Germany’s place in the emerging lower-alcohol category

Last month, Wines of Germany held the first ever UK Riesling Summit with over 100 members of the drinks trade descending on the RIBA in Central London. The idea behind the Riesling Summit was to encourage excitement and discussion about the most respected and versatile white grape in the world and get the trade to enjoy spending a day with Riesling.

The day started with a panel debate looking at the opportunity for German Wine as consumer tastes continue to move towards lower alcohol and lighter style wines. The panel was made up of Gerd Stepp (Winemaker and Industry Consultant), Helena Conibear (Director of Alcohol in Moderation), Maria Troein (Wine Intelligence), and Wines of Germany's (UK) Director Nicky Forrest.

Due to changing lifestyles and increasing government regulation, the idea behind the debate was to explore opportunities which might exist for Germany. As consumers increase their search for healthier options or at least, less heavy styles of wines, the panel also discussed if Germany's naturally low in alcohol options are currently being overlooked and possibly missing out. Should Germany seek to capitalise on the trend towards lighter wine styles and in doing so, would the UK trade support us?

Of course there are two totally different sectors here - under 5.5% with its 'technically / made 'wines' and advantageous tax breaks. This is the fastest growing sector of the UK market driven largely by price and margin. And then there is the second sector between 6-11% which has not benefited from tax breaks and shows slower growth within the UK market. Within the 6-11% sector, wines are naturally produced; therefore, wines within this sector taste like wine because they are wine. Conibear stressed the importance of the government's responsible drinking drive and the trade's promise to remove 1 billion units from consumption by 2015 - something that will be effected across beer, wine and spirits.

Conibear also considered the development of the low alcohol category as "very exciting" and considered it "Germany's best chance in years" as consumers are after lighter styles. This is something, of course, that Germany does very well because as everyone knows you can make an amazing fruity style wine with around 10%-11% alcohol that knocks the socks of most other wines at that level. In fact many years ago the Deutsche Weininstitut had a strapline: 'German wines - light and elegant naturally'. Is it time to bring it back?

So then the next question is about taste. As Stepp puts it, "winemaking is always in conflict. There's what's technically possible and then there's what's good for the wine." Far better from his point of view, was the ability of certain countries and regions to produce lighter, less alcoholic wines naturally, which as a result would retain the all important sense of balance between acidity, sugar and alcohol and lead to a better tasting, higher quality wine. "Naturally low tastes better," he concluded.

Rupert Millar from Drinks Business recently wrote, "It is difficult to argue against the idea that Germany should seek to capitalise on the trend towards lighter wine styles by pushing the message that it naturally produces less heavy and alcoholic wines."

Posted by Nicky Forrest

Supermarket price wars and the big picture

We Brits have always had a schizophrenic relationship with food and today is a prime example of that dichotomy. On the same day the FT, the Daily Telegraph, the Independent and the Daily Mail report on the UK’s frankly shameful £12bn food waste, the BBC (video) reports on the ‘austerity sandwich’ - two slices of bread with another slice of bread in-between. Surely £12bn could buy a slightly more exciting filling. Meanwhile the supermarket price war is being cited as a reason for falling inflation figures, which in this economic climate must be a good thing.

What the headlines don’t tell you is that neither the food waste nor the retailers’ discounting is sustainable. Food has been (too) cheap and plentiful for many of us for a long time. We need to remember that the global population is growing at such a rate that traditional farming can’t quite keep up. International grain prices have gone through the roof and combined with droughts, floods and now global warming we’re seeing falling agricultural yields just when they need to rise. It can’t be a coincidence that there have been food riots in more than 30 countries. Food security is becoming a concern for everyone. All of a sudden throwing out perfectly okay food is not just a problem for individual households in the UK. 

Posted by Toby Schuster

Oddbins on the brink of regaining its sparkle?

Working closely with the wine trade, it’s always sad for us to hear when an independent wine shop or national chain is struggling to stay afloat in these tough economic times. Oddbins has certainly been in trouble recently. Still, after going into administration earlier this year, 37 stores have been kept open and recently re-launched. Our ears perked up when we heard that more than 3,500 of their customers were then asked to price wines in a blind tasting which led to three wines going on sale last Friday at their customer recommended retail prices.

A good PR stunt or a genuine attempt to revive their business?

We think their efforts to overhaul the business are certainly valiant and have already generated a large amount of media coverage. However, in this ever-changing world we live in, will this be enough? With a lacklustre website and a relatively small Twitter and Facebook following, we think Oddbins should perhaps take a leaf out of their competitor, Majestic’s, book. Yes, it is now coming from a smaller base, but social media is a great leveller for brands provided they create compelling content for users to engage with. In lowering their minimum purchase from 12 bottles to six, Majestic have always been ahead of the game in terms of innovation, and now with their integrated digital campaign (each of the stores have their own Twitter feed and blog page), they are leading the way within their sector. With some promising ideas, such as giving greater freedom to store managers and categorising the wines by style rather than country, we think that Oddbins have the potential to rise from the ashes. For the time being, however, we’re holding our breath as to whether they will succeed in becoming a relevant brand once more.

