California snaps at France's heels
January 30, 2004
Adam Lechmere

California is set to overtake France as the UK's second largest wine supplier, decanter.com has learned.

According to the latest figures from analysts AC Nielsen, the USA (of which California accounts for 95% of wine produced) overtook Italy in both value and volume in the UK off-trade in 2003, taking the number three position behind Australia and France.

Australia is in number one position in the UK off-trade with 23.7% of the market (in terms of value). France is second with 20% of the market.

In the UK Californian sales are growing at a rate of one percentage point per year, while sales of French wines are declining at the same rate. Nielsen's figures, to the end of December 2003, show California with 11.7% of the total market by volume and 12.5% by value.

If the trends continue at the same rate, it is possible to predict California will push France into third place in the UK off-trade in four years' time.

The same research shows Italy's share of the UK market also declining year- on-year, its share by value going from 11.4% at the end of 2001 to 9.6 by the end of last year.

Spain's share has gone down one percentage point since December 2001 to 6.15, as has Germany (5.5%, as against 7.1% in 2001). South Africa has gone up from 7.8% to 9.6% in the two years since 2001.

As for America, the brands which are selling the most in the UK high street and supermarkets are high-volume 'jug' wines. Top sellers are Blossom Hill, Gallo Sierra Valley, Rivercrest, Paul Masson Carafe, Corbett Canyon and Echo Falls.

Higher quality producers do not feature. There are no Mondavi or Beringer wines, and Kendall-Jackson barely registers.

Whether this is good for California or not is a moot point, John McLaren, UK director of the California Wine Institute said. It depends on whether the average British consumer sees California as they see France – ie with a massive range of quality, or if they look at the state as a relatively small region. In the first place the consumer understands that wine at the bottom of the scale has no bearing on what is at the top. In the second instance, any wine from California will be seen as the standard for the state.

'I suspect they still see California as a pretty small place,' McLaren said. 'If someone buys a wine that isn't any good, that will affect the image of Napa and Sonoma.'

But he added, 'If we have 12% of the market it shows most people are comfortable with California wine.'

McLaren also said this was an opportunity for producers with wines in the £8-£10 range – Kendall-Jackson, Beringer, Mondavi – to exploit a gap in the market. All the US wine being sold in the UK at the moment is either at the very top end or the very bottom.

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