Introduction. Copyright - The IWSR 2009 Page 1

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1 Introduction The global wine and spirits market has been affected by the credit crunch and volumes for 2009 are expected to be down across many markets. A recovery will be seen in most categories and markets in the course of the forecast period but the speed of that recovery will vary considerably from one market to the next and also between categories. Spirits: The global spirits market will grow by only 0.4% between 2008 and 2013, down from 2.4% between 2003 and 2008, due to the difficult economic situation and the anticipated slowdown in China and India due to raw material issues as well as a slowdown in take-up of legal vodka in Russia. The spirits markets in Asia Pacific and the Americas will grow over the next five years while Europe will contract. India will be the leading growth market, followed by the US. Much of the growth in Asia will be driven by local spirits. Whisky and rum/cane will increase their share of the spirits market; flavoured spirits will remain stable and white spirits and other spirits will lose share. Premium and standard spirits will slightly increase their share of the market at the expense of low-price product. Wine: The global wine market will grow by 0.6% over the forecast period, down from 1.4% between 2003 and In wine, Europe will continue to lose market share to Asia Pacific and the Americas. The split by category in the global wine market will remain broadly unchanged. Standard and premium wine will increase slightly at the expense of low-priced wine. Other: The decline in RTDs will slow slightly as Asia Pacific takes market share from the Americas. The future of RTDs will depend to a large extent on how they are treated by governments around the world. Beer growth will slow but the category will still have a higher 5-year CAGR than wine or spirits. Methodology: The IWSR prepared forecasts for a total of 54 markets in detail (see list below). These are the most significant consumers of international wines and spirits, including all EU markets. Not all countries were forecast, and not even all countries for which the IWSR publishes annual reports are included. As a result certain countries with large markets in, for example, domestic spirits such as Kazakhstan or Sri Lanka do not appear in the tables even though their markets may be larger than those of some countries which do appear. Volumes for these countries which were not forecast in detail are included in others. Notes on individual countries: o Volumes for Russia only relate to the measurable market; the Ministry of Health estimates that the real market is twice the size. o Brazil also has large illegal production and forecasts relate to the measurable market. o Indian brandy is made from molasses rather than grapes; Indian whisky is made from molasses rather than grain. o Growth in China will depend to a great extent on government action. The market grew strongly in 2008 and there is scope for it to grow beyond these forecasts if the government allows it to. Markets forecast in detail Argentina Estonia Malaysia Slovenia Australia Finland Mexico Spain Austria France Netherlands Sweden Belgium/Luxembourg Germany New Zealand Switzerland Brazil Greece Norway Taiwan Bulgaria Hong Kong Philippines Thailand Canada Hungary Poland Turkey Canary Islands India Portugal UK Chile Ireland Romania Ukraine China Israel Russia USA Colombia Italy South Africa Venezuela Croatia Japan South Korea Vietnam Czech Republic Latvia Singapore Denmark Lithuania Slovakia Copyright - The IWSR 2009 Page 1

2 Summary of Forecasts Spirits Leading Markets: 5yr CAGR 03 to 08 World Total 2,401,187 2,374,478 2,391,039 2,415,389 2,436,288 2,446, % 0.4% China 639, , , , , , % 0.2% Russian Federation 310, , , , , , % -1.7% US 180, , , , , , % 1.3% India 150, , , , , , % 5.0% South Korea 150, , , , , , % 1.1% Japan 132, , , , , , % -1.1% Brazil 117, , , , , , % 0.7% Thailand 58,057 56,320 55,326 55,096 54,897 54, % -1.2% Philippines 47,322 47,810 48,360 48,495 48,664 48, % 0.7% Ukraine 48,005 47,651 48,129 48,323 48,185 48, % 0.1% Germany 49,512 48,368 47,813 47,352 47,061 46, % -1.2% France 37,945 38,036 37,684 37,580 37,786 37, % % Poland 36,035 35,824 35,764 35,594 35,470 35, % -0.3% United Kingdom 28,697 28,809 29,213 29,232 29,694 29, % 0.4% Romania 23,374 23,874 24,340 25,082 25,911 26, % 2.7% Mexico 24,193 24,221 24,124 24,458 24,979 25, % 1.1% Spain 27,441 26,285 25,693 25,342 25,104 24, % -1.9% Canada 16,902 16,995 17,124 17,345 17,607 17, % 1.2% Italy 16,808 16,384 16,164 16,073 15,950 15, % -1.2% South Africa 13,024 12,656 12,629 12,537 12,462 12, % -0.9% Colombia 12,197 12,137 12,403 12,277 12,291 12, % 0.2% Venezuela 9,545 9,724 9,567 9,506 9,810 10, % 1.0% Chile 8,277 8,754 9,109 9,405 9,718 10, % 3.9% Czech Republic 8,592 8,139 8,101 8,106 8,123 8, % -1.1% Turkey 6,992 7,307 7,357 7,736 7,909 7, % 2.7% Australia 6,676 6,991 7,142 7,394 7,640 7, % 3.4% Bulgaria 8,162 8,202 7,981 7,985 7,936 7, % -0.9% Netherlands 7,441 7,300 7,257 7,236 7,212 7, % -0.7% Argentina 5,689 6,177 6,463 6,864 6,949 6, % 4.0% Hungary 6,978 6,691 6,638 6,686 6,628 6, % -1.4% Greece 6,514 6,384 6,258 6,213 6,203 6, % -1.0% Lithuania 5,033 4,825 4,829 4,902 5,094 5, % 0.8% Slovak Republic 4,667 4,581 4,634 4,680 4,691 4, % 0.2% Belgium-Luxembourg 4,270 4,197 4,226 4,249 4,274 4, % 0.1% Austria 3,134 3,073 3,097 3,145 3,201 3, % 0.7% Finland 3,675 3,510 3,418 3,333 3,280 3, % -2.6% Portugal 3,182 3,080 3,075 3,068 3,065 3, % -0.8% Switzerland 2,654 2,715 2,771 2,809 2,827 2, % 1.5% Estonia 2,620 2,566 2,601 2,625 2,644 2, % 0.4% Ireland 2,537 2,353 2,415 2,495 2,576 2, % 0.9% Sweden 2,450 2,480 2,492 2,503 2,514 2, % 0.6% Latvia 2,466 2,284 2,255 2,294 2,343 2, % -0.5% Croatia 1,938 1,923 1,940 1,962 1,994 2,014 % 0.8% Israel 1,820 1,917 1,952 1,980 1,990 1, % 1.9% Denmark 1,988 1,911 1,879 1,872 1,903 1, % -0.4% Norway 1,630 1,615 1,642 1,666 1,689 1, % 1.0% Taiwan 1,766 1,711 1,708 1,697 1,703 1, % -0.7% Canary Islands 1,678 1,540 1,483 1,471 1,479 1, % -2.2% Hong Kong 1,493 1,430 1,389 1,361 1,439 1,430 % -0.9% New Zealand % -0.2% Vietnam % 5.5% Slovenia % 1.8% Malaysia % 0.5% Singapore % 1.2% Other Markets 153, , , , , , % 0.7% Copyright - The IWSR 2009 Page 2

