January 19, 2011 Sonoma, CA. Nielsen Beverage Alcohol Team

Transcription

1 US U.S. Wine Consumer / Category Trends January 19, 2011 Sonoma, CA Mik C li hi Cli B i P Mike Colicchio Client Business Partner Nielsen Beverage Alcohol Team

2 What we ll cover today U.S. Economic Backdrop Wine Consumer / Category Trends Total Table vs. Total California Wine, Sonoma Domestic vs. Imported Varietal Price Segments Channels Emerging Trends 2

3 Worlds #1 Market Research Firm Nielsen Measures audience in 30 countries 80% of Global internet users 85% of Global Advertisement Spending $$$Billions of retail sales transactions each month

4 Nielsen primary sources of data Scan Data Channels, markets, accounts, stores Grocery, Drug, Liquor, Club, Convenience, and Mass Merchandiser Category, segment, brand and item levell Consumer Data (Homescan/Spectra) Who is the consumer/shopper? Where do they live/shop? What are their lifestyles? Media habits? How many buy? How often? How much? What do they buy? What else is in their shopping baskets? Account coding for 560,000+ on and off-premise locations Account Coding (TDLinx) selling beer, wine, and/or spirits across the country Industry standard channel classification; up to 5 layers of hierarchies

5 Economic Backdrop 5

6 After six months of steady declines, consumer confidence bounced back for the holiday season Source: The Conference Board - Nine census regions, 5,000 US households; 1985 = 100; conducted by Nielsen U.S. Retail Trends

7 Overwhelming majority of consumers think the country IS in a recession. Only 10% think we ll be out in a year. Nielsen Survey Q Do you think your Do you think your country country is in a recession will be out of an economic at the moment? recession in the next 12 months? Yes: 84% No: 16% Yes: 10% No: 60% Don t know: 30% 7 Source: Nielsen Global Consumer Confidence Survey; Q U.S. Results

8 Saving & paying off debt priority, but less important with increased discretionary spend Once you have covered your essential living expenses, what do you do with spend your spare cash? I spend it on 1 in 3 reporting no spare cash 8 Source: Nielsen Global Online Consumer Confidence & Opinion Survey 3Q 11 U.S. Retail Trends

9 Unemployment improving drops to a new 2 ½ year low yr National Unemployment Rate Dec % 99% Nov % Dec % Mar % 9 Source: Bureau of Labor Statistics. Seasonally adjusted.

10 Economic impact uneven; consumer more polarized Unemployment impact is demographically uneven; wine impacted the least, Beer the most December 2011 Unemployment Rates Seasonally Adjusted Race/Ethnicity Asian 6.8% White 7.5% Hispanic 11.0% Afr-American 15.8% Age Group % % % % % Education Less than high school diploma 13.8% High school grad; no college 8.7% Some college, or assoc degree 7.7% Bachelor degree and higher 4.1% Gender (adults 20 +) Women 79% 7.9% Men 8.0% 10 Source: Seasonally Adjusted U.S. Total Non Farm Employment, Bureau of Labor Statistics U.S. Department of Labor

11 Wine Consumer 11

12 Wine consumers are affluent with highest Index at $100K and above 300 Household Income Index % of dollars vs % of population TTL Table Wine California Table Wine <$20 $20 29K $30 39K $40 49K $50 69K $70 99K $ Source: Nielsen Homescan Consumer Facts Wine 2010; All Outlets

13 California Wine has broad appeal, though skews highest in age group 200 Household Age Index % of dollars vs % of population TTL Table Wine California Table Wine Under Source: Nielsen Homescan Consumer Facts Wine 2010; Age of Female Heads of Household; All Outlets

14 CA wine is in approx 26% of all U.S. Households and Loyalty is high at 80% TOTAL TABLE WINE TTL CALIFORNIA TABLE WINE HH Penetration Loyalty 14 Source: Nielsen Homescan Channel Facts All Outlets

