Greg Sherwood MW: The complicated path to wine premiumisation
By Greg Sherwood, 24 August 2022
Pretty much every New World wine producing nation’s generic promotional body spends most of their time trying to work out how they can engineer increased sales of more premium wines from their nation within the lucrative, multi-segmented UK market place. But of course, any value-added promotional work needs a basic, established foundation of mass market wine sales to form a beachhead from which to launch off with more intricate, engaging, complicated premium consumer offerings. With the current cost of living crisis descending upon mainstream markets all around the world, the task at hand gets more and more difficult by the day as shoppers tighten their belts and rein in luxury spending.
In the UK, the mainstream, high-street wine trade buyers have often been accused of being ‘trigger happy’ when it comes to preempting any real-time consumer down trading by rejigging their supermarket shelves with cheaper, more generic value offerings long before consumers actually start to reduce their wine spend. But as we have learnt from the cosmetics industry globally, financial and economic downturns often coincide with increased spending in affordable luxuries like make-up and cosmetics, not less. Putting lipstick on the sacrificial pig, as they say. Much of the psychology is often counter-intuitive, but consumer economic patterns do often work in unusual and mysterious patterns.
During the on and off lock downs of the Covid-19 pandemic, all across Europe we saw an increase in spending on wine purchases as people, many of whom were furloughed at home or else simply working from home, treated themselves to better bottles of wine at higher price points, not lower – the classic ‘affordable little luxuries’ scenario. Any urges of product buying teams to dumb down and rationalise wine ranges in these circumstances would also have been a big commercial mistake.
When examining the very lowest entry level wine buying patterns, these consumers are the most vulnerable to tightening economic circumstances and they are often the first to tighten their belts and trade out of the wine category altogether in favour of cheaper beer or spirit products. But essentially, these are not the consumers that generic wine trade promotional bodies are trying to entice to up their spend and change their buying behaviour in favour of the next level of value added premium wines that, in almost all circumstances, offer the retailer and the wine producer a higher level of sustainable profitability.
Belt tightening or not, during the summer months of July and August, I often spend a lot of time down on the beautiful Isle of Wight located off the south coast of England in the Solent. It may still be part of the county of Hampshire, but the island undoubtedly has its own culture and bio-rhythm unlike anything on the mainland. Having holidayed here on and off for over ten years now, I have watched the island change and evolve, and more recently over the pandemic, become a prime tourist destination as UK holiday makers chose, often through necessity, to ‘staycation’ closer to home instead of heading off to classic summer destinations like Spain, Portugal, France or Greece.
With a sudden change in consumer holiday travel patterns, the island has also seen a noticeable change in the demographic of its average holidaying family and anecdotal evidence suggests that this family is a lot posher and more well off than might normally have been the case in the past. With this new influx of wealthy middle class tourists, the island has responded with incredible speed to accommodate the more upmarket tastes of these consumers. Refurbished hotel rooms, new high-quality, upmarket restaurants, new tourist activities and even new luxury wine bars – you name it, and someone is probably planning it. Gone are the dodgy 1970s penny arcades of old, replaced on prime beachfront sites by tapas bars, sushi bars and Ibiza-style beach clubs and cocktail bars. The changes are now entrenched, tangible and seemingly irreversible. The island is finally being gentrified.
But one should also be clear on another important point, climate. Global warming has been very kind to the island with long hot balmy summers now more the norm than the exception, and the island resembling more St Tropez on the Solent than cloudy Bournemouth or Blackpool. For me, the clearest manifestation of these socio-economic changes are represented in the changing wine ranges and wine offerings in the islands various retailers as well as in on-consumption hotels, bars and cafes. On my current visit, I have recently noticed how my local convenience store, which used to carry a very average range of mass-market, branded wines, has suddenly started to stock several £30+ red and white French Burgundies, some £50+ Côte Rôtie Syrahs from the Northern Rhône, a broad smattering of premium Côtes de Provence Roses like Domaine Miraval, Chateau Minuty and Chateau d’Esclan’s Whispering Angel and of course sneaky bottles of Pol Roger’s Sir Winston Churchill and Krug’s Grandes Cuvées Champagne.
Importantly, top premium South African wines have not missed the boat altogether but studying the general brand ranges and which mainland winetrade suppliers are now actively providing most of the island’s luxury wines, there is plenty of room for improvement, especially in the off-premise consumption retail ranges which are still dominated by value supermarket-style South African brands. But thankfully, there are plenty of more notable highlights in the on-trade restaurant establishments including some delightful Cederberg wines with entrenched listings at the Hut in Colwell Bay, one of the top seafood destination restaurants on the island, delicious bottles of Ken Forrester’s FMC Chenin Blanc and Thelema Shiraz on the list of the Smoking Lobster Restaurant, another of the island’s most exciting Asian-fusion cuisine restaurants, and then a fabulous selection of Klein Contantia’s red and white wines on the list at the stylish George Hotel and Restaurant on the Yarmouth Waterfront.
But I understand that these are early days and too much should not be read into the very classical wine lists being offered by many of the islands establishments. There is always a knee-jerk reaction to initially buy very classical French wines when suddenly premiumizing a wine list, especially when there is plenty of seafood and oysters on the menu. But if the top establishments in London are anything to go by, South Africa’s finest producers are finally finding a long-term home on many premium restaurant wine lists with 3 Michelin Star restaurants like the Core By Clare Smyth leading the way in featuring a massive selection of top-end wines from names including Sadie Family, Alheit, Naudé, Sions of Sinai, Restless River and Lismore.
My little island anecdote merely represents a larger, broader, changing market place picture that will increasingly start to come under massive cost and budgetary restraints from all quarters. Changes to ranges and wine lists will need to be considered to accommodate consumers available spending power. However, economising does not necessarily need to mean dumbing down or compromising on quality. South Africa’s best producers are the perfect alternative to many of the overpriced French classics, and while allocations of the sexy SA wines will always be very tight, you will be amazed how quickly extra stocks are made available to top restaurants looking to invest in some of South Africa’s finest winery names. So whether you are in London or down in the St Tropez of the Solent, make an effort to seek out some of South Africa’s best offerings when eating out.
- Greg Sherwood was born in Pretoria, South Africa, and as the son of a career diplomat, spent his first 21 years travelling the globe with his parents. With a Business Management and Marketing degree from Webster University, St. Louis, Missouri, USA, Sherwood began his working career as a commodity trader. In 2000, he decided to make more of a long-held interest in wine taking a position at Handford Wines in South Kensington, London and is today Senior Wine Buyer. He became a Master of Wine in 2007.
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