3 Overall the world spirits market will grow by 0.4% between 2008 and 2013, much slower than the 2.4% growth in the preceding five years. This is a result of the global economic slowdown caused by the credit crunch. China will remain the world s largest spirits market through to 2013, though it will fall in 2009 and return to gradual growth from Overall growth will be much slower than in the previous five years. Most of the market is in products closed to imports baijiu or local white spirits is by far the largest alcoholic drinks category but imported spirits will grow much faster than local ones. Although the market is falling, Russia will remain in second place, nearly 100 million cases above both the US and India. The US will remain in third place, with continued growth in whisky, brandy and white spirits, while rum and cane are expected to fall. However the US will only just remain ahead of India which is expected to grow rapidly. India s already enormous whisky market is expected to continue to grow, while brandy is expected to overtake rum/cane by 2013 to become the second largest category. The top seven markets will all experience slower growth than in the last seven years. Brazil, Thailand, the Philippines and Ukraine (ranked 7 th to 10 th ) will see improved growth from 2009 onwards. Brazil is expected to grow gradually and in doing so it will close the gap with Japan which will fall. The major growth markets will be India, the US, South Korea, China, Brazil, Romania, Chile, the Philippines, Mexico, Argentina and Australia, all of which will increase by more than 1m cases over the next five years. Copyright - The IWSR 2009 Page 3

4 Spirits Summary by Region: % 29.0% 28.6% 28.2% 27.8% 27.4% 27.3% Percent Share (%) % 51.3% 51.5% 51.9% 52.2% 52.4% 52.3% % 17.6% 17.8% 17.8% 17.9% 18.0% 18.2% Africa & Middle East Americas Asia Pacific Europe Rest of World Market yr CAGR 5yr CAGR 03 to 08 World Total 2,134,275 2,401,187 2,374,478 2,391,039 2,415,389 2,436,288 2,446, % 0.4% Europe 691, , , , , , , % -0.9% North West Europe 135, , , , , , , % -0.3% Nordic Countries 9,242 9,844 9,610 9,522 9,461 9,471 9, % -0.7% Southern Europe 69,501 63,392 61,762 60,823 60,712 60,536 60, % -1.0% Central Europe and 95,599 99,912 99,358 99, , , , % 0.3% Balkans Eastern Europe and Baltics 381, , , , , , , % -1.3% Americas 389, , , , , , , % 1.1% North America 168, , , , , , , % 1.3% Caribbean 25,472 25,036 24,726 24,641 24,977 24,932 24, % -0.1% Central America 32,120 36,508 36,663 36,583 37,027 37,663 38, % 1.0% Latin America 162, , , , , , ,146 % 0.9% Asia Pacific 1,011,423 1,232,869 1,222,534 1,241,034 1,261,315 1,277,183 1,280, % 0.8% Asia 978,337 1,199,520 1,189,166 1,207,592 1,227,415 1,242,683 1,245, % 0.8% Australasia 7,235 7,646 7,942 8,085 8,338 8,587 8, % 3.0% Central Asia 25,852 25,703 25,426 25,357 25,562 25,914 26, % 0.6% Africa & Middle East 25,260 30,897 30,499 30,501 30,524 30,794 31, % 0.2% South Africa 11,138 13,024 12,656 12,629 12,537 12,462 12, % -0.9% Rest of Africa 6,058 5,759 5,754 5,762 5,786 5,817 5, % 0.3% Middle East 8,065 12,114 12,089 12,110 12,201 12,515 12, % 1.3% Rest of World 16,792 18,749 19,152 19,718 20,502 21,411 22, % 3.6% All regions will experience slower growth over the next five years than they have seen between 2003 and 2008 with the exception of Southern Europe, the Caribbean, Latin America, Australasia, Central Asia, Africa and Rest of World. Europe s share of the global spirits market will continue to fall gradually, dropping from 29% in 2008 to 27.3% in Eastern Europe and the Baltics, which account for over half of European volumes, will fall most. The only area of Europe to grow will be Central Europe and the Balkans. The Americas will grow most, in percentage terms, of the major regions, increasing by 1.1%. North America and Latin America will drive growth in volume terms. Asia Pacific will continue to account for over 50% of the volume of spirits consumed worldwide, with three of the top five growth markets over the next five years: India, South Korea and China. Copyright - The IWSR 2009 Page 4

