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Transcript of Gareth Pearson - BMI
The Promotional Effectiveness of Wine in SA
30 August 2012
Presented by Gareth Pearson
BMi Research
2
Setting the Ambiance We are all mortal until the first kiss and the second glass of wine : Eduardo Galeano, Uruguayan author (1940-) Wine is bottled poetry : Robert Louis Stevenson, Scottish author and poet (1850-1894) Where there is no wine there is no love : Euripides, Greek playwright (480-406 BC) Wine improves with age - the older I get, the better I like it : Anonymous If a life of wine, women and song becomes too much, give up the singing : Anonymous
3
More Ambiance
If a life of wine, women and song becomes too much, give up the singing : Anonymous Wine is wont to show the mind of man : Theogenis, Greek poet (6th century) Drink wine, and you will sleep well. Sleep, and you will not sin. Avoid sin, and you will be saved. Ergo, drink wine and be saved : Medieval German saying Whether wine is a nourishment, medicine or poison is a matter of dosage : Paracelsus (Phillip von Hohenheim), Swiss alchemist, physician and astrologer (1493-1541) Life is too short to drink bad wine : Anonymous
4
The Size of the Glass
5
The Size of the Pint
Rest of Market 73.3%
Alcohol 26.7%
Note: Reconstituted volumes
Includes powdered beverages
Includes tap water estimate – 1.4 litres p.p.p.d
Total SA Beverage Market 2012 (E)
31 689 Million Litres
6
Total Beverage Trends
Still feeling effects of slowdown in economy
Consumers are spending but more aware of options and alternatives
Promotional activities still continuing
Continued influence of health and wellness
Consumers seeking value/promotions
Increased launches of functional beverages – prominent internationally
Total Beverage Trends for SA market
Wine Promotional Effectiveness
Promotions
Print Promotional
Tracking
Media Tracking
In store
Shelf Health
Shopper
Marketing
Wine Promotions
Promotion choices available to the Wine Industry
Broadsheet
Media - TV, Radio and Print
In store – POS
On consumption – POC
Wine tasting
Direct marketing
Online
Sponsorship
9
Retail Liquor Development
Rate of store expansion in the liquor market by majors
Outlets June 2005 June 2012
TOPS 156 600
Pick n Pay 16 140
Shoprite Checkers 7 90
Game - 4
Total 179 834
93
new
stores
p.a.
Promotional Effectiveness
Wine Point of Sale, Print Collateral & Graphic Design
“Winery print collateral and point of sales material is meant to be noticed, handled, read and re-read. More importantly, it's meant to cause the consumer to go out and buy a few bottles of wine. Sometimes a good accolade isn't enough. Effective wine point-of-sales and print collateral takes a brand message and incorporates a strong take-away that the consumer can relate to and use in the future.”
Source: www.intwinemarketing.com
In Store Promotion
In store promotion
Instore Performance
In store performance factors
13
Major Liquor Sponsorship
Sponsor Sport Property Term
Carling Black Label Soccer Carling Black Label Cup 2011 - 2013
Carling Black Label Rugby Varsity Cup Supplier 2009 - 2012
Castle Cricket Test events : Test Team : ODI Team 2012 - 2015
Castle Rugby Springbok Supplier ; SuperRugby Supplier : Castle
Championship
2011 - 2016
Castle Soccer Bafana Bafana : PSL Supplier 2012 - 2017
Smirnoff Lifestyle Smirnoff CT Comedy Festival
Smirnoff Music The Smirnoff Experience
Amstel Music Amstel Golden Hour - Music 2010 -
Amstel Programme ClassAct – SABC1 AFP 2011 -
Bells Golf Bells Experience Golf Day
Bells Fly Fishing Bells Experience Fly Fishing
Captain Morgan Adventure Kingsley Holgate Malaria Expedition On going
Captain Morgan Angling Billfish Classic - Angling 2010 -
Heineken Lifestyle Taste of Johannesburg and Cape Town 2010 -
Heineken Music SAMA Awards Partner 2011 - 2013
J & B Horse Racing J & B Met 2010 - 2015
Johnnie Walker Motor Sport Contribution to McLaren F1 On going
Windhoek Arts KKNK
Windhoek Canoeing Berg river Canoe Marathon 2010 - 2012
Windhoek Rugby Sharks Supplier 2011 - 2013
Print Promotional Tracking
Wine print promotional tracking and analysis
Who are the top retailers promoting wines?
