This article was initially published in the December/January issue of Global Drinks Intel magazine. For details on how to subscribe, click here.
The UK has been battling through a tough winter and multiple retailers are doing their best to appeal to shoppers amid the belt-tightening. Kevin Rozario talks to Asda’s senior manager for wine buying, Clive Donaldson, about the retail giant’s plans to keep its wine sales afloat.
As the global economy remains firmly in the grip of a cost-of-living crisis, competition in the UK supermarket sector has been heating up. Cash-strapped households are moving in droves to discounters such as Aldi and Lidl and away from the traditional ‘Big Four’ of Tesco, Sainsbury’s, Asda and Morrisons.
The shift has been evident for some years but accelerated in 2022 to the point that, according to analyst Kantar, Aldi (with a 9.3% share) narrowly overtook Morrisons (9.1%). Asda is in third place with a 14.1% share giving it some breathing space, but it will be watching closely.
Every category is under constant review to make sure each is pulling its weight – wine is no different.
Going head to head with M&S, Waitrose and Majestic
During the pandemic, Asda increased its range of ‘Extra Special’ wine SKUs from 39 to 61 to appeal to a wider audience and ensure a more inclusive offer, more so at the higher end. In August, aware of some shoppers’ sensitivities to price, the retailer also locked the price of five popular white, rosé and red wines until the end of the year, at GBP4.99 (US$5.91).
Two months later, Asda hosted its ‘Winter Wine Showcase’, offering the media, from fine wine writers to lifestyle bloggers, the chance to sample an array of its more unusual wines and product launches. “Asda has been moving towards a more all-encompassing offer over the past couple of years,” wine buying senior manager Clive Donaldson told Global Drinks Intel at the event. “That means we’re going up against M&S, Waitrose and Majestic to some degree.”
In other words, Asda, whose reputation was built on being the place to go for an economy shop, has added new lines that have taken its wine offering into the higher-end territory occupied by its rivals. The retailer’s previously narrower price focus has also widened, but not by too much.
“It’s about quality and choice, but inevitably there is a correlation with price,” says Donaldson. “Asda was aware that it catered to a lot of consumers’ needs, but it didn’t have something for every occasion.” For those special events, the consumer had previously tended to visit Asda’s more upscale rivals.
A broader offer for all occasions
The expanded ‘Extra Special’ range has been designed to address those needs. In June, for example, Asda launched a Châteauneuf-du-Pape Blanc (GBP18), a pretty niche addition, and a Rosso di Montalcino (GBP17), while two 2014 vintage Champagnes (GBP26 and GBP30) are suitably priced for any occasion and are good alternatives to better-known brands that cost much more at GBP40 and GBP50. Asda’s entry price for Champagne online is GBP15 for Henri Cachet Champagne Brut.
Well-known labels are also important, hence the presence of Catena, d’Arenberg, Ravenswood, Trimbach and Wakefield. Donaldson, who has been with Asda for two years, says: “We work as closely as possible with the producers and blend our wines at source. This renewed focus on quality has already resulted in an increased number of awards.” Last year, the retailer won no less than 250 gongs for its exclusive wine lines.
Before joining Asda, Donaldson was with Morrisons for about seven years, also in a wine-sourcing role, so he knows the market well and deals directly with wineries around the world. As such, he has his ear close to the ground at both the supply and consumer ends of the business.
Asked if he has seen shoppers moving to luxury despite the economic climate, he says: “We’re seeing some macro trends playing out. During the pandemic, people were not able to do certain things like go
out, so they looked to treat themselves or entertain at home. Now, our customers are doing a bit of both and we need an offer that reflects that behaviour.”
Wine has a lead time of about 12 months, so forecasting the current post-Covid environment, coupled with an energy crisis driven by the war in Ukraine, would have stretched the imagination a year ago. While Asda would look at all the forward insights available to it, a certain amount of corporate direction comes into play.
“It’s also about what offer we want to have and who we want to be,” adds Donaldson. “If something changes drastically, we have to adapt.” Therefore, taking a position and going for it is the general plan. In the lead-up to Christmas and beyond, “covering more customer occasions” was the strategic aim that has driven buying decisions.
The long-running demand for Prosecco, for example, has ushered in a Valdobbiadene (GBP9.50), a DOCG from a higher altitude and with a higher acidity, as well as a number of sparkling alternatives in the form of French crémants (at the GBP10-GBP12 mark), the latter arrivals also partly a reflection of the difficult Champagne vintage in 2021. The goal, says Donaldson, was to “try to remove products that were duplicates in terms of flavour profiles and bring in a more nuanced selection using our wine knowledge”.
Sales boost from a radical display revamp
One of the biggest changes for Asda during the pandemic was to move away from on-shelf country presentations to classification by grape. “About 18 months ago, we were the first UK supermarket to switch to displaying by grape variety rather than country of origin,” he says. “We noticed that customers on our website were searching by grape varieties much more than by country.” The online behaviour was also confirmed in-store.
Wine has been sold in a very static way for a long time in the UK, so Asda’s move shook up the market – it has also opened up some opportunities. “Because we’ve brought all our Sauvignon Blancs together,” he says, “what we see now is that consumers are more willing to trade between Chile, New Zealand and South Africa.”
To avoid creating a selection that only highlighted the most popular six to eight varieties, Asda included grapes of a similar style to Sauvignon Blanc. “What that means is that an aromatic, unoaked white wine with a good, clean acid profile would go in that section because the style is more related to Sauvignon Blanc than Chardonnay or Pinot Grigio,” explains Donaldson. “We have done that with Albariño, for example.”
This new way of grouping wines in-store has boosted sales. Placing less familiar, but related, grape varieties with those that are tried and trusted by shoppers has given them the confidence to try the lesser-known grapes or labels. This also engenders trust in Asda, because shoppers know they can rely on its wine buyers to present them with the flavour profiles they like.
Moreover, when the ranging was grouped by country, consumers who liked Chardonnays had to wander the aisles to compare them. Now, they’re all in one place. “This is one of the things that has made us more aligned to our customers and it has been successful for us,” says Donaldson. “We are sticking with it.”
Other supermarkets are yet to follow.
While grape variety is the main way that wine is sold in some other parts of the world, such as in Australia, New Zealand and the US, there is a cultural element to the approach. New World markets are much more about varietals, and consumers in these countries are possibly more knowledgeable about the topic. In Old World countries, such as France and Italy, the focus is on the regions and terroir. Donaldson believes the UK’s approach has been driven largely by its proximity to, and influence from, these European markets.
In the run-up to Christmas, Asda’s new selection – and the big increase in its ‘Extra Special’ range – was expected to cover more ground in terms of consumer tastes and the occasions for which they are buying. However, the retailer has been careful to stick to its core customers’ needs and has not breached the GBP50 mark (which is the price of a Bollinger Rosé Brut Champagne).
“Our focus is on interesting new lines, some that consumers might not expect Asda to have,” says Donaldson. “We have huge ambitions for our own-label wine.”
This article was initially published in the December/January issue of Global Drinks Intel magazine. For details on how to subscribe, click here.
