First Cape sails ahead as Jacob’s Creek flounders

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South African wine brand First Cape has nudged Jacob's Creek out of the top five biggest off-trade wines in the UK, leapfrogging its Aussie rival for the first time.

First Cape has taken fifth place following a 40% sales hike over the past year to £146.7m on a volume increase of 42%. Pernod Ricard's flagship Australian wine brand fell 25% to £125.7m and 32% in volume to sixth [Nielsen MAT w/e 10 July].

Steve Barton, director of First Cape owner Brand Phoenix, said consumers had been enticed by the lower prices of the South African range.

The average ­bottle price of Jacob's Creek had risen 47p to £5.40 over the past year [Nielsen 52w/e 7 August 2010], while First Cape edged up just 1p to £3.86. First Cape was enjoying particular success with its 50cl range, said Barton. At £3.49, it was ­currently £1.50 cheaper than the equivalent Jacob's Creek size.

Whereas Pernod had chosen to invest in heavyweight ad campaigns, such as its ongoing True Character TV ad, First Cape was finding more success with "very lean" marketing presence, Barton added.

"This is a big moment for First Cape," he said. "We respect Jacob's Creek entirely; it's a tremendous product. They have just put prices up because the Aussie ­dollar exchange is shocking, but consumers aren't willing to pay just over £5 at the moment when there are good quality, viable alternatives in the market."

Lee James, channel director for wine at Pernod, said Jacob's Creek had experienced lower year-on-year sales because it had scaled back promotional activity over the past year.

"As the third-largest wine supplier in the UK, we have a responsibility to take a lead in the category and believe the solution lies in driving for value," he said. "Premiumisation ­remains at the core of our wine strategy, which means maintaining price points for long-term sector profitability and carefully balancing that with market share in the short term." 

Pernod Ricard would continue to focus on quality wines that won awards and shoppers wanted to pay for, and invest in marketing those wines, he said.

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