes our proprietary global survey of wine drinkers practices, and the powerful loudspeaker of social media. Global Compass 2018-19 Q3 advisory and subject to change. 16 so useful? Elsewhere in this issue we touch on other outcomes of Nordics The ‘perfect storm’ in the UK on-trade the 21st century cultural earthquake: the changes coming Finland Landscapes 2018 Q1 Publication dates Although wine is struggling for attention in a UK restaurant sector experiencing to Canada’s retail universe and the impact of Brexit on the Sweden Landscapes 2018 Q2 Quarter 1 (Q1) - January-March 2018 18 a ‘perfect storm’ of adverse trading UK’s hitherto thriving on-trade. We are also welcoming two Sparkling Wine in the Swedish Market 2018 Q3 conditions, there is a growing interest in guest contributors: Suzana Barelli Quarter 2 (Q2) - April-June 2018 alternative wines Denmark Landscapes 2018 Q4 on Brazil’s emerging Quarter 3 (Q3) - July-September 2018 Italy’s sustainable advantage Pierpaolo market and Karissa Kruse on what North America Quarter 4 (Q4) - October-December 2018 Penco, Country Manager for Italy, prompted Sonoma to commit itself Rosé Wine Drinkers in the US Market 2018 Q1 reflects on how Italian winemakers collectively to sustainability. 20 have embraced environmentalism and Canada Landscapes 2018 Q2 sustainability Richard Halstead US Portraits 2018 Q3 COO, Wine Intelligence Behind the scenes Rodney Sammut, Canada Portraits 2018 Q3 Country Manager for Australia and Sparkling Wine in the Canadian Market 2018 Q3 New Zealand, discusses his past four months at Wine Intelligence, starting his Sparkling Wine in the US Market 2018 Q3 22 university’s wine club and trends in the US Millennials & Future Consumers 2018 Q4 Australian market US Landscapes 2018 Q4

2 | wineiQ | Q2 2018 Q2 2018| wineiQ | 3 NEWS AND EVENTS STATS OF THE QUARTER Latest dispatches from the Wine Intelligence Global Team Latest findings from our wine reports from around the world

Online Retail and Communications in the Brazilian Market 2018 his second quarter of the year generally delivers a jolt Percentage of online wine purchasing in a global context of adrenalin to the global wine market, with a thicket of After China and the UK, Brazil has the highest proportion of wine consumers who purchase wine online trade shows coinciding with retailer range reviews and % who have purchased wine online in the past 6 months southern hemisphere harvests. It is also typically the time Base: Regular wine drinkers/imported wine drinkers in each country Twhen Wine Intelligence’s global team hit the road to spend time with clients and in key markets.

We have been busy with our Brand Power, Innovations and Trends Workshop Series, celebrating the 15th anniversary of Wine Intelligence. This global series of workshops include findings from the Wine Intelligence Global Wine Brand Power Index 2018 report, Global Consumer Trends 2018 report and other insights from the global wine and drinks industry. This past quarter we held events in São Paulo, Brazil; London, UK; Barcelona, Spain; and Sydney, Melbourne and Adelaide, Australia. Our event in Franschhoek, in South Africa’s Western Cape winegrowing region, was notable in that 140 participants attended, signalling perhaps the growing ambition of South African growers and brand owners to build a stronger and

more valuable export business. We will continue events into Source: Wine Intelligence, Vinitrac® this upcoming quarter, with seminars in Santiago, Chile, and studies in all stated markets in 2017, Auckland, New Zealand. 2018 and 2014 (Russia)

In addition, Juan Park, Director for Spain and South America, Wine Packaging Formats and Closures in the UK Market 2018 spoke at several events over the past few months including FIVS Attitudes towards packaging formats in the UK Global Trade Policy Conference in Brussels, where he spoke on Currently, small format bottles have the strongest position in the UK market outside of standard 75cl bottles, with what the future holds for purchasing experience and who wine magnums showing the strongest future potential consumers will be in the future. He also presented a seminar at the ‘New challenges in the management of the wine industry of % who are aware of the following package types Base for awareness and purchase: All UK regular wine drinkers (n=1000) the 21st century: philanthropy, agri-food tourism and sensory Base for consideration and affinity = All those aware of the packaging type experience’ conference in Spain. 94% 93% In May, Chuan Zhou, Research Director, presented at Vinexpo 87% Hong Kong. His presentation investigated future consumer 79% demand for and expectations of wine and reviewed the trends 68% 62% 61% 61% that will impact consumers’ wine choice. 56%

46% This upcoming quarter, Wine Intelligence will launch another 40% 36% 36% wave of Vinitrac® in July and see new reports published. Please 33% 34% 32% 29% 29% 30%30% 26% see more about Vinitrac and submitting your question requests 23% 24% 23% 26% 21% 21%21% on page 16. Quarter three will also see reports published on 17% 13% 12% 10% 12% China Label Design and Branding 2018 and India Landscapes 6% 7% 6% 8%8% 2018, amongst others. A full list of 2018’s provisional reports 2% 1% 2% can be found on page two. StandardStandard glass glass SmallSmall bottle bottle LargeLarge bottle bottle / / Half bottle Bag-in-BoxBag-in-box (3L) Bag-in-BoxBag-in-box Pouch (1.5L)(1.5L) WineWine in in a a can can TetraTetra pak pack (1L) bottlebottle (75cl) (75cl) (single(single serve, serve, magnummagnum (1.5L) (1.5L) (375ml) (3L) (2.25L)(2.25L) (single(single serve, serve, (1L) For more information about our upcoming events, Vinitrac® 187ml)187ml) 250ml)250ml) surveys and our consulting services, visit Source: Wine Intelligence, Vinitrac® UK, Awarenessawareness purchasepurchase considerationconsideration affinity Oct’17, n=1,000 UK regular wine drinkers www.wineintelligence.com

