u.s. cider trendsciderchat.com/wp-content/uploads/2017/04/nielsen-cider-trends... · danny brager...

Danny Brager

U.S. CIDER TRENDSINCREASING YOUR ODDS OF SUCCESS BY EVALUATING MARKETPLACE DYNAMICS

APRIL 5, 2017Matt Crompton

USACM PARTNERSHIP WITH NIELSEN

NIELSEN MEASURES WHAT PEOPLE WATCH AND BUY

“Watch” “Buy”

Retail Sales; Consumer/ShopperUniverse of locations

WEBINAR CONTENT

• What do we (Nielsen/Nielsen CGA) measure? How?

• How is Beverage Alcohol performing?

• How is Cider performing? What is driving the growth of Cider?

• Who is the Cider consumer? What are they saying?

• How is Cider performing elsewhere?

WHAT WE DO

• Gather/report POS retail sales to consumers (not shipments, or depletions)

• For your products, at the individual item level, as well as your competitors– Each item coded based on the ‘label’ characteristics - items can then be aggregated up -

to brands, product segments, etc

• Specific channels within both OFF PREMISE and ON PREMISE

• Weekly data for off-premise; 4-weekly data today for on-premise

• Historical dbase for trends (3-5 years depending on channel)

• Variety of measures depending on the channel• Sales (volume/dollars)• Price paid by consumer• Distribution, sales rate/velocity• Ads/displays/tpr’s for some off-premise channels

• And in a variety of other countries around the world

CHANNELS WE MEASURE – RETAIL SALES

OFF PREMISE

• Food• Drug • Mass Merch (e.g. Target)• Walmart• Dollar (e.g. Dollar General, Family Dollar)• Select Club Stores (BJ’s, Sam’s)• Whole Foods (Q2 2017)

• Convenience• Military Exchanges• Liquor*

ON PREMISE

• Eating (Restaurants)

• Drinking (Bars)

Liquor market geographies (NYC, NJ, FL, MA, MD, CO, MN); PLUS approx. 16 Liquor chain retailers across the country

E-COMMERCE

(in development))

Total U.S. Eating vs Drinking

Chain vs Independent9 Census regions

6 major markets today

Ttl U.S. + multiple state/local market reporting

OFF PREMISE: TOTAL U.S., STATE, LOCAL MARKETS

Los AngelesSan DiegoSan FranciscoSacramento

MiamiJacksonvilleOrlandoTampa

ClevelandCincinnatiColumbus

AlbanyBuffaloNY CityRochesterSyracuse

DallasHouston

DetroitGrand Rapids

MemphisNashville

CharlotteRaleigh

Channel reporting differs by state

ON PREMISE: TOTAL U.S.; 9 CENSUS REGIONS; 6 MARKETS

Pacific

Mountain

West SouthCentral

West NorthCentral East North

Central

NewEngland

Mid-Atlantic

SouthAtlantic

East SouthCentral

9Source: Nielsen Off Premise channels – thru 1-28-2017 Source: Nielsen CGA On Premise channels – 52 w/e 1-28-2017

Category Annual Percentage Growth

SPIRITS

Total CPG: FLAT

Volume

+2.4% On

$$Volume

Source: Total U.S. All Outlets (xAOC + Liquor Plus + Conv + Military); 52 w/e 12-31-2016 Source: On Premise Eating and Drinking (52 w/e 1-28-2017)

Cider Annual Percentage Growth – Dollars

-9.9% +1.2%

($852MM at Retail)8.8MM Cases*

($468MM at Retail)12.6MM Cases*

*288 oz case

PRODUCTS

Consumer

BEV AL FRAGMENTATION AT A FURIOUS PACE

The top 25 brand profile – smaller and changing…

2010 Top 25 brands

# of top 25 2010 brands with lower

volume in 2016

2010 top 25 brands in

2016’s Top 25 brands

Beer 79.0% 19 70.5% 72.5%

Wine 49.8% 17 44.1% 47.6%

Spirits 43.7% 14 37.6% 42.6%

Source: (2017 Advance Handbook)

