Hallgarten & Novum is nudging suppliers to reduce the abv of their wines as it looks to grow its business in the off-trade.
The wine importer and distributor said cost pressures including a growing duty burden and foreign exchange rates were weighing on the competitiveness of imported wines.
Hallgarten & Novum was therefore encouraging some of its overseas suppliers to reduce the strength of their wines – as well as the weight of their bottles – to appear more attractive to retailers and shoppers, it said.
“We are encouraging producers to reduce abv if they can, as long as it is not to the detriment of the quality of the wine,” said Hallgarten & Novum commercial director Will Oatley. “The core area where we have been able to do this is in our range of own-label bulk wines, from different countries and regions that sit at the entry level of retailers’ shelves.”
These wines were mostly those where “price, quality and value are of paramount importance to the consumer”, Oatley said.
“The brand identities of each of these labels is owned by Hallgarten Wines, which gives us the flexibility to create a product that is best suited to the retailer,” he added.
Andrew Shaw, director of buying for Hallgarten & Novum owner Coterie Holdings, admitted last year’s duty changes that see wine taxed according to its alcoholic strength were a springboard for discussions around abv reduction.
“I genuinely don’t think the wine world had been considering this before five or so years ago, and now the right conversations are being had,” he said. “All of our suppliers are fully informed about why we are trying to do it, why the pressure is there and the opportunity that might unfold.
“Would we have done it before the ending of [wine] easement? Probably not, but since we have done it there are positives that have come out of it.”
‘Drinkable wines sought’
Lower-abv wines were more appetising to wine buyers as retailers were increasingly looking for a “style of wine that is more drinkable with food”, Shaw said.
“Retailers are trying to encourage a bigger basket, and it works to have a wine with a slightly fresher acidity that is slightly lower in alcohol and, dare I say it, encourages you to have another glass.”
With sustainability also high on the agenda of both retailers and consumers, pushing suppliers toward lighter bottles was also “a very sensible decision”, he added.
Reflecting on the shifting dynamics of the off-trade wine category, Shaw said retailers were moving away from mainstream labels to prioritise stocking a more diverse range of wines, as well as promoting more own-label and celebrity-backed wines.
“Ten years ago, retailers weren’t as adventurous… whereas now there is much more independent thinking on what their consumers want to drink, not what their suppliers really want them to sell,” he said. “Tesco have been really courageous in their sourcing model for the last three to five years and willing to push customers to trial things that are more premium.
“Own label is the vehicle they can control, and therefore plays an incredibly important role. But to drive footfall it is all about the celebrity brands.”
Hallgarten & Novum has recently added Phil Tufnell’s Tuffers’ Tipple brand to its portfolio in response to growing demand for celebrity-backed brands.
“Celebrity endorsements have probably taken over from old, traditional wine value brands in the multiple retail sector,” Shaw said. “They’re instantly recognisable, they’re engaging, they’re contemporary, and they’ve got a celebrity with good social media activity behind them.”
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