Pulse Report Alcohol Q2-2014

8/10/2019 Pulse Report Alcohol Q2-2014

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PULSE REPORT

IRI Pulse Report Alcohol

Welcome to the Pulse Q2 2014 edition for alcohol. We hope you find

it useful. Please do not hesitate to contact us if you have any

questions or comments at [email protected].

Q2 2014

IRIworldwide.eu


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PULSE REPORT

About the Report

2

This alcohol report is one of 10 super category reports designed to show a high-level

comparison and analysis for retail markets across major countries in Europe. This report contains data gathered from around Europe. This market was split into the

following categories: beer, cider, wine, spirits, fortified wines and alcoholic soft drinks.

The report highlights key metrics, such as total sales figures, market trends, category

share and winners and losers for Europe and individual countries.

The data has been sourced from IRI retail databases and Eurostat the statistical branch

of administration for the European Commission.

The countries included in the report are: France, Germany, Italy, the Netherlands, Spain

and the UK.

The market channels used for each country in this report are as follows:

Country Channels used

UK Hypermarkets, supermarkets, drugstores and impulse outlets

ESHypermarkets, supermarkets, hard discounters, drugstores. It includesthe Canary Islands.

DE Hypermarkets, supermarkets, hard discounters and drugstores

NL Hypermarkets, supermarkets, hard discounters and drugstores

ITHypermarkets, supermarkets, small self service, hard discounters anddrugstores

FRHypermarkets and supermarkets

For analytical purposes the data sourced from available retail databases has been

consolidated to provide consistent results. However, for some countries it has not been

possible to source data pertaining to certain categories. Where this is the case, it has beendocumented in the Notes section found at the end of the report.


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On the Radar

3

POPULATION INMILLIONS

UNEMPLOYMENT(%)

AVERAGE 12MONTHS

INFLATIONRATES GDP IN MILLIONS ()

Jan.2012

Jan.2013

Sep.2013

Average2012

Sep.2013

Average2012 2012

2013(Estimate)

France 65.3 65.6 11.1 10.2 +1.2 +2.5 2 032 297 2 059 358

Germany 80.3 80.5 5.2 5.5 +1.8 +2.4 2 644 200 2 694 499

Italy 59.3 59.6 12.5 10.7 +1.8 +3.5 1 565 916 1 568 388

Netherlands 16.7 16.8 7.0 5.3 +3.1 +2.8 600 638 604 459

Spain 46.8 46.7 26.6 25.0 +2.3 +2.3 1 049 525 1 051 076

UnitedKingdom 63.4 63.8 7.5 7.9 +2.7 +3.7 1 901 001 1 854 920

ECONOMIC FIGURES INFLUENCING CONSUMER BEHAVIOUR

Source: Eurostat, September 2013

The FIFA World Cup 2014, warmerweather and high promotional activityincreased demand for alcoholicbeverages across the market.


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1 162 1 369 1 557 1 351 1 201 1 472827 897

1 064 1 005 833919

459532

547 511479

5691 0291 092

1 243 1 2691 032

1 155

4 1084 545

4 753 4 905

4 179

4 842

2 581

2 868

3 277 3 222

2 705

3 049

0

2,000

4,000

6,000

8,000

10,000

12,000

14,000

31-mar-13 30-jun-13 29-sep-13 29-dic-13 30-mar-14 29-jun-14

Euros,

inmillions

Period Ending

France

Germany

Italy

Netherlands

Spain

UK

GLOBAL TRENDS

4

+3.1%

+2.7%

+7.1%

TOTAL EUROPE +4.0%

VALUE SALES IN MILLIONS ()

Total EU 47 139

DE 18 679

FR 12 253

UK 5 581*

IT 4 699

ES 3 820

NL 2 107

TOTAL ALCOHOL VALUE SALES AND % CHANGE VERSUS PRIOR YEAR

*based on an exchange rate of1.150 to the pound

+1.2%

+5.6%

+5.6%

TOTAL ALCOHOL VALUE SALES FOR THE LAST SIX QUARTERS

Source: IRI retail databases; period ending 29 June 2014


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8271 486

15 174

10 752

18 700

1.66.9

0.39.72.9

Beer Wine Spirits Cider Fortified

Wines

Euro

s,

inmillions

Total Sales % vs. YA

39.7%

0.4%

1.8%

22.8%

32.2%

3.2%

Beer Wine Spirits Cider Fortified Wines Alcoholic Soft Drinks

Europe

5

15 174

10 752

1 486

199

18 700

827

Euros,

inmillions

Europe includes: France, Germany, Italy, the Netherlands, Spain and the United Kingdom

TOP 5 CATEGORIES: EVOLUTION

Value sales () and % change versus a year ago


KEY TRENDS

Beer, wine and spirits account for almost

95% of the total turnover for alcoholic

beverages in Europe.