15 Chardonnay is in over 8% of all U.S. HH followed by White Zin and Pinot Grigio/Gris, Moscato high Loyalty HH Penetration Loyalty CHARDONNAY WHT ZINFANDEL PINOT GRIGIO/ O/GRIS MOSCATO/MUSCAT RIESLING SAUVIGNON BLANC GEWURZTRAMINER 15 Source: Nielsen Homescan Channel Facts All Outlets

16 Cabernet Sauvignon & Merlot in over 8% of U.S. HH and similar Loyalty, Pinot Noir in 4.5% of HH HH Penetration Loyalty CAB SAUVIGNON MERLOT PINOT NOIR SYRAH/SHIRAZ ZINFANDEL MALBEC PETITE SIRAH 16 Source: Nielsen Homescan Channel Facts All Outlets

17 Consumers are most loyal to $0-$2.99 price segment yet only 7% of HH, $3-$5.99 segment in 21.6% HH $0 $2.99 $2.99 $3 $5.99 $5.99 $6 $8.99 $8.99 $9 $11.99 $11.99 $12 $14.99 $14.99 $15 $19.99 $19.99 >$20 HH Penetration Loyalty 17 Source: Nielsen Homescan Channel Facts All Outlets

18 Wine On / Off-Premise 18

19 Nielsen coverage is approximately 48% of Total and 60% of Off-Premise Total Wine Volume Estimate 2010 On Premise 19% Off Premise excl. Nielsen/DtC 32% DtC Shipments 1% Nielsen 48% 19 Sources: Beverage Information Group for Total Industry Size; Nielsen Food Drug Liquor Convenience Plus; Wines & Vines and Ship Compliant for Dtc Estimates not including carryout; thru Dec 2010

20 On-premise recovery will have a long way to go, dollar share only now on par with 10 years ago On Premise Share of Total Wine Dollar Sales 51% 45% 45% * 20 Source: Beverage Information Group *2011 Estimates

21 491,000 U.S. Wine selling outlets; close to 63,000 more locations than in Source: Nielsen TDLinx Total U.S. December of each year , Nov for 2011

22 Across Total US, ~10,000 mores locations selling wine in on-premise and ~4,700 wine in off-premise. Total U.S. outlets Selling Wine 2011 vs 2010 Change Walgreen s 22 Source: Nielsen TDLinx Nov 2011 vs Dec 2010

23 In California State, 883 mores locations selling wine in on-premise and 393 wine in off-premise premise. California State - Outlets Selling Wine 2011 vs 2010 Change 23 Source: Nielsen TDLinx Nov 2011 vs Dec 2010

24 Wine becoming mainstream, reaches par with beer in recent Gallup polls Do you most often drink liquor, wine, or beer? (among those who drink alcohol); % of responses 24 Source: Gallup Poll (July 7-10, 2011)

25 Wine Category Report Card 25

26 Inflation driving stronger $ growth, while more non-edibles on fastest Units growing categories Top 10 Fastest Growing Categories (bolded categories on both lists) 26 Source: Nielsen Scantrack, (U.S. FDM w/ Walmart) 52 weeks end 12/24/ major category groupings

27 Most CPG categories NOT growing (118 categories) Total Unit Sales ( 1.6%) 19% Growing Declining Total Dollar Sales (+1.5%) 48% 52% 81% 27 Source: Scantrack, a service of The Nielsen Company; (FDM w/ Walmart) 52 weeks ending

28 Prices rising in all departments except alcoholic beverages and health & beauty Percent Change in Unit Prices 28 Source: Nielsen Scantrack, (U.S. FDM w/ Walmart) 13 weeks increments (vs. prior year); UPC-coded