Lower than 2010

COMPANIES

CIDERS ATTACHED TO LARGER BEER COMPANIES; SIGNIFICANT CONTRIBUTOR TO OVERALL CIDER SALES

THE CRAFT/LOCAL CIDER SEGMENT CONTINUES TO GROW IN IMPORTANCE

$100,000,000

$200,000,000

$300,000,000

$400,000,000

$500,000,000

$600,000,000

Total Cider Cider Large Cider Craft/Local

Nielsen Off-Premise; Annual Dollar Sales

2012 2013 2014 2015 2016Source: Total U.S. All Outlets (xAOC + Liquor Plus + Conv + Military); 52 w/e 12-31-2016

Represents a dollar increase of

+39% vs 2015

CRAFT/LOCAL CIDERS BUSTED THROUGH THE 20% MARKET IN THE LATEST 13 WEEKS

7.8%11.0%

17.6%20.1%

2014 2015 2016 Lat 13 wks (thru 2-25-2017)

Cider Craft/Local ($ Share)

Source: Total U.S. All Outlets (xAOC + Liquor Plus + Conv + Military); 52 w/e 12-31-2016

CRAFT/LOCAL CIDERS CLEARLY BEST PENETRATED IN LIQUOR STORES; FOLLOWED BY FOOD STORES

8.1% 6.7% 6.3%

Ttl OffPremise

Liquor Food C-store Club/Mass Drug

Cider Craft/Local ($ Share by Channel) - 2016

LOCAL/CRAFT CIDERS RESONATE WITH CONSUMERS

Strongly Agree Agree

I prefer to purchase from local cideries Lately, I’ve been purchasing more craft cider

Source: Nielsen, "Design Audit Series : Cider (US),” January 2017; n=323

65% 68%

Strongly Agree Agree

19Source: Nielsen Total U.S. All Outlets (xAOC + Liquor Plus + Conv + Military); 52 w/e 12-31-2016

143160 158

Total Beer FMB Craft Beer Big BeerCider

Craft/LocalCider

Avg Price Index

compared to total Beer = 100

AND SELL AT A SIGNIFICANT PREMIUM PRICE

CIDERS $ SIZE COMPARED TO BEER NATIONALLY

Source: Nielsen Total U.S. All Outlets (xAOC + Liquor Plus + Conv + Military); 52 w/e 12/31/2016

CIDER 2% OR MORE AS LARGE AS BEER

3% or more

Source: Nielsen 52 w/e 12-31/2016 - dollars

Wash DC

Orlando

Nashville

San Diego

San FranciscoSacramento

Nielsen Off Premise: Annual 2016 – All Outlets Combined; or Liquor only in some markets

CIDER ~20% AS LARGE AS FMB’SNATIONALLY…BUT

Source: Nielsen 52 w/e 12-31/2016 - dollars

Wash DC

San Francisco

Nielsen Off Premise: Annual 2016 – All Outlets Combined; or Liquor only in some markets

Cider is bigger 90-100% as large 80-90% as large 70-80% as large

Portland Seattle Wash DC San Francisco

Denver Vermont

23Source: Nielsen Grocery; 52 w/e 12-31/2016

Cider (total) growing Cider (ex #1 brand) growing >+1%

AlbanyMinnesota

OregonRichmond, VA

RochesterVermont

ColoradoCincinnati

IdahoMichiganSan Diego

VirginiaWashington

NIELSEN MEASURED MARKETS WHERE CIDER CATEGORY IS GROWING Off Premise: Annual 2016 – All Outlets Combined; or Liquor only in some markets

IN-STORE SIGNAGE PROVIDES CONSUMER DIRECTION

AND THESE REALLY GET ATTENTION

CIDER FRUIT FLAVORS GROWING…CIDER FLAVORS(top 5 $ gains year on year)

