| Thee annual publication of Alcoholic Beverage Review , the indispensable South African trade guide puts the spotlight firmly on the growth of premium, higher price brands, reports wine.co.za
Editor Andrew Moth, a veteran observer of wine and spirits, identifies ten trends in domestic and export wine markets during 2006:
1. Domestic wine consumption fell for the fourth year - recovery rests on new brand growth in the black market where wine is perceived as a 'highly aspirational category'.
2. Almost half of South Africa 's domestic wine is now exported - onto fickle markets flooded with a global white and red wine surplus and cut-price brands.
3. Exports are down in established entry-level brand markets like UK , Netherlands ) but growing strongly in more profitable high-value markets like USA , Canada and Germany .
4. HP (high price) wines grew at a sound rate of 7% on the domestic market - and premium wine brands are driving growth in newer markets.
5. LP and MP (lower/medium price wine brands) continue to decline at home - though they still account for over two-thirds of wine sales.
6. Red wines and rosé wines are increasing while white wines decrease in sales.
7. The increased competition for shelf space by 700 producers with 5000 wine labels is overloading the domestic market - and leading to new marketing strategies by smaller producers which band together within distribution networks.
8. The supermarkets have 'a pricing stranglehold' over HP wines - bad news for all the small-scale new cellars coming on line who struggle to get listings in limited categories.
9. Consumers know about the surplus - accelerating downward pressure on brand prices.
10. There is a low level of wine brand awareness among consumers relative to other beer and spirit brands.
He cautions wine producers, 'Too many attach too much importance to the plethora of domestic awards, competitions and critics that contribute very little to the bottom-line.'
Real workhorses of the wine industry remain namely Nederburg, The Saints, Graca, Grunberger, Chateau Libertas and Bellingham - the top-selling big six HP brands, respectively. The top-selling six wines are ranked as Graca, Chateau Libertas, Nederburg Baronne , Grunberger Rosenlese, St Anna and Nederburg Rosé.
Good-value brands which increased market share were Chateau Libertas, Nederburg Baronne, Two Oceans , Van Loveren Four Cousins and the Saints.
Many key industry leaders - Distell, DGB, KWV, Pernod Ricard, NMK - contribute revealing analyses. Predicts Tim Rands, MD of Vinimark, 'Red wine is no longer this scarce commodity. It is just another beverage drunk alongside white and rosé wine, and it will have to compete at the same prices. More wine is being consumed in the HP wine market than we have ever seen before. It is difficult to justify the higher prices that some producers are
Distell owns seven of the top ten premium wine brands and four of the top five super-premium wines.
The spend on wine advertising was down to only 2.7%, with 60% going to support the ten big brands. In an insightful debate on the relatively low level of brand awareness of wine compared to beer and spirits, the report concludes 'the SA wine market is close to saturation and unable to support labels initially conceived for the export market.'
Rands also warns producers of the high costs of marketing wine brands in an over-crowded commodity market with limited listings. He concludes, 'Supermarket wine buyers will deal with some new labels in the short-term but long-term they will drive those brands that are supported by strategic advertising. They can't deal with every wine producer.'
Full report on http://www.wine.co.za |
