Introduction
The United Kingdom seems to be a major consumer of wine but it does not produce it in high quantities. Research shows that the domestic market accounts for 1% of the total wine sales in the UK. This total is a combination of English and Welsh wine sales. U.K's cold climate is linked to low wine production in the country (Brager, 2018). However, the current market for wine in the UK is growing. Global; warming is said to have played a major role in boosting the sale and investment of wine business in the UK. The wine that is mostly produced in the UK is white and of sparkling variety. UK most wine's businesses are opened in warmers areas such as Wales and Southern England. In the UK, counties such as Essex, Kent, and Sussex attract the wine business due to their warmer and drier climate (ShipCompliant, 2018).
The current trend of the wine
Pinot Nero is currently not doing well in the UK market. However, new polling commissioned by the Wine and Spirit Trade Association (WSTA) shows that wine is the most favored alcoholic drink in the UK. 60% of UK adults prefer wine to other alcoholic drinks. Pinot Nero tends to perform poorly in the UK market because most people in the UK prefer consuming wines from brands they are familiar with. Some of these brands are; Hine Cognac, Martini Vermouth, Pol Roger, Champagne Bollinger, and Pimm’s. The other factor that leads to low consumption of Pinot Nero in the UK market is its price is high. In the UK, tax paid on wine sold is high which makes it hard for the UK consumers to use the Pinot Nero. Pinot Nero tends to do well in international markets (BW166, 2018). For example, Pinot Nero is ranked among the most used brands in Italy. Preferably, the reason may be the tax imposed on alcohol drinks is not high in other countries as it is in the UK. Thus, it would be advisable for the UK to consider expanding its alcohol business to overseas countries.
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Statistics relating to the wine and wine producer
Pinot Nero growth tends to increase over the years. For example, in the US, Pinot Nero is among the most consumed brands in the country. According to Wines & Vines and BW166 (2018), Pinot Nero growth rose by 2%. The rise in consumption levels of Pinot Nero tends to be boosted by its new packaging. Pinot Nero can now be sold in wines. 49% growth rate of Pinot Nero wine in cans has been recorded. New places that have been introduced promotes the consumption of Pinot Nero. For example, according to accountancy UHY Hacker Young, 80 wineries were launched in the UK market last year (BW166, 2018). This shows an increase as compared to the ones that were opened five years ago. According to EY, if the wine industry in the UK was given a 2% cut, this would lead to the openings of more wine businesses in the country. This would also lead to the future growth of the Pinot Nero wine. When it comes to the distribution of Pinot Nero, this particular wine is doing well. For example, in the US the largest distributors of Pinot Nero wine are; Johnson Brother’s, Republic National, Young’s Market, Southern Glazer’s, and Breakthru Beverage (Quackenbush, 2018).
How the wine is sold
According to Nielsen (2018), off premises of Pinot Nero has grown over the years. 55% of Pinot Nero wine is sold through the off-premises method in the US (Nielsen, 2018). The off-premises technique is mostly used by those people that prefer taking wine at their own private places. Some people are not comfortable taking their wines at public places such as pubs, restaurants, and hotels. Off-premise wine retailers are approximately 192, 000 in the US market (Grey, 2018). The merchandising activities that are linked to Pinot Nero are Winery Direct to Consumer (DTC). Winery Direct to Consumer (DTC) activities accounts for 2% of the total US market. However, these activities continue to increase as the wine industry market expands ( Shanken, 2017).
Pricing of the wine in ‘on-premises’ and ‘off-premises’
Off-premise price of a Pinot Nero wine bottle is $10. According to Nielsen (2018), this current price shows an increase as compared to past years (Nielsen, 2018). For example, in the year 2017, the off-premise price for Pinot Nero was $8 per bottle. On-premise price of Pinot Nero wine is at $40. This shows an increase of 1.3% on the on-premise prices of Pinot Nero wine bottle. On-premise prices seem to be competitive with spirits (Todorov, 2018). However, there is fear of the on-premises prices declining due to the establishment of new bars and restaurants. Online sales in the US wine industry have been estimated to 4% of the total volume. Pinot Nero wine has been doing well globally in terms of online sales. For example, in the year, 2016 it made a 5% sale which approximates to $9.8 billion sales (Wine Business Monthly, 2018).