29 Category growth rates at 2008 levels for Wine Spirits on upward trend while Beer on downward trend 3.2% 3.0% Annual Value % Change vs Year Ago L 52 wks end 12/10/11 6.1% 5.0% 4.2% 4.0% 4.4% 4.4% 3.7% 2.9% 2.3% 2.6% 2.0% 1.4% 0.5% 05% 0.5% 0.1% Beer Wine Spirits 0.1% Annual Volume % Change vs Year Ago 2.9% 1.5% 1.2% 3.5% 2.6% 2.2% 2.5% 1.2% 0.6% Beer Wine Spirits 1.8% 2.6% 3.7% 29 Source: Scantrack, a service of The Nielsen Company; (Off-Premise: Food/Drug/Conv/Liquor Plus//Selected Other Channels); 52 w/e

30 Domestic Table Wine continues to dominate and drive category growth. Wine Segments 30

31 California Table Wine shows strong growth and owns 66% of Table Wine sales. Lat 52 Value % Chg Volume % Chg Table Wine State $ Share Lat 52 Lat 13 Lat % TOTAL TABLE WINE % TTL CALIFORNIA TABLE WINE % TTL WASHINGTON TABLE WINE % TTL OREGON TABLE WINE Source Nielsen Latest 52 weeks end DEC F/D/Conv/Liq Plus 31

32 Sonoma 1 Wine sales about on par with California but lagging Napa 1 & CentralCoast/SB 1 growth rates Lat 52 Value % Chg Volume % Chg Table Wine Major AVA $ Share Lat 52 Lat 13 Lat % TTL DM TABLE WINE % TTL CALIFORNIA TABLE WINE % SONOMA TABLE WINE % NAPA TABLE WINE % CENTRAL COAST/SANTA BRB % ALL OTHER DM TABLE WINE Source Nielsen Latest 52 weeks end DEC F/D/Conv/Liq Plus 32 1 estimates based on current coding

33 Argentina and New Zealand visibly set themselves apart with positive trends, and in double digits. Lat 52 Value % Chg Vol % Chg Top 10 Imports $ Shr Lat 52 Lat 13 Lat % TTL Table Wine % Italy (1.1) 7.7% Australia (6.7) (5.8) (2.8) 2.4% Chile (3.8) (8.3) (10.7) 2.3% Argentina % France (3.5) (2.3) (3.7) 1.7% New Zealand % German 0.1 (8.9) (9.4) 1.1% Spain (2.7) (7.2) (7.8) 0.3% South Africa (14.2) (11.8) (13.7) 0.2% Portugal (13.9) (10.9) (12.4) 33 Source: Nielsen U.S. Food Drug Liquor Convenience Plus thru

34 Argentina has jumped ahead of France and Chile, while Australia shares significantly reduced. PRIOR 13wk Dollar Share CURRENT 13wk Dollar Share 34 Source: Nielsen U.S. Food Drug Liquor Convenience Plus thru

35 Growth for Argentina and New Zealand is driven by a single dominant varietal 35 Source: Nielsen U.S. Food Drug Liquor Convenience Plus thru

36 Malbec and Moscato leading, P Noir, P Grigio, S Blanc also trending well. Merlot & Wht Zin struggling. g Lat 52 Value % Chg Volume % Chg Table Wine Varietal $ Share Lat 52 Lat 13 Lat % TOTAL TABLEWINE TTL CHARDONNAY TTL CAB SAUVIGNON TTL MERLOT TTL PINOT GRIGIO/GRIS TTL PINOT NOIR TTL SAUVIGNON BLANC TTL WHT ZINFANDEL TTL MOSCATO/MUSCAT TTL RIESLING TTL MALBEC TTL ALL OTHER VARIETALS Source Nielsen Latest 52 weeks end DEC F/D/Conv/Liq Plus 36 Source: Nielsen U.S. Food Drug Liquor Convenience Plus thru