Growing (+4%); 16%* of Total*excluding “assorted” and N/A

CIDER OFF PREMISE SALES SEASONALITY GEARED AROUND HOLIDAY PERIODS

Index to Cider Average Weekly $ Sales = 100

JANUARY DECEMBERJULYSource: Nielsen Total U.S. All Outlets (xAOC + Liquor Plus + Conv + Military); 52 w/e 12-31-2016

58%26%

5-6% <5% >6%

Bottle Can

Package Type

12 oz 16 oz 22 oz

Bottle/CanSize

6 count 12 count 4 count OtherSource: Total U.S. All Outlets (xAOC + Liquor Plus +

Conv + Military); 52 w/e 12-31-2016

Excludes #1 BRAND

Pack Size

CIDER CONSUMPTION FREQUENCY HIGHEST 21-44; CIDER GENDER GAP IS LESS THAN BEERAbout how often do you drink the following types of Alcohol?

Total 21-34 35-44 44-54 55-64 65+ Male Female

Summary of “at least several times a year”

Ciders Beer WineSource: Nielsen study conducted by the Harris Poll – January 24-26. 2017

CORE CIDER CONSUMER IS 21-44; CAN WE INTEREST THOSE 45+? About how often do you drink Hard Cider? (percentages)

Total 21-34 35-44 45-54 55-64 65+

Several times a month or more often Once a month or several times a year

Once a year or less often Never

Source: Nielsen study conducted by the Harris Poll – January 24-26. 2017

Females much lower than Males

KEY 21-44 CONSUMERS – ESP MALES - SAY THEY ARE DRINKING MORE CIDER THAN A COUPLE YEARS AGOAre you drinking more, less, or about the same amount of hard cider now as you did a couple of years ago? (percentages)

Total 21-34 35-44

More Less About the SameSource: Nielsen study conducted by the Harris Poll – January 24-26. 2017

Base (21+): Those who drink Hard Cider several times a year or more often

APPLE OF COURSE, BUT PEAR AND OTHER FRUIT FLAVORS RESONATE WITH 1/3 OF CONSUMERSWhich of the following flavors of hard cider do you prefer to drink? (percentages)

Apple (total) Apple (withoutadded spices)

Apple (withadded spices)

Pear (total) Other Fruitflavors

Base (21+): Those who drink Hard Cider several times a year or more often

Midwest

CONTINUAL EDUCATION –INCLUSIVE OF VERSATILITY OF CIDERS - ARE KEYWhich best describes why you do not drink hard cider? - select all (percentages)

129 8 8

don't like thetaste

don't knowenough about

too muchsugar

too sweet expensive too manycalories

Base (21+): Those who never drink hard cider or drink once a year or less often

BEER SELLING LOCATIONS CONTINUE TO GROW –TRANSLATES TO MORE CIDER OPPORTUNITIES!

Off Premise On Premise

Total U.S. - # of Beer Selling Locations (000) 2012 2016

Source: Nielsen TDLinx

Limited Assortment/Dollar StoresNatural/Gourmet stores

Sports Bars/Premium BarsTheatersFast Casual Dining segment

Fastest Growing

BLURRING OF PREMISES

WE LIVE IN A BRICKS PLUS CLICKS WORLD

Brick n Mortar retailers

TODAY’S CONSUMERS ARE OMNISHOPPERS

Online Grocery Shopping

Retail Grocery Shopping

FUTURE OF ONLINE GROCERY SHOPPING

Source: FMI and Nielsen – Digitally Engaged Food Shopper Study (2017)

By 2025, the share of online grocery spending could reach 20%,

representing $100 Billion in annual consumer sales

Nielsen CGA On Premise Services

Cider Trends in US Webinar

The structure of the on premise universe

Source: Nielsen TDLinx (December 2016)

