WSTA Market Report. Quarter

Transcription

1 WSTA Market Report Quarter 2 216

2 Off Trade Guest Comment Thomas Oda Research Manager The Wine Society Understanding the nuances of the modern consumer Reading through the last few editions of this quarterly report, it is clear that the concerns being raised by our colleagues are common to all of us as off-trade retailers. These include gaining a better understanding of brand loyalty, the effect of value retailers on customer behaviour and how we can revitalise the stagnating wine category from lessons that craft beer, for instance, can teach us. In short, we are all trying our best to really understand what our customers want. The main differences between us (other than our perceived quality and value, the two main fundamentals to retailing) lie within how we serve our consumers, and how we try to remain one step ahead of others by making consumers lives easier. Next day delivery, wine advisers on the shop floor, abandonment of minimum purchase quantity, or even rearranging the shelf according to flavour characteristics, are just the tip of this iceberg. From the data available to us at The Wine Society and even just by looking at Society members visiting our showroom in Stevenage we can immediately identify different types of consumers. The general mantra of the consumer I want what I want, when and how I want it, and at the right price fragments in complex ways depending on their type. For example, some of our customers will be keen and knowledgeable, examining each of the bottles from their favourite region/s and comparing and contrasting variables such as vintages, growers, production methods and the value they perceive from their interplay. Then there are those who, quite simply, know what they want; those who grab and go taking their cues from the label; and others who seek help and reassurance from us to make the right purchase decision. Serving all of these consumers wine journeys while accommodating their outlooks and purchasing behaviour is, therefore, an intricate but essential task. In the world of wine where consumers idea of brand itself can blur according to their outlook, understanding the individual s wine purchase decision unlocks the key to success in the consumer convenience battleground. odat@thewinesociety.com Registered number: 4166 England Limited by Guarantee page 2

3 Off Trade Off Trade Overview There has been either positive or static total growth for the third quarter in a row, as slight increases in sales continue. Although still wine sales have declined overall in the last year, value sales have increased (.13) since the start of 212 (when the WSTA Market Report began). Whereas in the middle of 214 yearly value sales had declined by 3.24, this quarter that number is.49. Sparkling wine continues to grow in all areas shown in the table below. In the last 4 years, yearly value sales have doubled and volume sales have increased by 8. Champagne sales are also in positive growth in all areas and only a slight decrease in yearly price per litre. Last 12 months (to 23/4/216) Last 12 weeks (to 23/4/216) s hl s hl beer 17,432 3, , still wine 7,44 5, ,652 1, cider/perry 4,91-4 1, spirits 2,67 3, sparkling wine rtds fortified wine champagne Total Alcohol 33,866 15,87 7,82 3,336 Registered number: 4166 England Limited by Guarantee page 3

4 Off Trade Spirits Spirit sales remain in overall positive growth - with the exception of slight decline in quarterly value sales for vodka - and yearly value sales are just shy of 4bn. If current trends continue, 4bn yearly value sales will be achieved in the next quarter for the first time. Last 12 months (to 23/4/216) Last 12 weeks (to 23/4/216) s hl s hl Vodka 654 1, Whiskies 562 1, Gin Liqueurs Rum Brandy Tequila Total Spirits 2,67 3, ,16 Gin More positive growth for gin, with value sales increasing by 31 and volume sales by 11 since the start of 212. Vodka Vodka continues to grow at a steady pace on a yearly basis, with only some slight negative growth in quarterly sales. From its low base, flavoured vodka has fared better overall with better growth since Q1 and double digit quarterly growth. Last 12 months (to 23/4/216) Last 12 weeks (to 23/4/216) s hl s hl Vodka 636 1, Flavoured Vodka Registered number: 4166 England Limited by Guarantee page 4

