- This is the 11th instalment of The Future Of... a longread series which seeks to examine in depth what the next 5-10 years holds in a variety of different areas.
In February this year Lucy Wright sat in the wine tasting room of a large wholesaler in central London. Old posters of bordeauxs and clarets, maps of different wine regions and wine bottles lined the room. The obligatory spittoon was in place. Lucy was wearing a pink jumpsuit emblazoned with the word ‘Nice’, the name of her wine brand.
She had a small case, not large enough for bottles, but perfect for her pink, slim, aluminium cans. Wright had seen the success of canned wine in America and wanted to replicate its success with a younger demographic in the UK; think festivals and Friday night train drinks for weekends away.
Mid-pitch the wholesaler cut her off, saying if he’d been told when he started in the wine trade 30 years ago that he’d be sat here now, with a 30-year-old woman selling him cans of wine, he would have said it would never happen. Fortunately for Wright, he added that he now recognised that it was exactly the kind of innovation and disruption that the wine market needed. Wright got her deal over the line.
For those who love it, the appeal of the wine industry is that it doesn’t change fast. In a world that's chaotic and fast moving, wine is a faithful Dobbin. More than 8,000 years have passed since the first amphorae of wine were produced in the Caucasus. The Romans replaced them with barrels. In the 17th century glass was introduced but it wasn’t until the 1820s that wine bottles started to look like those we use today. Reputations are not made overnight, but built over generations. It takes hundreds of years to create a success story like champagne.
Things may not move fast, but there is an acknowledgement within the wine world that change is coming. There is a need to adapt and survive, not just to the exigencies of the market but to the climate. Although maybe not with utmost alacrity.
Online sales of wine boomed during lockdown but the bigger picture is one of consumption decline. In 2015 around 29.5 million people were drinking wine at least once a month, and around 80 per cent of these people were drinking wine at least once a week. Today, data by Wine Intelligence suggests that the overall monthly drinking population has fallen by about 1 million, to 28.5 million.
If it wasn’t for the prosecco boom and all those bottomless brunches the figures would be a lot lower, but even that is tailing off and certainly hasn’t been helped by Covid-19. The successful positioning of craft beer, the rise of artisan spirits, the mystique of whisky and even the prevalence of bean to cup coffee have overshadowed the humble grape. Factor in a shift towards healthier lifestyles and could we be witnessing the last days of the bon vivant?
Generation Z are more likely to chide their parents for the mid-week glass of pinot grigio than try to swipe a swig. More than half of those under 35, already a group not drinking as much as their parents had at their age, said they were trying to cut down. By 2022, it's predicted that British consumers will spend £487 each annually on 'wellness’, and the drinks industry is working hard not to be left behind.
The aptly named Alistair Viner, head buyer at Hedonism in Mayfair travels to the US frequently and has watched the growth in alcoholic seltzers, low calorie alcoholic carbonated waters, for a crowd of health-conscious younger people. The drinks market analysts IWSR predicts that these seltzers will have the highest growth rate in the UK’s canned alcoholic drinks category.
To understand the challenges facing the wine market across the globe, and closer to home, Viner says it’s necessary to differentiate between commercial and fine wine. The latter is doing just fine. Fine wine prices have escalated due to an increased interest in collecting wine, aided by the view that it is a safe commodity.
“At the top end wine is considered in the same category as fine art, cars or watches. They'll become more and more collectable as more people understand a little bit more about them,” says Viner. At his shop the average bottle of wine sells for £150, but he wouldn't advise casual investors to put their money into wine.
“When I was starting in the late 80s it was more affordable than now to buy a couple of cases of claret and bung it in the cellar. Now a lot of those cellars have become basements flats. It's a gross generalization but fewer people have cellars and buy wine to keep in them.”
Yet more people than ever are trying to get their hands on the latest releases, meaning fewer bottles to go around. “If I look at the en primeur release in Bordeaux this year the price was down considerably, bearing in mind the [coronavirus] crisis and the climate. However there was a lot less wine being released and a lot of châteaux were down 30 or 40 percent of wine going into the market, which automatically creates more buzz and excitement of people trying to get hold of these wines. As well as frustration for those who have always bought and now can’t.”
