I’ve just come from watching Stephen Skelton MW chair an Institute of the Masters of Wine webinar entitled ‘What’s In Store For English Sparkling Wine’ with Justin Howard-Sneyd MW (ex-head of Waitrose wine, Domaine of the Bee, The Hive Wine Consulting), Mark Harvey (MD of Chapel Down Wines), Stephen Duckett (founder and MD, Hundred Hills Winery) and Paul Murray (CEO of Cornerstone US Wine Imports Inc). It was a smart, level-headed session looking at business end of England’s flagship wine production.
“We do have a serious oversupply situation” Justin Howard-Sneyd
The oversupply of English grapes is a delicate topic. ‘Spooking’ the trade is a risk as market perception of oversupply could easily veer into ‘nobody wants to drink English Sparkling Wine because it obviously isn’t as good as they think it is’ rather than ‘it was so successful that we grew too fast’. Howard-Sneyd’s smart analysis of the current stock position would seem to suggest that the industry needs to forget about denying the upcoming pressures and start thinking about how to maintain the quality message. Here are a few headlines from the panelists.
- Stephen Skelton MW presented some basic facts and figures. UK plantings currently stand at around 3500 Ha, or 1/10th the size of Champagne. He estimates that 50% of all planted Chardonnay, Pinot Noir and Pinot Meunier have yet to produce wine on the shelf.
- Justin Howard-Sneyd MW showed that year-on-year sales growth of 10% per annum for 5 years followed by a fallback to 5% per annum would lead current stock levels to rise to almost 80 million bottles by 2028, with sales standing at just over 4 million bottles per year. This assumes planting slowing and stopping at 4000 Ha over the next two years.*
- Even with sales growing 20% year-on-year (followed by a relaxation back to 10%) 10 years’ worth of stock could easily build up.
- The current market for Traditional Method Sparkling Wine over £25 per bottle in the UK was around 14 million bottles. Exports last year stood at around 200,000 bottles. He predicts the £25-40 market to stall, whilst the £40+ ‘prestige’ market may actually grow, along with the £10-15 market.
- Paul Murray, with his experience in the global wine market, also sees £15-25 as key. His involvement in some of the UK’s first Charmat method wines stems from his belief in this sector. Nevertheless “there will be winners and losers”, and slowing down planting is key. ‘We all love the romance, but at some point you just have to stop people!” Murray believed there would be “big deals’ ahead.
“We’re going to have to differentiate more” – Mark Harvey
The panel was unanimous about the need to diversify. The question I always have about this is: with what? Those that have either been planting Chardonnay and Pinot Noir in exceptional sites or planting dedicated still wine varieties may be sitting pretty, but what about the enormous hectarage of champagne varieties planted for sparkling wine?
Skelton and Howard-Sneyd are big believers in still Pinot Noir Rosé, which looks to be the easiest pivot to make for sparkling producers who have either over-planted or are slow to establish newer brands. Still blanc de noirs could become a specialism, too. The problem is probably more what to do with Chardonnay; whilst the best growers can probably push their Pinot Noir into the sort of ripeness needed for still rosé, doing the same for still Chardonnay is no mean feat. Many in 2019 would have been picking Champagne clones at around 9% potential alcohol and 13+ g/l TA; unlikely to produce interesting still wines. Sussex and counties further West have produced very few still Chardonnays to date, with the best coming from Kent and Essex. Across the country I would estimate that no more than 20% of Chardonnay planted could reliably be turned into still wine likely to merit £15 per bottle. Neither would most of it make especially friendly entry-level sparkling, either as Charmat or extremely youthful Traditional Method wines.
So what are these “£10-15” sparkling wines going to be made from? Paul Murray’s Charmat method Angel and Four brand used 50% Reichensteiner, 25% Madeleine Angevine and 25% Seyval Blanc – varieties that cover about 7% of the planted area in England and Wales as things stand. Combine these with other aromatic varieties with potential for Charmat wines and you might reach about 12% (more if you include Bacchus). The Pinots do have potential for these wines, but probably not on their own.
Aside from newer Bacchus plantings, many of these aromatic varieties will come from smaller vineyards who may be perfectly happy selling their own still wines into local markets. The question facing growers, then; is it time to pull up that Chardonnay and plant some Reichensteiner?!
The Elephant Not In The Zoom
Covid has already forced many to discount to levels that will be difficult to clamber back from. Today you can buy a case of Nyetimber Classic Cuvée for £159 from merchants despite it still being listed at £222 per six on the producer’s own website. Hattingley and Hush Heath have also made serious discounts available, and are far from alone.
Accompanying this cold reality is a discussion that was not broached – wine quality. The panel felt that the “battle” between champagne and English Sparkling Wine in terms of quality was over, and that English Sparkling Wines had little to prove. My own sense is that English Sparkling Wines have reached a ledge on a difficult cliff face. With crumbling footing below, the choice is whether to descend or ascend. Long-term, the industry needs ascenders; flagship brands who can weather the storm of Covid and overplanting without compromise on quality and reputation.
The route for the descenders is no less perilous, and possibly harder than for Champenois who find themselves in similar positions. Cheap champagne is often made from harder pressings and less desirable grape sources, but these grapes would still tend to be essentially ripe; in England cheap grapes usually mean under-ripeness, high acids and green flavours (especially when over-pressed). My experience of English Sparkling Wines around the £20 has not inspired much confidence so far, although I’m hopeful this might change with the 2018 vintage in bottle (and 2020 looking promising too).
Competition in the field of contracted vineyard and winemaking services will certainly help, and Murray and Skelton both believe there is scope for a duty reduction for English wines. Perhaps this holds the key to producing something respectable at £20. Using a quicker turnaround to drop prices doesn’t work in a low sales-pressure environment, though; in fact a slowing in the market could hold some benefits for quality as wines are forced to spend longer on lees!
If stocks can’t be financed (or are seen to drop in value) then perhaps we will see sales of un-disgorged wine sur lattes and a rise in opportunistic “soft brand” English Sparkling Wines in the supermarkets and large wine retailers. There could be some good wines around at good prices. Too many of these, though, and the ability of the headline producers to maintain premium pricing becomes seriously compromised.
Survive or Thrive?
There will be niches for still wine, but English Sparkling Wine from classic grape varieties is currently the only product of globally-significant quality produced in any serious quantity. Whilst England joins much of the global wine industry in survival mode, then creativity and diversification is understandably the only game in town. Ultimately, though, England must remember that international recognition of its wines remains embryonic, and casting a haze over what it does best could prove unhelpful.
The best-case scenario is that poor and unproductive sites are weeded out, good sites remain (or come) under the control of well-funded operations with long-term financing, and more people get to taste ‘real’ English Sparkling Wine at a lower price point. If this dynamic prevails over the side-effects of post Covid and post-overplanting re-adjustments, then England will emerge into its recovery period with a star to follow.
*Howard-Sneyd’s predictions about growing stock levels assume that English Sparkling Wine rises to 80% of total UK production and that yields remain at 25 Hectolitres per Hectare. Neither of these are safe; the former could potentially drop, whilst the latter is likely to climb higher as yield figures have been dragged down for many years by lower-performing vineyards. Most of the modern vineyards will achieve 7-8 tonnes per hectare of fruit (more in 2018/2019/2020), or closer to 35 Hl/Ha. Covid, too, is likely to add a few million bottles to the stock backlog.