5 Off Trade Whiskies Blended Scotch continues to decline in yearly and quarterly sales but this negative growth appears to be slowing, with only.12 decline in yearly value sales over the last 12 months compared to 1 in previous years. Imported whiskies continue to grow, particular year-on-year. Yearly volume and value sales have increased by 4 and 46 respectively since Q Malt Scotch continues to rise from its low base, with the best quarterly growth figures in the category. Since Q1 212, Malt Scotch yearly value sales have increased by 25. Last 12 months (to 23/4/216) Last 12 weeks (to 23/4216) s hl s hl Blended Scotch Imported Malt Scotch Liqueurs Cream liqueurs sales continue in positive growth but non-cream liqueurs performed better in quarterly sales. Yearly total liqueur volume and value sales have increased 15 and 14 respectively since Q2 in 214. Last 12 months (to 23/4/216) Last 12 weeks (to 23/4/216) s hl s hl Cream Non-cream Rum Overall volume and value sales have increased by 11 and 2 respectively since Q However, it remains a mixed story for rum, with positive overall growth again for flavoured and spiced rum, flat for dark rum in most sales and overall negative growth for white. Flavoured/spiced rum sales have increased 34 in yearly volume and value in the last 2 years. Last 12 months (to 23/4/216) Last 12 weeks (to 23/4/216) s hl s hl White Flavoured & Spiced Dark Golden Registered number: 4166 England Limited by Guarantee page 5

6 Off Trade Wine (price points) Volume (s HLs) Last 12 months 2,429 2, Last 12 weeks -8 1,85 1, months to 23/4/15 12 months to 23/4/ weeks to 23/4/15 12 weeks to 23/4/ < Total: 6748 () < Total: 1511 () Decline in both volume and value has come mostly from the 5-6 price points with some yearly gains in the higher ones. There is a similar story for the quarterly price points, with declines occuring in the middle pricing points but there are also percentage losses further up the price points, with other mid-range ( 3-4 and 6-7 ranges have increased in both volume and value) points benefitting. Value () 1,537 1,542 Last 12 months -8 1,339 1, months to 23/4/15 12 months to 23/4/ Last 12 weeks weeks to 23/4/15 12 weeks to 23/4/ < Total: 4932 () < Total: 115 () Registered number: 4166 England Limited by Guarantee page 6

7 Off Trade Wine (country of origin) Country of origin s hl Last 12 months (to 23/4/216) Australia Italy USA France South Africa Spain Chile New Zealand Argentina Germany 1,719 1, , With the exception of South Africa and the US, New World wines continue to lead the way in terms of positive growth in sales, Australia is again impressive in both leading the table and continuing to increase overall sales. Yearly and quarterly prices per litre for France and Spain are in positive growth, with the remaining countries either static or in slight decline. Argentinian wine in the off trade has by far the greatest percentage growth in both yearly and quarterly sales. Since Q1 212, yearly Argentinian wine volume sales have doubled (3) and value sales have increased by 116. Country of origin s hl Last 12 weeks (to 23/4/216) Australia Italy France USA Spain South Africa Chile New Zealand Argentina Germany Registered number: 4166 England Limited by Guarantee page 7

8 Off Trade Wine (colour and varietal) Market share by volume of colours remains constant, at just above 4 for red, 47 for white and 11 for Rosé. This has been roughly the distribution since Market reports began. Overall, red wine by varietal is a healthy picture. The top 5 varietals show good growth in all areas shown in the table below and yearly prices per litre for Tempranillo and Rhône are in positive growth. Last 12 months (to 23/4/216) 42 red 11 rosé 47 white 3, ,483 Volume (s Hl) -8 2, ,483 Value () -8 Growth in white wine by varietal is more erratic than in red but Sauvignon Blanc maintains strong growth at the top of the table. Last 12 weeks (to 23/4/216) 44 red 1 rosé Volume (s Hl) Value () 1 46 white Last 12 months (to 23/4/216) Last 12 weeks (to 23/4/216) s hl s hl Merlot Shiraz Tempranillo Last 12 months (to 23/4/216) Last 12 weeks (to 23/4/216) Sauvignon Blanc s hl s hl Pinot Grigio Chardonnay Registered number: 4166 England Limited by Guarantee page 8