4 | wineiQ | Q2 2018 Q2 2018 | wineiQ | 5 project, which produces only Pinot and make wines in his ‘garage’, had natural wine fair, called Naturebas, Noir in Nova Padova (Rio Grande all his production seized after an which is now on its sixth edition. do Sul) on a landscape of hills, 750 anonymous complaint that he was 75 exhibitors are already confirmed, metres from sea level; and the Vinha not adhering to the rules. Up to that with 15 Brazilian winemakers already Unna in Pinto Bandeira (Rio Grande point, Zenker was becoming popular signed up for the following event do Sul), which produces reds, such as by producing wines by the ancestral taking place in August. , but also whites from method and providing several wine- Renano, di Candia making experiences. This resulted In addition, at the end of 2016, the and old vines of Moscato, amongst in interesting wines, some with very area of Jardins dos Vinhos Vivos also others. high volatile acidity, and all with appeared in São Paulo, which follows a lot of personality. His wines are the same trend of selling and serving In addition, the Era dos Ventos currently not allowed to be sold only natural wines. Some nights, the , founded in 2008, in the while Brazilian authorities decide on couple Analu Torres (Brazilian) and Serra Gaúcha was the pioneer in his case. Xavier Meney (French) promote rescuing the Peverella grape, a alternative wine tastings, always with a type of grape brought by Italian These natural producers are mainly full house. immigrants in the 19th century that popular in the consumer market of almost disappeared. Its winemaker São Paulo and also Rio de Janeiro. Therefore, although natural wines and partner Luís Henrique Zanini The restaurant Enoteca Saint are only beginning to flourish in follows the techniques of ancestral Vin Saint channels this trend of Brazil, we can expect to see increased and produces both its providing natural wines. To this day, interest and production in the and sparkling wine by members organise the only São Paulo coming years. fermenting the must along with the bark, classifying it as orange. The concern, however, is with the lower-alcohol content from these Natural wines producers. For example, the still Featured report: wine from Peverella has 12.5% abv and the sparkling 11.5%. Brazil Routes to Market 2018

Era dos Ventos’ production 5 report credits in Brazil is one of the most organised, perhaps because Zanini also has a he phenomenon of prolific Isabel, a very sweet table £2,500 conventional winery. But many of Brazilian natural, organic grape, is one of the most used). €3,000 these natural winegrowers do not and biodynamic wines is AUD $4,500 Otherwise, many of the Brazilian have their production regulated, due quite recent – the first labels USD $3,500 commercial wine producers to the difficulty of adhering to the Tappeared no more than a decade tend to copy the style of various complicated and detailed Brazilian ago – but these types of wine Email eleanor@ Chilean and Argentinean labels legislation. The law is designed for wineintelligence.com seem to follow a different path rather than looking for a Brazilian everyone who can only sell their for more information from the country’s commercial identity. whites and reds in their own winery. wine producers. Still emerging, but Small producers with capacity to Brazilian journalist promising, these wines bring their The natural producers are mostly sell more than from their door own identity, known by dynamic concentrated in the south of the have to play with the rules applied Suzana Barelli discusses This report aims to unpick some of the mysteries about the flavours and high acidity, which country, in the states of Rio Grande to the largest producers, which market supply chain and reveal the opportunities how alternative wines is typical of the Brazilian palate. do Sul and . Not all include complicated tax systems and tools for those wanting to compete effectively with their have only appeared They use varieties of little-known have their own and it is and mandatory infrastructural wines in the largest economy of Latin America. grapes (Peverella, of Italian origin, common to purchase third-party capabilities. in the Brazilian market is a good example) and many of grapes. Those who have vineyards Read more about what domestic production looks like. For example, what is going on within the last decade, them even work with varieties are concerned with following But those who cannot play within in distribution? What are the main regional differences and who are the main local of table grapes (in Brazil, it is organic philosophy and, some, the rules struggle. Last year, importers? What makes each one of them unique? Where is imported wine being but are already gaining landed? What are the main taxes and how do they work? in popularity also possible to make wines with even biodynamics. Two biodynamic producer Eduardo Zenker of Arte Lambrusco varieties, and the examples are the Vinhedos Serena da Vinha, who used to buy grapes