Print and digital media
UK market has considered the use of print and digital media to advertise its wine business (Gomberg Fredrikson Associates, 2018). The UK decided to use these methods of advertisement in order to reach a huge number of consumers. Over the years the UK was not known to conduct wine business. The change in climate that took place in the country encouraged many people to invest in the wine business. The other factor that makes the wine business favorable in the UK market is that most UK citizens prefer wine to other alcoholic drinks (Wine Institute, 2018). According to accountancy UHY Hacker Young, some 80 wineries were opened in the UK market last year. Technology has made it possible for the UK to make its wine business venture known to people globally. The use of digital and print media can boost Pinot Nero sales in the UK market (Penn, 2008).
Conclusion
Pinot Nero does not seem, to do well in the UK market. This brand seems to be new in the UK market and not preferably to UK consumers. The current price of Pinot Nero also makes it difficult for UK consumers to afford it (Weber, 2016). The UK government has imposed a high tax on the alcoholic drinks hence affecting the rate at which consumers use alcoholic drinks in the country. Pinot Nero tends to do well in international markets. For example, in the US market, Pinot Nero is among the top five most used brands. Thus, the UK can consider merging with the US market in order to increase its Pinot Nero sales. This would also act as a way of advertising its business to other countries. On-premise Pinot Nero strategy tends to do well as compared to the off-premise strategy. The UK market can first use the on-premise in the Pinot Nero brand before going to the off-premise strategy (Kedge, 2017).
References
Brager, D. (2018). State of the Industry – The Demand Side. Keynote presentation at Unified Wine Symposium . Sacramento, CA, Jan. 24, 2018.
BW166. (2018). US Wine Sales Up 1% in December. Wines & Vines. Jan. 15, 2018. Available at: https://www.winesandvines.com/template.cfm?section=widc&widcDomain=USwineSales
GFA – Gomberg Fredrikson Associates. (2018). 2017 Wine Webinar Review with Jon Moramarco. Gomberg, Fredrikson & Associates . Online Presentation, Jan. 11, 2018.
Gordon, (2017). Distributors Republic National and Breakthru to Merger. Wines and Vines . Nov. 17, 2017. Available at: https://www.winesandvines.com/news/article/192511/Distributors-Republic-National-and-Breakthru-to-Merge
Grey, B. (2018). US Wine Outlook Bullish Despite Bank Warning . Winesearcher.com, Jan. 25, 2018. Available at: https://www.wine-searcher.com/m/2018/01/us-wine-outlook-bullish-despite-bank-warning
Kedge. (2017). E-Performance Barometer Report for Wine. Kedge Business School, Bordeaux, France . Available at: http://www.eperformance-barometer.com/
Linda, Weber. "Find out about the UK's Premier Alcohol & Drink Delivery Service for London, Surrey, Kent, and Middlesex & Essex". www.booze-up.com. Retrieved 11 August 2016.
Nielsen. (2018). Danny Brager: State of the Industry – The Demand Side. Keynote presentation at Unified Wine Symposium . Sacramento, CA, Jan. 24, 2018.
Penn, C. (2008). Review of the Industry . Wine Business Monthly, Feb. 2018 Issue, pgs., 24-35.
Quackenbush, J. (2018). Wine business to remain growth-forward with strong notes of competition, analysts say. North Bay Business Journal, Jan. 25, 2018. Available at: http://www.northbaybusinessjournal.com/industrynews/wineindustry/7917734-181/wine-consumer-mergers-outlook
Shanken. (2017). Shanken’s Impact Databank Review and Forecast. Report available at http://www.shankennewsdaily.com/index.php/impact-databank-report/
ShipCompliant. (2018). 2018 Direct-to-Consumer Wine Shipping Report. ShipCompliant.com. Available at: http://www.shipcompliant.com/dtcreport18/
Todorov, K. (2018). The number of wineries across the United States reaches 9,654. Wine Business Monthly, Feb. 2018, p./ 82-83.
WBM – Wine Business Monthly. (2018 ) . Off-Premise Wine Sales Rise 1.2%. Wine Business Monthly, Feb. 2018, p./ 150-151.
Wine Institute. (2018). Press Release: California Wine Exports Total $1.53 in 2017. Wine Institute.org. March 19, 2018. Available at: https://www.winebusiness.com/news/?go=getArticle&dataid=196877