9 On Trade Guest Comment Guy Holland Insight and Category Manager Enotria and Coe Millennials and wine: the danger of a lost generation? Historically, the typical journey of a UK wine consumer was fairly clear cut. It started with sweet rosé through the university years before joining the real world, discovering the potential of a little extra expenditure and emerging as a fifty-something, quaffing Claret and white Burgundy. However, today s wine consumer is not following the same pattern. A recent total trade Nielsen report shows that, in the UK, Millennials spend just 6.3 of their budget on BWS, heavily under-indexing versus the population as a whole. Therefore, the need to understand this lack of engagement is key. If we cannot attract the next generation of consumers to get involved and trade up, the future of the wine market will drastically. That said, this is not the case internationally. A recent Wine Market Council report stated that across the pond, 42 of all wine was drunk by Millennials; more than any other generation, with 3 of frequent imbibers coming from this consumer segment. Furthermore, they are drinking higher quality as well as quantity; against a backdrop of an average retail bottle costing $7.81, 17 of Millennials spent over $2 on a bottle in the past month, compared to just 1 for the total population. So, how do we entice this group to explore the world of wine, and what can we learn from America? Firstly, UK Millennial drinkers are a diverse group, which means a one size fits all approach will not work. Secondly, we know that they are interacting with the on trade: 6 dine out at least once a week, with 3 eating out three or more times. However, dining out is no longer a formal occasion - Millennials expect an experience, not just tradition. They demand provenance behind the product; not in terms of terroir and barrelageing, but the story and the people behind the wine. Where the on trade has unlocked Millennial engagement in the US, perhaps it is time we applied the same approach here - they may be drinking less in the UK, but producers and suppliers focusing on quality, people, place and provenance are key to helping Millennials drink better. G.Holland@enotriacoe.com Members are invited to write commentaries through the WSTA Research and Insights Group, a group set up to collaborate on industry data and identify gaps in research. If you are interested in becoming a member, please contact ciaran@wsta.co.uk. Registered number: 4166 England Limited by Guarantee page 9

10 On Trade On Trade Overview Yearly on trade value sales have hit 24bn for the first time. Value sales continue to grow, slightly outpacing the off trade, and volume sales have fallen in to negative growth this quarter. Still wine continues to decline in volume but increase in value sales and the price per litre has increased by 4. Sparkling wine continues its boom, yearly volume sales in particular increasing by more than 5 on last year. Growth in volume sales is outpacing value sales and it is the only category to experience decreasing prices per litre. Champagne has seen decreasing volume but increasing value sales which accounts for the positive in price per litre. Spirits continue steady growth in all areas. Since Q1 212, value sales have increased by 3. Last 12 months (to 19/3/215) Last 12 weeks (to 19/3/215) s hl s hl beer 19,966 12, ,75 2, cider/perry 2,826 1, wine 1,684 3, spirits 545 5, , rtds sparkling wine champagne fortified wine Total Alcohol 25,432 24,74 5,193 5,49 Registered number: 4166 England Limited by Guarantee page 1

11 On Trade Spirits Another quarter of growth for spirits - with most categories in positive growth for both yearly and quarterly sales and in all cases value outpacing volume sales. The overall price per litre for spirits has increased by 3 over the year and 2 in the last quarter. Every sub-category has experienced positive growth in prices per litre this quarter. Last 12 months (to 19/3/216) Last 12 weeks (to 19/3/216) s hl s hl Vodka 178 1, Whiskies 146 1, Liqueurs Rum Gin Brandy Tequila Total Spirits 545 5, ,255 Gin Gin is displaying similar growth and patterns to Q1 with both yearly and quarterly prices per litre increasing by more than 6. Yearly value sales have increased by 78 since the start of 212 and volume sales have hit 5, hectolitres for the first time. Vodka Plain vodka sales are back into positive growth in all areas shown in the table below after a slight decline in yearly volume sales last quarter. Prices per litre also continue to grow by around 5. Flavoured vodka s price per litre has increased the most in the spirit category; 5 and in yearly and quarterly figures respectively. Last 12 months (to 19/3/216) Last 12 weeks (to 19/3/216) s hl s hl Vodka 171 1, Flavoured Vodka Registered number: 4166 England Limited by Guarantee page 11