5 Spirits Leading Growth Markets 2008 to 2013: India 41,600 US 12,392.2 South Korea 8,660.5 China 5,127.5 Brazil 4,085.4 Romania 3, ,00 10,00 15,00 20,00 25,00 30,00 35,00 40,00 Growth 08 to 13 India 150, , , , , , % 41,600 US 180, , , , , , % 12,392 South Korea 150, , , , , , % 8,660 China 639, , , , , , % 5,127 Brazil 117, , , , , , % 4,085 Romania 23,374 23,874 24,340 25,082 25,911 26, % 3,292 Chile 8,277 8,754 9,109 9,405 9,718 10, % 1,729 Philippines 47,322 47,810 48,360 48,495 48,664 48, % 1,574 India will be the fastest-growing spirits market over the next five years, outpacing its nearest rival the US by a factor of three. Whisky will remain India s largest spirits category; its share is expected to increase from 61.4% in 2008 to 67.6% in The US will be the second fastest-growing market, driven by growth in white spirits and rum/cane. Growth in South Korea will come predominantly from white spirits although by 2013 these will be in decline again. China shows the slowest growth in percentage terms of any of the eight leading growth markets; it will lose significant volumes in Copyright - The IWSR 2009 Page 5

6 Spirits Major Declining Markets 2008 to 2013: Spain -2,505.8 Germany -2,951.5 Thailand -3,316.0 Japan -7,371.3 Russian Federation -25, ,00-24,00-20,00-16,00-12,00-8,00-4,00 Growth 08 to 13 Russian Federation 310, , , , , , % -25,894 Japan 132, , , , , , % -7,371 Thailand 58,057 56,320 55,326 55,096 54,897 54, % -3,316 Germany 49,512 48,368 47,813 47,352 47,061 46, % -2,952 Spain 27,441 26,285 25,693 25,342 25,104 24, % -2,506 Italy 16,808 16,384 16,164 16,073 15,950 15, % -993 Poland 36,035 35,824 35,764 35,594 35,470 35, % -556 South Africa 13,024 12,656 12,629 12,537 12,462 12, % -550 The Russian Federation will fall most, losing 25m cases between 2008 and 2013, with white spirits predominantly vodka continuing to fall. Trading-up is likely to resume in 2011 but consumers will cut down in volumes at the same time. In addition a number of companies are likely to close as a result of the economic crisis. It is important to note that this 25m-case drop relates to the measurable market only, and not home production and the black/grey market. Japan will see falls in all major categories of spirits except flavoured spirits, with the largest category white spirits being hardest hit. Copyright - The IWSR 2009 Page 6

7 Spirits Share by Category: % 5.7% 10.4% 5.6% 10.8% 5.6% 11.1% 5.6% 11.3% 5.5% 11.5% 5.5% 11.7% 5.5% Percent Share (%) % 7.4% 10.3% 35.6% 6.8% 9.4% 35.7% 6.8% 9.5% 35.5% 6.8% 9.5% 35.2% 6.8% 9.5% 35.0% 6.7% 9.5% 34.9% 6.7% 9.6% % 32.1% 31.6% 31.6% 31.6% 31.7% 31.5% Other Spirits Rum / Cane Flavoured Spirits White Spirits Brandy Whisky Market yr CAGR 03 to 08 5yr CAGR Whisky 200, , , , , , , % 2.7% Brandy 122, , , , , , , % % White Spirits 787, , , , , , , % % Flavoured Spirits 157, , , , , , , % 0.1% Rum / Cane 220, , , , , , , % 0.7% Other Spirits 646, , , , , , , % % Whisky and rum/cane will be the only major categories to increase their percentage share of the worldwide market between 2008 and Flavoured spirits will remain stable while other spirits and white spirits will lose percentage share. Copyright - The IWSR 2009 Page 7

8 Spirits Share by Quality: Percent Share (%) % 81.9% 81.8% 81.8% 81.7% 81.5% 81.3% % 2.9% 14.1% 3.2% 14.2% 3.2% 14.1% 3.3% 14.2% 3.3% 14.3% 3.4% 14.4% 3.4% Prestige Ultra Premium Super Premium Premium Standard Low Price Market yr CAGR 03 to 08 5yr CAGR Prestige % 2.9% Ultra Premium 940 1,544 1,489 1,480 1,522 1,576 1, % 1.2% Super Premium 9,077 17,395 17,218 17,591 18,113 18,848 19, % 2.4% Premium 61,578 76,702 76,203 77,822 79,606 81,828 84, % 1.8% Standard 296, , , , , , , % 0.8% Low Price 1,765,670 1,966,195 1,943,399 1,955,784 1,973,314 1,986,117 1,988, % 0.2% The economic difficulties around the world are having an impact on the growth of premium spirits, and 2009 will see falls across all quality brackets. However all brackets are expected to return to growth in 2010 (except ultra-premium which will return to growth in 2011) as the situation calms down and in the longer term the trend towards more premium products is expected to return. In percentage terms, over the next five years, prestige and super premium products are expected to perform best, followed by premium and ultra premium, while the much larger standard and low-price segments will grow more slowly. Copyright - The IWSR 2009 Page 8