6 | wineiQ | Q2 2018 Q2 2018 | wineiQ | 7 wine can now be purchased in the rising. With packaging aimed to same shop as groceries, or at least in appeal to those under 35, and adjacent settings, in a structure that success due to its ‘Instagrammable Hot topic: Alternative would be familiar to consumers in qualities’, trade experts see it wines in Canada The Canadian choice most of the rest of the developed becoming a perennial drink and the world. ‘cheap’ label will fall away as it has • Organic and natural begun to do in the US. styles of wine are the This contrasts with the picture in the most recognised amongst west of the country, in Alberta and Sparkling wine growing Canadian regular wine British Columbia, where the state but from a very low base drinkers, despite being retains some control of the supply the least purchased types anada crosses six time wine, while Ontario has a strong bias 4 chain, but the actual job of retailing No current Landscapes report seems of wine in this group of zones and occupies a towards (traditionally, wine has been either partially or complete without a mention of people and confusion greater land mass than much of it grown within Ontario), completely turned over to the private , and the Italian sparkling around the definition of the United States – nearly and more generally North American sector. juggernaut is also making ground in ‘natural’ wines C10 million square kilometres. This and New World wines. Canada. It is, however, not growing geographic spread, along with a long The wine market remains as quickly as in other markets. • There is no difference history of strong Provincial identities In addition, according to our Canada steady in growth, Prosecco now accounts for 28% of in the perception of and government structures, have Landscapes 2018 report, key particularly in the sparkling wine volumes in Canada alternative types of bequeathed the country a patchwork trends in the Canadian wine market can 2 premium wine sector and consumers are beginning to get wine amongst regular of different regulatory processes be identified as follows: on board with sparkling wine as an wine drinkers in English- dealing with alcohol. The Canadian still light wine market ‘everyday’ drink, but the category is speaking parts of Canada Growing importance of is showing steady year-on-year still very small compared to light still and those based in Once upon a time, these Province- grocery & convenience growth both in terms of volume wines. Québec level rules were broadly aligned, stores as a wine-buying 1 and value according to IWSR. Trade stable, and with only nuanced channel is allowing greater experts are also observing a growth Cannabis: a possible • There is also some lack of differences. In recent years, however, access to wine on an in the premium wine sector, stating threat to the wine understanding amongst the Canadian alcohol regulatory everyday basis for consumers that while they notice sales of wine category in Canada consumers of what the landscape has undergone more 5 under $12 falling, those in the higher different alternative wine Wine Intelligence fundamental shifts. Combined with Traditionally, while both Ontario and price categories are increasing. Another big legislative change, much types actually mean the renaissance of wine growing in Québec have exerted a strong hold COO Richard Premium wine growth appears also anticipated but yet to be enacted, Canada, particularly in the Okanagan on the alcohol supply chain through Halstead reflects to be driven by the change in wine will be the legalisation of cannabis region of British Columbia, the the use of Scandinavian-style retail retailing laws, which are allowing – currently scheduled for summer points, where consumers are less on how legislative changes are starting to have a monopolies (LCBO in Ontario and greater availability of premium wine 2018. Experts remain divided over involved in wine as a product and profound impact on consumer SAQ in Québec), Québec offered a changes in alcohol offerings. Vinitrac® data shows that the level of impact this will have. more as a means to a good time. This behaviour. Add in the intriguing slightly more liberal regime, where although regular wine drinkers based The data currently available on the is, perhaps, a reason to play down and cannabis are disruption of legalised cannabis, convenience stores and supermarkets in English speaking Canada are effect on wine sales from US states the proposed threat of cannabis: likely to shape due to be implemented in summer could offer a limited range of beer drinking wine at the same frequency where partial or full decriminalisation the premium wine sector is seeing 2018, and the market is braced for and wine. the wine industry in the off-premise as they did back in has taken place is inconclusive – a particular increase in sales and an unprecedented period of change. 2014, their stated spend on a bottle partly because of flaws in the studies cannabis seems an unlikely substitute in Canada As one industry leader recently put However, in the past two years, major of wine, particularly for informal themselves and partly because it for a nice bottle at a dinner party. it: “It’s like going from flat calm to a changes have been in the works in throughout the occasions, has significantly increased. is very difficult to separate out raging storm”. Ontario, the most populous Province, coming year as change that is directly attributable Overall, the future is bright for as it moves more towards the Québec Rosé category tipped for to cannabis versus other factors in a wine in Canada. Domestically much as long-run The traditional view of wine model. In the new Ontario model, future growth given market. produced wines (particularly in consumer trends consumption in Canada is often prices and what they are able to stock British Columbia) are growing in framed by the contrasts between the remain controlled by government, 3 Rosé also appears to be on a Wine Intelligence is starting to stature, wine is becoming more two biggest Provinces by population: but a number of grocery and dramatic growth path. While many collect data in this area, but it may accessible than ever before – either Ontario and Québec. Despite convenience stores can now stock consumers still consider it a seasonal, be some time before we know as part of a weekly shop or from an enjoying something of a rarity in wine, which provide far greater access cheap option, the premium rosé anything conclusive. One hypothesis expanding array of online purchasing Canadian geography – proximity – and convenience for the everyday sector is expanding. Significantly that we’ll be following up: the most options – and consumers (notably Québec clings determinedly to its consumer. This means that in most more popular among younger likely substitution between wine so in Québec) are becoming more French roots with a love of European major population centres in Canada, drinkers, rosé is expected to continue and cannabis may be at lower price involved in wine.

