Recently, we paid a visit to The George Public House, in Soho, London, where we spent considerable time perusing their extensive English wine list. For those of you who follow us on Instagram, you might recall that this comes quite quickly on the heels of our trip to The Stag at Offchurch, in Leamington Spa, by all accounts a posh wine-drinking market, but where pubs struggle to keep English wines on the menu. For GM Ollie at The Stag, numerous attempts to include UK still and sparkling wines have fallen on somewhat resistant pub-goers, who forego premium English fizz for Prosecco or a Pinot.
A similar challenge is happening in the off-trade market, where wine shops are increasingly stocking English wines, but in a climate where name and label recognition is low, and many are nervous to shell out £30 or more on a bottle they’ve never heard of, especially when a well-known Italian or French varietal is available by the glass. On a recent visit to Birmingham, we stopped in at Arch 13 which also houses the wine shop Connelly’s. We enjoyed a fantastic Sharpham Figgie Daniel and had a great chat with Abigail who shared that, while wine shops and bars are happy to bring in more local wines, customers often don’t ask for them. Later, we checked into and spoke with some young locals, out for a fun night, who admitted that they usually pick a wine by its label and proceeded to fill their glass using Loki’s Coravin system, which again they chose because they ”liked the guy” on the bottle (in this case a South African Chenin Blanc). When that ran out they moved one to the right – this time a Simpson’s Gravel Castle Chardonnay – and surprised themselves by how much they enjoyed it. We shared a bit of our Kingscoate Brut with them (which they also enjoyed) and retired back to their friends, promising to consider trying more English in the future.
In recent years, the English Wine Market Expansion has become a hot topic in the industry, particularly as we look beyond the cellar door. As direct-to-consumer sales are showing a downward trend, the expansion of the English wine market into off-trade and on-trade channels presents a new frontier for growth.
These observations by UK Fizz are also backed by research. Beyond the cellar door, for instance, the biggest 25% of UK wine producers account for a massive 83% of off-trade sales. Full disclosure: we are ardent fans of the winery visit and of gaining insight into wines through tours, tutored tastings, and the experience of walking through a vineyard and crush pad, and learning the lifecycle of a wine, from vine to bottle. And it is still a fact that most visitors to your winery will leave with a bottle in hand.
The truth, however, is that DTC sales are falling rapidly in the UK. In 2022, online and winery transactions accounted for about 36% of sales; in 2023, this fell to 30%, and the expectation is a continued downward trajectory, especially as social mingling and eating out have returned to pre-pandemic levels.
WineGB’s 2023 report argues that “purchasing habits have changed” in the wake of COVID-19. “This can be seen in the reduction of direct-to-consumer sales and growth in on- and off-trade accounts.” The primary take ways from the report however, is that while the biggest producers unsurprisingly seem to have the off-trade market dialled (i.e Gusbourne experienced a 53% increase in 2022, and Chapel Down), there is massive potential to scale off-trade sales for wineries in the production range of 12,000 to 80,000. This seems to be the “sweet spot” for wineries looking to scale sales, where the case count is high enough to warrant distribution through bottle shops, restaurants, and bars, but more trust, scaling strategy, and expanded marketing plans are needed.
To be sure, the UK off-trade is not the ceiling here. The export market for English wines is rapidly expanding – accounting for 7% of UK wine sales last year and only trending upward. Indeed, the expansion of the English wine market is evident; with more and more English wines winning awards at international competitions, the demand for British fizz in overseas markets will continue to grow. While some research suggests that Hong Kong, the United States, and Singapore are leading demand abroad, we’ve got our eye on South Korea, Scandinavia and Germany, stay tuned for a future post on this!
Get in touch if you want to chat about how to develop an off-and-on trade marketing plan to complement your DTC efforts and raise the profile of your wines beyond the cellar door.