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From Cornwall to Kent, English wine producers are thriving, although the UK sparkling wine market has been in turmoil recently.
English sparkling wine improves with age. Top producers in this sector, such as Bolney Wine Estate, Chapel Down and Nyetimber, are gaining trust and building a stronger reputation, both at home and abroad. Meanwhile, the UK market itself (for both sparkling wine and Champagne) has seen declines, but is still attracting interest from many quarters, especially from prosecco makers in Italy.
Humphry Sergeantson, research director at IWSR Drinks Market Analysis, says: “In 2021, UK domestically produced sparkling wines (including British wines and English wines) grew by almost 20% in volume compared to 2020. Some of this recovery was from A slight decline in 2020, but the category is on a long-term growth path and volumes are expected to reach a CAGR of 6% between 2022 and 2026.
The biggest player in the market is Kent-based Chapel Down, which released a strong set of results for 2022 at the end of March. Sales rose 10% year-on-year to £15.6 million (US$19.4 million), led by sparkling wine. The winery makes its fizz using the traditional method just like Champagne producers, which helps improve its image.
In 2022, the company's sparkling wine sales rose 53% to £9.6m – against an already strong 2021 – to reach a record volume of around 800,000 bottles. “The concept of English wine has changed a lot,” Tom Hepworth-Bond, Chapel Down sales director, tells Global Drinks Intel. “We now export to 14 markets and also operate in global travel retail at London Heathrow, Gatwick and Eurotunnel.”
In early 2021, Chapel Down became a winery after disposing of its beer and cider business. CEO Andrew Carter is expanding the company's space as he doubles down on continued interest in English wines, and sparkling wines in particular.
High prices and premiumization
Last year's sharp sales jump reflected higher prices to some extent. “Customer average selling prices are up 19%,” says Carter. “This has been driven in part by higher prices to help offset inflationary cost pressures, but more importantly, by a changing mix of sales as we focus on higher-priced traditional method sparkling wines. Consumers are looking for premium drinks brands that are exciting, fresh and of real provenance.
Carter knows a thing or two about brand excellence, having previously held senior positions at both Treasury Wine Estates and Bacardi. He raised the profile of the Chapel Down brand with a deal to become the 'official sparkling wine' of the England and Wales Cricket Board last year, as well as a long-term sponsorship of the men's and women's Oxford-Cambridge boat races, which attract international audiences. . To mark the coronation of King Charles III in May, the company created a limited edition sparkling wine.
Chapel Down also leads in export duties, aided by the presence of vineyards (owned or under long-term contracts) that by 2024 will cover 1,000 acres. Exports are still small at £456,000, but have grown by more than 160% in the past year and are earmarked for future development. “In the export channel, we focus almost exclusively on traditional-style sparkling wines,” says Carter.
Smaller competitors are not as active, partly due to size. At Camel Valley in Cornwall, CEO and owner Bob Lindow says of 2022: “We've been selling to custom for many years, so sales have either been flat or better.” As for exports, he adds: “About 95% of our production goes to the United Kingdom, where demand exceeds supply.”
Bolney, near Brighton in Sussex, is one of England's leading estates and was acquired by Henkel Frixent last year. “As producers of Champagne, Crémant, Cava and Prosecco, we are delighted to add English sparkling wine,” the German drinks giant's chief executive, Andreas Brokemper, said at the time. “We are convinced that we can strengthen its image both nationally and internationally.”
“In 2022, our wine business grew by 17%, with sparkling wine outperforming across the business overall,” James Davis, managing director at Bolney Wine Estate, tells Global Drinks Intel. We envision strong export prospects with Polni's existing customer base, but also as a result of being part of the larger Henkel team.
Global warming is partly to blame for the rise of English sparkling wines, as has been the case for cool-climate wines elsewhere. “The quality of English bubbly has been improving for many years, partly due to climate change, which provides a longer growing season,” says IWSR’s Sergeantson. “This is leading to improved recognition both at home and abroad, and increased investment, including from major international Champagne houses.” , such as Taittinger and Pommery.
The popularity of English sparkling wine shows no sign of abating, as indicated by IWSR forecasts promising a CAGR of 6%. Chapel Down plans to double its total business by 2026, but in terms of UK industry-wide exports shining, a lot depends on production volumes that have never been high in the country.
UK decline, but there is little sign of interest in sparkling wines abating
As for sparkling wine in the UK, sales in the 12 months to the end of February fell by 8.5% to £1.3 billion (based on sparkling wine and Champagne combined). Freixenet, run by the Freixenet Copestick UK division of the group of the same name, retained its leadership position and was the only brand to achieve sales in excess of £100m (source: Circana 52 weeks to 19 February). The brand also saw the smallest decline of 2.2%, while Asda's Yellow Label collapsed by 27%. Veuve Clicquot and Taittinger Champagne also saw great waterfalls.
The only brand to grow in the top 15 was I Heart (+7.8%), another brand in the Henkell Freixenet portfolio.
For Italy-based Zonin, known globally for its prosecco brand, the UK accounts for around 20% of the company's exports and is still considered a growth market. “Prosecco is an important sector in the UK, accounting for more than 60% of sparkling sales on and off trade,” says a company spokesperson. “We produce a large amount of private labels, including Kylie Minogue Prosecco Rosé. In just one year, rosé prosecco became No. 1 in the UK and has since been launched in the US.
However, the company notes a decline in high-end DOCG lines, due to “the economic situation affecting consumer behavior in the short term.” In the longer term, according to the spokesperson: “We believe the premiumization trend will return, driven by UK consumers’ thirst for strong, high-quality brands.”
Meanwhile, Bottega, another Italian company that produces sparkling products near Venice, is also optimistic. “Our Prosecco product continues to grow in the UK in 2023,” says a company spokesperson. “But given the uncertainty affecting the global economy, it will be difficult to repeat our performance in 2022.”
Bottega's namesake brand is well represented in hotels, restaurants and department stores, and stands out with its metallic gold Bottega bottles. The company has also focused on the global travel retail channel in the UK. A year ago, Bottega opened Prosecco Bar & Caffè at London Stansted Airport, a format that has been expanding globally since its launch in 2014, with around 30 locations to date. Other UK locations include Birmingham Airport as well as seasonal pop-ups at Bath and Windsor Racecourses.
“The Prosecco Bar formula has been a huge success in Italy and around the world,” says President Sandro Bottega. “It turns a quick break into an experience. Our wine bar format is of particular interest in the UK, where the Bottega brand is popular in the prosecco and sparkling wine market.”
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