8 | wineiQ | Q2 2018 Q2 2018 | wineiQ | 9 It took into consideration awareness objectives to increase the market lower-alcohol and non-alcoholic (people who are aware of the types share of organic wines. wines. According to the opportunity of wine), purchase intent (people index, lower-alcohol wines are making who have specifically bought the But following closely behind organic some progress, but struggling with wine in the past 6 months or intend wine is sustainably-produced, inherent quality challenges and the to buy it) and affinity (people who Fairtrade and environmentally- availability of more attractive lower or The SOLA universe think the type of wine is right for friendly wine. Despite the complexity non-alcoholic drinks. In other words, sustainable, organic and lower-alcohol wines people like them) in 11 key wine of certifying these SOLA categories, the lower-alcohol wine category markets. consumers report being drawn to may deliver some future potential, SOLA products are a growing force wine that is produced ‘sustainably’ driven by consumer moderation ranks top of the or ‘environmentally’, whether or trend. However, observation of within the global wine industry, though opportunity index, indicating it has not it comes with a consistent consumers suggests they are switching consumer understanding remains patchy. the strongest opportunity within accreditation. This suggests that to alternatives beyond wine (e.g. Lulie Halstead, Wine Intelligence CEO, the SOLA universe. This could be people have a growing intent to buy ‘mocktails’ and ‘adult soft drinks’) for explained by the fact that ‘organic’ wines that are produced in a way lower-alcohol or no-alcohol occasions highlights findings from our recent report is generally best understood and that takes both the environment and rather than wine. on alternative wines recognised by both trade and those creating it into consideration, consumers based on external and are willing to consider But the appeal for lower-alcohol or he wine category 2018 is our first multi-market, multi-category accreditation and strong awareness of designations that are broader than no-alcohol wines supports consumer has always operated view of the alternative wines sector, and to the term in adjacent food and drink just ‘organic’ as supporting cues. appeal for more ‘natural’ products, as under the paradoxical escape the rather clumsy phrase we have categories (e.g. coffee and chocolate). there is a stronger potential for wines benefit / liability of adopted an acronym – SOLA – to describe The organic wine opportunity is The Global SOLA Report: naturally lower in alcohol, rather complexityT and diversity. The the scope of the report. particularly strong in Finland, Sweden Sustainable, Organic & Lower-alcohol than those reduced via mechanical benefit of variance in provenance, and Germany, driven by strong retail Wine Opportunities 2018 also covers methods. and ingredients has made it perhaps On top of the standard complexity of their the most interesting beverage category in product, SOLA producers face the same the world; so much so that other categories, challenges as the rest of the wine industry: to such as craft beer and gin, have adopted convey their understanding of the approach Calculating the Global SOLA wine opportunity index similar variance to make their categories more they have chosen to take. Using three measures of ‘opportunity’ - awareness, purchase intent and affinity - we created interesting. The downside of this approach is an index to show which alternative wine types had the best opportunity by market. that complexity breeds confusion, and many However, some may see this as a solution: consumers in the wine category tend to resort lower-alcohol may be a to intellectual short-cuts to get to a purchase simpler proposition to someone specifically or consumption decision. looking for a lighter product to serve at lunchtime; a committed vegan will perhaps Into this mix comes a number of new (and be grateful for a vegan wine when faced not-so-new) viticultural and winemaking with the alternative of not drinking wine at approaches, which are often aggregated into all. the phrase ‘alternative wines’. Some, such as organic wine and lower-alcohol wine, For the report, we have also developed an have been with us for some time. Others, opportunity index, crossing 11 markets and such as vegan or sulphite-free wine, are 12 sub-categories, to determine where SOLA relative newcomers. All are characterised by a wines have the greatest chance of success, and combination of positive desires: to make more which of the individual product types within environmentally-responsible and sustainable the group might work best. wine, to give consumers a choice beyond the mainstream and to cater to committed (and The opportunity index considered the often vocal) minorities, such as vegans, who relative opportunities by market of wines are seeking out products that fit their lifestyle that are lower in alcohol, non-alcoholic, choices. Fairtrade, organic, sustainably-produced, environmentally-friendly, from a carbon- The index has been weighted to reflect the size of the wine drinking population in each The Global SOLA Report: Sustainable, neutral winery, biodynamic, preservative-free, market, enabling the SOLA wine opportunity index to be more reflective of the global market Organic & Lower-alcohol Wine Opportunities sulphite-free, orange / skin contact and vegan. opportunity.

10 | wineiQ | Q2 2018 Q2 2018 | wineiQ | 11

“With a very short timeline and a mission of providing Global SOLA wine opportunity index 2018 ‘investigative-type research’, the Wine Intelligence team was capable of delivering Market Insights through our wine the report on-time and with information that market and issue-based reports we had not anticipated. While I have used their We believe in supporting wine business in every way services before for a more traditional research we can. After all, it’s our industry too. project, this is the first for a project that required in-depth market intelligence from a variety One way we help is by publishing reports that all wine of industry sources across multiple markets. organisations can benefit from. To see our extensive Mission accomplished and a job well report collection and find out more about how we help done.” some of the world’s biggest wine brands be successful, Greg Berti, Vice-President, Peller visit www.wineintelligence.com.