37 Red Blends ahead of White Zin, Moscato ahead of Syrah & Riesling & Zin, Merlot lost most share. Chardonnay Cab Sauv Merlot Pinot Grigio Pinot Noir Wht Zinfandel Sauv Blanc Red Blends Syrah/Shiraz Riesling Zinfandel Moscato/Muscat Malbec PRIOR 13wk Dollar Share CURRENT 13 wk Dollar Share Chardonnay Cab Sauv Merlot Pinot Grigio Pinot Noir Sauv Blanc Red Blends Wht Zinfandel Moscato/Muscat Riesling Zinfandel Syrah/Shiraz Malbec Source: Nielsen U.S. Food Drug Liquor Convenience Plus thru

38 Moscato continues steep growth curve Millions $400 $350 $300 $250 $200 $150 $100 $50 $0 Rap Lyrics +65% +79% Moscato 38 Source: Nielsen U.S. Food ending

39 Sideways movie drove huge increase in Pinot Noir sales and double digit growth ever since.. Millions $400 $350 $300 $250 $200 $150 $100 $50 $0 SIDEWAYS +76% Rap Lyrics +11% +65% +79% Pinot Noir Moscato 39 Source: Nielsen U.S. Food ending

40 Strongest growth at $9 and above, price decline greatest for the $15 + segment Lat 52 Table Wine Price Tier Value % Chg Volume % Chg Avg Price Chg $ Share Lt52 Lat Lt13 Lat Lt13 Lat Lt13 Lat 100% TOTAL TABLE WINE ($0.02) $ $ $3 $ ($0.10) 16.6 $6 $ ($0.08) 20.9 $9 $11.99 $ ($0.09) 10.2 $12 $ ($0.03) 6.1 $15 $ ($0.30) $ ($0.20) Source Nielsen Latest 52 weeks end DEC F/D/Conv/Liq Plus 40

41 Discounting since end of Q1 has correlated with strong uptick in Sales for $20+ segment $0.40 $0.30 $0.20 $0.10 $0.00 ($0.10) ($0.20) ($0.30) ($0.40) ($0.50) ($0.60) 13 w/e 01/09/10 13 w/e 02/06/10 13 w/e 03/06/10 13 w/e 04/03/10 13 w/e 05/01/10 13 w/e 05/29/10 13 w/e 06/26/10 13 w/e 07/24/10 13 w/e 08/21/10 13 w/e 09/18/10 13 w/e 10/16/10 13 w/e 11/13/10 13 w/e 12/11/10 13 w/e 01/08/11 13 w/e 02/05/11 13 w/e 03/05/11 13 w/e 04/02/11 13 w/e 04/30/11 13 w/e 05/28/11 13 w/e 06/25/11 13 w/e 07/23/11 13 w/e 08/20/11 13 w/e 09/17/11 13 w/e 10/15/11 13 w/e 11/12/11 13 w/e 12/10/11 $ Vol % Chg vs YA Avg Eq 750ml Price Chg vs YA 41

42 Trend is strong & growing for $15 + Dom Table Wine with < $15 growing g but weakening 14.0% 12.0% 12.1% 10.0% 8.6% 8.0% 6.0% 4.0% 2.0% 5.4% 4.7% 0.0% 52 wks YAG Latest 52 wks Dom Tbl Wine < $15.00 Dom Tbl Wine $ Source: Nielsen U.S. Food Drug Liquor Convenience Plus thru

43 Growth across all segments within $ % 25.0% 20.0% 15.0% 10.0% 5.0% 0.0% 5.0% 50% Share 6.5% 3.3% 0.9% 2.7% 25.9% 9.7% 5.8% 5.6% 16.0% 15.6% 6.6% 1.4% $15.00 $19.99 $20.00 $24.99 $25.00 $29.99 $ wks YAG Latest 52 wks 43 Source: Nielsen U.S. Food Drug Liquor Convenience Plus thru Shared against Domestic Table Wine

44 Nearly 75% of Sonoma Table Wine sales are under $20 whereas almost 40% of Napa come in over $25 44 Source: Nielsen U.S. Food Drug Liquor Convenience Plus thru