In contrast, 80 per cent of wine in the UK is still sold through supermarkets. Last year, the average price of a bottle of wine in the UK rose to £5.93, up from £5.73 in 2018, according to the Wine and Spirit Trade Association. A trifling amount when you consider that excise duty currently stands at £2.23, accounting for 44 per cent of the cost of a £5 bottle. Factor in the glass, the label, the cork or cap, along with 20 per cent VAT, and that doesn’t leave much money for the liquid inside.
When Master of Wine Richard Bampfield entered the industry in 1981 the supermarkets were just beginning to become a major player in wine. It's hard to imagine a time when a bottle to a friend’s for dinner was not standard practice, yet back then far fewer people drank wine. Although among the upper classes, he points out, it had always been a table drink, purchased through wine merchants. It was a time of Bordeaux reds and German whites like liebfraumilch and piesporter. “Waitrose and Sainsbury’s were at the forefront of pioneering with wine at the time,” says Bampfield. “Suddenly Bulgarian wine became very popular.”
Then in the late 80s the UK was hit by a wave of Australian cool. “Everything from Crocodile Dundee to their wine became popular,” he adds. Far better at understanding what the market wanted from wine than the traditional suppliers in France, Germany, Italy and Spain, Bampfield says Aussies helped make wine a party drink. “It suddenly became more aspirational in the 80s and through the 90s. Australian wines were very good at working with the supermarket and our consumption per head increased rapidly.”
Bampfield, who consults for Lidl, believes that where supermarkets have been less helpful is in the pricing mechanics they’ve employed. Artificial discounts that inflate a wine to £9.99 only to knock it down to a ‘bargain’ £4.99. “The impact of that is I don't think people know the true value or price of a wine. I think the public are confused,” he says.
Meanwhile global overproduction keeps the price of wine low, and producers struggling for financial sustainability. Even before the pandemic, wine prices were projected to hit a five-year low in 2020 due to a surplus of California grapes and shrinking demand industry-wide.
Even the premium wine market has been affected. With not much to celebrate in 2020, it is predicted that 100 million bottles of champagne will be languishing unsold in cellars by the end of the year. Covid may spell the end for some smaller producers. While the turning over of some vines to other crops might ultimately be a good thing, says Bampfield, in practice wineries are often bought by larger players such as pan-national wine brands Gallo and Lindemans, looking for greater economies of scale.
“It makes sense when negotiating with large supermarkets,” says Bampfield. Although he adds that it contributes to a lack of diversity, just as the trend for artisanal and crafted products is setting the tone. The fear is that driving down the margins for growers will only lead to a more homogenised offering that is less exciting for wine lovers. Should we all be prepared to spend more on our wine?
The owners of Bloomsbury wine bar Noble Rot are trying to dispel the conviction that knowing about wine is the preserve of a certain class of person.
Master of Wine Mark Andrew and his business partner Dan Keeling first started the punchily-styled magazine of the same name in 2013, born of a desire to use the same vocabulary about wine as they would use for food, music, football or movies. “We always saw wine in terms of popular culture and felt the wine media that was out there was more traditional, and dare I say eltisit,” says Andrew.
They hit upon a parched part of the market. In Andrews’ view, the UK wine scene is going through a bit of a purple patch at the moment, pointing to the 900 independent wine merchants around the UK. He hopes it’s part of a shift away from the sub-£6 supermarket spend and an appreciation that wine isn’t just something that gets you drunk.
The popularity and ease of online shopping means bricks and mortar retailers are focusing on the creating a whole experience, says Andrew. The enoteca environment, part wine bar, part wine shop is popular on the continent and emerging in the UK. More wine shops are offering tastings in store. “That interactive experiential approach to selling wine in an offline environment is much more fulfilling than buying wine in the supermarket,” he says.