No. of restaurants, bars & nightclubs: December 2016 vs YA

Drinking83,190 -0.3%

298,835 +0.4%

Eating215,645 +0.7%

Casual Dining208,680 +0.6%

Fine Dining6,169 +3.1%

Neighborhood Bar

58,678 -0.9%

Sports Bar9,501 +4.3 %

Casual Nightclub7,249 -5.9%

Premium Bar2,571 +23.9%

Key points and long-term trends• Casual dining outlets drive openings while neighborhood bars decline• Drinking segment propped up by increases in sports/premium bars• 85% of bars, nightclubs and restaurants are independently owned• Between 2004 and 2014 we lost 1 in 6 Neighborhood Bars• Over the same period the number of restaurants increased by 40%

Spirits steal share from Beer & WineSpirits sales in bars and restaurants have been growing steadily over the last 52 weeks at the expense of Beer whilst wine is recovering steadily

Beer/FMB/Cider Wine Spirits

Volume % chg vs YA

$ % chg vs YA

Cider grows $ by +1.2% on the year

Source: Nielsen CGA on premise data – volume, value, subsegment, 288oz EQ, w/e 01/28/2017 vs YA

Volume (288oz EQ), rolling 52 w/e 01/28/17 vs YA, Total US

Domestic Premium

Craft Import Domestic Super

Premium

CiderBelow Premium

+0.9%-6.5% -7.1%-0.8%-5.9%288oz

-6.2% +2.4% +5.4% +9.3% -5.1% +1.2%$

+8.5%-6.2%

18.4%29.3%38.2% 0.31.8%3.2%3.6%▼ 1.8 ▲0.8 ▲1.1 ▲0.3 ▼ 0.1 - 0.0+ 0.0

Volume Share

Without the top three brands volume growth

Source: Nielsen CGA on premise data – volume, 288oz EQ, rolling 52 w/e 01/28/2017 CYA

+7.7%vs YA, increasing in

+330k 288oz

The *top 3 cider brands account for

46%Of Total Cider share

*Top 3 in terms of largest TDP

Draft Cider is driving the growth, with volume levels over double that of Packaged

Source: Nielsen CGA OPM – Volume (288oz), rolling 52 w/e 01/28/17 CYA

Draft Packaged

2.4m 288oz6.2m 288oz

+3.9% -11.2%

-302.7k CYA+230.7k CYA

Though Cider has a small share of tap handles, it has increased it’s share of draft volume by +0.2pp vs YA

Source: Nielsen CGA In Outlet Audit Data (2016); Nielsen CGA OPM – volume, L52 wks, w/e 12/03/16

Share of tap handles vs share of draft volume sales:

Share of tap handlesShare of draft volume

sa les

58% 42%Craft

21% 15%Import

17% 33%Domestic Premium

7% 11%Other

(inc. Cider)

Chicago and New York markets are driving Total Cider growthVolume (288oz EQ), rolling 52 w/e 01/28/17 vs YA, Total US

Drinking

3.2m 288oz EQ

Vol % Chg: -0.3%

Share of Cider: 37.7%

Independent

7.3m 288oz EQ

Vol % Chg: -0.6%

Chicago

452.7k 288oz EQ

Vol % Chg: +3.4%

New York

481.8k 288oz EQ

Vol % Chg: +1.5%

Source: Nielsen CGA OPM – volume, TDP, rolling 52 w/e 01/28/2017 vs YA

Distribution is driving Cider growth, leading to penetration of the total market

TDP % Change vs YA

Total US

Chicago

Dallas

Denver

Los Angeles

New York

Boston

Distribution % Change vs YA

How is the typical Cider consumer different to the typical Beer consumer?

Over 2/3 of Cider consumers drink out weekly - the Drinking segment is propelling Cider’s growth in the market, this driven by millennials

Source: Nielsen CGA On Premise Consumer Survey – sample sizes: 2397, 7174

67% 53%

Proportion drinking out weekly

83% 75%

Proportion eating out weekly

$85k $77k

Age range

Average household income

42% 37%

58% 63%

GenderHard Cider Beer

Hard Cider drinker vs average beer

drinker

54% 39%8%

37% 38% 25%

21-34 35-54 55+

Hard Cider Beer drinker

Source: Nielsen CGA On Premise Consumer Survey (October-November, 2016) – sample size: 2381, 7119

4.1Cider drinkers

Cider drinkers are more fickle than beer drinkers, trying more new brands each year than the average beer drinker

Average number of new drinks brands tried in the last year

3.3Beer drinkers

Q: How many, if any, new drinks brands have you tried in the last year?

