“Club of Knowledge Hunters”

California Wines Overtake French at UK Supermarket Chain

Posted by superstar23 on September 18, 2008

Although Australia still remains the top supplier to the British supermarket chain Sainsbury’s, California has overtaken France as a region for the first time in terms of sales volume to be the second most important region.

To most of our Indian viewers this piece of news item may appear to be unrelated, but Diageo, Gallo and all other biggies like Constellation Brands know that the time for the ‘kill’ is not too far in India when retail in the supermarket opens up as their popular brands will have an upper hand.

According to the report in the News portal for the grocery retail industry, most of the growth at Sainsbury’s is being driven by brands such as Gallo and Blossom Hill (both brands already sell in retail in India).

California wines sales in Sainsbury’s are growing at 3.3% per year and during the last month the region has overtaken France in volume terms.

“The quality and distinctiveness of California premium wines continue to provide our customers with a great opportunity to trade up from the big brands that dominate California sales,” says wine buyer Daniel Bracegirdle.

Australia remains the biggest source of wine for the supermarket giant, accounting for 27% of sales. But the strong year-on-year growth seen in recent years for wines from Australia has slowed to only 2% in 2008.

This slowdown has been caused by the smaller 2007 Australian vintage due to drought which  caused a rise in prices. Sainsbury’s and other supermarkets are very price conscious and will return to Australian wines if 2008 vintage brings in lower prices as they hope it will.

As might be expected, the company owned brand Fish Eye, an exclusive line for Sainsbury’s is also doing very well.

Opening of Indian Retail is going to open up brand new vistas the major advantage for which will be wrested by big and popular brands which can provide promotion and cheap prices-same will be true for the company owned private labels. This may not augur well for premium wines but will certainly catapult  the wine industry to an unforeseen high growth trajectory.

source:-indian wine academy


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