Californian UK market is wide open for new brand launches reveals California Summit

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Despite the dominance of Californian wine brands the category is still wide open for new brands to enter the market and gain significant market share.

 

That was the view of marketing consultant and former marketing director of Pepsi-Cola, Andrew Marsden, during yesterday’s Harpers first Californian Summit held in London.

 

Marsden was speaking during a day of keynote talks, panel debates, masterclasses and tastings at an event held in partnership with the Wine Institute of California to highlight the opportunities for the category in the UK.

 

Marsden said that whilst clearly the top five Californian brands in the sector were in a completely dominant position in the UK, how many of them had achieved real consumer affinity? He even went on to ask how far the branded Californian proposition for consumers had gone on “since the days of Paul Masson”.


“We don’t know Californian wines in this country. We have done a bad job selling the Californian wine in the UK,” he claimed.


But California was such an important category for the major multiples, because brands are essential to their business model. They bring an immediate and important affiliation with consumers.


It was essential, he added, that power brands like Blossom Hill, Gall and Echo Falls, are operating effectively because they set the trading context for all that is good or bad in that category.

But he stressed: “The UK market is ripe for any Californian brand to develop it.”

 


A point picked up later in the day by Robin Copestick, co-founder of Copestick Murray, that through its Cornerstone business based in California is working hard to build and potentially bring new brands to the UK. “I would agree there are great opportunities for new Californian wine brands in the UK.”

 

Lucy Clements, formerly of Cornersone and now Tesco wine buyer for California, said it was very much open to new branded propositions from California and that the category was so important to it because it appealed directly to its core, mainstream consumer. Consumers that buy straight in to the branded, easily approachable branded proposition that California can do so well.

 

As part of the same debate, Ian Anderson, commercial deveopment director at Accolade Wines, defended the role of Californian brands in the UK, and said they have been vital in attracting key consumer groups to the category.

 

He said: “The wine brands that dominate the US wine category in the UK have been a good thing by introducing wines to ‘newbie’ consumers at the beginning of their wine experience. It is now up to wine companies to improve their wine offering to include higher priced wines and take the lead on providing wines that rival, and better, Spain and France. It is these countries that ‘newbies’ migrate to when they develop their knowledge and further their appreication of wine.”

 

But he also warned that failure to do this could result in the California wine category “falling off a cliff”, similar to what happened to the Germany wine category in the 1980s.

 

Anderson said the potential for Californian wine in the UK was enormous, stressing the category was alreay one and a half times the size of the tea market in the UK with sales of just over £1 billion a year, of which £690 million goes through the off-trade and £355 million goes through the on-trade.

 

He said the top five wine brands - Blossom Hill, Gallo, Echo Falls, Turning Ridge and Barefoot - account for 80% of all US volume sales in the UK. Without those five brands California sells 35% less wine over £7 than Argentina. Only 1% of US volume sales were over the key £7 figure accounting for just 2.4% of the £7 plus market compared to France which has a 38% share. Which meant that 69% of sales are below £5, underneath the overall average bottle price of £5.04 in UK.

 

Accolade Wines, he said, hoped Geyser Peak which was introduced to the UK market earlier this year offered a “credible premium wine range from California that retails at £7 and over which aims to drive value growth in the category”.

 

Marsden said the Californian branded sector will only go on to prosper and grow if Californian producers really want to invest in it. “Are they advertising direct to consumers, because that is how you build a brand. How you build a consumer franchise.”

 

John McLaren, UK head of Wine Institute of California, said the summit had been an important day for the trade to openly discuss the opportunities and challenges facing the sector and that he was heartened by much of what was said and would be taking the key messages back to California.

 

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