Which brands are being promoted ?
Which geographic regions are promotion dominant?
Total Print Advertising
Jan to June 2011 - 2012
Total broadsheet tracking and analysis
R 0
R 20
R 40
R 60
R 80
R 100
R 120
R 140
R 160
R 180
R 200
Mill
ion
s
2011
2012
R 0
R 20
R 40
R 60
R 80
R 100
R 120
R 140
R 160
R 180
Mill
ion
s
Top 10
2011 2012
Total Market
Spend
2011 – R993m
2012 – R1 109m
+11.7%
Print Advertising
Expenditure
Liquor
Market
Volume
Value
Growth
Value ± 25%
Volume ± 3%
0
10
20
30
40
50
60
70
Jan - Jun 09 Jan - Jun 10 Jan - Jun 11 Jan - Jun 12
58% increase in spend for period
Rm
Print Advertising Spend
Selected Categories
Jan - June 2011 Jan – June 2012
Product Category Print Spend Product Category Print Spend %
Beer - Malt R 7 764 263 Beer - Malt R 9 304 179 20%
Brandy R 4 540 535 Brandy R 5 799 927 28%
Cane R 378 094 Cane R 345 627 -9%
Flavoured Alcohol Beverages R 4 583 531 Flavoured Alcohol Beverages R 6 701 592 46%
Liqueur R 1 690 031 Liqueur R 1 572 406 -7%
Rum R 1 224 597 Rum R 2 232 177 82%
Sambuca R 58 764 Sambuca R 109 250 86%
Shooters - Sour R 98 939 Shooters - Sour R 120 349 22%
Vodka R 1 625 249 Vodka R 2 241 762 38%
Whisky R 12 798 776 Whisky R 15 484 766 21%
Wine R 16 034 083 Wine
R 16 624 221
4%
Total R 50 796 867 Total R 60 536 260 19%
Category Print
Advertising Expenditure
Share
0
2
4
6
8
10
12
14
16
18
Wine accounts for 27% of total spend for period (Jan to Jun 2012)
Rm
Top 10 Company Brands (% number of Ads)
Top 10 Company Brands % no of ads MAT June 2011 vs MAT June 2012
0.00%
1.00%
2.00%
3.00%
4.00%
5.00%
6.00%
MAT LY
MAT TY
Top 10 Brands (% number of Ads)
Top 10 Brands % number of ads MAT June 2011 vs MAT June 2012
0.00%
0.20%
0.40%
0.60%
0.80%
1.00%
1.20%
1.40%
MAT LY
MAT TY
Top 10 Retailers (number of Ads)
Top 10 retailers promoting wine in print MAT June 2011 vs MAT June 2012
0.00%
5.00%
10.00%
15.00%
20.00%
25.00%
30.00%
35.00%
40.00%
MAT LY
MAT TY
Wine Promotions
Regional Share (Number of ads Jan – June 2011 vs 2012)
Wine Print Ads Regional share by number of ads
0
5000
10000
15000
20000
25000
30000
35000
40000
2011
2012
Wine Media Tracking
So how has wine been promoted through media this year?
Which of the print, TV and radio mediums is being target ?
What brands are being promoted ?
What are the strategies being employed in media spend?
