Irish consumers lose their bottle for on-trade wine drinking

June 16, 2011

It may have been the drink of the God’s but for the children of the Celtic Tiger the grapes have turned sour. With Irish consumers finding themselves under increased financial pressure the number of consumers willing to splash out on life’s little luxuries has diminished. And according to latest research from Mintel, it seems that this climate has not inspired consumers to go out and drown their sorrows with wine, as on-trade sales of wine shrunk by an estimated 13% between 2009 and 2010, from €393 million to €342 million.

Furthermore, the all-Ireland wine market valued at €1.4 billion in 2010 – has declined from €1.5 billion in 2009. Conversely, the all-Ireland off-trade wine sales grew by 3% between 2009 and 2010, from €1.02 billion to €1.05 billion. The NI off-trade accounted for €285 million (85% of total wine value sales) in 2010, and the RoI off-trade €768 million (75% of total wine value sales). Mintel Ireland’s exclusive consumer report into the Irish Wine market sheds light on the shift in the sales of wine, and why for Irish consumers drinking at home is the new going out. Indeed, today, some 39% of NI and 34% of RoI consumers claim that they are more likely to drink at home – up 6% RoI and 4% NI from 2005 to 2010. Overall some 60% of RoI and 46% of NI consumers have drunk bottled wine in the last year.

Brian O’Connor, Senior Consumer Analyst at Mintel, said

” our research highlights that for Irish consumers are entertaining more at home – and it seems that the majority of this decrease in on-trade is due to Irish consumers increasingly forsaking restaurants, pubs and bars in favour of drinking at home. This isn’t likely to change while the recession is eating into consumers leisure spending, with the opportunity to sell premium wine diminished; for the foreseeable future. While people are still willing to pay for brands they require some justification for splashing out. If a higher price tag cannot be justified in the recession, consumers simply won’t pay it. “

Fortunately, the future looks rosier for the overall market as it is expected to stabilise to stay at the €1.4 billion mark in 2013. It is estimated that between 2010 and 2013 the on-trade market will contract by 18%, with the off-trade seeing an increase of 6% for the same period.

” it seems that its not just financial worries contributing to decline in wine drinking – but also health concerns. Put the two together and it present a compelling reason for consumers to drink less. Further to this, our research shows that many consumers associate wine, particularly red, with having health benefits due to the presence of anti-oxidants in wine. ” Brian O’Connor continues.

Today it seems an increase in consumers hosting dinner parties may have also helped to sustain off-trade wine sales. A quarter of NI and 39% of RoI consumers will drink wine when having dinner at home with friends, while 20% of NI and 29% of RoI consumers will drink it while dining with family at home. Furthermore, some 64% of NI and 68% of RoI consumers claim that when they have friends around for drinks that they are more likely to buy better quality alcohol. Furthermore, some 40% of NI and 36% of RoI consumers claim to look for meal deal promotions that include alcohol, (ie M&S dinner for two and bottle of wine deal).

Mintel’s research also highlights that Irish consumers are more likely to buy wine for home consumption than beer. Some 44% of NI and 59% of RoI consumers will buy wine for home consumption as opposed to 36% of NI and 52% of RoI consumers buying beer for the same purpose. However, the trend to in-home drinking has eroded alcohol brand loyalty somewhat with 55% of RoI and 54% of NI consumers claiming they are less loyal to brands than they used to be as price is now paramount. Further still, some 23% of NI and 19% of RoI consumers bought own-label alcohol in the last 12 months.

Typically the average NI and RoI wine drinkers will spend between €6 and €10.50 on a bottle of wine, with the recession seeing them unlikely to boost their spending per bottle in the near future. Just under a quarter 24% of NI consumers compared to 35% of RoI consumers state that they are willing to pay more for good quality wines. Over the past year, sales of red wine accounted for half (50%) of wine value sales, with white (45%) and Ros

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