In July 2019 something happened which the wine world had thought never would. The Bordeaux Syndicat, the organisation representing the economic interests of 6,700 producers in Bordeaux, approved seven new types of grape which included the Portuguese favourite touriga nacional, plus the lesser known castets and arinarnoa.
All have natural resistance to specific diseases, such as grey rot and mildew, and a proven ability to cope with warmer conditions.
The move was hailed and praised as a wake-up call to other traditional wine producing regions.
Due to the fragile nature or grapes, viticulture is the canary in the coal mine of climate change; an issue that brings both ends of the industry together. Now “we are having to start to contemplate the heretical notion that chardonnay and pinot noir might not be the best things in Burgundy in the next half century,” says Master of Wine Peter Richards, presenter of the Wine Blast podcast with his wife, fellow MW Susie Barrie.
Twenty years ago such a notion would have had you laughed out of the room, however five spring frosts in the space of a decade and he says it is, “Nature saying these things ain't working here anymore.” Climate change isn't just about heat in the harvest. It’s about irregularity where there was regularity before. Bordeaux has grown used to the devastation of the May hail storm. Frost shrank the harvest by 40 percent in 2017. Meanwhile, in Rioja, the UK consumer’s favourite winemaking region globally, they are facing the prospect of running out of water.
Producers aren’t giving up without a fight. The Barcelona Supercomputing Centre uses short-term weather forecasts to warn grape growers of approaching weather phenomena. Thanks to them a wine producer in Catalunya can get a message to their phone warning of a flash frost in two days' time, which gives them enough time to prepare.
One organic Burgundy producer reportedly flew over his vineyard repeatedly in a helicopter all night to keep the frost off. More commonly, but hardly more ecologically sound, is the use of oil drums burning heavy fuel oil to warm up the vineyard.
In the long term massive adaptations of the vines in established regions like Saint-Emilion in Bordeaux, known for merlot, poses questions about convincing consumers to buy something different? And what happens to the local economy if wine tourism goes elsewhere?
Sixteen years ago Eric Heerema had a vision and a belief that English sparkling wine could become the best in the world. He stood firm in the face of ridicule and bad weather. 2012 was a disaster apart from two weeks of sun during the Olympics, which led to the painful decision not to pick any fruit that year.
His faith is beginning to be rewarded now. This year, in the middle of the Covid crisis, his producer Nyetimber planted another 40 hectares of vines in Kent and West Sussex, taking their total to 327.
“We used to have to justify our existence every day. Why are you so expensive? Why do we need you when there is champagne? Now that's changed”, the Dutchman tells me. The reputation of English sparkling wines improves year on year, with Nyetimber top of the class. A strong brand has been matched by the quality factor.
While Champagne has struggled with Covid, Heerema says retail sales have been reasonably good. At present, Nyetimber is still a loss-making operation. Sales are below one million bottles a year, limited by how many they have been able to produce. Last year they breached the one million bottles produced mark, which will be ready for market in two years, and Heerema already has his sights set on the two million bottle mark within the next five years.
A one degree shift in global climate temperature has allowed the South East of England to compete with champagne. Dr Alistair Nesbitt of Vinescapes, a consultancy working on researching how the wine production sector can increase its resilience to recent and future climate change, says that growing conditions are similar to those 40 years ago in the Champagne region. Indeed the Taittinger family have invested in England, planting their first vines in Kent in 2017. The Pommery house soon followed.
For all the positive media coverage, English Sparkling remains niche (only one in five sparkling drinkers have consumed it in the past year), partly because it's not that widely available in restaurants and shops. Still, there is a lot of optimism in the area. Hectarage planted in Great Britain has grown by 188 per cent in the last 10 years and quadrupled since 2000. WineGB, the national association for the English and Welsh wine industry, states that over the next 20 years the industry will create between 20,000 and 30,000 new jobs. It also predicts that by 2040 the industry could generate an additional £658m in revenue a year through tourism as wine estates seek to attract visitors from outside the UK.