“The wine producers in Brazil are currently repositioning their brands Key findings of the Global SOLA Report: According to the opportunity in the domestic and international markets. index, the strongest opportunity for Wine Intelligence insights came at the right lower-alcohol wine was identified time, helping us to develop and execute the most Organic wine first in the in Australia and New Zealand while assertive actions for each market. They highlight SOLA wine opportunity Nordic markets of Finland and 1 index amongst consumers The ‘free-from’ wine the trends that drive consumers’ behaviour and how Sweden had the highest opportunity across 11 markets and is category has not yet they will affect the wine category. With their data, for non-alcoholic wines. In both 5 particularly strong in Finland, reached the prominence we also monitor the world market and build a fields, there was low appeal in Sweden & Germany seen in other food and drink sectorial strategy with the Brazilian wine industry. both Japan and the US, but there categories is potentially more opportunity for Undoubtedly, the research helped to guide our lower-alcohol wine in emerging Fundamental consumer planning and actions.” misunderstanding of wine markets of China and Brazil 2 Diego Bertolini, in comparison to more established the term ‘natural wine’; low Promotion manager of the Brazilian Wine Institute (IBRAVIN). markets. awareness and mixed views 6currently seen as on are due to marginal in the category, instability & quality issues with the validity of the This 144-page report covers a vast “When we amount of the alternative wine biodynamic process eliciting sector and spells out opportunities Strong and positive strong and conflicting views decided to embark on this opportunity for amongst the trade challenging project we knew for 12 types of alternative wines 3 We can help you with over 11 markets. It is now available sustainably-produced that there would have been only one for purchase or download for our wines, despite complexity Lower-alcohol wine • Brand health assessment agency to work with: Wine Intelligence. All Access subscribers. It can also be of sustainability certification 7opportunity currently • Wine brand development – Vinibrand® The project has been brilliantly managed, the purchased in sections at a reduced and lack of single definition niche, with consumers • Bespoke, quantitative & qualitative insights report delivered on time with the schedule, and price. Please contact Eleanor at turning to other low and • Wine business market entry strategies non- choices the team managed to provide us with valuable [email protected] for Strong opportunity for findings incredibly useful for our future projects. more information. wine positioned as over wine 4 Our services are based on a unique combination of solid We couldn’t be more proud of this project, so environmentally-friendly that research and extensive global wine trade experience. may not carry accredited thank you to the team at Wine Intelligence for Some of our team have been involved in developing endorsement, but must be your fantastic work.” wines, and many of us have had prior experience of credible distributing wine, wine retailing and on-premise selling. Alessandra Brugola, Marketing & Communications Manager, The Benevolent, the Drinks Industry Charity 12 | wineiQ | Q2 2018 Q2 2018 | wineiQ | 13 be done. Most importantly, a 100% commitment engages the whole community. If you only commit to 90% or 95%, there will always be some grape growers who think this does not apply to them or that they don’t have to participate. If it’s 100%, then every grape grower needs to be a part of this program and it becomes a goal for the entire grape growing Sustainability, community in Sonoma County. WI: How do you measure the sustainability progress? Sonoma style KK: There are three areas in evaluating how we are performing: 1. How many grape growers/ acres of vineyards do we have doing 2016 in Sonoma County WI: Would you say become the first 100% sustainability practices? How many sustainability is something sustainable wine region are looking for improvement? you’ve always been in the US by 2019? How 2. How many have gone through Sonoma County was interested in or did you are you doing against this the audit process and achieved grow to be passionate target? certification? They need to be KK: I think sustainability is really the first wine region about it? sustainable in a certain number of a roadmap, a toolbox, for helping in the US to make a KK: So about 6 weeks after I was practices in order to certify. ensure family businesses remain, KK: I think I found it really promoted to President, a board 3. How are we doing on these that agriculture is preserved and the pledge to be 100% interesting when I started working member emailed me on a Saturday practices themselves and how land remains beautiful so that we sustainable by 2019 for the farmers here in Sonoma afternoon, and he asked a question: do we want to move the needle? are able to give back to the earth County. They have such a rich how we could get Governor What are we doing well in? For and have that nice partnership with example, we could be doing well in the earth and community. We talk to Karissa history here of being stewards Brown – a very pro-sustainable of the land and of being multi- governor – to recognise Sonoma water conservation, but we could stewards of the land if you’re not Kruse, president of generational grape growers – County Winegrowers as leaders of focus more on providing better thinking about being stewards in WI: How have your farmers Sonoma County which is such a big deal in the US. sustainability? training for our growers and staff. your community. So we wanted a reacted to this pledge? Sometimes it’s not that much to So we ask how can we improve program that was really broad and Winegrowers, on this and help people improve in KK: For us here, it’s been really be a 19th or 20th generation grape We had to ask what exactly does incorporated the people piece. what sustainability grower, especially in Europe, but sustainability mean? What could these areas. fun to see the commitment evolve. in the US, where it is a younger this path look like? Right from the commitment of means and why it is so WI: What do you see as the country, being a third or fourth Part is participation and part is becoming 100% sustainable to future for sustainability and important generation business owner and being And I realised there’s only one looking at all of our practices and seeing that our farmers are so proud wine? a steward of the land and caretaker way to show you are a leader in how we can improve as a county. to be a part of this sustainable for that long is really important. sustainability – there’s no shortcut: movement. We are leaders in These farmers are at the heart of you have to actually become a WI: How does sustainability fit KK: What I look forward to most is sustainability around the world and sustainability – which is really what it leader in sustainability through your with organic, Fairtrade, bio- walking into a restaurant and every our growers know that what they’re stands for. And I noticed that’s what behaviour. dynamic, low-sulphur and wine list has whether the wine is doing on the farm matters and they’re really doing here in Sonoma natural wine? sustainably made with a little ‘S’ next people care about their role in the County: preserving the land for We committed to 100%, which to it. And that will be great, because wine making process – a product future generations – they just hadn’t seems like an impossible KK: What we like about the term that is the moment that consumers will that brings so many people together really put a definition for it. commitment, but we felt like ‘sustainability’ is that it is an umbrella know exactly what they are buying. around the world, whether it’s about for Sonoma County, with its term – that the triple bottom- family, conversation, or sharing – so WI: What led to Sonoma history in agriculture and multi- up approach affected everything. WI: Why do you think I think they’re really proud of this County committing to generational grape growers, it could You couldn’t really think of being sustainability is so important? commitment.

14 | wineiQ | Q2 2018 Q2 2018 | wineiQ | 15 studies (an omnibus, like Vinitrac® itself, is a survey where anyone can buy a space and ask questions of their own choosing). WINE INTELLIGENCE The data coming out of an all-adults survey ® with national representative reach will tell VINITRAC us, with a reasonable degree of accuracy, the information we need to set our all-important quotas, which determines how many people Throughout the year, Wine Intelligence runs in each age and gender category we need to various waves of Vinitrac® both for still and target in order to be nationally representative. sparkling wine. Please get in touch with What is Vinitrac? [email protected] with your question By analysing the demographics of this request or project proposal to be included in segment of the population, we are able the next wave. to establish our quotas so that our survey ack in 2007, just as have a reasonable idea of the sample reflects the gender and ages of these the financial crisis was profile of the people who should regular wine drinkers. brewing up in the world’s be present in the survey from the largest economies, Wine overall population of interest. Vinitrac® remains the largest ongoing online BIntelligence launched the first We need to then make sure that study of wine drinkers in the world, and multi-market consumer survey those characteristics – age, gender, since 2013 we have collected responses of dedicated to wine drinkers. By this income level, wine drinking approximately 500,000 wine drinkers. It is not point we, as a company, had run behaviour – are matched in the only an incredibly powerful tool, but also one quantitative consumer research sample you take. Following the that allows us to be much more confident in in several markets and for several tenets of statistical theory, such a the reliability and accuracy of our surveys years, but this was our first go at sample (known as a quota sample) due to Vinitrac® samples being nationally something co-ordinated and large will then give you a better picture representative of each country. scale. of the population of interest rather than one where you just Extraordinarily, some well-known studies Jasmin Blockey, Wine Crucially, the launch of our took the first 1,000 answers you in the wine category still don’t bother with Intelligence research global wine drinker survey got, irrespective of who these this step. So if you are being presented with followed a significant investment respondents were. survey evidence, and want to test its validity, analyst, explains our in establishing exactly what kind ask about how it deals with the question of proprietary global of people we should be talking Of course there are problems representativeness. The person presenting it survey of wine drinkers, to in each of the 10 markets we with quota sampling too. For is either going to be delighted at being able to surveyed in that first wave – in instance, how do you get the quota disclose the extensive work they have done to which monitors and order to create a survey that was in the first place? And how do address this (you have been warned); or shift representative of the populations you know it’s correct? Nowadays, uneasily and stare at the floor. Either way, you tracks the attitudes, BRAND LABEL BESPOKE of wine drinkers we were trying Wine Intelligence runs Vinitrac® will have your answer. behaviour and the to understand. It’s worth clarifying surveys in 33 countries (latest HEALTH TESTING QUESTIONS consumer’s relationship what we mean by ‘representative’, addition: India) and part of the AMONGST OTHER MEASURES with still and sparkling as this is a word often thrown challenge we face every year is Wine Intelligence around (sometimes erroneously) keeping our quotas up to date – or Vinitrac® waves: wine around the world, when evaluating the meaning of even, in the case of new countries, AVAILABLE MARKETS has just turned 11 years specific data points in a broader establishing them in the first place. old, and has expanded context. In order to make sure all surveys Still wine drinkers: Argentina - Australia - Belgium - Brazil - Canada - Chile are representative, extensive market January, March, July, - China - Colombia - Denmark - Finland - France - to cover 32 countries. Put simply, collecting a sample of, research has to be conducted Germany - Hong Kong - Italy - Ireland - India - Japan say, 1,000 interviews in a market before we even distribute the October - Mexico - New Zealand - Norway - Paraguay - Peru But what makes it so - Poland - Portugal - Russia - Singapore - South Korea - and then claiming that the views surveys. In a given market, we useful? Spain - Sweden - Switzerland - The Netherlands - and behaviour of those 1,000 need to run calibration studies. We United Kingdom - United States ‘represent’ that of the market as tend to use very well established Sparkling wine drinkers: a whole is only possible if you and far-reaching general omnibus May / June

