Satisfying the wine consumer - the Swedish way!

Satisfying the wine consumer - the Swedish way!

AGENDA Why we exist and who we are How we work Wine sales The South African success The future

Uppdraget Alkoholens avigsidor Svensk alkoholpolitik Alkoholpolitik i Europa Systembolagets forskningsfond 2014-05-20 Systembolaget 3

Our History 1850 First local monopoly on spirit 1919 Ration books introduced Monopoly including wine 1955 Ration book abolished Systembolaget as today established 1977 Beer > 3,5% included in monopoly 1991 First self service store opened 1995 Sweden joining EU Import monopoly abolished 2014-05-20 Systembolaget 4

Our mandate: To help limiting the harmful effects of alcohol 2014-05-20 Systembolaget 5

Our mandate means: Limited access via Number of stores Opening hours Sales regulations No maximisation of profits or additional sales Brand neutrality, transparency and equal treatment. Balancing responsibility with service. 2014-05-20 Systembolaget 6

Our vision: A society where everyone can enjoy alcoholic drinks with due regard to their health and without harming themselves or others. 2014-05-20 Systembolaget 7

Our business concept: To sell alcoholic beverages responsibly while offering a firstclass standard of service and sharing our knowledge of alcohol and health 2014-05-20 Systembolaget 8

Systembolaget in brief 413 stores 500 agents 114 million customers/ year 4 900 employees Turnover SEK 23.3 billion 410 suppliers 3 100 articles 8 000 articles in ordering range 2014-05-20 Systembolaget 10

Store formats Small stores Medium sized stores Large stores Superstores Wine cellar stores Food Hall stores 2014-05-20 Systembolaget 11

Key figures opinion index OPI 70 60 50 40 30 20 10 0 2002 2003 2004 2005 2006 2007 2008 2009 2014-05-20 Systembolaget 12

AGENDA Why we exist and who we are How we work Wine sales The South African success The future

We consider Convenience 8 trends The ME brand

Product range strategy Our focus: Consideration The environment Human rights Health Knowledge and expertisediversity with breadth & depth Inspiration Value for money Brand neutrality Quality control Efficiency

Product range structure 2014-05-20 Systembolaget 20

Launch plan 2014-05-20 Systembolaget 21

Purchasing process Launch plan Request for tenders Tasting and purchasing Tender examination Tasting for product descriptions Tasting for wine writers Sensory & laboratory Quality control First order from stores Launch Lead time app 25 weeks

Blind tastings 13 000 samples tasted out of 18 000 tenders Best price/ quality ratio in relation to specifications and taste profile as described in tender request. Brand neutral

Quality control To ensure that the same style and quality winning the blind tasting also ends up on shelf.

AGENDA Why we exist and who we are How we work Wine sales The South African success The future

The market today 449 million litres 23,5 billion SEK

Wine sales/ category 2009

Volume share different packaging 2009

Volume old vs new world 2000-2009

Volume share wine/ country 2000-2009

AGENDA Why we exist and who we are How we work Wine sales The South African success The future

SA wine sales vs total (excl fortified wine)

Sanctions liftedfirst wines in Sweden December 1993 KWV Chardonnay 92 Boschendal Grd Cuvée Sauvignon Blanc 92 Nederburg Pinotage 90 Meerlust Rubicon 87

Key success factors SA: 1. Conditions Climate giving full-bodied wines- in favour by many Swedish consumers Several big, brand building export companies Flexible wine legislation English speaking Winemakers being customer driven WOSA understanding the potential

Key success factors SA: 2. Offer Over delivering on quality in both entryand premium segments Diversified styles Early on bag-in-box

Key success factors SA: 3. Swedish market Many importers early engaged in the SA wines High amount of press coverage- SA 20 mill. vs other NW countries 2 mill. hits on Google. Systembolaget to follow customer preference- many new launches. Transparent sales statistics Swedes travelling to SA- building friendship

AGENDA Why we exist and who we are How we work Wine sales The South African success The future

The future Excellent service Customer segmentation Corporate Social Responsibility

www.systembolaget.se 2014-05-20 Systembolaget 39

Customer segmentation

Cautious traditionalists (17%) Dutiful and traditional Only drink on special occasions Women and men Over represented in the 60+ age group Handicrafts Books Crosswords 19% 12% 31% 38% Wine Beer Spirits Cider Music

Blokes who yearn to learn (8%) High interest in alcoholic drinks Men aged 30-60, Beer is a major hobby Consumption during boys nights out, mostly beer and whisky Buy new products on each occasion Motor sport TV Hunting & Fishing 20% 5% 49% 26% Wine Beer Spirits Cider Partying Gambling (horce-racing, lottery, poker)

Sophisticated connoisseurs (13%) Considerable interest Sociable, like organised parties Men and women aged 50+ Consume during meals with friends, mainly wine Buy new products on each occasion Travel Books Cooking 18% 21% 3% 58% Wine Beer Spirits Cider Sailing/Golf Culture

Unpretentious bon vivants (13%) Not that knowledgeable about alcoholic drinks but keen to learn more Alcohol a large part of everyday life Men and women 40+ Reasons for consumption: feels slightly luxurious and might have health benefits Sailing/Golf Cooking Travel 19% 29% 4% 48% Wine Beer Spirits Cider

Social experience seekers (10%) Young, inquisitive and enjoy challenges Alcohol has a social context Women and men aged 18-30 Reasons for consumption: to feel more relaxed/exhilarated, to get drunk and get away from everyday life for a bit. Music Fashion Partying 17% 13% 36% 34% Wine Beer Spirits Cider TV/Computer games Eating out

Healthy security seekers (13%) Not particularly knowledgeable about alcohol but keen to try new things Appearance is important Women aged 20-39 Buy new products each time Fashion Working out Partying 17% 15% 30% 38% Wine Beer Spirits Cider Eating out Home styling

Folksy bargain hunters (13%) Traditional and do not stand out Price is important Think that there s too much snobbery associated with wine Men and women 50+ Consume in their leisure time, mainly wine and beer. However, they drink more spirits than the average. 24% 8% 33% 35% Wine Beer Spirits Cider Watching sports Music Books Clubs/ Associations Travel

Multifaceted connoisseurs (1.4%) Alcoholic drinks are their main interest They are expert allrounders Men 50+ Consume mostly wine, usually during weekday dinners Buy new products each time Cooking Travel Clubs/ Associations 20% 17% 1% 62% Wine Beer Spirits Cider Sailing/Golf Culture

Those who don t drink alcohol (11%)

Systembolaget customer satisfaction index- in comparison with other retail

Social responsibility 2014-05-20 Systembolaget 51

A Nordic monopoly co-opertaion on CSR 2014-05-20 Systembolaget 52

Long-term commitment for a sustainable supply chain 2014-05-20 Systembolaget 53

T hankyou! Vision & Affärsidé Systembolaget i korthet Etik & Värderingar Försäljningsregler Historia Nyckeltal Dotterbolagen 2014-05-20 Systembolaget 55