Wine on tap: A Draught too far?

From barrels, to bottles and now to taps – whilst on-trade sales of wine have performed poorly in the UK in recent years, wine on tap could be an unusual way for the market to increase sales.

Wine remains a highly traditional drink category, with innovation tending to be more conventional than adventurous. The hard-won battle for acceptance of wines which use screw cap closures instead of corks is testament to this conservatism. However, there are signs that consumers are becoming increasingly receptive to alternative formats of wine serves such as cans and on tap (draught). The craft beer revolution has played a role in the shift – particularly in terms of packaging formats – leading many consumers to reappraise their perceptions of how drinks can be served.

These developments could be particularly influential in the on-trade, where high price mark-ups and difficulties in selling sufficient quantities of wine by the glass have hindered growth.

The popularity of sparkling wine on tap paves the way for still wine

Wine on tap could be an unusual way for the on-trade to revive its waning fortunes of recent years. The popularity of sparkling wine – initially branded as Prosecco on tap before opposition from Italian winemakers – has shown that there is an appetite for this type of serve among British wine drinkers.

This solid foundation could mean that still wine served on tap may provide operators with further growth opportunities. There are clear benefits for operators in using wine on tap, not least in enabling them to sell a wider range of wines by the glass. As well as saving a large amount on packaging and shipping costs which could theoretically be passed onto customers, these wines are considerably more environmentally-friendly than glass bottles. Keg wine also takes up much less space in venues, whilst theoretically ensuring it stays fresher for longer.

Consumer interest in wine on tap is high

As well as there being encouraging interest in sparkline wine on tap, consumer interest in still wine on tap is also surprisingly high considering the current rarity of this format. Although over half of UK consumers state that they are not interested in these wines; a share which is boosted by those who do not drink wine at all; three in 10 are interested in them.

Millennials are typically the age group most likely to be open to product and serving innovation and least wedded to traditional factors. While interest in still wines on tap does skew towards under-35s, this is not as large as may have been expected, with interest holding up reasonably well among older age groups and only falling to 24% among over-55s. Retaining the interest of over-55s will be important for the growth of the segment as this age group is in fact the most likely to buy wine in venues such as pubs, bars and restaurants.

Wine on tap should offer on-trade operators opportunities to sell a wider range of glass with less risk than in bottles. However, acceptance of this kind of serve will be dependent on quality and the focus should be on premium rather than economy wines. Brands with a wine on tap proposition could leverage freshness cues, which have been so effective in the draught beer market.

Chris Wisson, Senior Drinks Analyst at Mintel, researches and writes reports on the UK drinks industry. He was also responsible for setting up Mintel’s Toronto office which opened in May 2014. Prior to joining the company, he worked for M&S/Park Cakes as a Bakery Merchandiser and as a Business Analyst at Moët-Hennessy. Chris has been quoted in a variety of industry and national publications such as BBC Online, the Financial Times and the Guardian.