16 | wineiQ | Q2 2018 Q2 2018 | wineiQ | 17 Delivery services and Consumers are still pop-ups are offering looking for quality in the 3less risk and more 5on-trade wine — and are The ‘perfect storm’ in appeal for investors, while willing to pay for it also creating competition against the on-trade If a job is worth doing, it’s worth doing properly. It’s a mindset we’re the UK on-trade With their low overheads and ability seeing with wine choices in the to be flexible geographically, pop-up on-trade. One of our findings from restaurants present far lower risk to SOLA wines are last year’s UK Landscapes report t used to be a simple decision for legislation and restaurants are investors. They also enjoy a novelty still a very small was that people are drinking less a British consumer to get food: finding it hard to attract staff from factor and it is far easier for them to but spending more when they do. go out or cook. Now, we have an ever-decreasing pool of skilled tap into current food trends, which part of the If you’re only going to have one multiple other alternatives to workers. As well as the financial means they are pulling customers wine category glass, then make it a good one. Ithrow in the mix: takeaway, ready- uncertainty that Brexit brings for away from traditional restaurants. On-trade premises are happy to meals and meal-at-home kits to any business owner, European but awareness facilitate this and we’re seeing a name just a few. workers are trying to secure their We’re also seeing fewer people and demand is wider range of wines being made uncertain futures and the result is a eating in the on-trade and it’s easy available so people have greater These elements are all affecting the departure, which in turn is leading enough to see where they’re going growing. scope to experiment. UK on-trade, as discussed in Wine to increased wage demands from – UK-based food delivery company Intelligence’s recent report UK those who know they have the Deliveroo is growing at 25% each On-trade Trends 2018. Our key bargaining power. month. Organic wines There is a growing findings include the following: are becoming interest in alternative It’s not entirely doom and gloom, wines, albeit from a a part of the 6 Although wine The uncertainty of Brexit though, while some more specialist small base is struggling for The UK restaurant sector is impacting both staff concepts like vegan restaurants are successful is experiencing a and import costs showing some growth. SOLA wines (sustainable, organic, attention in a UK 2 vegan and lower-alcohol) are still a very small commercial crisis 1 part of the wine category but restaurant sector As our tastes have changed and the vegetarian Wine is receiving less awareness and demand is growing. experiencing a It’s a worrying time for those in the world has become smaller, we take movement and on-trade with a ‘perfect storm’ of exotic dishes and ingredients for attention as other drinks Organic wines are becoming a ‘perfect storm’ of are taking share of the demand part of the successful vegan and deteriorating commercial conditions granted, but they have to come from 4 adverse trading driven by increasing costs including somewhere. Price and currency mind for both consumers is such that vegetarian movement and the conditions, there is wage legislation and increased instability means that importing and trade demand is such that we are seeing business rates. food and alcohol is an increasingly we are seeing speciality events for natural wines. a growing interest expensive challenge. The uncertainty Wine is getting more expensive. speciality The label is not enough – people in alternative In the report, we commented on surrounding Brexit and the weak With an almost exclusively will only drink SOLA wines if imported wine market, it’s hard to events for they taste good – but those in the wines, albeit from high-profile mid-market chains sterling means that investment is such as Prezzo and Jamie’s Italian becoming increasingly risky. get away from those rising costs as natural wines. industry sense a willingness to a small base. closing branches and since the the sterling stutters. Although wine engage in the category as soon as Wine Intelligence report’s publication, that situation We have a large non-UK workforce remains the backbone of alcohol education levels increase. on offer in most food outlets, research analyst has continued. The profits of the but potential restrictions on their UK’s top 100 restaurant groups ability to travel and work means spirits (notably gin), cocktails and Overall, while the UK on-trade Luke Catterson have fallen significantly in the last there is a strong possibility of a big craft beers are the noisy neighbours sector is experiencing a wave of highlights the top year as companies are forced to employment hole that will need drawing share of mind when it challenging trading conditions, it comes to alcohol. The number of is not all bad news for wine, as six findings from UK tighten their belts instead of having filling. It’s also possible that health customers loosen theirs at the legislation may be influenced by the regular wine drinkers has stabilised restaurateurs think outside the box On-trade Trends table. growing anti-alcohol movement and shows no sign of increasing for on how to engage customers and 2018 without the countervailing influence now, while the others are growing provide them with both quality and Labour costs are also rising of the EU to keep any likely and that can only mean eating into alternative wines. wine’s share. following the new Living Wage restrictions in check.