At the European level, all categories

showed value sales growth in the latest

quarter.

The FIFA World Cup 2014 played an

important role in the increase of demand

for beer (up 6.9%).

Wine also grew in all European countries,

mostly due to price increases (inflation).

Spirits continued to grow this quarter,

driven by strong growth in France, whilst

value sales in all other European countries

are in decline.

CATEGORY VALUE SALESIN THE LAST YEAR

CATEGORY SHARE OF VALUEIN THE LAST YEAR


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Europe

6

CATEGORY INSIGHTS

Beer was the fastest growing category in Europe, with increased demand across all countries,

particularly in France, the Netherlands and Germany (up 16.6%, 8.8% and 6.3%,

respectively). The FIFA World Cup 2014 had a significant impact on the increase in demand,although other factors such as warmer weather, new product development (e.g. aromatized

beers)and an increase in promotions also improved sales. In addition, tax increases in

France at the start of the year drove revenues up.

Wine sales also increased across Europe with France, Italy and the Netherlands being the

best performers (up 4.8%, 5.0% and 3.3% respectively). Inflation, a poor harvest and an

increase in demand for premium products drove prices upa main driver for category

growth.

Spirits sales also increased slightly in Europe due to increased demand in France, which

compensated for the decline seen in all other European countries.

Europe includes: France, Germany, Italy, the Netherlands, Spain and the United Kingdom


TOP LOSERS: VALUE SALES

CHANGE VERSUS A YEAR AGO ()

TOP WINNERS: VALUE SALES

CHANGE VERSUS A YEAR AGO ()

13.2

30.7

131.5

430.5

1 204.0

0 500 1 000 1 500

Beer

Wine

Cider

Spirits

Fortified

Wines

0 0 0 0 0 0

Euros, in millions Euros, in millions


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114

493

4 054

2 173

5 407

6.04.8 16.6 4.21.7

Wine Spirits Beer Fortified

Wines

Cider

Euro

s,

inmillions


44.1%

0.1%

0.9%

17.7%

33.1%

4.0%

Wine Spirits Beer Fortified Wines Cider Alcoholic Soft Drinks

France

7

KEY TRENDS

In hypermarkets and supermarkets,

beverages grew faster than total fast moving

consumer goods (FMCG) during the period of

January to June 2014.

Alcoholic beverages continue to grow faster

than non-alcoholic drinks. Excluding spirits,

the macro alcohol category is also growing

value sales faster than FMCG (+1.9%).

The alcohol market benefited from improved

weather conditions from January to June

compared with the same period last year.

A value sales increase in the alcohol marketcan be linked to an increase in volume sales

(excluding still wine). Beer and cider are

driven by premium products, whilst inflation

is in decline (down 0.9%). Spirits and

fortified wines dropped 0.1% in value;

inflation gains of + 1.1% are offset by the

increased popularity of flavored wine.

Sales have increased across all segments,

driven by national brands and on-shelf sales.

Promotional sales increased only in the beersector.

4 054

2 173

493

12

5 407

114

Euros,

inmillions







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- 0.6

-1 -1 -1 0 0 0

Alcoholic Soft

Drinks

.

France

8

CATEGORY INSIGHTS

The beer segment enjoyed the highest value sales growth among alcoholic beverages in

France, positive both on moving annual total (MAT) and year to date (YTD). In 2014, growth

has been linked to new product launches (e.g. aromatized beers) without changes in

promotional pressure; good weather and the economy are also supporting growth. After a

year of strong inflation in 2013, attributable to tax increases, the category experienced

deflation (0.9%). In the long term and YTD, the fastest growing segments remain specialtyand blonde beers.

Wine - value and volume sales continue to grow, supported by both the still and sparkling

wine segments (MAT and YTD).

Still wines price increases are still driven by inflation and a low harvest level,

while a price war is strong across national brands.

Sparkling and champagne both champagne and other sparkling wine increased

in volume sales on YTD. Inflation is at 0.7% and premiumisation at 0.6%.

Spirits and fortified wines the total segment retained 1.0% inflation over the first quarter,

while the increase of flavored wine sales drives the value sales structure down (-1.2%).For spirits (volume YTD):

Gin, vodka, tequila, rum and rum -based cocktails are still the main segments to

show growth.

