Forecast Report - Sample: Greece Date: November 2010 the IWSR & the IWSR Magazine 254-258 Goswell Road, London EC1V 7EB t: +44 (0) 20 7689 6841 f: +44 (0) 20 7689 6827 e: info@iwsr.co.uk www.iwsr.co.uk
This is an extract from The IWSR s annual forecast of the global alcohol market for to. The forecast report covers the 54 most important countries in written detail. This extract covers parts of the Greek market. If you have any questions about the report or would like to find out more about The IWSR, please contact Agata Andrzejczak on t: +44 (0) 20 7689 6841 or e: agata@iwsr.co.uk NOTE: This Forecast Report was published in November 2010. Revised forecasts for -2016 will be published in November.
Greece Date of Publication : November 2010 INDEX OF CONTENTS Demographic & General Background Data 4 Still Light Wine Sparkling Wine Fortified Wines - Summary Sherry and Sherry-Style Wines Port and Port-Style Wines Fortified Wines - Others Light Aperitifs Other Wines Whisky Gin/Genever Vodka Tequila Other White Spirits Rum.. 5 Cane. 7 Brandy Liqueurs Bitters and Spirit Aperitifs Aniseed 8 Fruit and Other Eaux de Vie RTDs Beer Cider
Demographic data 2010 Adult Population (Mn) 8.9 8.9 8.9 8.9 8.9 8.5 8.5 GDP -3.5-2.0-1.1 +0.2 +1.0 +0.5 +1.4 Sources: GDP from IMF World Economic Outlook Database; Population from US Census. Comments on demographic and economic data: The drinking population is slowly increasing by between 10-15,000 people per year. This will help the market, but only fractionally. The economic data could well prove optimistic, as much will depend on what happens with tourism. The IMF is forecasting a tough two years ahead, before a very slow recovery takes hold. General background to the alcohol market: All forecasts for Greece have been revised extensively since both the last forecast report and since the domestic report was completed in March 2010 in the light of the rapidly deteriorating economic situation and the very difficult trading conditions. The Greek market is being hit by a triple whammy: the well-publicised economic troubles, much higher taxes and a major credit issue in the wholesale channels. The economic situation with increased taxation, a crackdown on the huge black economy and widespread tax evasion, rising unemployment and inflation, and the freeze in public sector pay, has severely dented consumer confidence; there has been a severe cutback in any non-essential expenditure. This means that people are going out less, spending less and consuming less, which is severely affecting the all-important on-premise sector an unusually crucial part of the Greek drinks market. The industry has also been hit by significant and frequent increases in direct taxation, with excise rates rising by +124% between January and May 2010. With VAT also moving from 19% to 23%, the retail price of all spirits has risen significantly. For an average bottle, this means around an extra 5 per bottle, which in the current environment is a very large and damaging increase. The situation is being further damaged by the rising numbers of bad debt especially in the on-trade with many unable to pay the wholesalers, which affects the whole supply chain. Given the importance of the wholesale channel and credit in general, the bad debt situation acts as a major brake on the availability of drinks. The restaurant trade has been severely affected by the downturn with Greeks going out much less often, as many elder clientele have reacted quickly to the downturn by cutting back on visits. Specific problems in forecasting: The IWSR 2010 Page 391
Rum Rum Market by Category 000's 9 Litre Cases 21 18 15 12 9 6 32 28 24 20 16 12 8 Total Rum 3 4 2002 2003 2004 2006 2007 2008 Dark / Gold Rum Flavoured Rum White Rum Total Rum Rum Market by Quality 10 8 6.8% 16.5% 16.3% 16.7% 17.2% 19.0% 21.2% 23.3% %Percent Share 6 4 94.9% 87.4% 79.5% 79.5% 78.9% 78.5% 77.2% 75.2% 73.3% 2 3.0% 5.8% 3.9% 4.2% 4.4% 4.3% 3.8% 3.6% 3.4% Value Standard Premium The IWSR 2010 Page 412