12 On Trade Whiskies Imported whiskies and Malt Scotch continue to grow, particularly in value sales. Blended Scotch is still in decline but there are signs that value sales in particular are steadying. Prices per litre have increased by 5 both yearly and quarterly. Malt Scotch has sold more the 1, hectolitres for the 6th consecutive quarter. Last 12 months (to 19/3/216) Last 12 weeks (to 19/3/216) s hl s hl Blended Scotch Imported Malt Scotch Liqueurs Non-cream liqueurs are showing consistent growth in both volume and value sales. Both yearly and quarterly prices per litre have risen by 1. Cream liqueurs quarterly volume has gone back in to positive growth since Q1 s decline. Last 12 months (to 19/3/216) Last 12 weeks (to 19/3/216) s hl s hl Non-cream Cream Rum Both golden and dark rum show signs of premiumisation, with value growth outpacing volume and inflationary rises. White rum has shown negative growth in volume sales but positive growth in value sales and prices per litre. Last 12 months (to 19/3/216) Last 12 weeks (to 19/3/216) s hl s hl Golden White Dark Registered number: 4166 England Limited by Guarantee page 12

13 On Trade Wine (country of origin) Country of origin s hl Last 12 months (to 19/3/216) France Italy Australia USA Chile Spain South Africa New Zealand Argentina Germany ,382 1, Overall, sales in wine by country is mixed but value sales are almost exclusively outpaces volume. Yearly and quarterly prices per litre for every country are in positive growth. By percentage growth, New Zealand wine leads the way in all areas. For the second quarter in a row, Italian wine value sales have exceeded 1bn and has increased by 11 in the last 2 years. France and Italy have consolidated their market share in the on trade: in Q1 212, they occupied 24 and 21 respectively of the top 1 market share. This quarter, that share has risen 28 () and 25 (), 53 in total. Country of origin s hl Last 12 weeks (to 19/3/216) France Italy Australia USA Chile Spain South Africa New Zealand Argentina Germany Registered number: 4166 England Limited by Guarantee page 13

14 On Trade Wine (colour and varietal) From its low base, Pinot Noir is again the only red varietal that has grown across all areas, with Shiraz showing some quarterly value sales growth. In the last 2 years, Pinot Noir has increased its yearly volume sales by 9 and value by 14 and is the only red varietal to be in positive growth over that time period. Last 12 months (to 19/3/216) 37 red 1 rosé 53 white Volume (s Hl) -4 1, ,752 Value () White wine is in better health this quarter, with positive growth in many areas, Sauvignon Blanc and Chenin Blanc in particular. Pinot Grigio and Sauvignon Blanc are the only white varietals that have seen yearly growth in both volume and value sales in the last 2 years. Prices per litre have largely increased by varietal, with the exception of Sémillon and a slight decrease in the quarterly for Merlot. Last 12 weeks (to 19/3/216) 39 red 9 rosé 52 white Volume (s Hl) Value () -8 Last 12 months (to 19/3/216) Last 12 weeks (to 19/3//216) s hl s hl Merlot Shiraz Cabernet Sauvignon Zinfandel Pinot Noir Last 12 months (to 19/3//216) Last 12 weeks (to 19/3/216) s hl s hl Chardonnay Pinot Grigio Sauvignon Blanc Chenin Blanc Sémillon Registered number: 4166 England Limited by Guarantee page 14

