Wine prices rising still further in the UK

Since the vote in June 2016 for the UK to exit the European Union, wine prices have been on the rise. And in summer 2017, there seems to be no let up in these price increases.

According to recent figures released by the Wine & Spirit Trade Association (WSTA), price rises are only going to get worse.

Ideal Wine Company UK wine prices
To what extent are wine prices rising in the UK?

Average price up by 4%

Between the Chancellor’s Budget announcement in March 2017 and 17 June 2017, the average price of a bottle of wine rose to £5.58. This is an increase of 4% on 2016’s prices for a bottle of wine in the UK, according to the WSTA.

The information released by the WSTA came at the same time of the first reading by Parliament of the Brexit ‘divorce bill’ that would shift EU laws into UK legislation.

Already up in 2016

Average prices for wine had already exceeded the £5.50 per bottle mark for the first time ever in the last quarter of 2016. And, the WTSA warns that the whole industry, including fine and premium wines, are facing a “triple whammy” of pricing pressures going into Autumn 2017.

The WTSA said at its annual conference on 12 September: “For the first time we can see the how prices have been affected by the triple whammy resulting from Brexit’s impact on the pound, rising inflation and the 3.9% inflationary duty rise on alcohol imposed by the Chancellor at his Budget in March.”

Autumn budget looms

The WTSA also warns that the Autumn Budget is likely to see alcohol duty rise yet again by inflation. They have called on the government to have a period without tax rises.

A YouGov poll commissioned by the WSTA clearly shows the concern levels by consumers about the ever -increasing cost of food and drink. It found that four out of five respondents to the poll were worried about the prospect of paying higher prices in this sector.

However, the WTSA also says that it is “committed to working with the government in order to achieve the best possible deal in Brexit negotiations.” What this will mean for the wine industry is yet to be seen.

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Would you bake with ‘wine flour’?

It’s pretty common to see plenty of wine flavoured products on shelves, particularly with the recent interest in Prosecco flavoured goodies. But what about flour made from wine. Is that a step too far?

US-based company Finger Lakes Wine Flour doesn’t think so. They have created a range of flours using by products from wine production. Their flavours include flour made from Merlot, Cabernet Franc, Riesling, Cabernet Sauvignon and Gewürztraminer.

As well as selling the flours for use at home, the company also makes truffles, cupcakes and crackers from the flour.

Ideal Wine Company wine flour
Will wine flour be the next big thing?

Recycling wine by products

Initially, the creator of Finger Lakes Wine Flour Hilary Niver-Johnson, set out to create bio-diesel using grape-seed oil.

As the company continued to research into the by products of wine production, they learned that grape seeds are only a tiny part of waste that’s discarded. The overall grape pomace (the solid matter left after pressing) consists of grape skins. These hold many nutrients.

The company recycles every part of the pomace they can source. However, they’re not the first to come up with the idea of wine flour. Other companies have also produced some, including WholeVine.

Supplementary product

The flour made from grapes should be used in addition to regular flour, rather than as a total replacement. The flours in the range have flavour profiles that match the grapes they’re made from.

They can therefore be paired with complementary dishes. For example, Merlot flour works well with strawberry bakes, Cabernet Sauvignon with blackberry, Cabernet Franc with blueberry, Gewürztraminer with peach, Riesling with apple and Pinot Noir with cherry.

The company is constantly refining flavours and will be releasing three more varieties of wine flour this year. They cost £63.52 for a pack of eight wine flours made from different grapes (excluding shipping from the US).

How will Brexit affect the wine business?

The fall out from Brexit continues to cast economic uncertainty over pretty much every sector in the UK. And the wine business is no different.

For anyone selling or importing wine in the UK, and for those making wine destined for the UK, the exchange rate is the biggest problem of all.

Ideal Wine Company brexit
How will Brexit impact the wine business?

The collapse of Sterling

Sine the Referendum in June 2016, the value of Sterling has nosedived. Right now, it costs 92p to buy a Euro. This is unprecedentedly low for the pound. Morgan Stanley predicts that by the end of this year the pound will be worth the same as the euro and by next year less.

Its previous record low came in December 2008 at the onset of the global financial collapse, and Brexit’s influence looks set to beat this. The pound isn’t doing much better against the US dollar. Historically, it’s the currency strength that shows the world how well a country is doing, which isn’t great news for retailers in the UK.

Europe’s economy growing

While the government carries on its mysterious negotiations for leaving the EU, it seems that Europe’s economy is doing well. With America looking uncertain due to its own political changes, the euro is set to become the world’s leading economy.

