pulse report alcohol q3 2013

8/13/2019 Pulse Report Alcohol Q3 2013

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PULSE REPORT

IRI Pulse Report Alcohol

Welcome to the Pulse Q3 2013 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].

Q3 2013

IRIworldwide.eu



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 U.K.

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

Country Channels used

UK Hypermarkets, supermarkets, drug stores and impulse outlets

ESHypermarkets, supermarkets, hard discounters, and drug stores,including the Canary Islands

DE Hypermarkets, supermarkets, hard discounters and drug stores

NL Hypermarkets, supermarkets, hard discounters and drug stores

ITHypermarkets, supermarkets, small self service, hard discounters anddrug stores

FR Hypermarkets 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.



PULSE REPORT

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 BEHAVIOR

Source: Eurostat, September 2013

The late summer start in Europe didnot contribute to growth in a marketwhere sales increases are mainlydriven by surges in taxes.



PULSE REPORT

1,384 1,387 1,290 1,161 1,366 1,552

914 1,036 1,016 827 8961,062

509 504 498458

531547

1,118 1,200 1,2371,028

1,0911,240

4,664 4,565 4,882

4,0724,505

4,713

2,778 3,037 3,089

2,578

2,867

3,271

0

2,000

4,000

6,000

8,000

10,000

12,000

14,000

01-jul-12 01-oct-12 30-dic-12 31-mar-13 30-jun-13 29-sep-13

M i l l i o n s

Period Ending

France

Germany

Italy

Netherlands

Spain

UK

GLOBAL TRENDS

4

TOTAL EUROPE +2.5%

+1.2%

+1.1%

+2.8%

VALUE SALES IN MILLIONS (€)

Total EU 45 776

DE 18 172

FR 11 804

UK 5 369*

IT 4 596

ES 3 801

NL 2 035

TOTAL ALCOHOL VALUE SALES AND % CHANGE VS. PRIOR YEAR

*based on an exchange rate of€1.150 to the pound

+0.8%

+5.3%

+5.9%

TOTAL ALCOHOL VALUE SALES FOR THE LAST SIX QUARTERS

Source: IRI retail databases; Period ending 29 September 2013



PULSE REPORT

824

17 854

10 725

14 754

1 427

3.7 8.11.12.0 2.9

Beer Wine Spirits Cider Fortified

Wines

M i l l i o n s

Total € Sales % € vs. YA

39.0%

32.2%

23.4%

1.8%

0.4%

3.1%

Beer Wine Spirits Cider Fortified Wines Alcoholic Soft Drinks

Europe

5

14 754

10 725

1 427 191

17 854

824

E u r o s ,

i n M i l l i o n s

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

TOP 5 CATEGORIES: EVOLUTION

Value sales (€) and % change vs. year ago


KEY TRENDS

• Beer, wine and spirits account for almost

95.0% of total alcoholic beverage turnover

in Europe.

• All categories showed value growth at the

European level.

• As stated in previous reports, in most

countries growth was driven by tax

increases and inflation (particularly in

France).

• Spirits sales resumed growth, with France

accounting for all the increase in value

seen in Europe

CATEGORY VALUE SALESIN THE LAST YEAR

CATEGORY SHARE OF VALUEIN THE LAST YEAR



PULSE REPORT

Europe

6

CATEGORY INSIGHTS

• Despite the poor climate conditions seen during the course of spring and early summer in

Europe, tax increases applied in France at the beginning of the year increased beer sales.

France accounts for 2/3 of the total value growth in Europe. Specialty and premium beersales continued developing in most European countries.

• Wine was the top performing category, driven by strong growth in most countries. France

also played an important role in wine sales expansion, predominantly driven by still wines.

Spain (5.0%) and the Netherlands (6.5%) also experienced high value growth.

• Spirit sales in Europe also rose due to a combination of inflation and tax increases in France

and Germany. However, sales by volume continued to decline in this category, while in some

European countries, sales by value also continued to decline, particularly in Spain (2.6%) and

Italy (1.9%).