9 Global Wine Leading Markets: 5yr CAGR 03 to 08 World Total 3,206,468 3,193,233 3,214,429 3,238,687 3,267,766 3,296, % 0.6% China 361, , , , , , % 3.1% US 302, , , , , , % 2.1% Italy 313, , , , , , % % France 328, , , , , , % -1.6% Germany 288, , , , , , % -0.2% United Kingdom 151, , , , , , % 0.2% Argentina 124, , , , , , % % Russian Federation 114, , , , , , % 0.6% Spain 114, , , , , , % -1.4% Japan 105, , ,350 99,555 98,834 97, % -1.6% Romania 58,437 57,699 58,125 58,576 59,148 59, % 0.4% Australia 54,221 54,380 55,330 56,030 56,675 57, % 1.2% Canada 41,421 42,864 44,164 45,680 47,322 49, % 3.5% Netherlands 45,887 45,571 46,480 47,101 47,614 48, % 1.0% Portugal 46,015 45,685 45,571 45,525 45,462 45, % -0.3% Brazil 37,397 35,149 35,018 35,933 37,117 39, % 1.1% South Africa 38,273 37,448 36,624 36,597 36,554 37, % -0.5% Belgium-Luxembourg 35,366 35,149 35,403 35,556 35,811 36, % 0.4% Switzerland 33,342 33,400 33,730 33,944 33,915 33, % 0.4% Hungary 33,061 32,624 32,327 32,547 32,879 33, % % Austria 31,754 31,745 31,847 32,004 32,217 32, % 0.4% Ukraine 31,154 29,470 29,134 29,764 30,452 31, % % Greece 30,980 30,873 30,533 30,558 30,668 30, % -0.1% Chile 29,980 30,244 31,746 31,167 30,836 30, % 0.3% Croatia 29,962 30,015 30,055 30,097 30,131 30, % 0.1% Sweden 20,751 22,253 23,037 23,682 24,243 24, % 3.6% South Korea 21,002 21,425 22,241 23,016 23,693 24, % 2.9% Poland 24,851 24,331 24,056 23,943 23,916 23, % -0.8% Denmark 18,455 18,222 17,939 17,882 17,884 17, % -0.7% Czech Republic 15,265 15,213 15,306 15,641 16,020 16, % 1.3% Slovak Republic 16,327 15,845 15,843 15,790 15,561 15, % -1.1% Bulgaria 12,307 12,329 12,301 12,417 12,499 12, % 0.5% New Zealand 9,475 9,635 9,825 10,008 10,361 10, % 2.4% Slovenia 9,466 9,472 9,482 9,491 9,489 9, % 0.1% Ireland 8,545 8,058 8,241 8,500 8,762 9, % 1.1% Turkey 7,729 7,748 7,854 8,006 8,203 8, % 1.8% Norway 7,212 7,515 7,804 8,003 8,174 8, % 3.0% Mexico 7,130 7,129 7,149 7,317 7,559 7, % 1.9% Finland 7,163 7,183 7,274 7,403 7,553 7, % 1.4% Philippines 6,840 6,959 7,072 7,241 7,366 7, % 1.8% Venezuela 5,962 6,276 6,523 6,789 7,064 7, % 4.0% Hong Kong 2,394 2,947 3,552 4,148 4,733 4, % 15.6% Israel 4,440 4,446 4,507 4,559 4,603 4, % 0.9% Lithuania 4,243 4,040 4,049 4,098 4,152 4, % -0.2% India 1,682 1,959 2,191 2,461 2,824 3, % 15.5% Colombia 2,822 2,737 2,760 2,771 2,777 2, % -0.3% Latvia 2,925 2,660 2,610 2,637 2,755 2, % -1.3% Canary Islands 2,417 2,289 2,218 2,163 2,267 2, % -0.7% Estonia 1,529 1,441 1,431 1,438 1,452 1, % -0.8% Taiwan 1,444 1,210 1,102 1,145 1,243 1, % -1.6% Thailand 1,102 1,088 1,097 1,110 1,134 1, % 0.9% Singapore ,012 1, % 4.5% Vietnam % 12.0% Malaysia % 1.9% Other Markets 197, , , , , , % 0.1% Worldwide growth in wine consumption will be considerably slower over the next five years that it has been in the last five. The markets which have been responsible for growth in the last five years will see slower growth in the next five. Growth in China, the world s largest market, will slow as the consumer base increases. Russia will see slower growth as wealthier and better-informed consumers seek out higher quality wines. Those markets which are currently seeing falling consumption of wine France, Argentina, Spain, Japan, Portugal will see those falls slowing in the next five years. France is likely to slow its decline at the end of the forecast period for two reasons: firstly it seems to have been less affected than its neighbours by the economic crisis, and secondly it has one of the highest birth rates in Europe and its population keeps growing. Copyright - The IWSR 2009 Page 9

10 Global Wine Summary by Region: Percent Share (%) % 15.8% 60.5% 18.3% 59.9% 18.8% 59.5% 19.1% 59.1% 19.4% 58.7% 19.6% 58.3% 19.8% % 18.2% 18.3% 18.5% 18.7% 18.8% 19.0% 2.6% 2.6% 2.6% 2.5% 2.5% 2.5% Africa & Middle East Americas Asia Pacific Europe Rest of World Market yr CAGR 5yr CAGR 03 to 08 World Total 2,995,461 3,206,468 3,193,233 3,214,429 3,238,687 3,267,766 3,296, % 0.6% Europe 1,904,459 1,941,482 1,913,606 1,911,725 1,913,325 1,917,607 1,920, % -0.2% North West Europe 932, , , , , , , % -0.5% Nordic Countries 48,953 53,950 55,507 56,371 57,280 58,175 58, % 1.8% Southern Europe 528, , , , , , , % -0.3% Central Europe and 219, , , , , , , % 0.1% Balkans Eastern Europe and Baltics 174, , , , , , , % 0.2% Americas 539, , , , , , , % 1.5% North America 296, , , , , , , % 2.2% Caribbean 7,142 8,249 8,023 8,044 8,243 8,433 8, % 0.9% Central America 5,798 8,873 8,843 8,945 9,216 9,571 9, % 2.3% Latin America 230, , , , , , , % 0.4% Asia Pacific 474, , , , , , , % 2.1% Asia 401, , , , , , , % 2.3% Australasia 54,554 63,695 64,015 65,155 66,038 67,036 68, % 1.4% Central Asia 18,916 20,122 19,555 19,134 19,597 19,564 19, % -0.3% Africa & Middle East 66,310 83,740 82,929 82,317 82,495 82,678 83, % % South Africa 37,859 38,273 37,448 36,624 36,597 36,554 37, % -0.5% Rest of Africa 23,344 39,055 39,041 39,136 39,205 39,262 39, % 0.1% Middle East 5,107 6,412 6,440 6,557 6,693 6,863 7, % 1.9% Rest of World 10,232 11,127 11,109 11,109 11,157 11,239 11, % 0.4% Having grown marginally between 2003 and 2008 Europe will fall very slightly over the next five years, as both north west Europe and southern Europe continue to see declines in consumption. The Nordic countries will be the only region of Europe to see growth but even in 2013 they are expected to account for only 3% of consumption in Europe. The Americas will continue to see the same rate of growth over the next five years as it has over the last five 1.5%. While growth in North America will slow, Latin America will return to growth. Growth in Asia Pacific will slow from 4.4% to 2.1%, mirroring the slowdown in growth in the Chinese market. Africa and the Middle East are expected to remain flat at current levels up to Copyright - The IWSR 2009 Page 10