45 Imported Table Wine $15 and above not performing well over latest 52 week period (0.6) (1.5) (13.9) $15.00 $19.99 $20.00 $24.99 $25.00 $29.99 $ wks YAG Latest 52 wks 45 Source: Nielsen U.S. Food Drug Liquor Convenience Plus thru

46 California Wine By Channel and State 46

47 The Food Channel is dominant with California showing strong ggrowth across each, Liquor Channel soft. 47

48 In the Grocery Channel, California Wine share has held steady over the past 7 years 5,000 California Wine Dollars ($Millions) Sales in US Food 3,000 2, , , , , , , , Lat 52 wks Shr of TTL Table 67.6% 66.7% 66.2% 66.7% 67.2% 67.7% 67.7% 48 Source: Nielsen U.S. Food 52wk 12/16/06 thru 52wk 12/11/10; YTD thru

49 5.1% 4.8% 4.5% 4.3% 4.0% 3.7% 2.5% 2.3% 1.7% 1.5% 1.3% 1.0% 0% Within Grocery, the states of California & Florida comprise over one-third of California Wine Sales. 25.5% California Table Wine Dollar Share of US Food by State 10.1% 7.6% 51% 48%45% less than 3% share CA FL TX NC OH VA IL WA MI OR SC MO LA IN IA NM 49 Source: Nielsen 52 wk thru

50 California Table Wine sales growing strong across most key states with only FL and IL < 5% growth Food Channel by State Value % Chg Volume % Chg Lat 52 Lat 13 Lat 13 TTL CALIFORNIA TABLE WINE TOTAL U.S. GROCERY CALIFORNIA FLORIDA TEXAS NORTH CAROLINA OHIO VIRGINIA ILLINOIS Source Nielsen Latest 52 weeks end DEC F/D/Conv/Liq Plus 50 Source: Nielsen U.S. Food Drug Liquor Convenience Plus thru

51 Emerging Varietals and Other Trends 51

52 Sweet...is HOT!!! and not just limited to Moscato Sweet Red labels, wine w/chocolate, wine with eggnog $ Shr Table Value % Volume % Segment Lat 13 Chg Lat 13 Chg Lat SWEET TABLE WINE Source: Nielsen U.S. Food Drug Liquor Convenience Plus thru

53 New World blends, especially REDS, are hot Lat 13 $ Shr Tbl Segment Value % Chg Vol % Chg Lat 13 Lat 13 40% 4.0% Red Blended d Table Wine Source: Nielsen U.S. Food Drug Liquor Convenience Plus thru

54 Unoaked chardonnay also on the Rise. $ Shr Table Tbl Value % Volume % Segment Lat 13 Chg Lat 13 Chg Lat UNOAKED CHARDONNAY Source: Nielsen U.S. Food Drug Liquor Convenience Plus thru

55 Other Emerging Table Wine Segments Lat 13 $ Shr Tbl Segment Value % Chg Vol % Chg Lat 13 Lat 13 97% 9.7% Screw Cap % Private Label % 2.1% Premium 3L Box > $ % Tetra Pak Source: Nielsen U.S. Food Drug Liquor Convenience Plus thru

56 Closing thoughts 56

57 Closing Thoughts. Economy likely to remain difficult / uneasy.consumers will continue to seek Value Pricing will continue to play key role Wine is a growing category and skews to Demographic less impacted dby Economic Factors Wine is important to Retailers It s a BIG and growing Category Consumer access to Wine continues to grow More Outlets selling Wine +63K in 6 yrs 1,276 more locations in California alone over the last year 57

58 Closing Thoughts. Largest segment for Sonoma is $9 $ How can you get Consumers to Trade Up Cabernet, Chardonnay & Merlot have broadest reach acrossu U.S. HH..good news forsonoma Red Blends, Sweet, Malbec & Unoaked Chardonnay are all growing trends What & Where can you capitalize on this. 58

59 THANK YOU and CHEERS