Posted by Sara Evans

Why going niche could go mainstream

We don’t need to tell you there’s an economic crisis going on – we all know it. But with the biggest and best London Cocktail Week just gone and higher than expected results from major distillers it seems the spirits market is well and truly bucking the trend. Admittedly, alcohol is what the Financial Times calls a “defensive sector that carries on selling through the downturn”, though it’s clear the sector is not immune to thrifty consumers and is facing tough times. A closer look at the sector reveals that growth is actually driven by a small number of categories within the spirits sector, namely higher quality and premium brands. This seems utterly counterintuitive at a time when logic dictates that we should be tightening our belts and trading down, not trading up to more expensive drinks.

An explanation comes in form of James Harkin’s book Niche: Why the market no longer favours the mainstream. He defines a niche product as one most people don’t want but one that is ideally suited for the people who do (subsequently, James argues that any loss of volume should be offset by a widening of value sales and profit margins from the market “sweet spot” – consumers who are willing to pay more for the privilege). The key is to avoid being “stuck in the middle” and one way we believe for drinks brands to avoid the dreaded middle is to position themselves as affordable luxury, a very niche positioning since consumers may not be able to splash out on a 5-star holiday, but a high-quality spirit is still attainable. The trouble is if everyone’s doing it the niche may become the mainstream. 

Posted by Lucy Richardson

I don’t drink coffee, I take tea my dear…

No one summed up the English’s love affair with tea better than Sting. But most Brits would be hard pushed to know where their beloved brew is actually coming from. Which is where we come in. Earlier this month the Phipps office was celebrating with, er, a lovely cup of tea after winning a six-way pitch organised by the PRCA/ FAPRA to work with the Tea Board of Kenya. Kenyan tea is one of the world’s most drunk teas and is in almost all of the UK’s best-loved blends but it also has a lot to shout about it its own right. We’re implementing a campaign including social media, consumer and stakeholder communications to help Kenyan tea get the credit it deserves. So watch this space for all things tea-related and in the meantime, pass the sugar! 

Posted by Lynne Shirley 

The Great British Beer Blog

British ale has undergone somewhat of a renaissance of late. Bottled ales are cropping up on supermarket shelves and, assisted by a generous duty relief for producers of less than 3,000 barrels a year, microbreweries are cropping up all over the place. The big trend for provenance and authenticity are being cited as main reasons and industry experts are predicting a further 50 new small breweries opening around the country this year. 

Conversely, the UK beer market has shrank by 7% last year and we're losing 25 pubs a week. On the other hand, Phipps client Sainsbury’s, has seen a 7% year-on-year growth in bottled beers this year. Capitalising on a renewed consumer appetite for real ales, Sainsbury’s earlier this year also launched a nationwide competition to find Britain’s best independently produced beer. ‘The Great British Beer Hunt’ drew entries from all over the country by brewers experimenting with new styles and reviving old ones all eager to get their beers out to a wider market.

Phipps is of course well known for its work in the wine industry but on working with Sainsbury’s on the Great British Beer Hunt we’ve discovered that beer is every bit as complex as wine and the wide array of media that have covered the event seem to agree.

Posted by Becky Erwood

Postmodernism on a Plate?

As the V&A opens the doors to its autumn blockbuster exhibition Postmodernism: Style and Subversion our thoughts (naturally) turned to the kitchen. Could it really be that the years between 1970 and 1990 gave us nothing more than prawn cocktail, potato waffles or the Alessi kettle? And if so, what was the connection to Postmodernism, the cultural movement of the time that said goodbye to radically utopian architecture in steel, glass and concrete, and hello to ornaments, kitsch and banality? While it’s certainly true that just as postmodernism shrugged off the austerity of modernism and reintroduced aesthetics, eclectics and ornamentation, cooking became a lot more elaborate, fun and clever but equally disposable.

From cheese hedgehogs and oh-so-sophisticated Chicken Kiev in the seventies, the kitchen took a detour via Nouvelle Cuisine to end up with convenience food ranging from Pot Noodles to Walls Vienetta. And the parallels don’t end there. Scratch the shallow surface - architecturally and culinarily speaking - and often you’ll find a plethora of quite worrying details. The nutritional content of most foods was shocking – packed with transfats, sugars and salt – while architecture revelled in high-rise superficiality hiding the economic hardship many experienced during that time. Postmodernism gave us pink granite in form of City office blocks and fluorescent pink desserts courtesy of liberally applied E123 food colouring. So why didn’t Postmodernism last? For the same reason the Chicken Kiev didn’t make it…both were essentially quite disturbing. 

