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Robert Louis Stevenson called it ‘bottled poetry', but UK consumers have been less enamoured of wine of late. Although the sector has been in the ascendancy, last year its volume and value declined for the first time in several years.

Health concerns and reports high­lighting the perils of binge-drinking have dented alcohol consumption across the board, and the recession has also taken its toll. Producers are encouraging consumers to trade up, but supermarkets have been discount­ing wines, and cash-strapped shoppers are keen to seek out bargains.

By the end of this year, Mintel estimates that wine sales in the UK will be worth £9.5bn, a 1% drop on 2008. Volumes are predicted to decline 2% in the same period, to 1.1bn litres.

The off-trade has performed better than the on-trade, with a 5% year-on-year value increase to £4.5bn. How­ever, duty increases play a significant role in this. The on-trade accounts for slightly more value (54%), although it fell 5% year on year.

In 2008, the government increased duty on wine by 17%, so while prices have risen, margins have not, with more of the price consumers pay going on taxes. Other economic factors have been the strength of the Euro against sterling, driving up the price of European wines, and the rising costs of manufacturing and raw materials.

The continued success story of this sector is rosé. Connoisseurs may once have ridiculed those drinking a glass of cool, pink wine, but the British are now converts. Value sales of rosé wines reached £527m in 2008, compared with just £110m in 2004, and rosé now accounts for 6% of the market value.

Meanwhile, red wine accounts for an estimated £4.8bn sales in 2009, slightly ahead of white's £4.1bn.

Wine can be intimidating and con­fusing to those with less knowledge of the sector. Consequently, people are often unwilling to experiment, or simply avoid wine. This is particularly evident among younger drinkers. TGI data shows that 25- to 34-year-olds drink less wine than the rest of the adult population, and consump­tion has decreased most in this group.

When consumers acquire a taste for wine, they typically stick with it. If producers can tap into the younger market, they have the potential to build sales in the long term. Branding is one way to draw in these consumers and help them navigate the confusing variants. Rosé is appeal­ing to this demographic, as it is easy to drink and simple to understand.

Australia is the leading producer of wine for the off-trade, although it is finding current conditions tough. France is in second place, and Chile has also had an exceptionally good year, capitalising on its value-for-money image.

Constellation Europe owns several leading brands, including Hardys, the market leader, Banrock Station, Kumala and Stowells. The company has backed its brands with strong support, including a £3m advertising campaign for Hardys last year. This year, it added Hardys' Cellar Collect­ion, aimed at young professionals, to its on-trade offering, and acquired South African producer Flagstone to provide a premium extension of its wines from that region.

Other leading players include Diageo, which owns brands including Blossom Hill and Piat d'Or. Last year the former was repackaged and a dedicated website launched to build its appeal to women aged 35 and over.

The impact of the recession will be felt for a few years, but Mintel predicts that the wine market will begin to grow again in 2011. Over the next five years, volume is forecast to grow by 4% to 1.2bn litres, but the value will decline by 2%, or 14% when inflation is taken into account, to £9.3bn.

Sales in the on-trade will suffer the biggest fall, as the pub market con­tinues to shrink. Value will also be dented in the off-trade, as producers to struggle to convince shoppers to move to more premium brands in the face of supermarket discounting. Mintel predicts the average price of a litre of wine will fall from about £8.30 in 2009 to less than £8 by 2014.