11 Global Wine Leading Growth Markets 2008 to 2013: China 59,533 US 32,411.0 Canada Sweden Russian Federation Australia South Korea Hong Kong Netherlands Brazil 7, , , , , , , , ,00 20,00 30,00 40,00 50,00 60,00 Growth 08 to 13 China 361, , , , , , % 59,533 US 302, , , , , , % 32,411 Canada 41,421 42,864 44,164 45,680 47,322 49, % 7,676 Sweden 20,751 22,253 23,037 23,682 24,243 24, % 4,051 Russian Federation 114, , , , , , % 3,650 Australia 54,221 54,380 55,330 56,030 56,675 57, % 3,398 South Korea 21,002 21,425 22,241 23,016 23,693 24, % 3,240 Hong Kong 2,394 2,947 3,552 4,148 4,733 4, % 2,543 Already the world s largest market, China is expected to continue to grow rapidly. Wine consumption is spreading out from the largest cities to second- and third-tier cities and also entering the banqueting channel alongside Cognac and baijiu. Per capita consumption of wine remains very low and the government continues to promote wine as an alternative to baijiu. Growth in the US is set to continue as more and more people find that drinking wine fits with their lifestyles. The US also has relatively low per capita growth rates and so there remains plenty of scope for wine to grow as more people try and adopt wine, partly because it is perceived to be healthier than some other drinks. Copyright - The IWSR 2009 Page 11

12 Global Wine Major Declining Markets 2008 to 2013: Slovak Republic South Africa Poland Germany -2,776.5 Spain -7,863.3 Japan -8,292.7 France -24, ,00-20,00-16,00-12,00-8,00-4,00 Growth 08 to 13 France 328, , , , , , % -24,753 Japan 105, , ,350 99,555 98,834 97, % -8,293 Spain 114, , , , , , % -7,863 Germany 288, , , , , , % -2,777 Poland 24,851 24,331 24,056 23,943 23,916 23, % -963 South Africa 38,273 37,448 36,624 36,597 36,554 37, % -947 Slovak Republic 16,327 15,845 15,843 15,790 15,561 15, % -902 Denmark 18,455 18,222 17,939 17,882 17,884 17, % -672 France will continue to show the sharpest falls in wine consumption as the long-term declining trend continues. However the falls are slowing and are expected to continue to slow up to While the decline is still in evidence at the end of the forecast period, the signs are that shortly afterwards the market will finally stabilise, largely due to France s relatively good performance through the credit crisis and high birth rate (as previously mentioned). The falls in the Japanese market will be in sake which is in long-term decline (although the rates of decline for sake are also expected to slow towards the end of the forecast period). Still light wine in Japan should grow moderately once the economy improves. Spain has the lowest per capita consumption of any wine-producing country, and younger consumers are entering wine at a later age if at all. However, like France, the decline in wine consumption in Spain is likely to slow over the forecast period. Copyright - The IWSR 2009 Page 12

13 Global Wine Share by Category: % 14.9% 15.2% 15.3% 15.3% 15.2% 15.1% 8 5.6% 6.1% 6.0% 6.0% 6.0% 6.0% 6.1% Percent Share (%) % 76.0% 76.0% 75.9% 76.0% 76.0% 76.1% Still Light Wine Sparkling Wine Fortified Wine Light Aperitifs Other Wines Market yr CAGR 03 to 08 5yr CAGR Still Light Wine 2,305,943 2,437,380 2,426,267 2,441,253 2,459,917 2,484,415 2,509, % 0.6% Sparkling Wine 166, , , , , , , % 0.6% Fortified Wine 63,234 59,005 57,401 56,243 55,304 54,567 53, % -1.8% Light Aperitifs 38,265 36,972 35,421 35,076 34,930 34,889 35, % -1.1% Other Wines 421, , , , , , , % 0.8% The proportions of different wine types are likely to remain broadly similar over the next five years. Copyright - The IWSR 2009 Page 13

14 Global Wine Share by Quality: % 16.8% 16.1% 16.3% 16.4% 16.3% 16.3% 8 Percent Share (%) % 82.5% 83.2% 83.1% 83.0% 83.0% 83.0% Prestige Ultra Premium Super Premium Premium Standard Low Price Market yr CAGR 03 to 08 5yr CAGR Prestige % Ultra Premium % 0.5% Super Premium 1,865 2,263 2,134 1,886 1,924 1,968 2, % -2.2% Premium 16,152 18,888 17,759 17,899 18,343 19,012 19, % 0.8% Standard 2,545,952 2,645,837 2,657,720 2,670,887 2,688,480 2,712,886 2,737, % 0.7% Low Price 431, , , , , , , % -0.1% All segments are expected to fall in 2009 with the exception of standard wine which will grow very slightly. Despite the difficult economic conditions, low price wines are not expected to grow in the course of 2009 and Premium wines will fall in 2009 and remain flat in 2010 but will return to 2008 levels by Standard and premium wines are expected to see the strongest percentage growth up to Copyright - The IWSR 2009 Page 14