The whisky segment returned to stability during this latest period, thanks to the

development of bourbons that offset the decrease of blended whisky a year ago.

Anise, fruit creams and brown alcohol (e.g., cognac and armagnac) are declining.

Fortified wines are still driven by flavored wines, whilst traditional fortified wines, such as

port, vermouth and French appellation ,show less growth.

TOP LOSERS: VALUE SALESCHANGE VERSUS A YEAR AGO ()

TOP WINNERS: VALUE SALESCHANGE VERSUS A YEAR AGO ()

6.4

19.8

69.0

249.3

308.9

0 100 200 300 400

Beer

Wine

Spirits

Fortified

Wines

Cider




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103122

5 421

4 836

8 138

-1.26.3 -0.3 12.30.4

Beer Wine Spirits Alcoholic

Soft

Drinks

Fortified

Wines

Eur

os,

inmillions


43.6%

0.3%

0.6%

25.9%

29.0%

0.7%

Beer Wine Spirits Alcoholic Soft Drinks Fortified Wines Cider

Germany

9

KEY TRENDS

As expected, the FIFA World Cup 2014

boosted volume sales in the German beer

market. Together with stable prices, this led

to overall volume and value sales increases.

A rainy summer did not affect the sales of

sparkling wine. An increase in volume sales

is being driven by the entry of market-

leading brands into the flavored sparkling

segment.

Promotional activity has increased volume

and value sales of branded still wines.

Collapsed sales in the hard discounter

channel are negatively impacting the value

outcome.

The spirits sector is in decline. Rum shows a

negative performance, whilst vodka is

recovering its volume sales.

Branded spirit companies continue to grow

across spirit-based alcoholic soft drinks.

5 421

4 836

122 60

8 138

103

Euros,

inmillions







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Germany

10

CATEGORY INSIGHTS

Promotional sales and increased demand during the FIFA World Cup drove volume sales for

beer in the second quarter of 2014. However, due to higher promotional prices versus 2013,

value sales increased as well. Value growth is also affected by increasingly popular beer

segments, such as alcohol-free beer or mixes (e.g. beer with lemonade), which are generally

sold at higher price points.

Sparkling wine is still affected by a two-sided evolution. Classic German sparkling wine is

experiencing sharp volume sales declines, but losses are being offset by higher prices,

especially on promotion. Volume losses are also being offset by strong growth within the

flavored sparkling market. The base market/flavors are strong, but there is also a rapidly

increasing number of new products coming into the market, such as Rotkppchen

Fruchtsecco or Jules Mumm Plus.

In spirits, several market influencers took a negative turn in the second quarter of 2014.

Rum, which has had momentum during recent periods, is losing volume. In turn, vodka sales

have picked up, thanks to promotional efforts. Both vodka and whisky are demonstrating

high demand across most FMCG channels. In all decreasing segments, growth has come only

from flavored articles. Brandy/cognac and liquors volume losses lead to negative value sales

and cant compensate the category drop.

Value sales growth across alcoholic soft drinks are hailing completely from branded

businesses.

Private label wine sales are strongly decreasing, especially in discount stores.




- 1.2

- 15.7

- 1.2

-20 -15 -10 -5 0

Fortified

Wines

Cider

Spirits

.

13.3

23.9

480.5

0 100 200 300 400 500 600

Beer

Wine

Alcoholic Soft

Drinks



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PULSE REPORT

1348

1 402

971

2 265

-19.95.0 -0.3 -1.32.9

Wine Beer Spirits Fortified

Wines

Alcoholic

Soft

Drinks

Euros,

inmillions


0.3% 20.7%

29.8%48.2%

1.0%

Wine Beer Spirits Fortified Wines Alcoholic Soft Drinks

Italy

11

KEY TRENDS

In the wine category, value sales are

increasing, but volume is declining.

Beer is experiencing a period of stable sales,

supported by the expectation of the summer

season.

Spirits are gradually improving in both in

value and volume sales, seen in the slight

growth of aperitifs and the recovery of

bitters. Whisky, cognacs and other high

alcohol content products sales are impacted

by the Italian Governments excise duty,

modified late in 2013.

1 402

971

13

2 265

48

Euros,

inmillions







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Italy

12

CATEGORY INSIGHTS

Slow price increases are supporting volume growth in the wine category. Promotions are no

longer the key growth area within brands, as short term success related to increased

promotional pressure quickly disappears.

In recent months, beer marketers have found success in driving growth through innovation

despite a weak trending market. One Italian company ended the year with a 9.0% increasein value sales (+8.8% in volume sales), significantly higher than other firms in the category.