Wine Media Tracking
Wine Adspend TV, Radio and Print Jan to June 2011 vs 2012
R 0
R 2 000 000
R 4 000 000
R 6 000 000
R 8 000 000
R 10 000 000
R 12 000 000
R 14 000 000
R 16 000 000
Print TV Radio
2011
2012
Top 20 Brands All Media
(Print, TV and Radio)
Top 20 Brands Adspend for Wine all media January to June 2011 vs 2012
R 0
R 1 000 000
R 2 000 000
R 3 000 000
R 4 000 000
R 5 000 000
R 6 000 000
R 7 000 000
R 8 000 000
R 9 000 000
R 10 000 000
2011
2012
Wine Media Tracking Print
Print Adspend for Wine January to June 2011 vs 2012
R 0
R 200 000
R 400 000
R 600 000
R 800 000
R 1 000 000
R 1 200 000
2011
2012
Wine Media Tracking - TV
TV Adspend for Wine January to June 2011 vs 2012
R 0
R 1 000 000
R 2 000 000
R 3 000 000
R 4 000 000
R 5 000 000
R 6 000 000
R 7 000 000
Nederburg Drostdy Hof Namaqua DouglasGreen
Graca Two Oceans Obikwa Casillero DelDiablo
Swartlands
2011
2012
Wine Media Tracking Radio
Radio Adspend for Wine January to June 2011 vs 2012
R 0
R 500 000
R 1 000 000
R 1 500 000
R 2 000 000
R 2 500 000
2011
2012
Wine Media Tracking
Wine media trends YTD
TV remains the dominant media channel for wine by spend for this period
Spend in TV and Radio have grown marginally while Print has declined for this period
Nederburg’s TV spend dominant as a result of Master Chef SA
Nederberg combine TV and Print in this campaign
Douglas Green made significant increase from 2011 to 2012 with strong TV spend and
increased spend in radio
Drostdy Hof and Namaqua also dominant in TV and radio spend for the period reviewed
In Store
Shoppers making purchase decisions at shelf
“Shopper marketers got it wrong when they claimed 70% of
purchase decisions were made in store. It’s actually 76%,
says new US research by Point of Purchase Advertising
International (POPAI).” Jason Frichol MD Integer June 2012
Cutting through the clutter
Purchase appeal
Visual appeal - Labels, bottles, images
Brand experience – tried it before
What makes a new brand irresistible to shoppers?
What type of wine drinking experience does a bottle on shelf promise?
Does it evoke a sense of excitement, connoisseurship, celebration, dining ?
Would you buy?
BLACK BOX MERLOT
CAFE CULTURE COFFEE PINOTAGE
CLOOF - DAISY DARLING SAUVIGNON BLANC
CLOOF - HAPPY DRAGON PINOTAGE
CLOOF - POSH PINOTAGE
CLOOF - THE VERY SEXY SHIRAZ
NAUGHTY GIRL
FAT BASTARD SHIRAZ
HAPPY DRAGON PINOTAGE SHIRAZ
INKSPOT PINOTAGE
LEOPARDS LEAP MAGNUM
MAD HATTERS WINE
MAIDENS PRAYER RED WINE
MEERKAT SUN ANGEL
PORCUPINE RIDGE SYRAH
THE CHOCOLATE BLOCK 2009
WOLFTRAP WHITE
THE CRICKET PITCH
TOFFEE CHUNK
LADY IN RED
Or ODD BINS BIN
NO NAME DRY WHITE
UNNAMED SAUVIGNON BLANC
WINE LOVERS COLLECTION
Attracting Sales
Catchy Themes
Shelf Health
Shelf Health performance factors By Store
OSA vs OOS – the prize is won or lost in the final 50 meters to shelf
On shelf forward share
Retail Selling Price vs Promotion Price
On Promotion vs competitors
Planogram compliance
Merchandising – KPIs and measureable metrics
Ranging – more critical, more scientific, more geocentric
Effective communication from marketing boardroom to shelf (E2E)
Shelf Forward Share
What is the your brand’s shelf share by store?