15 Consumer polling: Sparkling wine Summer is upon us and the WSTA has pollled on the recent boom in sparkling wine, gauging what the public thinks of Prosecco, Cava, Champagne and English Sparkling Wine. Poll taken between 2th1st April 216 Base: All GB adults who drink alcohol (1728) Which, if any, of the following words/phrases come to mind when thinking about... Prosecco Prosecco is seen as the best value sparkling wine 1. Trendy 2. Female 3. Good value 4. Fun 5. Summer Prosecco is by far seen as the trendiest sparkling wine at 26. Champagne and English are second trendiest at 8. 1 in 4 respondents said they think of Prosecco as female. The next on this list is Cava and English at 1. It is also associated with the summer season more than any other sparkling wine. 23 say Cava is good value Perhaps unfairly, Cava is seen as the cheapest but is also second for good value at 23, just behind Prosecco on 24. Curiously, more older respondents see Cava as good value than younger respondents. Cava 1. Cheap 2. Good value 3. Summer 4. Fun 5. Female Registered number: 4166 England Limited by Guarantee page 15

16 Consumer polling: Sparkling wine Which, if any, of the following words/phrases come to mind when thinking about... 1 in 3 see Champagne as the most sophisticated sparkling wine Champagne Perhaps unsurprisingly, 2 out of 3 think that Champagne is the most expensive sparkling wine and 1 in 3 also think it is the most sophisticated. 66 of respondents aged between 18 and 24 view it as sophisticated compared to only 29 of respondents aged over 55 who think likewise. Furthermore, it is interesting to note that not only is it viewed as sophisticated, but it is also seen as exciting and fun. Only 1 of respondents thought of it as old fashioned. 1. Expensive 2. Sophisticated 3. Traditional 4. Exciting 5. Fun English 1. Summer 2. Contemporary 3. Expensive 4. Good value 5. Cheap English sparkling wine has made a fairly confused impression on this sample: the top five most popular answers includes both expensive and cheap. It is interesting to note that Contemporary is on the list with 12, behind on Summer on in 5 18 to 24 year olds think of it as cheap where as only 5 of over 55s do. Of all four categories, English wine has the most don t knows at 27. The next Female 7. Trendy 8. Sophisticated Registered number: 4166 England Limited by Guarantee page 16

17 Consumer polling: Sparkling wine Conclusion Price and value play a major role in people s perceptions of sparkling wine. Prosecco and Cava are associated with good value where Champagne is seen as expensive. But there is confusion regarding English sparkling wine, where it is seen as both expensive and cheap. The perception of Prosecco as trendy is in keeping with its popularity in sales over the last few years. Cava is similar to Prosecco in that people associate it with summer and it is seen as fun and a drink for females. It is interesting to note that English sparkling wine is seen as contemporary, perhaps nodding to its increase in popularity over the last few years. What types of still wine have you drunk in the last month?... Merlot Cabernet Sauvignon Shiraz/Syrah Pinot Noir Malbec Tempranillo Cote du Rhône Chianti Zinfandal Grenache Can't recall Other White Sauvignon Blanc and Pinot Grigio are by far the most popular white grapes, which mirrors the top 2 varietals in the off trade. Chardonnay comes 3rd which again is in keeping with off trade sales. The 5 most popular varietals in the on trade mirror the 5 top selling varietals in the on trade, though in a different order. Red 49 Merlot is by some distance the most popular red varietal, which mirrors sales in the on and off trade. Cabernet Sauvignon and Shiraz are the next most popular, again in keeping with sales. From the off trade top 5 sales list, Tempranillo is the 6th most popular red varietal and Rhone comes 7th. From the on trade, Pinot Noir is the 4th most popular varietal and Zinfandal is 9th. This is curious given sales of the latter are slightly more in terms of volume than the former. Sauvignon blanc Pinot Grigio Chardonnay Chenin Blanc Sémillon Soave Riesling Bourgogne Can't recall Other Registered number: 4166 England Limited by Guarantee page 17