15 RTD Leading Markets: 5yr CAGR 03 to 08 World Total 294, , , , , , % -1.9% Japan 66,605 67,780 67,250 66,610 66,400 66, % -0.1% Russian Federation 50,000 45,500 44,865 44,445 44,205 43, % -2.5% Australia 34,515 30,700 30,850 30,900 31,000 31, % -2.0% US 48,615 44,075 39,650 36,000 32,950 29, % -9.2% United Kingdom 15,845 15,134 15,241 14,742 14,847 14, % -1.8% South Africa 9,644 10,500 10,980 11,350 11,460 11, % 3.1% Ukraine 12,075 11,500 11,000 10,700 10,500 10, % -3.1% Brazil 5,569 5,940 6,500 6,925 7,700 9, % 10.8% New Zealand 6,900 7,210 7,540 7,805 8,060 8, % 3.8% Canada 8,402 8,200 7,985 7,755 7,600 7, % -1.6% Finland 4,730 5,180 5,630 6,125 6,500 6, % 7.8% Mexico 7,832 6,890 6,730 6,740 6,815 6, % -2.7% Italy 3,317 3,173 3,040 2,908 2,771 2, % -4.4% Thailand 1,802 1,665 1,741 1,842 1,914 1, % 1.8% Estonia 1,775 1,690 1,658 1,659 1,665 1, % -1.2% India 895 1,050 1,135 1,225 1,300 1, % 8.9% Lithuania 1,473 1,278 1,176 1,101 1, % -7.7% Romania % South Korea % 5.3% Germany % -2.8% Ireland % -1.5% Latvia % -3.1% China % 3.4% Belgium-Luxembourg % -3.7% Netherlands % -6.6% Venezuela % -2.3% Argentina % 1.0% Greece % -4.6% France % -15.5% Poland % -0.1% Denmark % -17.6% Colombia % 1.9% Taiwan % -3.9% Switzerland % 3.9% Sweden % -7.6% Spain % -10.7% Hungary % -6.0% Philippines % 20.5% Canary Islands % -14.3% Hong Kong % -11.5% Czech Republic % -15.2% Austria % -18.6% Vietnam % 2.2% Israel % -22.8% Singapore % -5.9% Croatia % -5.7% Bulgaria % % Portugal % -15.4% Slovenia % -3.6% Norway % -34.7% Malaysia % 1.4% Slovak Republic % 7.4% Chile Min Min Min Min Min Min -99.2% -12.9% Turkey Min Min Min Min Min Min -19.7% Other Markets 3,482 3,039 2,972 3,014 2,991 3, % -2.8% The overall global decline in RTDs is expected to slow very slightly, from 2.0% to 1.9%. The top five markets will all see falls over the forecast period, and of the top 20 markets only eight will see growth. The future of RTDs will depend to a large extent on how they are treated by governments around the world. The world s largest market, Japan, which in 2008 accounted for 22.6% of global sales, will remain flat up to Functional RTDs reduced calories, reduced sugar etc are growing strongly at the expense of mainstream products and this is expected to continue. In Russia RTDs were readily available in kiosks all around the country; with the number of these kiosks falling and government initiatives to cut drinking increasing, consumption will drop. The decline in the UK will slow partly due to a generalised increase in on-trade consumption around the 2010 football World Cup. Copyright - The IWSR 2009 Page 15

16 RTD Summary by Region: % 33.3% 32.5% 32.6% 32.7% 32.9% 33.0% Percent Share (%) % 38.1% 39.2% 39.9% 40.5% 41.0% 41.4% % 25.2% 24.5% 23.4% 22.5% 21.7% 21.3% 3.4% 3.9% 4.1% 4.3% 4.3% 4.3% Africa & Middle East Americas Asia Pacific Europe Market yr CAGR 5yr CAGR 03 to 08 World Total 325, , , , , , , % -1.9% Europe 120,134 98,198 91,123 89,885 88,789 88,702 88, % -2.1% North West Europe 47,286 20,171 19,000 18,870 18,194 18,194 17, % -2.5% Nordic Countries 5,747 6,183 6,113 6,475 6,914 7,220 7, % 4.1% Southern Europe 8,288 4,439 4,146 3,947 3,750 3,557 3, % -5.3% Central Europe and ,109 1, % 15.0% Balkans Eastern Europe and Baltics 58,224 66,593 61,095 59,821 59,060 58,623 58, % -2.7% Americas 96,601 74,302 68,671 64,458 61,069 58,593 57, % -5.1% North America 83,692 57,017 52,275 47,635 43,755 40,550 37, % -7.9% Caribbean 2, % -6.1% Central America 7,879 8,967 7,949 7,803 7,870 7,952 7, % -2.4% Latin America 2,802 7,865 8,017 8,612 9,032 9,717 11, % 7.4% Asia Pacific 100, , , , , , , % -0.2% Asia 66,867 70,940 72,127 71,765 71,341 71,389 71, % 0.1% Australasia 33,887 41,415 37,910 38,390 38,705 39,060 39, % -0.9% Africa & Middle East 7,932 10,040 10,849 11,294 11,633 11,714 11, % 2.7% South Africa 7,375 9,644 10,500 10,980 11,350 11,460 11, % 3.1% Rest of Africa % 0.8% Middle East % -12.2% Asia Pacific will continue to grow its share of the global RTD market but will still overall be in marginal decline. Americas will suffer the heaviest decline as the large North America market continues to fall. Europe will continue to decline but more slowly than in the past five years; the bulk of consumption is in Eastern Europe and the Baltics and this region will fall by over 8,000 9-litre cases in the forecast period. Africa and the Middle East will be the only global region to see growth but by 2013 it will still account for only a fraction of worldwide consumption. Copyright - The IWSR 2009 Page 16

17 RTD Leading Growth Markets 2008 to 2013: Brazil 3,731.0 Finland 2,17 South Africa 1,606.0 New Zealand 1,43 Romania India South Korea Thailand ,20 1,60 2,00 2,40 2,80 3,20 3,60 4,00 Growth 08 to 13 Brazil 5,569 5,940 6,500 6,925 7,700 9, % 3,731 Finland 4,730 5,180 5,630 6,125 6,500 6, % 2,170 South Africa 9,644 10,500 10,980 11,350 11,460 11, % 1,606 New Zealand 6,900 7,210 7,540 7,805 8,060 8, % 1,430 Romania % 921 India 895 1,050 1,135 1,225 1,300 1, % 475 South Korea % 176 Thailand 1,802 1,665 1,741 1,842 1,914 1, % 166 Brazil has seen its RTD market more than treble between 2004 and 2008 and growth is likely to continue partly because RTDs suit the hot climate. Most local vodka brands run a line extension and Bacardi is likely to re-enter the market too. RTDs were the fastest-growing category in Finland in 2008 for the second consecutive year. Increasing numbers of consumers switching from cider and beer, and competition between the two leading brewers, is expected to lead to continued growth. In South Africa growth in RTDs will continue through to 2012 and will then begin to decline. RTDs have been the fastest-growing category in New Zealand and here, as in South Africa, competition between the two leading brewers (alongside a constantly growing consumer base) is expected to lead to increased sales of existing brands. Copyright - The IWSR 2009 Page 17