Rum - Cont/d... Forecast Trends of Consumption: 000 9 Litre Cases Category 5yr CAGR 5yr CAGR 05 to 10 10 to 15 Rum 298.0 277.5 265.0 272.8 29 306.0 322.0 3.6% 3.0% White Rum 225.3 21 20 205.0 214.0 219.0 224.0 2.2% 1.3% Standard 215.3 20 19 195.0 205.0 21 215.0 2.7% 1.5% Value 1 1 1 1 9.0 9.0 9.0-4.9% -2.1% Dark / Gold Rum 72.0 67.0 64.0 66.8 75.0 86.0 97.0 10.5% 7.7% Premium 49.3 45.3 44.3 47.0 55.0 65.0 75.0 23.5% 10.6% Standard 21.0 2 18.0 18.0 18.0 19.0 2-3.9% % Value 1.8 1.8 1.8 1.8 2.0 2.0 2.0 21.9% 2.7% Flavoured Rum 0.8 0.5 1.0 1.0 1.0 1.0 1.0-34.0% 14.9% Standard 0.8 0.5 1.0 1.0 1.0 1.0 1.0-34.0% 14.9% Source: IWSR Calculations Rum - Share of Spirits Market 7,00 6,00 5,00 3.3% 3.5% 4.7% 4.9% 5.0% 5.1% 5.4% 5.6% 5.8% Relative Size 4,00 3,00 2,00 1,00 Relative Size of Rum market Rest of spirits market Current Trends and Factors Affecting Forecasts Rum has recently been a key growth category. Volumes rose +2.4% in, to hit 298,000 cases an alltime high. Growth has come from both white and gold rums. Bacardi have invested heavily behind Bacardi Superior and volumes rose for the fourth year running. Equally strong growth in volume terms came from Havana Club s Anejo Reserva, which as part of Havana Club range has grown very strongly over the past few years. There are two key drivers behind this growth. First is an increasing interest in gold rum among newer spirits drinkers not proven, but likely to be a reaction against Scotch s ageing profile. Secondly, there is also growing interest in cocktails and the mojito in particular. Heavily weighted to the on-premise and with a younger consumer profile than many other categories, rum is likely to suffer in the short term. Volumes are currently said to be down by -6% and volumes are likely to sink further. However, longer-term, rum has the potential to be the mainstream growth category as a new generation of consumers enter the market looking for alternatives to Scotch. The IWSR 2010 Page 413
Cane Cane Market by Category 9.0 9.0 8.0 8.0 7.0 7.0 000's 9 Litre Cases 6.0 5.0 4.0 3.0 2.0 6.0 5.0 4.0 3.0 2.0 Total Cane 1.0 1.0 2002 2003 2004 2006 2007 2008 Cachaca Total Cane Forecast Trends of Consumption: 000 9 Litre Cases Category 5yr CAGR 5yr CAGR 05 to 10 10 to 15 Cane 5.3 4.0 3.5 4.0 4.0 4.5 4.5-15.0% 2.4% Cachaca 5.3 4.0 3.5 4.0 4.0 4.5 4.5-15.0% 2.4% Source: IWSR Calculations Current Trends and Factors Affecting Forecasts Cachaça remains a very small niche category. Several attempts have been made to generate consumer interest in the category, but these have largely failed. It is very unlikely that the market will grow in the current circumstances. The IWSR 2010 Page 414
Aniseed Aniseed Market by Category 000's 9 Litre Cases 1,40 1,20 1,00 80 60 40 1,60 1,40 1,20 1,00 80 60 40 Total A niseed 20 20 2002 2003 2004 2006 2007 2008 Dry Aniseed Sweet Aniseed Total Aniseed Forecast Trends of Consumption: 000 9 Litre Cases Category 5yr CAGR 5yr CAGR 05 to 10 10 to 15 Aniseed 1,377.0 1,154.8 1,054.5 1,063.5 1,093.0 1,103.0 1,104.5-5.6% -0.9% Dry Aniseed 1,134.3 928.8 838.5 853.5 879.0 884.0 879.5-6.8% -1.1% Pastis 0.3 0.3 0.3 0.3 0.3 0.3 0.3-19.7% % Ouzo 1,133.5 928.0 838.0 853.0 878.5 883.5 879.0-6.8% -1.1% Absinthe 0.5 0.5 0.3 0.3 0.3 0.3 0.3 Infinity -12.9% Sweet Aniseed 242.8 226.0 216.0 21 214.0 219.0 225.0 0.4% -0.1% Sambuca 22.5 18.0 16.0 15.0 14.0 14.0 15.0-12.1% -3.6% Tsipouro 220.3 208.0 20 195.0 20 205.0 21 2.1% 0.2% Source: IWSR Calculations The IWSR 2010 Page 422
Aniseed - Cont/d... Aniseed - Share of Spirits Market 7,00 Relative Size 6,00 5,00 4,00 3,00 24.6% 23.0% 21.9% 20.4% 19.7% 2% 20.2% 20.2% 19.9% 2,00 1,00 Relative Size of Aniseed market Rest of spirits market Current Trends and Factors Affecting Forecasts Aniseed slipped -6.4% to 1.38m cases. The downturn in the restaurant business affected the market for ouzo, which is 88% of all sales. The other large category in this sector is tsipouro, which was alsogaining ground. This aniseed-flavoured drink is gaining momentum as an alternative to ouzo. Ouzo is being heavily affected by the on-premise downturn, especially in restaurants. In the current year, volumes are said to be down between -20-25%. However, one key thing to note is that The IWSR is tracking the branded market. There is a considerable unbranded, or regionally branded, market for which no figures exist and which may be making up some of the tracked decline, but which may be suffering by a corresponding amount. It is more likely to be the latter given the already pretty low-price of most branded ouzo. The market will continue to suffer in the short term, as consumers simply stay away from restaurants. Longerterm, the decline rate will slow and may even recover as consumers go out more. The IWSR 2010 Page 423