18 Consumer polling: Off Trade In the last 4 weeks... What have you drunk at home? Red wine 3 White wine 25 Lager 25 Cider 18 Ale 15 Whiskies 13 Sparkling wine inc. Champagne 13 Rosé wine 13 Gin 11 Vodka 11 Rum 7 Fortified wine 6 Spiced Rum 3 Don't know/ can't recall 3 I haven't drunk alcohol here in the last month out of 4 people drank at home last month Wine is the most popular drink for the home, with red and white occupying the top two spots. Interestingly, polling shows that at home, men drank more red than white at home whereas women drank more white than red. Whiskies remain the most popular spirit at home, closely followed by gin and vodka. What have you drunk at a friend s house? 3 of 5 top drinks consumed here are wine White wine 11 Red wine 11 Lager 11 Sparkling wine inc. Champagne 9 Cider 8 Vodka 8 Rosé wine 6 Ale 5 Whiskies 5 Gin 4 Don't know/ can't recall 4 Fortified wine 3 Spiced Rum 3 Rum 2 I haven't drunk alcohol here in the last month Wine is the most popular drink when visiting a friend, with white and red again taking the top two spots and sparkling in 4th. Vodka is the most popular spirit at a friend s house, followed by whiskies and then gin. Perhaps unsurprisingly, older respondents were less likely to drink spirits at a friend s house. Registered number: 4166 England Limited by Guarantee page 18

19 Consumer polling: On Trade What have you drunk at a restaurant? White wine 17 Red wine 15 Lager 13 Sparkling wine inc. Champagne 9 Ale 7 Rosé wine 6 Cider 6 Gin 3 Don't know/ can't recall 3 Vodka 2 Whiskies 2 Rum 2 Fortified wine 2 Spiced Rum 1 I haven't drunk alcohol here in the last month of drinks consumed here were wine or spirits Sparkling wine has jumped from fifth to the fourth most popular drink in a restaurant from the last quarter and it is predominantly drunk by 184 years and women. Gin remains the most popular spirit at a restaurant. What have you drunk at a pub or bar? 53 of drinks consumed here were wine or spirits Lager Ale Cider White wine Vodka Gin Red wine Rosé wine Whiskies Sparkling wine inc. Champagne Rum Spiced Rum Fortified wine Don't know/ can't recall I haven't drunk alcohol here in the last month White is more popular in pubs than red, rosé or sparkling, and has increased slightly in popularity. Interestingly, more male respondents than female drank red wine in a pub. Vodka and gin remain the most popular spirits, particularly amongst women but men favour whiskies. Registered number: 4166 England Limited by Guarantee page 19

20 Report Releases and Discounts Report and services discounts for WSTA members Company Report Price* Discount How to claim CGA Strategy IWSR Nielsen Wilson Drinks Report CGA Mixed Drinks Report International Mixed Drinks Emerging Trends: Eating and Drinking out GB v USA - note discounts available for multiple deliveries The IWSR Yearbook - single user The IWSR Global Trends Report - single user -available to pre-order, reports are due to be released in July All reports available from the Nielsen store: Wilson Drinks Report Online BWS Retail Report 3, 2, 2, 3,295 1, lian.nuttall@ cgastrategy.co.uk graziella@theiwsr. com various 15 carlina.johnson@ nielsen.com tim.wilson@wilsondrinks-report.com Wine Intelligence Global Consumer Trends 1, 15 eleanor@ UK Independent Wine Retail 1, 15 wineintelligence. com UK Landscapes 2,5 15 *All costs are list price. Upcoming releases Company Report Due to be released CGA Strategy Influencers Report July 216 Wilson Drinks Report Wilson Drinks Report Online BWS Retail Report Wine Intelligence Sparkling Wine in the UK market TBC WSTA Market Report Quarter Market Overview 216 Spirits Report 216 August 216 June 216 September 216 September 216 October 216 Sources & contact Off trade: On trade: Consumer polling: Other data and analysis: HMRC data WSTA analysis WSTA contact: Ciaran Myles / ciaran@wsta.co.uk Copyright Information contained in WSTA Market Report is confidential and for use only by members of the WSTA. All copyright in these publications is reserved. No part of this report may be reproduced or transmitted in any form or by any means without prior permissin from the copyright owners. Liability Whilst every effort has been made to ensure that information contained in this report is accurate and that opinions expressed are sound. WSTA cannot be made liable for any errors, omissions and incorrect information or for any loss or consequential losses arising as a result of decisions taken based on contents of this report.