18 RTD Major Declining Markets 2008 to 2013: Canada Italy Mexico -1,007.0 United Kingdom -1,344.3 Ukraine -1,775.0 Australia -3,265.0 Russian Federation -6,055.0 US -18, ,00-18,00-15,00-12,00-9,00-6,00-3,00 Growth 08 to 13 US 48,615 44,075 39,650 36,000 32,950 29, % -18,665 Russian Federation 50,000 45,500 44,865 44,445 44,205 43, % -6,055 Australia 34,515 30,700 30,850 30,900 31,000 31, % -3,265 Ukraine 12,075 11,500 11,000 10,700 10,500 10, % -1,775 United Kingdom 15,845 15,134 15,241 14,742 14,847 14, % -1,344 Mexico 7,832 6,890 6,730 6,740 6,815 6, % -1,007 Italy 3,317 3,173 3,040 2,908 2,771 2, % -663 Canada 8,402 8,200 7,985 7,755 7,600 7, % -652 The US is likely to see continued declines in RTDs although product innovation could change this. Russia will fall as regular consumers outgrow the category and increased excise tax, along with government anti-drinking measures, continues to wean consumers off RTDs. Australia s RTD market collapsed in 2008 as taxation was raised without any warning. Growth is likely to return but at a much slower pace. Copyright - The IWSR 2009 Page 18

19 Beer Leading Markets: 5yr CAGR 03 to 08 World Total 1,741,139 1,756,676 1,794,159 1,830,660 1,866,441 1,900, % 1.8% China 410, , , , , , % 3.7% US 250, , , , , , % 0.5% Brazil 106, , , , , , % 5.8% Russian Federation 112, , , , , , % -0.1% Germany 94,687 94,700 94,835 94,825 94,825 94, % % Mexico 64,945 65,560 66,145 66,800 67,788 68, % 1.2% Japan 61,358 58,936 58,195 57,740 57,344 57, % -1.5% United Kingdom 51,990 49,400 50,590 49,400 50,050 49, % -1.1% Poland 35,850 33,740 33,905 34,045 36,450 34, % -1.0% Spain 33,387 32,095 31,700 31,900 32,250 32, % -0.4% Ukraine 28,790 26,930 27,510 28,430 29,650 30, % 1.5% South Africa 26,650 26,000 26,400 25,900 25,600 25, % -0.9% Venezuela 24,994 23,824 23,969 24,188 24,650 24, % -0.2% Canada 22,985 23,000 23,025 23,090 23,185 23, % 0.3% Romania 21,210 21,410 21,525 21,775 22,075 22, % 1.1% Italy 18,640 18,950 19,650 20,500 21,150 21, % 3.1% Argentina 17,125 18,200 19,155 20,015 20,925 21, % 4.8% Thailand 19,842 19,693 19,766 20,369 21,172 21, % 1.7% India 12,841 14,750 16,088 17,547 19,389 21, % 10.6% Colombia 18,805 19,795 20,329 20,665 20,990 21, % 2.4% South Korea 19,033 19,630 20,045 20,270 19,930 19, % 0.7% France 18,900 17,515 18,250 17,750 17,550 17, % -1.3% Australia 17,300 17,450 17,450 17,500 17,500 17, % 0.3% Vietnam 13,303 14,120 14,720 15,400 16,080 16, % 4.6% Czech Republic 16,810 16,310 16,120 16,185 16,250 16, % -0.6% Philippines 13,412 13,563 13,914 14,265 14,618 14, % 2.1% Netherlands 12,250 12,125 12,085 12,050 12,015 11, % -0.4% Turkey 9,206 9,705 10,080 10,480 10,905 11, % 4.2% Belgium-Luxembourg 10,680 10,465 10,530 10,565 10,600 10, % -0.1% Austria 8,890 8,730 8,660 8,695 8,705 8,710 % -0.4% Hungary 7,855 7,810 7,750 7,805 7,840 7, % 0.1% Chile 6,216 6,375 6,650 6,900 7,100 7, % 3.6% Portugal 6,496 6,755 6,835 6,813 6,791 6, % 0.8% Bulgaria 5,715 5,715 5,730 5,780 5,855 5, % 0.8% Sweden 4,582 4,845 5,045 5,205 5,355 5, % 3.5% Taiwan 4,955 4,750 4,900 5,070 5,050 5, % 0.6% Ireland 5,110 4,775 4,750 4,775 4,825 4, % -0.7% Switzerland 4,488 4,625 4,620 4,600 4,600 4, % 0.5% Denmark 4,200 4,225 4,265 4,370 4,440 4, % 1.7% Finland 4,465 4,200 4,100 4,175 4,280 4, % -0.1% New Zealand 3,300 3,600 3,750 3,870 4,070 4, % 5.8% Slovak Republic 4,350 4,370 4,275 4,240 4,230 4, % -0.6% Greece 4,238 4,130 4,035 4,000 4,035 4, % -0.7% Croatia 3,780 3,790 3,870 3,930 3,990 4, % 1.4% Norway 2,725 3,095 3,100 3,100 3,100 3, % 2.6% Lithuania 2,860 2,700 2,845 3,005 3,050 3, % 1.5% Slovenia 1,800 1,725 1,750 1,795 1,835 1, % 0.9% Hong Kong 1,737 1,635 1,660 1,695 1,725 1, % -0.5% Canary Islands 1,763 1,615 1,520 1,545 1,600 1, % -1.4% Latvia 1,525 1,460 1,438 1,472 1,498 1, % -0.1% Malaysia 1,300 1,303 1,307 1,314 1,320 1, % 0.4% Estonia 1,210 1,165 1,147 1,160 1,178 1, % -0.1% Singapore ,005 1,060 1, % 3.5% Israel % 2.3% Other Markets 80,631 81,867 83,150 84,886 86,186 88, % 1.9% The world s largest beer markets, China and the US, will continue to grow over the next five years but at a slower pace than has been seen between 2003 and Once economic conditions return to normal in the US, premiumisation is likely to become the norm again. Brazil ranked fourth in 2008 but is set to see an acceleration in growth of beer over the next five years as the adult population continues to grow. This will see Brazil overtake Russia to become the world s third largest beer market in Beer will fall in Russia in the near term as a result of the economic situation but growth is likely to resume in the long term. However the government has proposed tripling the tax on beer in 2012, which would lead to price increases and could significantly dent sales. Japan, the UK and Poland are all set to decline over r the next five years. In Japan this is due to the declining population; in the UK it will continue to be affected by the smoking ban and duty increases and pub closures. In Poland the decline will come in 2009 due to an excise tax increase in March; 2010 should see the beginning of a recovery. Copyright - The IWSR 2009 Page 19