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


TOP LOSERS: VALUE SALES

CHANGE VS. YR. AGO (€)

TOP WINNERS: VALUE SALES

CHANGE VS. YR. AGO (€)

524.0

354.6

115.7

106.9

23.3

0 100 200 300 400 500 600

Wine

Beer

Spirits

Cider

Fortified

Wines

0 2,000

Millions Millions



PULSE REPORT

109

484

3 992

1 978

5 228

4,44.413.2

5.33.0

Wine Spirits Beer Fortified

Wines

Cider

M i l l i o n s


44.3%

0.1%

0.9%

16.8%

33.8%

4.1%

Wine Spirits Beer Fortified Wines Cider Alcoholic Soft Drinks

France

7

KEY TRENDS

• Hypermarkets and supermarkets increased

their total value sales by 1.2% on moving

annual total (MAT), thanks to the fastmoving consumer goods (FMCG) trend

(+1.6% excludes wine).

• Growth rates remained unchanged compared

to the previous year

• Alcoholic beverages are driving the value

sales increase. All segments benefitted from

a higher rate than total FMCG.

• Volume sales only increased by around 1.0%

on MAT and remains stable YTD. The bad

performances were due to rainy and coldweather in May and June, which managed to

be offset by the warm and sunny summer.

• Beer value sales are still being driven by the

tax increase more than volume increases

(+2.0%).

3 992

1 978

484

13

5 228

109

E u r o s ,

i n M i l l i o n s








PULSE REPORT

- 0.9

-1 -1

Alcoholic Soft

Drinks

.

France

8

CATEGORY INSIGHTS

• Beer remains the winner in terms of value gains due to the tax increase. Volume sales remain

positive on MAT and YTD. The good weather conditions of the summer allowed the segment to

increase in sales after a difficult spring, which was driven predominantly by weather. Both

volume and value sales are driven by specialty beers and blond beers, which both benefitted

from an increase in their product range and promotional activity, which adds value to the

segment (beer + cider = +1.4% YTD P8 2013, which is close to the total beverage level of+1.0%).

• Wine value sales keep increasing, supported by both the still and sparkling wine segments, but

remains positive in volume (MAT and YTD) due to still wines.

− Still wines – Price increases are driven mainly by inflation, low harvest level, change of

priority markets (focus on export, for example) and a price war between retailers. The

drivers of the segment remain rosé, bag in box and private label.

− Sparkling and champagne – These segments are losing volume due to lower promotional

activity in champagne (mainly for own label) and high prices in sparkling wine

•

Spirits – The trend remains the same as the last quarter. Whilst value sales keep on increasing,volume sales are in decline by almost 1.0% on MAT, but are managing stability YTD.

− Gin/vodka/tequila/rum and cocktails are still the only segments to show growth, due to

product range increases and promotion.

− Anise/liquors are in volume decline, while whisky is almost stable at -0.5% YTD.

• Fortified wines are still driven by flavored wines, which have benefitted from an increase in

store presence, an increase in product range with the launch of new flavors

(strawberry/raspberry are amongst the leaders) and the duplication of 75cl and bag in box.

TOP LOSERS: VALUE SALESCHANGE VS. YR. AGO (€)

TOP WINNERS: VALUE SALESCHANGE VS. YR. AGO (€)

4.6

24.5

117.0

222.0

230.7

0 50 100 150 200 250

Beer

Wine

Spirits

Fortified

Wines

Cider


Millions Millions



PULSE REPORT

105112

5 2794 850

7 763

-1.90.2 0.9

16.8

2.2

Beer Wine Spirits Alcoholic

Soft

Drinks

Fortified

Wines

M i l l i o n s


42.7%

29.1%

26.7%

0.6%

0.3%

0.6%

Beer Wine Spirits Alcoholic Soft Drinks Fortified Wines Cider

Germany

9

KEY TRENDS

• After mostly declining volume sales that

were turned into profit by higher prices in

the first half of the year, the German marketgained volume again in the third quarter and

increased value sales as a consequence.

• A huge impact on the growing categories are

promotional sales, which keep spirits and

beer in positive sales growth.