Heeremais mistrustful of the grape rush, though. “We have seen examples in other countries where there was such a wine bubble, like in Australia and realty in New Zealand where too much wine was produced and it produced a crisis and a lot of farmers went bust.”
If that is the case and farmers plant too many vines in the next 10 years then only the strongest brands will survive.
Wine lists of the future will be markedly different from today’s. Britain is part of a larger latitudinal shift north in production. What you are handed in a restaurant in 20 years time will have traditional wines coming from the very non-traditional terroirs of Sweden, Norway, Canada and China.
While the exciting growth of English wine wouldn’t be possible without climate change, it is, says Richards of Wine Blast podcast, “a very small silver lining in a very bad context.”
Still, one of the advantages of growing in cooler climates is that alcohol levels tend to be lower due to lower sugar levels in the grapes. Alcohol is produced by the fermentation of sugars by yeast. The higher the growing temperature of the grapes, the higher the rate of photosynthesis and the sugar levels.
It is becoming a challenge for hotter parts of the world to keep sugar levels low. Wines with over 14 percent alcohol are now fairly common. Yet the general market demand is for lower alcohol wines.
In July this year actress Cameron Diaz launched a ‘clean’ wine with her friend Katherine Power. Diaz told of her struggle to find wines made with organic grapes and without the use of pesticides or additives. Previously she’d had no idea that wineries are allowed to use more than 70 additives when making wine. Her brand Avaline was founded on “ingredient transparency”.
It’s fair to say it put a lot of wine noses out of joint, not just because of the implication that all other wine was dirty. Avaline says its sulphur levels are under 100 parts per million, but the generally accepted standard among “natural” winemakers is below 70 ppm.
While sulphur occurs naturally in wine grapes, most winemakers add some extra sulphur dioxide in the winery, largely to prevent unwanted bacterial growth. The natural wine movement, which refers to winemakers who try to produce "natural" wine without pesticides, chemicals and other additives, favours limiting sulphur additions both because of the perception that it can strip a wine of its nuances, and the belief that they can be harmful.
Love or loathe Diaz's wine, experts acknowledge that its marketing appeals to the mood of the moment. “The clean wine thing is important because it ties into something good and bad,” says Richards. “Wine is getting better at tapping into people's lives and values.”
Natural wine, which began in France in the 1990s, was both a reaction against the dominance of bland internationalised wine. “Ripe and oaky styles that were easy going and tasted the same everywhere,” says Richards. As well as the massive overuse of chemicals in agriculture in the latter part of the last century, of which viticulture was no exception.
“Many vineyards came about in the 60s and 70s and that’s what you were told to do back then,” says Tobias Webb, co-founder of the website Sustainable Wine, which seeks to drive debate within the industry.
He has spoken to farmers in the Bandol, east of Marseille, an appellation that gets 3,000 hours of sunlight a year (“If you use chemicals to grow grapes down there then you’re an appalling farmer”) who reckon that many still are relying on pesticides.
The inevitable consequence of such overreliance is land that has grown steadily less fertile. Consequently there is a growing consensus on the need for better practices; Champagne is banning herbicide by 2025.
Yet Webb says there is a lot of confusion about what organic means. He recalls talking to one Champagne grower who believed he was organic because he no longer used herbicides, yet saw no problem in using heavy machinery to till the land and release carbon into the atmosphere.
Meanwhile, earlier harvests due to climate change might lead to more additions in the winery; think sugar, or worse, oak chips and sawdust. Still, for all its ability to cause a stir, the natural wine movement is a social and cultural revolution that punches above its weight, given that most wine by volume is shipped in bulk and is then bottled or goes into boxes.
However much natural wine is an emblem of social capital, it is nevertheless indicative of a need to have better labelling and information provided by growers about their processes. For example, biodynamic wine producers prepare the soil over winter by burying a cow’s horn willed with a humus mixture below ground, which is said to to harvest "cosmic forces in the soil” but is hardly in accordance with vegan principles. Meanwhile much wine is already vegan due to being refined for brightness (more prevalent in commercial wines that need to be ready for drinking more quickly) using bentonite, which is clay derived, rather than casein, which is milk derived or albumin that is egg derived.