18 | wineiQ | Q2 2018 Q2 2018 | wineiQ | 19 consumption patterns towards less therefore, is not only limited to chemical, natural or sustainable small groups of enthusiasts but has products. The evidence so far an increasingly influential impact suggests that, just as the wines on distribution and on price points. themselves arise from a diversity of Retail is embracing ‘traditional’ methods and philosophies, so too organic wines that flank the positive do consumer motivations to drink trend of food. Restaurants, even organic or biodynamic wine. There Michelin-starred, gastro-pub or wine are the environmentally committed bars, have increased the number (“I buy only wine from small farmers of these organic or natural wines because they do not pollute”), those found on their menu, often to the who have a personal taste preference detriment of famous brands that (“I cannot stand the taste of wine are perceived as too commercial. produced with Wines whose selected yeasts”) price, despite being throughout the year promoting these and those who have often higher than types of natural wines, some of decided there is an This introduction that of traditional which take place at the same time as equivalence between of natural wines competitors, Italy’s sustainable the biggest trade fair in the sector, chemical intervention is not only limited does not seem to Vinitaly in Verona. like sulphur and discourage these the size of their to small groups of loyal consumers. Vinitaly, in fact, is flanked by several hangover (“I could enthusiasts but has independent events aimed at specific advantage drink two bottles of an increasingly Such trends do not niches of consumers, especially these wines and not appear in isolation. those of organic or natural wines, have a headache the influential impact Our new report verything that is organic, organic food, Italy has become the that occur in different locations at next day”). on the alternative biodynamic, sustainable and largest organic in the world, on distribution and a distance not too far from Verona. wine sector, Global ‘natural’ is currently very with a share of 15.5% . Italy is on price points. Just before Vinitaly, I attended a The profile of these Wine SOLA report, popular in the followed by Bulgaria (share of 14%), high-level at Summa, drinkers is a bit makes the broader Ebusiness. This trend started with Spain (11.1%) and Austria (10.9%). hosted by one of the most important more consistent: point that consumers food, but now includes wine. Indeed, producers of the South Tyrol, Alois they are often younger consumers, are connecting more strongly than after a few years, the phenomenon Similar to the development of the Lageder, who is also president of perhaps reflecting a casual stereotype ever before with the environmental has changed the face of Italian Italian Federation of Independent Demeter Italia. For the 21st time, of the hipster, morally committed philosophies of those who produce wine, creating new market space in a Winegrowers (FIVI), which aims to over 80 quality-conscious, mainly Millennial, impressionable by artisan their wines. While some concepts, mature market for alternative wines, protect and promote the figure of environmentally-friendly microbrewery drinkers, with a such as natural wine, remain vague even beyond what is happening in Italian winemakers artisan winemakers, there is a great from all over the world assembled in lifestyle that provides a good dose and poorly understood by consumers other countries. have embraced stirring of producers who have his wine estate in Magrè to present of curiosity and use of social media (and, it turns out, for many in the trade environmentalism and embraced environmentally-friendly their wines to an international, highly to communicate. Their brand loyalty as well), more tangible aspects of the Sales of alternative wines are practices – all the way from the Alps qualified audience (mainly importers might be low for individual brands sector such as organic, or ‘sustainable’ sustainability more climbing even as the long-term to Sicily. and on-trade professionals working in (because they are not as experienced (however defined) are gaining traction strongly than any other trend of wine drinking in Italy is superpremium and iconic segments). in the category), it is much higher from Japan to Canada. major production down. According to data processed This interest can be seen in the In a quiet and relaxed setting, totally than the average for the genre of by Corriere Vinicolo, the weekly market, with growing numbers of different from the Vinitaly pavillions, alternative wines, and the alignment In this regard, then, Italy’s country, and their vision magazine of Unione Italiana Vini distributors specialising in natural a program of guided tours, seminars of environmental and ethical values. winemaking community seems to is paying dividends, (UIV), in 2016, the total hectares wines. The same positive trend in and wine tastings gave visitors the The consequence of this loyalty to be moving ahead of the curve, and according to of vineyards classified as organic sparkling wine consumption (as opportunity to meet famous vintners the ‘natural’ sector is an arresting strategically find themselves well- (including those in conversion) investigated in our Sparkling Wines and their wines. commercial proposition for Italian placed to advance in both volume Pierpaolo Penco, Wine rose to 101,290 – a 24% increase in the Italian Market 2018 report) winemakers: here is a segment willing and value, in a world market Intelligence Country compared to the previous year. This has led to the appearance of new Italian ‘natural’ wine is not only to spend a little more for this type of (including the domestic market) Manager for Italy number now represents 16% of all artisan bubbles, mainly in the ‘sur strong abroad but also on the wine. that is now valuing environmental Italian vineyards. After already being lie’ or ‘pet-nat’ (i.e. pétillant natural) domestic market. It attracts a segment sustainability, in all its forms, much the largest producer of certified categories. There are even events of consumers that have careful This introduction of natural wines, greater than in any previous era.

