Wine fights to maintain its 'share of throat'

The line between wines, beers, spirits, soft drinks and alternatives is becoming increasingly blurred - as Coca Cola and Constellation are demonstrating. Robert Joseph has his own opinion on the subject.

What will the glasses of the future contain? And how much alcohol will it contain?
What will the glasses of the future contain? And how much alcohol will it contain?

A quarter of the way through a month when many people give up alcohol every year, comes the news that Coca Cola is to add it to Fresca, one of its most successful soft drinks. This might have passed unnoticed by most members of the wine industry, if the Atlanta beverage giant hadn’t also agreed a distribution with Constellation, much of whose income – though not necessarily as large a proportion of its profits – comes from wine.

Even so, it is easy to imagine most wine professionals glancing at the story and moving on to something of greater relevance to them and their business.

This may be a mistake. Coca Cola famously has the ambition to own as large as possible a ‘share of throat’. Its bean counters would naturally like to sell a torrent of Coke in various forms, but they are just as intent on marketing the company’s wide range of other drinks, from Peace Tea and Costa Coffee to Innocent Smoothies, Minute Maid Juices, Simply almond milk and Dasani water.

Wine producers anchored to a single region and a small range of styles struggle to imagine the way a corporation like Coca Cola, with 200 different beverage brands, actually thinks. But Constellation is no different. With its beers, spirits and wines, it too wants a share of throat – and buzz, when you consider its investment in cannabis. Like Coca Cola it is in the business of offering consumers what they want to buy, rather than what it wants to sell. Which, to be blunt, describes the model of most classic wine producers.

And, according to most research and sales data, what consumers increasingly want to drink, is low and non-alcoholic beverages.

The brewers have been addressing this for decades, but have increasingly ramped up this part of their business. Constellation’s Corona brand now has a non-alcoholic version, as does Guinness. A growing number of craft breweries now produce beers with alcohol levels of around 2.5% or less, including the case of Rothaus and Maisel two well-respected players in Germany, as low as 0.5%. Meanwhile, Constellation has backed a startup called HOP WTR which is basically canned water for IPA fans.

Low spirits

The spirits brands have leapt onto the bandwagon. Santa Claus generously brought me a 0.0% version of Tanqueray that tastes remarkably like the alcoholic original, but without the backbone and richness. It beat its Gordon’s counterpart and Seedlip in a recent Good Housekeeping tasting of non-alcoholic spirits, but both of those also featured in the magazine’s 11 top recommendations. IWSR expects sales of these highly profitable products to grow by over 30% by 2024.

But that growth will be competing with that of the RTDs: cocktails and Long Drinks, flavoured alcoholic beverages (FABs); Hard Seltzer, Tea, Coffee and Kombucha; wine coolers and spritzers. This is a sector in which the brewers and spirits companies have invested heavily and it is the fastest growing alcoholic category since 2018. At that time, IWSR estimated that RTDs represented 4% of beverage alcohol market volumes. By 2025, they predict that share will have doubled. One in twelve alcoholic drinks will be an RTD.

Which brings me back to Coca Cola’s share of throat. Wine producers have traditionally imagined that they were competing with each other. Now many will have to accept that, especially, among younger consumers, wine is increasingly just one of a range of options. And the fact that some hipsters have fallen in love with orange wine and pet nat is not going to help in the broader battle for attention.

Unlike beer and spirits, the wine industry has struggled to produce lower strength versions that satisfyingly resemble the more alcoholic ones. I have yet to taste a dry still wine with 5% or less that is remotely as good a copy and alternative drink as that Tanqueray or any decent ‘light’ beer. And I have yet to encounter a wine professional who regularly drinks low or non-alcoholic wine.

My instinct is that until anyone cracks that code, the companies that have focused on wine-based drinks, from sangria to coolers, spritzers and seltzers, are on the right track. They’re producing fruity beverages that people already understand and enjoy. I once ran some research in which young British consumers were given glasses of best-selling fruit-flavoured ciders and a pair of wine coolers. They liked both but were unable to say which were made from apples and which from grapes.

Obviously, I’m not suggesting that terroir-based traditional wines are generally threatened by RTDs, but huge numbers of wine drinkers are not buying, and may not actually enjoy, terroir-based traditional wines. The real question facing the wine industry is how the 12-13.5% Proseccos, Pinot Grigios, White Zinfandels,  off-dry Chardonnays and Merlots consumers are buying today are going to fight off the challenge from easy-to-drink beverages like Fresca with half as much alcohol.

Robert Joseph





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