The result of all this is that wine prices will definitely rise over the months and years ahead. This comes at a time when the consumer in the UK has less to spend in general, and certainly less on luxury items.

Market niches

This is likely to lead to an increase in the British grown grapes where possible, in order to increase British made wine. However, it will also lead to retailers needing to source wine from niche areas.

 

In whichever direction the Brexit negotiations take the country, and whatever the grounds for leaving the EU eventually show themselves to be, it’s unlikely to improve prospects for anyone in the wine trade over the next 12 months at least. 

Blue wine launches in the US

It’s never going to appeal to traditional wine lovers, and it came in for a fair amount of criticism on its launch in Europe in 2015, but Spanish ‘blue wine’ is heading to the US undeterred.

According to its creators, it will launch in Texas, Florida and Massachusetts later this month, bringing its quirkiness to new shores.

Ideal Wine Company blue wine
Will blue wine be the next big trend?

A brand new category?

While the EU doesn’t allow the creator of ‘blue wine’, Gïk, to call it wine at all as there is no category for it under EU law, the owners are pushing on regardless.

Co-founder of Gïk, Aritz Lopez has announced the US launch, although he has said that there are no specific retail chains signed up as yet. The company is talking to operators and there have been pre-orders by US consumers online of around 30,000 bottles, costing $48 for three.

No EU category

Gïk was also banned by Spanish wine officials from using the word ‘wine’ on its labels, and in addition the company was fined 3,000 euros due to EU legislation. While it’s not clear whether the brand will have similar problems in America, it has made sure its homepage on the website carries a strapline that clearly says ‘blue not wine’, which could be enough to keep it safe.

The ‘wine’ has an alcohol content of 11.5% and is made from organic grapes. Gïk says that it’s already on sale in 25 countries, including South Korea, Japan and most of the European Union.

How is it made?

The company says it uses grapes sourced from various regions in Spain, including Navarra and Rioja. The blue colour comes from two organic pigments, from indigotine and anthocyanin.
A launch party is set to deliver the wine to US shores later this month in Miami and the company plans to target California and Washington on the West Coast and the Northern and Southern part of the East Coast.

It will be interesting to see if blue wine catches on in America – perhaps it’s the start of a whole new trend.

How climate change could alter the taste of cava

As if there aren’t enough worries surrounding the impact of climate change on our world, it seems that it could also alter the flavour of cava.

New research published in Agricultural and Forest Meteorology shows that conditions will change the way the grapes grow.

Ideal Wine Company cava taste
How might climate change alter the taste of Cava?

Warm and dry

With less rainfall and warmer, drier conditions, the grapes that are used in making cava will become ripe faster. This will alter and impair the Spanish sparkling wine’s aroma, flavour and quality.

Cava is made in a similar way to champagne. The Catalonian sparkler is made with a blend of white grapes that are grown in north east Spain. The grapes are particularly loved for their rich and creamy flavour.

Two grapes varieties studies

The research was conduced between 1998 and 2012 and studied two main grape varieties that are used to make cava. These grapes are Macabeo and Paralleda. A formula was created that copied how the different grapes would grow under conditions altered by climate change.

Assuming that climate change causes moderate warming, then the average temperature during the season when grapes are grown could increase by 3.2 degrees C by 2020. However, if emissions aren’t controlled then the temperature increase rises significantly to 4.4 degrees C over the next three years.

Water deficits in vineyards

The hotter temperatures and dry conditions caused by global warming will likely cause a water deficit in vineyards. This means that more water will be lost through evapotranspiration and won’t nourish the crops.

This reduction in water will change the flavour of the wine. Cava will become more acidic and sugary as the grapes are exposed to higher temperatures as they ripen. It will also become more alcoholic.

Thirst for the fizz

There has been a huge increase in demand for cava and other sparkling wines in the UK recently. HMRC published figures showing an 80 per cent increase in sales of cava and prosecco over the last five years.

Can wine improve creativity?

Wine lovers tend to cast their favourite tipple in a positive light. There have been numerous studies purportedly showing that it can improve everything from the chances of getting dementia to dealing with insomnia (in moderation of course!). A new study shows that wine can even help with creativity.

The research from Austria backs up claims by writers that there is a positive link between creativity and drinking wine.

Ideal Wine Company wine and creativity
Can wine have an impact on creativity?

Scientific proof

Researchers based at the University of Graz have discovered scientific proof that backs up the long-held theory that wine can help writer’s block. The study, by Dr Mathias Benedek, was published in Consciousness & Cognition, and looked at the effects of minimal alcohol on creative thinking.

The research reports findings from 89 people who were asked to solve creativity measuring tasks after drinking alcohol. Some of the participants were given actual alcohol, and some drank alcohol free servings. Neither group were told whether they were drinking alcohol or not.