• After a very successful first half of the year

in value growth, price increases for still wine

can´t compensate volume losses. Sparkling

wine is continuing to grow by volume and

value, but driven predominantly by sparklingcocktails, such as Hugo.

• Spirits growth is still very much affected by

the evolution of whisky and rum, but this

quarter, only liquor has a slight value

growth, which brings spirits a positive result.

• Alcoholic soft drinks continue to grow

double-digit again this quarter.

5 2794 850

112 62

7 763

105

E u r o s ,

i n M i l l i o n s








PULSE REPORT

Germany

10

CATEGORY INSIGHTS

• The German beer market is in growth due to massive promotional sales, which have gained

almost half of the volume sales back that were lost in the first two quarters of the year.

Nearly 90.0% of the gained volume came through promotional activities, with price

remaining stable. The better weather conditions in the third quarter seem to have had a

positive impact on beer sales, as every channel increased in volume.

• Promotional sales affected spirits sales as well. The third quarter outcome was a positive

result with value sales increasing through promotional activities in all spirit segments. The

biggest segments, white spirits and liquors, can almost compensate the losses from

promotional deals due to increased prices. Rum is continuing growth due to infused and

flavored rums. The alcoholic mixed drink segment has continued its success in volume and

value sales.

• The majority of the sparkling wine segments are losing volume, with the exception of wine-

based cocktails. In total, this brings the sparkling wine market to an improved result this

quarter. Cocktail growth is mainly influenced by new products or gained distribution rather

than promotional sales. Promotional sales instead have reduced losses for German sparkling

wine compared to the previous year, while the evolution in 2013 is still regressive. Alcohol-

free sparkling wine is also in decline.

• Still wine is struggling with decreasing volume sales and additional missing promotional sales

have led to losses that can´t be compensated with price increases. Most of the volume sales

have come from red wine.




- 2.1

-8 -6 -4 -2 0

Fortified

Wines

.

114.7

41.6

17.3

16.1

5.0

0 50 100 150

Wine

Spirits

Beer

Alcoholic Soft

Drinks

Cider

Millions Millions



PULSE REPORT

1548

1 371

976

2 185

-19.6

3.7 -1.9 -0.80.1

Wine Beer Spirits Fortified

Wines

Alcoholic

Soft

Drinks

M i l l i o n s


47.6%

0.3% 21.2%

29.8%

1.1%

Wine Beer Spirits Fortified Wines Alcoholic Soft Drinks

Italy

11

KEY TRENDS

• Revenue from the wine category continues

to grow in the third quarter, penalizing the

volume sold (about -6.0%).

• Beer has had a neutral period of sales, due

to a cooler but longer summer.

• Spirits have suffered with general low

consumption that is predicted to continue in

the next few months. The Italian

government increased taxes on alcohol

(spirits only, none for wine and beer) which

is expected to produce further declines in

the category.

1 371

976

15

2 185

48

E u r o s ,

i n M i l l i o n s








PULSE REPORT

Italy

12

CATEGORY INSIGHTS

• Beer – two findings:

- Last year, specialty beer was the only segment that showed sustained growth. In the

Specialty segment we found the most number of innovation that Shoppers showed to

appreciate (craft beers consumption could represent a new fashion in the next months).

- Increase the frequency of promotional sales in high season to achieve the bestperformance.

• Wine – The next few months will be very important for the wine sector. The current vintage

is plentiful and it will be very important not to reflect this with price positioning. Shoppers

need to see stable and non-continuous price fluctuations.

• Spirits –Be strategic in order to identify the right level of price and the right level of

promotional activities. Companies have to understand that the future will be influenced by

new price positioning and this could be an opportunity to sell less volume in order to increase

profits.




- 18.9

- 0.4

- 3.6

-40 -30 -20 -10 0

Fortified

Wines

Alcoholic Soft

Drinks

Spirits

.