20 Beer Summary by Region: % 32.1% 31.0% 30.5% 30.1% 3% 29.6% Percent Share (%) % 34.0% 34.9% 35.3% 35.6% 35.9% 36.3% % 31.9% 32.2% 32.3% 32.4% 32.3% 32.3% Africa & Middle East Americas Asia Pacific Europe Rest of World Market yr CAGR 5yr CAGR 03 to 08 World Total 1,485,090 1,741,139 1,756,676 1,794,159 1,830,660 1,866,441 1,900, % 1.8% Europe 527, , , , , , , % 0.1% North West Europe 222, , , , , , , % -0.4% Nordic Countries 16,564 16,131 16,530 16,679 17,023 17,352 17, % 1.9% Southern Europe 67,856 74,312 73,839 74,421 75,853 77,358 78, % 1.2% Central Europe and 88, , , , , , , % -0.1% Balkans Eastern Europe and Baltics 131, , , , , , , % 0.3% Americas 479, , , , , , , % 2.0% North America 262, , , , , , , % 0.5% Caribbean 10,083 11,445 11,344 11,560 11,831 12,006 12, % 1.3% Central America 61,378 72,969 73,467 74,055 74,849 75,530 77, % 1.1% Latin America 145, , , , , , , % 4.3% Asia Pacific 448, , , , , , , % 3.1% Asia 424, , , , , , , % 3.2% Australasia 20,378 20,600 21,050 21,200 21,370 21,570 21, % 1.2% Central Asia 4,029 5,946 5,955 6,005 6,160 6,281 6, % 1.3% Africa & Middle East 29,537 34,158 33,504 33,954 33,545 33,366 33, % -0.5% South Africa 23,510 26,650 26,000 26,400 25,900 25,600 25, % -0.9% Rest of Africa 3,922 4,679 4,603 4,582 4,567 4,582 4, % -0.3% Middle East 2,105 2,829 2,900 2,972 3,079 3,185 3, % 3.0% Rest of World % Nil Asia Pacific will continue to increase its share of the world s beer market (driven by China and India) as consumers become more affluent and growth in Europe and the Americas slows. Copyright - The IWSR 2009 Page 20

21 Beer Leading Growth Markets 2008 to 2013: China 82,82 Brazil 34,615.0 India 8,425.0 US 6,815.0 Argentina 4,557.0 Mexico 3,855.0 Vietnam 3,317.0 Italy 3,11 10,00 20,00 30,00 40,00 50,00 60,00 70,00 80,00 90,00 Growth 08 to 13 China 410, , , , , , % 82,820 Brazil 106, , , , , , % 34,615 India 12,841 14,750 16,088 17,547 19,389 21, % 8,425 US 250, , , , , , % 6,815 Argentina 17,125 18,200 19,155 20,015 20,925 21, % 4,557 Mexico 64,945 65,560 66,145 66,800 67,788 68, % 3,855 Vietnam 13,303 14,120 14,720 15,400 16,080 16, % 3,317 Italy 18,640 18,950 19,650 20,500 21,150 21, % 3,110 The Chinese beer market is reported to have grown 6.3% in the first half of 2009; the rate of growth in China will decline gradually however. Beer is low-priced and suits the climate in Brazil and so is expected to continue to grow. Copyright - The IWSR 2009 Page 21

22 Beer Major Declining Markets 2008 to 2013: Czech Republic -47 Russian Federation -50 Spain South Africa -1,15 France -1,20 Poland -1,74 United Kingdom -2,69 Japan -4, ,00-3,00-2,00-1,00 Growth 08 to 13 Japan 61,358 58,936 58,195 57,740 57,344 57, % -4,358 United Kingdom 51,990 49,400 50,590 49,400 50,050 49, % -2,690 Poland 35,850 33,740 33,905 34,045 36,450 34, % -1,740 France 18,900 17,515 18,250 17,750 17,550 17, % -1,200 South Africa 26,650 26,000 26,400 25,900 25,600 25, % -1,150 Spain 33,387 32,095 31,700 31,900 32,250 32, % -737 Russian Federation 112, , , , , , % -500 Czech Republic 16,810 16,310 16,120 16,185 16,250 16, % -470 Beer in Japan will suffer from the declining population; in addition, imported beer will suffer from the difficult economic conditions in The UK market will continue to see declines in the long term, though the 2010 World Cup and 2012 Olympic Games may halt this slide briefly. The fall in Poland is in 2009 and due to tax increases (as previously mentioned). From 2010 gradual growth will return and 2012 will see a sharp rise as Poland co-hosts the UEFA cup with Ukraine. The long-term decline in France is set to continue though warm summers could slow it down. In South Africa an initiative by the Western Cape government to regulate shebeens and other unlicensed outlets is likely to affect beer more than other categories. Copyright - The IWSR 2009 Page 22