 

Posted by Toby Schuster  

Pens At The Ready...Food Writers Discuss Supermarkets

We were under no illusions…putting together a panel of distinguished food writers with food retailers, and asking them to debate the power of the supermarkets was always going to be an evening of conflicting views. And sure enough the event, hosted by the Guild of Food Writers delivered. Kicking off by highlighting a trend we discussed a few weeks ago Alex Renton claimed that food has become “too cheap” while Guardian writer Zoe Williams cited feminism as an influence on the way we eat, using “supermarket meal solutions” as an example of how the modern working woman doesn’t have time to shop around. Meanwhile, former ad-man turned food writer Tim Hayward argued that advertising has created perceived problems for which, in return, brands and supermarkets provide profitable solutions (a tactic he claimed perfectioned by the beauty industry). In defence of the retail sector Andrew Opie was calling for more fact checking in the media, and used BOGOFs as an example of skewing public perception, insisting the deals are not always funded by suppliers. Thankfully, Sophie of fresh produce supplier Barfoots bridged the gap between the two sides saying that whilst supermarkets have undeniable power it is up to suppliers to be smarter in the way they run their businesses. Not surprisingly for a group of foodies, the general consensus was that it was important for the people in the room to encourage their readers to shop at places other than supermarkets and show how that can be made easy. Then again, we couldn't help but think that this is really a middle classes debate, with the majority of the general public not having the time, money or interest to look beyond the supermarkets when it comes to shopping for food. Discuss. 

Posted by Becky Erwood

What Circulation Figures Say About Us

When The Guardian published the latest list of the Top 100 paid-for magazines we at Phipps couldn’t help drawing some conclusions on how these figures reflect the social trends of the year and consumers and their buying habits.

Forget House Beautiful, think House Maintenance

The rise in the circulation of Good Housekeeping (up 1.9%) and BBC Gardeners World (up 3.3%) suggests we’re keeping our houses clean and fingers green. The recession and stamp duty has forced home owners to stay put, and invest in their current home rather than putting the For Sale sign up. We’re less concerned with making our house look ready for buyers and more concerned with house maintenance and adding actual value to our homes while riding out the economic storm.

Nation of Economists

We know that in a recession the public pays more attention to the economy. This is certainly supported by The Economist’s circulation figure (up 6.4%) and The Week (up 3.2%), satisfying our need to understand what’s going on around us and making us better informed. It also explains why trashy celeb mags are on their way out. Heat magazine’s circulation figure is down a whopping 21.8% and while we could argue that the typical Heat reader has grown out of the mag, we also think that the fall in circulation figures of other celeb based weeklies such as New, Closer and Star show we’re less bothered about reaching into our recession-battled pockets to splash out on the latest z-list gossip.

TV event of the decade

The Kate Middleton wedding (who cared what Prince William was wearing?) led to a huge 26.8% increase in Hello!’s circulation. Having been the biggest TV event in history it’s not totally surprising that TV guides are on their way up. TV Choice topped the Top 100 list with a circulation of just under 1.5 million (up 3.5% year on year). What’s on TV follows as a close second, with an even higher year-on-year increase of circulation at 5.4% and Total TV Guide has a rise in circ of 7.7%. With less disposable income, this year was definitely the year for TV and we wonder if the Royal Wedding has catapulted us into a nation of couch potatoes.

Posted by Rachael Everitt

Celebrity wines – cheap marketing ploy or democratisation of wine?

So AC/DC is the latest band in a long line of famous names to bring out their own wine – a smart attempt to influence a more sophisticated fan base or a ‘highway to hell’ for the winery? PR-wise it’s certainly been successful in generating column inches – a famous name always helps when it comes to the holy grail of wine coverage off the wine columns, but in terms of brand image can a celebrity wine ever really be credible? It’s far from a new phenomenon with Olivia Newton John bringing out her Koala Blue range of Australian wines back in 1983 and Gerard Depardieu – he of the recent ‘oui,oui’ scandal - working for over thirty years with French wineries. Our insight suggests that like any sponsorship or endorsement it all comes down to matching brand values and publics. Francis Ford Coppola, with a long family history of winemaking and a high-brow fan base has managed to achieve both critical acclaim and financial success for the Californian wineries that he owns. On the other hand, wine enthusiasts are likely to shun the vinous offerings of Madonna and AC/DC, but if their wines open up the world of wine to a new audience of music fans then surely it has to be a good thing, with one proviso – the quality has to match up to the price. Charging a huge premium for a poor quality wine just because it has a photo of a famous person on the front will do nothing in the long term for the image of the wine or the personality – who could forget the moment that Sir Cliff Richard described his own wine as ‘tainted and inspid’ on the ‘F-Word’?

Posted by Anna Harris-Noble