0.9

77.7

0 20 40 60 80 100

Wine

Beer

Millions Millions



PULSE REPORT

152

840

83

1 058

7.66.3 -2.3 2.46.5

Beer Wine Fortified

Wines

Alcoholic

Soft

Drinks

Cider

M i l l i o n s


0.1%

41.3%

52.0%

4.1%2.5%

Beer Wine Fortified Wines Alcoholic Soft Drinks Cider

Netherlands

13

KEY TRENDS

• The Netherlands are leaving the recession

behind with 0.1% growth in Q3 2013.

• Supermarkets continue to outperform

national growth with a 2.0% increase.

• Alcoholic related categories are

outperforming supermarket growth with an

increase of 6.0%.

• Growth within alcoholic segments is mainly

due to higher prices within beer and wine

categories.

840

83

1

1 058

52

E u r o s ,

i n M i l l i o n s








PULSE REPORT

Netherlands

14

CATEGORY INSIGHTS

• Within the beer category, the growth in sales is caused by higher priced products. Volume

sales in beer are showing a decrease, caused by a change in promotional volume. Next to the

overall beer category, the alcohol free/light segment is continuing its growth. The growth of

the category is mainly due to new products within the alcohol free/light segment, with the

biggest contribution coming from Amstel Radler.

• Growth in wine is being driven by higher prices. The wine category is also showing growth in

volume as well as growth in sales, mainly caused by promotions and new product lauches,

especially within red wines. Growth is toned down by the fact that newly lauched products

are selling on a lower level.

• Alcoholic soft drinks are showing a small increase in value sales. Nevertheless, volume sales

are showing a slight decrease, mainly caused by new products and mixed cans which

replaced higher selling products like Breezers.

• Fortified wines are suffering from declining sales figures within dutch supermarkets. The level

of innovation is still low. New items keep coming in, but are not contributing to the growth

of the segment.




- 1.9

-3 -2 -2 -1 -1 0

Fortified

Wines

.

0.1

1.2

51.4

63.2

0 20 40 60 80

Beer

Wine

Alcoholic Soft

Drinks

Cider

Millions Millions



PULSE REPORT

32104

1 221

908

1 537

-1.7-0.4 -2.6 3.15.0

Beer Wine Spirits Fortified

Wines

Cider

M i l l i o n s


40.4%

32.1%

0.9%

23.9%

2.7%

Beer Wine Spirits Fortified Wines Cider

Spain

15

KEY TRENDS

• FMCG sales grew by 0.5% in Spain, whilst

beverages decreased by 1.2%, affected bythe lower average summer temperatures.

• For the same reason, beers showed a

slight reduction (-0.4%).

• Wine was the top-performing category,

driven by lower priced wines and white

wines, while spirit sales continued to

decline.

• Whisky, rum and vodka continued to lose

value, while gin sales remained growing at

double digit rates, boosted by trends in ginand tonic.

1 221

908

104

1 537

32

E u r o s ,

i n M i l l i o n s








PULSE REPORT

Spain

16

CATEGORY INSIGHTS

• Beers and soft drinks continue to be the most resilient categories in the present economic

crisis. However, the larger beer segment experienced a slight contraction (-0.4% versus

MAT September, 2012), affected by the lower average temperatures over summer.

• The beer segment relies heavily on restaurants, bars and pubs, which have gradually lost

market share over the last few years, although it still accounts for nearly two thirds (63.0%)

of total sales. Demand from restaurants and bars declined by 21.0% over the last six years,and this decline has not been fully compensated for by the increase in home consumption.

• One of the main strengths of the beer sector is its capacity for innovation. The main players

are focused on creating new products for new drinking times (lunch, afternoon and night

time drinking alternatives), moving forward from the traditional pint or aperitif. Artisanal and

premium beers emerged as both an alternative to industrial beers and as a result of the

search for added value products.

• The wine category has shown better development (5.0% versus MAT September, 2012). The

increase in value added tax (from 18.0% to 21.0%) in September 2012 played an important

role in demand remaining constant. Sales in the main appellation of origin regions have

expanded, although sales of wines with no appellation of origin, white wines and lower pricedwines are the ones which have grown the most (+10.0%).