Mild intoxication

Each person who was drinking alcohol was required to reach a level of mild intoxication. This equates to a blood alcohol level of 0.03% (out of every 100ml of blood there is a measurement of 30mg of alcohol). This is less than half the limit on drink driving in England, by way of example.

When they had reached the required limit, they were asked to carry out word association tasks. For example, they would be asked to find a link between apparently unrelated words. The study found that the participants who had been drinking alcohol could reach the answers faster.

Creative thinking tasks

Those that were drinking alcohol were also found to perform better (albeit only slightly) during tasks that measured creative thinking. For example, they were asked to come up with as many uses for a specific object as they could.

However, the study also showed that too much alcohol can limit ‘cognitive control’ and essentially loosen the focus of attention. This can then allow problems to be solved.

The report ends with a caution that the results are not a reason to drink excessively if you’re struggling to complete your novel! Dr Benedek said: “Beneficial effects are likely restricted to very modest amounts of alcohol, whereas excessive alcohol consumption typically impairs creative productivity.”

French wine harvest likely to be at historic low

Plenty has been written about the adverse weather conditions during the spring and early summer of 2017, and their likely effect on wine harvests. Officials are now in a position to estimate the damage done to French wine production.

Experts have predicted that the wine harvest from 2017 will fall to ‘historic lows’ because of the frosts during the early spring. The French wine harvest for this year is predicted to fall by 17%, down to between 37m hectolitres (the equivalent to 4.9 billion bottles) and 38.2 million hectolitres. The figures for 2016 stood at 45.5 million hectolitres.

Ideal Wine Company french harvest
French wine production has been impacted this year due to poor harvests.

Lower than average

This would make the 2017 vintage a historic low and a full 16% lower than the average over five years. It will be worse than the vintage from 1991, which was also hit hard by frosts and bad weather.

What will this mean for buying certain French wines? The poor harvest could mean that specific wines are more difficult to track down, and therefore more expensive. The poor harvest is compounded by the fact that, for some regions, it’s the second year in a row when the vineyards have been badly affected by frost and hail.

Bordeaux production cut by half

A recent report shows that the production of Bordeaux this year could be hugely impacted, with a likely 50% fall in production.

Some estates used their extensive resources to mitigate the weather with frost avoidance techniques, such as circulating the air over vineyards with helicopters. And it’s not all doom and gloom with some on the Right Bank reporting positive flowering and ripening. It’s expected also that the Champagne harvest will increase by 8% this year, and while this is positive news it’s still 9% down on the 2012-2016 average.

Frost and hailstorms

Among the worst affected by frost are the Côte de Nuits and some parts of Chablis, while hail decimated parts of Fleurie. Over in Alsace, it looks like production will fall by 30% when compared to 2016, with the Gewurztramine variety hit hardest thanks to the fact that it buds early.

Hard frosts also damaged vineyards in both the Hérault and Aude regions, with production falling by 6%. Similarly, production has been cut by 10-40% in some parts of the Loire, but overall this region’s growers are in luck as production is set to rise by 7% over 2016, as last year suffered from frosts too.

Early summer weather was hotter than average, which has brought the growing season across the whole country ahead of the normal pace, something that could help the grapes that have survived to fully ripen.

Beer taking a backseat for millennials

Craft beers and IPAs have had a resurgence over the last few years, thanks at least in part to the taste of the millennial generation. This group of consumers is frequently used as ‘tastemakers’ in many industries and nowhere more so than with the drinks industry.

However, in 2017 it seems their tastes in alcohol are finally changing, moving away from beer towards wine and spirits. According to a recent report from Goldman Sachs, the future looks brighter for whisky and wine, and less so for beer brewers.

The report focuses primarily on the American market, but its findings have certainly been taken on board across the global industry. It explicitly cites millennial tastes as the reason for the shift away from beer to wine and spirits and goes on to say that this is the major factor behind the slowdown of the beer industry.

Ideal Wine Company beer vs wine
Beer is no longer more popular than wine for millennials.

Declines expected in beer industry

Goldman Sachs has laid out that it expects volume declines across the beer industry, driven mostly by mainstream brands like Miller Lite, Coors Light and Budweiser. In particular, the report states that the recent slowdown in the beer industry will escalate over the next two years. This includes a rapid slowdown of the previously extremely popular craft beer sector.

So, the move away from beer has boosted sales of wine and spirits. The market in the US for wine is expected to expand by 1.1% to around 330 million cases sold by the end of 2017. Spirits look set to rise about 2.5% to 228 million cases sold.