Cider drinkers are more experimental than beer drinkers, who are more inclined to stick with what they know

I am open to trying different drinks brands

I actively seek out new drinks brands

I am loyal to my favorite drinks brands, but could be persuaded to try a different brand

I am loyal to my favorite drinks brands, and it would be hard to change my mind

I am unlikely to try new or different drinks brands

US average Cider

Beer% agreeing with statement

Source: Nielsen CGA On Premise Consumer Survey (October-November, 2016) – sample size: 2641, 588 - 1033

Cider is not limited to the Beer on premise market- cider flavored cocktails are more popular than beer flavored cocktails across all ages

17%of cocktail drinkers drink Cider flavored

cocktails

Q: How many, if any, new drinks brands have you tried in the last year?

Millennials (21-34)

Generation X (35-54)

Baby Boomers (55+)

Cider flavored cocktails

Beer flavored cocktails

How is Cider performing elsewhere?

Source: Nielsen CGA On Premise Consumer Survey (October-November, 2016) – sample size: 13074, 12816

% of consumers drinking Cider out-of-home

The GB Cider market is better established than the US Cider market, with +10pp GB consumers drinking it than US consumers

As in US, it is draft cider that is seeing exponential growth, with flavored ciders driving this in the L52 weeks

Source: Source: CGA Strategy OPMS P11 Data to: 05/11/2016

Total CiderVol: +1.9%Val: +2.5%

Draft CiderVol: +4.3%

Vol Share: 68.0% (+1.5pp)

Val: +5.0%

Packaged CiderVol: -5.0%

: (Vol Share: 32.0% -1.5pp

Val: -1.3%

Vol: +137.0%Share: 16.3%

(+9.1%)

Val: +132.2%

Vol: +7.9%Share: 65.3%

(+6.5pp)

Val: +9.7%

Flavored Cider Flavored Cider

Key findings (On Premise)• Unlike Beer, Cider is growing – propelled by …the “long” tail – without the more widely distributed brands, cider growth is

+13.6% Eq volume vs YAIndependent segment, and Drinking channelMajor urban areasDistribution gains

• Cider drinkers are young and versatile, and very open to new drinks brands

• Cider drinkers’ expectations are growing, and overlap with those of Craft beer drinkers

• Cider should not be boxed in within the Beer/FMB/Cider mega-category

WHAT YOU SHOULD TAKE AWAY Cider category upside is strong with craft/local driving

growth; opportunities both off and on premise

Innovation/education/visibility/trial are keys

Always listen to your core consumer; beyond that, you have very little voice today with 45+

Are you prepared for online opportunities

Facts can be your friend• Support and sharpen your message!• Discuss the facts with your retailers/distributors/others• Assess/quantify opportunities!• Tell – no SHOUT - your story!

OUR ONLY ASK …. AND NO STRINGS ATTACHED HELP US REPORT YOUR PRODUCT SALES ACCURATELY...• Nielsen information is used/referenced widely –

retailers, distributors, investment firms, media, industry associations, etc -

• We strive for report accuracy and completeness

• Inclusive of your products’ sales in our reporting when it passes a store scanner

• We identify/gather a lot of that ourselves, but you can help us tell your story even better!

• All we need - your products’ labels (back and front; digital or actual copies)

• Send to npcimages@nielsen.comdanny.brager@nielsen.com; margaret.acquaviva@nielsen.com

Danny BragerSVP, Nielsen Beverage Alcohol Practice

danny.brager@nielsen.com

Matt CromptonAssociate Client Director: Nielsen CGAmatthew.crompton.consultant@nielsen.com

u.s. cider trendsciderchat.com/wp-content/uploads/2017/04/nielsen-cider-trends... · danny brager...

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