Not that wine marketing is so straight-forward. One merchant in Winchester who decided to group his incidentally vegan wines as such in his shop, found sales plummeted as his non-vegan customers suddenly perceived those wines as somehow not for them. Wine after all, has a tradition of appealing to a carnivorous community.
“The less there is to justify a traditional custom, the harder it is to get rid of it,” wrote Mark Twain in The Adventures of Tom Sawyer. At the 2020 Future of Wine Forum this November (now being held online) Webb intends to challenge the industry over its use of glass bottles.
While he is motivated by the environmental impact of the wine industry, it is also economically an issue that can no longer be ignored. Consider that 87 per cent of consumers are concerned about packaging, but the majority believe responsibility lies with producers.
Bottle weight remains a point of contention. Pick up a bottle of chateauneuf du pape and its heaviness conveys a sense of quality and substance. Yet even cheaper bottles of wine can have considerable heft. A €9 (£8.12) bottle of wine weighing in at 900 grams with 750ml of liquid inside can hardly wash its face once you’ve accounted for shipping and logistics.
The climate though is what really pays the price, says Webb. From the firing of the glass to the increased fuel shipping costs. He suggests that no wine bottle should weigh above a certain amount, pointing to a Burgundy producer of his acquaintance who has got his bottles down to 350 grams. “Below that glass technology means they're a bit too fragile,” says Webb.
Nota bene: Carbon footprints don’t always work out the way you would expect. A lot of South African wine has a low carbon footprint because of the good weather for growing, and then it’s shipped in bulk in a large rubber bag before being bottled in the UK. So the carbon footprint of cheap South African pinotage could be amongst the lowest in the industry. Same with Chilean merlot, the good growing conditions means it needs fewer chemicals.
However it is Webb’s hope, as it is many others that in the future we will see more sustainable packaging, be it cans, or more wines available on tap, as pioneered by the likes of Borough Wines. The wider use of enomatics in restaurants and bars would not only reduce waste, but studies have shown that wine-by-the-glass sales increase turnover and are more profitable than bottle sales.
During lockdown sales of so-called “bagnums”, bag-in-box wines were up 40 per cent as consumers opted for better value for money and fewer trips to the supermarket.
Part of the allure is not only their picnicking portability, but also the eco-credentials (although the inner bags generally can’t be recycled) of the new-generation of wine boxes, which stays fresher for longer (up to six weeks). The wine quality has also vastly improved, in line with general improvements; nowadays given the refinement of technology, it’s very hard to make a bad wine. A boring one maybe, but an undrinkable one, no.
That's not to say Chateau Lafite is going to want to put their wine in boxes any time soon, but given that 54 percent of wine sold in the UK is for bottles under £6 there's no reason it couldn't be sold in boxes or on draft in order to take a lot of packaging out of the chain.
The wine industry, given its complexity and different market segments with very different dynamics, is unlikely to make any sudden moves, and with good reason feels Richards.
“Does it need to evolve, absolutely and it will. The industry changes slowly but for a good reason. Not because of protectionism, not because wine people want to keep things old school, it's because wine is a difficult product to understand and it has a diversity and complexity in the making of it that doesn’t easily conform to what we want our products to be,” he says.
“But that’s its beauty. If the wine world were to change dramatically in the next 10 years it would be worse for it. This is a product that has a history and continues in human history.”
- The Future Of... is a longread series published on Thursdays at 8am. Previous chapters have explored the future of the great British country pub, the future of meat and the future of the fried chicken shop. Return to Telegraph.co.uk next Thursday for the next instalment
- Would you tolerate a lighter bottle to help save the environment? How do you pick which wines to buy or drink? What have been the best and worst wine-drinking experiences of your life? Let us know in the comments section below