@WineIntell Wine Intelligence 2015 1
About Wine Intelligence Decision-making based on evidence Last year we spoke with more than 80,000 wine consumers in more than 27 wine markets We conducted quantitative and qualitative research For wineries, importers, supermarkets, retailers, regions, generic organisations. brand health, audit, strategy, NPD, trends and innovation 2
Quick quiz 1 Which is the largest wine market? (1000 9L cases) UK 3 China 2 Germany 1 123,000 152,000 226,000 32,000 130,000 Source: IWSR 2015 consumption data for 2014 3
Quick quiz 2 Which country has more wine drinkers? UK 2 41 (80%) China (imp) 3 38 (4%) Germany 1 45 (67%) Source: Wine Intelligence 4
Quick quiz 3 Who is more corrupt? Brazil 3 China 2 Russia 1 Source: Transparency International 2014 5
Market classification Five distinct groups with different volume totals, average growth and per capita consumption MATURE ESTABLISHED GROWTH EMERGING NEW EMERGING Traditional producers. Volumes declining Strong historical growth, have reached potential Wine becoming mainstream Growth from low base Wine new but growing fast Source: Wine Intelligence Compass model 2015-16 6
Wine Intelligence Compass model MATURE ESTABLISHED GROWTH EMERGING NEW EMERGING Markets where wine has reached its potential with stable or declining volumes Markets with strong historical growth which is tailing off Markets where wine is becoming a mainstream product and experiencing growth Markets where wine is experiencing growth and shows potential from a relatively low base Markets where wine is still a relatively new and unknown beverage, but showing potential Markets Markets Markets Markets Markets Germany (2) France (15) Austria (16) Italy (20) Chile (29) Spain (31) Argentina (33) Hungary (34) Portugal (37) Romania (39) Greece (42) Slovenia (46) United Kingdom (4) Switzerland (5) Australia (8) Norway (9) The Netherlands (10) Sweden (12) Denmark (14) Belgium & Luxembourg (21) New Zealand (22) Finland (30) Ireland (35) United States (1) Japan (3) Canada (7) Hong Kong (11) South Africa (41) China (6) South Korea (13) Singapore (17) Russia (18) Poland (19) United Arab Emirates (23) Brazil (25) Mexico (26) Czech Republic (27) Taiwan (28) Slovakia (32) Colombia (38) Peru (43) Angola (50) Malaysia (24) Turkey (36) India (40) Vietnam (44) Philippines (45) Thailand (47) Indonesia (48) Nigeria (49) Source: Wine Intelligence Compass model 2015-16 7
Wine Intelligence Compass model: EU markets MATURE ESTABLISHED GROWTH EMERGING NEW EMERGING Markets where wine has reached its potential with stable or declining volumes Markets with strong historical growth which is tailing off Markets where wine is becoming a mainstream product and experiencing growth Markets where wine is experiencing growth and shows potential from a relatively low base Markets where wine is still a relatively new and unknown beverage, but showing potential Markets Markets Markets Markets Markets Germany (2) France (15) Austria (16) Italy (20) Chile (29) Spain (31) Argentina (33) Hungary (34) Portugal (37) Romania (39) Greece (42) Slovenia (46) United Kingdom (4) Switzerland (5) Australia (8) Norway (9) The Netherlands (10) Sweden (12) Denmark (14) Belgium & Luxembourg (21) New Zealand (22) Finland (30) Ireland (35) United States (1) Japan (3) Canada (7) Hong Kong (11) South Africa (41) China (6) South Korea (13) Singapore (17) Russia (18) Poland (19) United Arab Emirates (23) Brazil (25) Mexico (26) Czech Republic (27) Taiwan (28) Slovakia (32) Colombia (38) Peru (43) Angola (50) Malaysia (24) Turkey (36) India (40) Vietnam (44) Philippines (45) Thailand (47) Indonesia (48) Nigeria (49) Source: Wine Intelligence Compass model 2015-16 8
Market classification Five distinct groups with differing wine volumes, average wine growth rates and per capita consumption MATURE ESTABLISHED GROWTH EMERGING NEW EMERGING 51% 15% 19% 14% 1% Annual growth rate: Annual growth rate: Annual growth rate: Annual growth rate: Annual growth rate: -1.2% -1.1% 2.1% 3.0% 6.0% Per capita consumption: (in litters) 31 Per capita consumption: (in litters) 23 Per capita consumption: (in litters) 8 Per capita consumption: (in litters) 3 Per capita consumption: (in litters) >1 Source: Wine Intelligence Compass model 2015-16 9