This was as a result of innovation, communication and in-store activities.

It is a tough climate for spirits, nothing is improving sales; the aging population, busy

lifestyles and high taxes are all feeding into sales declines. Can there be any solutions to the

problem? The right promotional levels, consistency in commercial offers and products

adaptable to socio-demographic change can be put in place to overcome the sales drop.

Overall, businesses need to understand what consumers want and invest in research and

development to meet demand.

The alcoholic soft drinks sector has been in decline since its launch two years ago.

TOP 5 LOSERS: VALUE SALESCHANGE VERSUS A YEAR AGO ()

TOP 5 WINNERS: VALUE SALESCHANGE VERSUS A YEAR AGO ()


- 3.3

- 0.6

- 2.9

-40 -30 -20 -10 0

Fortified

Wines

Spirits

Alcoholic Soft

Drinks

.

108,1

39,4

-10 40 90 140

Wine

Beer



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153

856

80

1 118

-2.38.8 -6.6 1.03.3

Beer Wine Fortified

Wines

Alcoholic

Soft

Drinks

Cider

Eur

os,

inmillions


0.1%

40.6%

53.0%

3.8%2.5%

Beer Wine Fortified Wines Alcoholic Soft Drinks Cider

The Netherlands

13

KEY TRENDS

Despite high summer temperatures the

Dutch alcoholic beverage market shows a

decline in value of 1.4% in P8 compared to

last year.

Total private label share in retail is at its

lowest point since 2013.

Promotional activity has declined to 17.3%

of volume sales, yet the beer and wine

categories show a increase in promotional

share (to 39.0% and 32.0% of volume,

respectively).

The popularity of cider has been overtakenby product introductions within the radler

segment, mainly driven by Amstel and

Bavaria. Alcohol-free beer is also showing

growth in value and volume sales.

856

80

1

1 118

53

Euros,

inmillions







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The Netherlands

14

CATEGORY INSIGHTS

Beer is showing volume growth because of the successful introduction of the radler segment,

alcohol-free beer and low alcohol beer. Both of these new segments are growing due to

increasing promotional activity.

Wine is growing in value, but volume sales are in decline, mainly due to declines in red and

rose wine sectors. Aromatic wines (fruit flavoured) are still relatively small, but are showinghuge growth. The growing prevalence of Hugo concepts (sparkling white wine with lemon and

Elderflower flavour, originally from the north of Italy) is one of the drivers behind the growth

in this segment.

Alcoholic soft drinks are showing a small increase in value sales, while volume sales are

slowly declining due to the introduction of mixed drinks cans, which replace higher-selling

products like Bacardi Cola and Bacardi Red Dragon.

Fortified wines are suffering from declining sales within Dutch supermarkets, largely due to

stagnant new product development efforts.




- 5.7

0.0

-6 -5 -4 -3 -2 -1 0

Cider

Fortified

Wines

.

0.5

27.3

90.3

0 20 40 60 80 100

Beer

Wine

Alcoholic Soft

Drinks



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PULSE REPORT

33104

1 224

892

1 567

3.32.6 -2.2 0.91.8

Beer Wine Spirits Fortified

Wines

Cider

Euro

s,

inmillions


0.9%

41.0%

32.0%

23.4%

2.7%

Beer Wine Spirits Fortified Wines Cider

Spain

15

KEY TRENDS

Fast moving consumer goods (FMCG) sales

grew by 0.7% in Spain, with beverages

performing in a similar way, expanding by

0.6%.

Beers was the top performing alcoholic

beverage category this quarter, driven by

higher temperatures, the FIFA World Cup

and an increase in tourism (which reached

a record high in 2014).

Wine also showed a growth in value, driven

especially by Protected Denomination of

Origin (PDO) wines and by the white winesegment.

Whisky, rum and vodka continued to lose

value, while gin sales carried on growing at

double digit rates, due to consumers

affinity for gin and tonic beverages.

1 224

892

104

1 567

33

Euros,

inmillions







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Spain

16

CATEGORY INSIGHTS

Signs of recovery were seen in the beer segment, particularly in FMCG, bars and restaurants.

For the first time after years of consecutive contraction, the market bounced back, driven by

demand from the FIFA World Cup, warmer weather conditions and record high levels of

foreign tourism. Despite recovery in national levels of demand, major beer manufacturers

continue to push exports.

The wine segment also experienced positive evolution in the mass market. Consumers areincreasingly demanding higher quality products at lower prices. This is driving demand for

PDO wines (year-on-year 4.0% increase by value). Where the type of wine is concerned,

white wine has shown the highest increase year-on-year (4.0%), with Rueda PDO being the

best performer in the category (up 14.0%).

