Natural wonder: organic wines
Organic wine is starting to look like one of those things everyone talks about but no one is actually buying into.
Search Majestic’s website for organic wine and just five bottles come up, on Sainsbury’s just four appear, and on Tesco’s none.
Steve Lewis, general manager of organic specialist Vintage Roots, says generalist retailers have been cutting back their organic wine ranges in recent years. He says: “The conventional trade is resistant to increase or put more emphasis on organic wines and has been reducing selections year on year. If these same people bang on the organic drum too much the consumer could question the integrity or authenticity of their whole wine range.” But Vintage Roots saw takings rise last year after a few years of little change – and Lewis is not the only one in the trade to see the potential.
Ehrmanns is focusing on building up its organic portfolio and senior marketing manager Inma Lopez Cantos says big improvements in quality could mean the sector’s dowdy image is set for an overhaul.
Consumer polling company Mintel found in its first research into organic wine that only 5%-9% of adults in major European markets had drunk organic wine.
The company has not yet carried out any research into UK consumers’ drinking habits, but analyst Jonny Forsyth said the market is “still very niche, but with huge potential”.
At Vintage Roots, which has more than 300 organic wines from 17 countries in its portfolio, turnover grew 12% last year after four to five years of very little growth, and a healthy operating profit is expected.
Lewis puts that down to the recovering economy and growing consumer confidence, as well as improvements in the company’s range, pricing and service levels.
He says organic wines work well online – 17% of the company’s business is mail order – because it is still such a niche area and benefits from people searching for something specific.
Ehrmanns is seeing more of its conventional wine producers adding an organic offering to a standard range, including Paternina from Spain and Giesen from New Zealand.
“They see a gap in the market and want to tackle that area of growth,” says Lopez Cantos.
She believes many consumers and some producers see organic wines as inferior, as well as commanding higher price tags – a serious flaw in a recession.
“There are producers who have organic vineyards but won’t put organic on the label because it is seen as detrimental to a super-premium wine,” she says.
But today quality has improved “dramatically” and Lopez Cantos says it is time for consumers to be won over to organic wine.
“Wine should justify its price with its quality, and the fact that it is organic should be an added bonus,” she says. “Retailers need to play a more educational role and emphasise what organic wine means. They should help change the perception that organic wine is of inferior quality.”
But Connoisseur Estates director Andrew Steel says organic will never be more than an added bonus when it comes to selling wine, and advises against merchandising organic wines in a separate section.
“A lot of people who are buying regular wine won’t buy it because it is organic, they buy it because it is wine. If you are looking for organic you go to a health food shop or an organic store, and there is not the mass push towards organic wine in grocers as there is with organic vegetables.”
While he disagrees with Lopez Cantos that organic wine is seen as lower quality – he believes the organic tag gives the wine a more hand-made feel – he does not see the sector’s commercial potential.
Steel says: “I still get turned off by people preaching that they are totally organic. There are good things to be done with organics. A lot of wineries are going organic and biodynamic and cutting down on pesticides. But they will want to use them from time to time if they want to have a commercial business, so they can’t saddle themselves with being 100% organic.”
Connoisseur Estates supplies organic wines from Marabino in southern Sicily, but says that a Nero d’Avola for £15-£30 is always going to be a hand-sell.
Steel says: “The wine is great but it just doesn’t move volume. We are getting good sales but not through retail. We are hand-selling it as a Nero d’Avola rather than specifically as an organic wine.”
Whether it’s a pure hand-sell or a potential growth area, health- conscious January is a good time for retailers to look at their organic ranges and see if they could be doing more to generate organic growth.