20 | wineiQ | Q2 2018 Q2 2018 | wineiQ | 21 to be the next big thing…unfortunately (especially for me as I am a big fan) we are Australia & New Zealand BEHIND THE SCENES still waiting. Stats of the Quarter WI: How do you think the Packaging Formats and Closures in the Australian market compares to other Interview with Rodney Sammut, Market 2018 markets? Wine Intelligence Country Manager for Australia and New Zealand Packaging consideration Currently, wine packaged in a can has the lowest levels of RS: We are definitely more similar than consideration amongst wine drinkers in Australia different to other wine markets around the WI: What kind of projects a wine surplus and had the added world: % who would consider buying wine in the following types of packaging formats Base = All Australian regular wine drinkers who are aware of the following packaging are you working on in the bonus of starting the journey • We are highly parochial in our wine choice formats for wine Australia office? of many wine consumers today favouring own local wines more than 100% discover more premium wine and other markets 93% RS: It has been a great start for better understand wine regionality. • We have a highly fragmented category that me at Wine Intelligence, and I However, it had the adverse effect spans multiple price points with thousands have dived straight back into the of getting those same consumers of wines to choose from wine category working on a myriad expecting good quality regionally • We drink wine for the same reason 41% 40% of projects from brand tracking, declared wines at more affordable everyone else around the world does for 33% 33% 33% 25% packaging, communications testing prices. This has morphed in the relaxation and reward. as well as one particular project last five years into the ‘exclusive where we were asked to give brand/private label’ phenomenon WI: What initially attracted to you 1% direction on ways to improve the that we are seeing in major to working in the wine industry – Standard glass Half bottle Large bottle / Smaller cask Small bottle Cask (4 or 5L) Wine in a can None of these bottle (750 ml) (375ml) magnum (1.5L) (2L) (single serve, n=689 (single serve, presence and imagery of a particular retailers. and what keeps you there today? n=876 n=487 n=610 n=621 187ml) 250ml) wine region amongst consumers. n=553 n=108 Rodney joined Wine Marlborough Sauvignon Blanc RS: I was definitely a (very amateur) wine Intelligence’s Sydney WI: What kind of trends have replaced as the number hobbyist before I joined the industry you seen in the Australian one white wine sold in Australia having started a wine club at University office in January market over the last 20 almost ten years ago now and this and spending a lot of spare time in liquor Source: Wine Intelligence, Vinitrac® Australia, Oct’17, n=1,000 Australian regular wine 2018 with 20 years of years, and specifically your trend piggy-backed off a massive stores discovering new wines (I still enjoy drinkers last four months at Wine taste and flavour trend in Australia that today). I kind of fell into the wine industry experience. Intelligence? that saw consumers seek out less industry from a career perspective; I was New Zealand Landscapes 2018 He is the former Head sweet / full bodied flavours and working for a spirits distributor in the late Country of origin awareness and consumption While consumers show high awareness of countries like France more refreshing / tangy styles in ’90s and when they decided to expand into of Customer Insights RS: Wow, this is a big question! and Italy as ‘wine-producing’ markets, the majority of actual There have been some fantastic the foods and drinks that they wine, I put my hand up to work on all the consumption still comes from the domestic market at Endeavour Drinks pitch documents and marketing material for trends in the wine industry over the consumed. Base = All New Zealand regular wine drinkers (n=1,000) Group (Woolworths) last 20 years. potential wine suppliers. When we started The introduction of screw-caps to meet these suppliers, and taste their and has held New Zealand 93% 96% was the other big trend, but this wines, it kind of became a no brainer – how When I first started in 2000, the big Australia 61% 88% leadership positions trend was wine in frosted, curved was more a production led trend could you turn down wine tasting at work! France 23% 85% and coloured bottles with brands that reached a critical mass that I then started actively seeking opportunities at Fosters, Southcorp Italy 15% 79% like Glass Mountain and Soho. They consumers really didn’t have a in the industry and haven’t looked back. and McWilliams. Here, California - USA 8% 69% were never going to last long, but choice but to buy in screw-cap. Spain 10% 68% Rodney reflects on they had a massive impact in the WI: What are your favourite wines South Africa 13% 65% time they were around and moved In the last four months, the biggest or regions of wine? his past four months Chile a lot of consumers out of cask and ‘noise’ has come from the full-scale 11% 59% at Wine Intelligence, wine coolers into the bottled wine launch of wine in a can within RS: Of all the questions you have asked Germany 4% 52% starting his university’s category. Dan Murphy’s and BWS. Whether me this one is the hardest as I like so many! Portugal 3% 50% wine club and trends in this is a trend or not is yet to be But despite my quip about above, Argentina 6% 49% The rise of cleanskin (unlabelled/ determined, so watch this space! I am a massive Riesling fan (Eden Valley) Other USA (outside of California) 1% 23% the Australian market …ohh and every few years for the in whites and Shiraz fan (from all over) in FOR SIZING 100% unbranded) wines helped Source: Wine Intelligence, Vinitrac® New Zealand, Oct’17, n=1,000 New Zealand regular Australian winemakers get through last 20 years I hear Riesling is going reds. wine drinkers

22 | wineiQ | Q2 2018 Q2 2018 | wineiQ | 23 Globally connected. We believe that the only way to really understand what drives us as consumers is to watch, listen and learn.

That’s where you’ll find us.

We’ll be following home lives by rummaging through kitchen cupboards (with their owners’ permission) in suburban Sydney, surveying 5,000 in Germany, France and Denmark, or recording in-depth interviews with women in Chengdu, China.

Camera, recorder, questionnaire and discussion guide in hand, you’ll find us just about anywhere.

Contact your regional LONDON - HEAD OFFICE E [email protected] • T +44 (0)20 7378 1277 Wine Intelligence office: www.wineintelligence.com

AUSTRALIA - Ben SOUTH AFRICA - Dimitri FRANCE - Jean-Philippe E [email protected] E [email protected] E [email protected]

GERMANY - Wilhelm USA - Erica ITALY - Pierpaolo E [email protected] E [email protected] E [email protected]

BRAZIL - Rodrigo SPAIN - Juan E [email protected] E [email protected]