The growth of wine sales is due mainly to California wines that are selling above $10, as well as the ever-expanding sparkling wine sector. This latter segment is expected to rise a whopping 8% to sell a record 22 million cases in 2017.

Market changes driven by millennials

Taking the millennial generation as those currently younger than 32, this is the consumer sector that is changing the drinks market. This generation are drinking less than previous groups did by their stage in life.

The next generation up (35 to 44-year-olds) are choosing to drink spirits and wine rather than beer. It certainly looks like this is a continuing trend both in the USA and the rest of Europe, as beer continues to take a back seat.

Global warming changing wine production in Europe

Some people may still refuse to take the threat of global warming seriously, but the signs are increasingly apparent that our climate is changing. We’re all aware that at some unspecified point in the future, rising sea levels and general temperature changes will fundamentally alter our way of life. But did you know that wine is already being affected?

Rising temperatures, uncertain winters and unexpected weather patterns are all disrupting the production of wine across the Mediterranean. Ultimately, it’s threatening the amount of wine that’s being made, and therefore exported.

Ideal Wine Company global warming
Global Warming is being said to change wine production within Europe

Productivity loss

A recent report backs this up, showing data that points to increased temperatures in the Mediterranean. These higher temperatures are resulting in productivity losses in the wine industry. The report uses Cyprus as an example.

While manual agricultural grape picking is generally done in temperatures of up to 36C on the Greek island, researchers found that even higher temperatures in the summer has directly led to losses in results.

This is down to the elevated stress levels affecting the workers due to the heat. The need for an increased amount of breaks due to the extreme temperatures also led to a 15 per cent decrease in the actual work time being completed by workers.

Vineyards destroyed across Europe

Along with rising summer temperatures, random hail storms and late frosts have decimated crops in Spain and France. It’s likely that this year’s output will be significantly lower from these areas, due to the destruction of budding wine crops.

The soil’s balance is key to the taste of the wine, as vines are very sensitive to changes in the weather and the environment surrounding them. So, even vines that have escaped the late wintery conditions of Q2 2017 could still be adversely affected when it comes to the taste of the wine they make.

Positive news in England

While the Med might be struggling, global warming seems to be helping out in unexpected ways for UK vineyard owners. Crops are flourishing and the market is rocketing, with an ever-increasing number of vineyards opening in the south of England.

Sales of sparkling wine from England have risen fast, due to the fact that the country has experienced eight of the hottest years on record since 2002. These temperature increases mean that the South East of England is almost the same as Champagne when it comes to heat levels.

Who knows, in a few generations it may be that England is the frontrunner in wine production, leaving the Mediterranean in its wake!

Record turnover for wine producers in England

Despite a distinct lack of confidence in them from the market historically, wine producers in England are having the last laugh. An impressive £132 million turnover from 2015 to 2016 has been registered by independent wine producers in England – that’s an all-time high.

New research from online business finance company Funding Options has released this information, which clearly shows that English vineyards are now very much part of the global market and potentially a force to be reckoned with.

Ideal Wine Company UK production
Record turnovers in the UK for wine production.

England now viable wine producer

While English wine has never really been seen as serious competition to the well-established wine growing countries that everyone’s used to, it seems that it’s become a major growth industry over the last few years. The latest figures show an increase of 16 per cent on the year before, and reports show that the sector has pretty much trebled during the last five years.

Previously the industry had suffered from a certain amount of consumer scepticism, but now that there is much more national and international recognition, this has receded somewhat. As this has diminished, prices have risen and English wine has become more popular.

Norfolk white named best in the world

Just a few months ago, in May 2017, Winbirri Vineyard’s Bacchus 2015 wine was awarded with the prestigious accolade of ‘world’s best white wine’ in the Decanter World Wine Awards. This wine was made in Norfolk, making this an extraordinary achievement for a burgeoning industry.

Wine makers are also riding high on the back of the popularity of British boutique alcohol production. Sales are encouraging more producers to get on board and try the market. New figures from HM Revenue & Customs show 64 new wine producers gaining a wine production licence in 2016.

On a par with French and German vintages

English wine is beginning to be ranked up with German and French vintages and it’s imperative that producers continue investing to be able to satisfy the growing demand. There needs to be long term sustainable growth if the industry is going to succeed in the UK.

The climate is still not able to produce good quality red wines, but the south of England has quickly built up a reputation for producing sparkling white wine. Names like Tattinger have moved to plant vineyards in Kent, showing very clearly that there is a confidence in England as a wine producer.

There are now 502 vineyards in Wales and England, which are producing around five million bottles every year. And this could be just the start.