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‘Sub 10.5% ABV wines can Rule Britannia!’: New Zealand government

By Ben Bouckley+

16-Dec-2013

Picture: Alex Ranaldi/Flickr
Picture: Alex Ranaldi/Flickr

The New Zealand government insists that the British are increasingly keen on sub 10.5% ABV wines as it backs a NZ $16.97m investment in lower alcohol wines, but there is skepticism in some quarters.

BeverageDaily.com asked the nation’s government whether the drive on lower calorie, lower alcohol wines wasn’t make people in the industry nervous – given fears about less desirable products that could give the industry a bad name, and raise the suggestion that New Zealand was pushing glorified grape juice?

What made the New Zealand government so confident that world consumers still wanted lower calorie, lower alcohol wines?

Justine Gilliland, director of the Primary Growth Partnership, Ministry for Primary Industries, told us that (unnamed) research indicated that growing numbers of consumers were making purchasing decisions on lifestyle grounds – choosing healthier foods and weaker wines.

One tenth of UK market by 2015?

38% of consumers are buyers of sub-10.5% alcohol by volume (ABV) wines, she added, and by 2015 10% of the British market is predicted to comprise such wines.

“There is a growing category for these wines, both internationally and locally. Lower alcohol wines are estimated as one of the fastest growing segments of the beverages market, at approximately 30% per year,” she said.

Challenged as to whether the NZ $16.97m (circa. $14m) might have been better spent on marketing regular New Zealand wines more effectively, Gilliland said the industry was already successful in this respect.

“However innovation and product development is also very important. Lifestyle wines provide a significant opportunity for market growth,” she said, insisting that by 2023 the New Zealand government expects the economic benefits of the program to reach NZ $285m/year.

‘Kiwi government stuck behind the 8 ball…’

Thus, the Primary Growth Partnership/NZ Winegrowers innovation program aimed to maximize New Zealand’s share of this growth market, Gilliland added, by creating high quality, lower calorie and lower alcohol wines that are naturally produced and retain the flavor of the grape varietal.

The seven-year project will focus on developing new natural techniques for grapevine growth and wine production and developing viticulture and winery tools.

But it was heavily criticized by the opposition New Zealand Labour Party on November 27, with primary industries spokesman Damien O’Connor insisting that the nation’s wineries did not need such support.

“The low calories wine research…shows how far behind the eight ball the government is. New Zealand companies have already brought low alcohol products to market,” O’Connor said.

‘Crazy’ EU tax structure unhelpful

Earlier this year, influential analyst Richard Halstead, from Wine Intelligence, also cast doubt on future growth for lower alcohol wines, despite Nielsen data showing that the category passed the 1m case mark in 2012.

Writing in the March 2013 issue of Wine & Viticulture Journal, he said the preceding year’s growth in the category was down to 11%, down from 30%+ a year before, with problems apparent in the UK as a “test bed for innovation”.

Although he saw promise in lower alcohol wines, Halstead said the industry needed to convince consumers that a product with less of a desirable substance (alcohol), that often tastes worse than higher alcohol products, was worth buying.

A ‘crazy’ EU tax structure also means producers must reduce alcohol to 5.5% ABV or below (which technically means the drink isn’t wine) that also penalizes makers of good quality 6-8% ABV wines, he added.

Moreover, Wine Vision’s November 2012 research showed that 48% of UK wine drinkers said they wouldn’t buy 5.5% ABV wines, four fifths on principle and one fifth because they didn’t enjoy their initial experience.