Wine matches Swedish option for balanced, quality lifestyle
Wednesday, 28 January, 2004
Tessa de Kock
Balance in life, wine … and everything
The Swedes, belonging to one of the most affluent nations in the world, are understandably more concerned with quality of life than financial aspirations. Their material comfort allows them to be. Although it would be hard to argue the same for residents of the United States, who still make money a top priority.
According to research from the Fremtidsforsknings Institut, quality of life and free time are valued above all by Swedes, who boast among the highest education levels of the nations of Europe. The notion of balance is central, which could explain why they regard their own physical health and that of the environment to be very important, and might also explain their growing preference for wine as their alcoholic beverage of choice. Swedes consume an average 16 litres of wine a year, although in Stockholm it’s more like 20 litres, whereas retail sales of hard liquor have been declining. They have fallen to around 2,8 litres a year from 7,5 litres a year in 1975, although consumption of spirits is estimated to be higher than officially recorded because of contraband sales.
Given that liquor advertising is still highly restricted and until recently was not permitted to consumers at all, the move towards a healthier lifestyle could well be a contributing factor to the rapid rise in wine consumption by Swedes since 1995. So could the fact that Sweden’s Government-run national liquor retail monopoly Systembolaget, has made shopping easier. Until recently, shoppers would go into any one of its 400 stores, ask for a product by name and wait for someone behind the counter to fetch it from the storeroom. These days, Swedes can browse up and down the aisles, selecting for themselves from the rows of numerous wine brands on display.
And now it looks as if wine sales could climb even higher with this year’s anticipated reduction in excise tax. Already the Swedes are charmed by the convenience and environmentally friendly bag-in-box packaging, which is not limited to low-end wines as in some other countries. Pocket-friendlier pricing could be the next trigger to bring wine to more Swedish tables.
Retail sales of reds, through Systembolaget, rose 30% year-on-year from July 2002 to June 2003, with whites increasing 7% over the same period.
South Africa has benefited significantly from the trend, playing catch up with its competitors, no mean feat considering that it entered the market as late as 1993. By 2000, the country was the 8th biggest supplier to the market, according to Wines of South Africa (WOSA). By June last year, it had moved up to 5th position as a supplier of red wines (which comprise 60% of Sweden’s wine sales) behind Spain, Italy, France and Chile. The most dramatic increases have come from reds in the super-premium sector, selling between 70 and 79 Krone (R85 to R96) a bottle, a price segment where sales more than doubled between 2001 and 2002. At the same time, sales of 3-litre bag-in-box wines shot up 178%, accounting for 47% of Systembolaget’s sales of reds. And South Africa has shown well in these categories.
Retail sales of South African whites increased 83%, putting us behind Germany, Italy, Spain and then Hungary and France (in joint fourth position) and Australia.
SA Wine Industry & Information Systems (SAWIS) shows a 125% increase in sales for the first 10 months of last year, compared with 2002. If you were to log onto the Swedish website of WOSA, you’d see listed in alphabetical order the hundreds of local wines available in Sweden, starting with African Sky and ending with Zonnebloem. While both these are Distell products, by no means do they reflect the sole source of local wines to Sweden. But the company is fortunate in having several products which are showing robust growth.
Among these are Alto Cabernet Sauvignon, a great favourite, enjoyed for its classical styling, which increased sales for the 12 months to November 2003 by 84%, while newcomer to the market Stellenzicht Pinotage has been a great hit, as has Tukulu Pinotage, along with Jacobsdal Pinotage.
But it is not only the reds that are rocketing. Whites like Plaisir de Merle Chardonnay and Zonnebloem Sauvignon Blanc are flying too. Most impressive has been the growth of Two Oceans. Brand sales rose 125% in the 12 months to November 2003, fuelled by competitive pricing and quality.
Critical in the Swedish market is the high regard of wine writers, whose opinions are closely followed. Says Don Gallow, Distell’s group general manager: international operations: ‘Because advertising to consumers is limited, producers are very reliant on the views of wine journalists, whose ratings hold great sway. Fortunately, South Africa is acknowledged for its excellent value offerings across price points and is gaining increasing credence in the mid to higher-price segments. We make a point of keeping the media updated on the wines we export to Sweden.
‘But as important is exposure in on-consumption outlets. Sweden has a population of just under 9 million people and some 10 000 licensed outlets. It’s important to reach sommeliers and to work with distributors who can ensure wide placements of your wines not only in upmarket restaurants but also in wine bars and cafés.’
Tessa de Kock for Distell News Service