Brand A Brand B Brand C Brand D Brand E
2011Q1 20.65% 6.35% 26.22% 14.95% 31.83%
2011Q2 18.22% 6.28% 27.55% 15.20% 32.75%
2011Q3 21.14% 6.58% 26.61% 13.77% 31.90%
0.00%
5.00%
10.00%
15.00%
20.00%
25.00%
30.00%
35.00%
2011Q1
2011Q2
2011Q3
What is my share of type of
display in the store?
Brand 1 Brand 2 Brand 3 Brand 4 Brand 5
Dump Bin 6.38% 44.68% 4.26% 12.77% 31.91%
Free Standing unit 28.70% 18.52% 14.81% 16.67% 21.30%
Full Gondola End 26.47% 25.74% 11.03% 23.53% 13.24%
Shared Gondola End 38.75% 8.75% 1.25% 5.00% 46.25%
0.00%
5.00%
10.00%
15.00%
20.00%
25.00%
30.00%
35.00%
40.00%
45.00%
50.00%
Promotional activity competitor check – by store
On-shelf availability Capturing the lost
sales
Driving short, medium
and long term
solutions
Retail Execution
– On Shelf Availability
Ensuring the products a customer wants to buy
are actually available when they want to buy
them
European Out Of Stock rates are typically
8.3%
OOS costs the industry €4bn in Lost Sales
EVERY YEAR
20% of all OOS remain for more than 3
days
Inventory counts are typically 65%
inaccurate
Chance of finding all 40 items on your
shopping list? 4%
When faced with an OOS shoppers will:
31% will switch stores
26% will buy another brand
19% of the time buy brand variant
15% will buy at a later time
9% will buy nothing
Source: ECR Europe
If a manufacturer can improve OSA by 3%,
it’s worth 1% increase in sales
If a retailer can improve OSA by 2%,
it’s worth 1% increase in sales
The size of the prize
Shopper Marketing
Understanding Trip Missions for effective sales
Trip targeting
Adding incremental items
Requires a much more scientific approach
Uncapping own internal data
Skilling up internally
Shopper Marketing
Shopper Marketing Shifts
BEFORE
CPG marketers operated under two separate silos:
1) Shopper Insights
Focused on the consumer‘s needs, attitudes, usage, etc.
2) Category Management
Focused on product definition and role, performance mgmt, go-to-market/sales strategies, etc.
NOW
CPG organizations are
integrating these two disciplines
to form Shopper Marketing
Shopper Marketing
Derived Value of Market Leader Characteristics
Market Leader Characteristics
Value to Retailer and Manufacturer
Understanding the Shopper Occasion as the Foundation for
Insights
Joint Planning Assures Alignment with Retailer & Manufacturer
Objectives
Execution Informed by the Trip Mission and the Store
Fostering an Environment of Continuous Learning
and Innovation
Develop Shopper Occasion Centric Merchandising and Marketing
Strategies
Elevate Relationships for Better Collaboration and Success
Improve Store Level Effectiveness
Ongoing Cycle of Improvement and Increased Relevance to Shopper
Trip Mission
Profiling the Trip mission
Profiling the trips reveals:
Which trips are most important?
Which do we want to grow?
Where do we want to win?
Metrics include:
Share: % of trips, units, sales
Trip Details: units and Rands
Discount/deal characteristics
Basket contents (e.g. top categories)
Time of Day/ Day of week
Geographic distribution
International Trends
What is happening globally?
SA is a net follower of international trends
What are beverage trends doing globally?
Beverage Consumption –
Emerging Markets
Developed vs Emerging
Source : Canadean
Drivers of Change
But a number of themes have been key in shaping the beverage industry
over recent years
Source : Canadean
Retailer Expansion –
Private Label
B Brand currently under pressure globally from PL
Source : Canadean
Global Growth Forecast
95% of the forecast contribution to growth comes from emerging markets
Source : Canadean
Global Growth Forecast
What the beverage future could look like
Source : Canadean
Growth Forecast
African dream or future?
Source : Canadean
52
Thank
You
www.bmi.co.za