Sales of spirits continue to decline, with contraction in all categories: whisky (down 5.0%),

rum (down 6.0%), vodka ( down 4.0%). The only exception is gin, which continues to

expand at double digit rates (+12.0%), driven by booming demand for gin and tonic.




- 19.9

-30 -25 -20 -15 -10 -5 0

Spirits

.

1.1

0.9

22.0

40.2

0 10 20 30 40 50

Beer

Wine

Cider

Fortified

Wines



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PULSE REPORT

22.9%

77.1%

Beer Cider

The United Kingdom

17

Euros,

inmillions






1 279

4 302

1 279

4 302

6.0 10.9

Beer Cider

Euros,

inmillions


KEY TRENDS

The beer and cider market continues to

grow in the long term in both value

(+7.0%) and volume (+6.3%), although in

the latest quarter (Q2) sales increases

have been driven by a later Easter versus

2013 and the build up to the FIFA World

Cup. Q2 volume increased 10.4% and

value increased 8.0%. Promotional activity

has driven the growth in volume ahead of

value.

Lager supported Q2 growth with

promotional activity. As a result, volume

sales growth outpaced value sales growth

(+12.8% and +8.7%, respectively). Ale

and cider both enjoyed strong growth in

Q2, as well (+7.8% and+6.6% in value

sales, respectively).

Only stout has not been able to deliver the

same level of growth in Q2. Volume sales

fell 2.0% and value sales grew +1.5%, due

to decreases in promotional support.


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PULSE REPORT

The United Kingdom

18




-50 -40 -30 -20 -10 0 10

.

125.3

244.7

0 50 100 150 200 250 300

Beer

Cider


CATEGORY INSIGHTS

Late warm Easter - Total beer and cider benefitted from a late Easter versus 2013. Sales for

week ending 26thApril are +13.5% in value, driven by lager (+14.1%), cider (+13.1%) and ale

(+12.2%).

FIFA World Cup - The build-up to the FIFA World Cup saw beer and cider promotions play a key

role in the UK retail market. Seen as a driver to get shoppers in to their store, brewers fought

to win the promotional slots. Brands, such as Budweiser and Fosters, were the main winners

during this time, supporting significant lager gains (volume +15.7% for the month of June). As

volume growth was ahead of value growth (+9.6%), the challenge for the brewers is to drive

sales that are not deflationary to the market.

Q2 highlights - Cider continues to be the key driver of annual sales (+11.4% in value and

+7.1% in volume), largely due to strong performance by the flavoured segment (particularly

Bulmers Dark Fruit and Stella Cidre Raspberry), with annual growth of 65.3% in value and

80.5% in volume. This segment now accounts for 21.9% of the cider category.


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Final Notes

19

Notes on category definitions for countries

Due to the diverse products found in individual countries across this market, it was necessaryto consolidate the available data into the categories in this report. In some cases it wasnt

possible to align products across all 6 countries. Those exceptions are listed below:

Cider

The Italy data in this report includes cider within the fortified wines category.

The Netherlands data in this report does not include pear cider.

Wine The UK data in this report does not include this category.

Spirits

The UK data in this report does not include this category.

The Netherlands data in this report does not include this category.

The France data in this report includes punch and cocktails, while the other countries do not.

Fortified wines


Alcoholic soft drinks


The Spain data in this report does not include this category.


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Resources

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FOR MORE INFORMATION

Please contact Leandro Chiesa, Consultant,

IRI at [email protected] or

+33 1 30 06 23 62 with questions or comments about this report.

To gain insight into opportunities across specific categories, segments, channels or retailers,

contact your IRI client service representative regarding custom analyses leveraging thefollowing resources:

InfoScan Censusis a syndicated retail tracking service that enables manufacturers and

retailers to acquire industry insights used to make better business decisions. InfoScan

Census utilises the data that IRI collects from grocery, drug, and mass merchandise retailers

to provide the most comprehensive and accurate syndicated data offering in the FMCG

sector. With access to accurate, granular detail by category, geography, measure, and time

period, clients have the tools needed to develop marketing and sales strategies based on

product performance, distribution, and promotion responsiveness. All data about alcohol

comes from InfoScan Census.

IRI Consulting provides strategic insights and advice leveraging a variety of data sources,predictive analytics, enabling technologies, and business analyses to help FMCG

manufacturers and retailers address significant sales and marketing issues effectively.

Pulse Report Alcohol Q2-2014

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