• The outlook for spirits remains subdued. Sales for this market segment have been

decreasing over the last 10 years, lately worsened by the increase in taxes (VAT in

September 2012 and an additional 10.0% special tax for spirits in place since July 2013). The

market contraction has affected all spirits, with the exception of gin, which continued to grow

(12.0% versus MAT September 2012).

• The main strategies that companies are putting in place to tackle the crisis are financing (for

bars, restaurants and pubs), innovation and internationalisation (exports).




- 0.6

- 24.0

- 6.5

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

Cider

Beer

Spirits

.

58.1

3.1

0 20 40 60 80

Wine

Fortified

Wines

Millions Millions



PULSE REPORT

1 222

4 147

1.2 8.7

Beer Cider

M i l l i o n s


22.8%

77.2%

Beer Cider

United Kingdom

17

KEY TRENDS

• The beer, wine and spirits (BWS) trends

continue in the long and short term, with

volume down across all BWS sectors

excluding cider on MAT (3.1%) and for the

four weeks ending 29 September 2013

(-0.7%).

• Cider continues as the only sector in value

and volume growth across all time periods

(+3.9% MAT, +3.6% for the four weeks

ending 29 September 2013).

• Impacting the Q3 trends is a two week

heat wave that occurred during the fourweeks ending 20th July. This positively

impacted many categories across FMCG.

• The biggest winner across the store during

the heat wave was beer and cider, details

of which are included on the next page.

1 222

4 147

E u r o s ,

i n M i l l i o n s








PULSE REPORT

United Kingdom

18

CATEGORY INSIGHTS

JULY UK HEAT WAVE

• Total BWS volume grew +18.7% in the four weeks ending 20th July 2013 versus a year ago,

with 70.0% of this attributed to beer and cider, due to shoppers looking for refreshing drinks.

• Beer and cider were the biggest volume winners across total FMCG with +£111.2M added value

during the four weeks ending 20th July 2013 versus a year ago.

• Cider saw the greatest impact from the heat wave, with volume up by +40.8% in the four

weeks ending 20th July 2013.

• Wine saw little impact from the weather due to poor performance in red wine, whilst white did

okay, it was rose that saw the biggest impact from the weather due to it being a better

accompaniment for barbeques.

Q3 HIGHLIGHTS

• The modern cider segment continues to shine within cider, with over two and a half times the

growth rate of the cider sector. This segment is now 0.1 points off parity with basic cider.

Heineken U.K. (HUK) is a key driver, with strong growth within its Bulmers range (Bold Black

Cherry, No.17 and Pressed Red Grape combined for +42.3kHecs versus year ago), contributing32.0% of growth and 26.0% share of volume.

• HUK shines in the top 10 cider winners, owning five of the top 10 volume winning brands in the

12 weeks ending 29 September 2013. Strongbow Dark Fruits (+£10.2M) and Bulmers Bold

Black Cherry (£3.8M) topped the list, whilst Strongbow Original re-emerged in 7th position

(+£1.9M versus year ago).

• ABI continues to shine in the top 10 beer volume winners for the 12 weeks ending 29

September 2013, with Budweiser (+61.1kHecs) and Stella (+46.7kHecs) topping the list.

• Carling threatens Foster’s pole position in the off trade after four consecutive periods in the top

10 beer winners, delivering a total gain of +108.1kHecs versus year ago. Carling’s share ofStandard Lager in the four weeks ending 29 September 2013 has jumped three points this

year, narrowing the gap between the two brands to three points versus 10 points a year ago.


TOP 5 LOSERS: VALUE SALESCHANGE VS. YR. AGO (€)

TOP 5 WINNERS: VALUE SALESCHANGE VS. YR. AGO (€)

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

.

49.0

97.7

0 20 40 60 80 100 120

Cider

Beer

Millions Millions



PULSE REPORT

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 wasn’t

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 U.K. data in this report does not include this category.

Spirits

• The U.K. 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.



PULSE REPORT

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:

• IRI InfoScan Census® is a syndicated retail tracking service that enables manufacturers

and retailers to acquire industry insights used to make better business decisions. IRI

InfoScan Census utilizes 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 alcohol data comes from IRI 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 q3 2013

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