Market classification Five distinct groups with different volume totals, average growth and per capita consumption MATURE ESTABLISHED GROWTH EMERGING NEW EMERGING Markets where wine has reached its potential with stable or declining volumes Markets with strong historical growth which is tailing off Markets where wine is becoming a mainstream product and experiencing growth Markets where wine is experiencing growth and shows potential from a relatively low base Markets where wine is still a relatively new and unknown beverage, but showing potential Current mind-set Volume Professional structure Saturation Future Growth rate Investment and risk Source: Wine Intelligence Compass model 2015-16 10
What is important for consumers? US market case study 11
What is important for consumers? US market case study 1 Grape variety (80%+) 2 Brand I know (70%+) Country of origin (70%+) Region of origin (70%+) Recommendation from friends and families (70%+) 3 Recommendation from shop staff (60%+) 4 Recommendation from a wine critic(50%+) Recommendation from wine books or guides (50%+) Awards and medals (50+) Source: US Premium consumers 2014 12
Case study: why are US consumers buying more Prosecco? 1- Recommendation 2- Social acceptance 3- Ubiquity 13
Semantic study what is the impact of words? We created 16 new varietals which one will be more successful? Malbec is successful because it s easy to pronounce 14
Ease of pronunciation in the USA Claster Yoffa Frynn Miresa Tasaroo Bumola Rassee Vallume Chacaka Didiza Aberidus Boaconic Kiraric Eexa Jiofrax Scitenoa Zdjl Oeiwlax 5% 4% 9% 20% 19% 16% 15% 14% 11% 26% 31% 33% 46% 45% 43% 41% 41% 59% Source: Wine Intelligence Vinitrac USA Apr. '15, n=902 US premium wine drinkers 15
Ease of pronunciation in the USA Claster Yoffa Frynn Miresa Tasaroo Bumola Rassee Vallume Chacaka Didiza Aberidus Boaconic Kiraric Eexa Jiofrax Scitenoa Zdjl Oeiwlax 5% 4% 9% 20% 19% 16% 15% 14% 11% 26% 31% 33% 43% 41% 41% 46% 45% 59% Easy words Purchase intent Difficult words Double 100%+ Quality perceptions 60%+ Source: Wine Intelligence Vinitrac USA Apr. '15, n=902 US premium wine drinkers 16
Which wine terms are associated with quality? USA case study Gran Reserva Reserva Crianza Joven Special selection Winemaker s choice Exclusive collection Single vineyard Blend Organic Natural Fair-trade Alpha Clásico Único 17
Wine term awareness Wild Limited Swan edition unprompted brand associations - unappealing % who said the following Blend were appealing aspects about the design Base=All USA regular wine drinkers - split sample (n=649) Organic Reserva Special selection Natural Winemaker s choice Single vineyard Exclusive collection Gran Reserva Fair trade Clásico Joven Único Alpha Crianza None of these Birds Colours Label design Font type / hard to read Boring / plain Brand name Screw cap Black bottle Dislike as a whole Lack of information on wine label 7% 9% Bottle shape / bottle top 9% Looks cheap 9% Cabernet Sauvignon 9% Other 4% 3% 2% 2% 2% 1% 1% 15% 15% 7% 5% 5% 4% 31% 27% 27% 44% 43% 40% 37% 35% 35% 35% 34.0% 52% 54% Source: Wine Intelligence, Vinitrac USA Nov.'13, n=2,018 USA regular wine drinkers Source: Wine Intelligence Vinitrac USA Apr. '15, n=902 US premium wine drinkers 18
Purchase and quality perceptions 60% Quality perceptions 50% 40% 30% Wild Swan unprompted brand associations - unappealing % who said the following were appealing aspects about the design Base=All USA regular wine drinkers - split sample (n=649) Birds Exclusive collection Colours Gran Reserva Label design Winemaker s choice 7% Font type / hard to read Boring / plain Brand name 5% Single vineyard 4% Limited edition 15% Special selection 15% Reserva R² = 0.2227 Screw cap 20% 4% Clásico Black bottle Natural Organic 3% Dislike as a whole 2% Único Blend 10% Lack of information Fair on trade wine label 2% Alpha Crianza Bottle shape / bottle top 2% Joven Looks cheap 1% 0% 0% 5% Cabernet 10% Sauvignon 1% 15% 20% 25% 30% Other 5% Purchase (last 6 months) 34.0% Term purchase in the past 6 months Source: Wine Source: Intelligence Wine Intelligence, Vinitrac USA Vinitrac Apr. '15, n=902 USA Nov.'13, US premium n=2,018 wine USA drinkers regular wine drinkers 19
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Winners and losers Resistant to consolidation / distribution control Production, transport, bottling cost efficiency at all price levels Refreshing or easy to drink is becoming the norm Indifferent brands Mid priced wines with no added value Easy to substitute products (own label ) Other threatening categories are becoming more interesting: Craft beer, Cider, Gin, Tonic, Tea, Coffee Everything should be made as simple as possible, but not simpler Albert Einstein 21
Muchas gracias Juan Park, Research Director juan@wineintelligence.com Wine Intelligence 109 Maltings Place. 169 Tower Bridge Road. London. SE1 3LJ Telephone: +44 (0)20 7378 1277 Web: www.wineintelligence.com Wine Intelligence 2014 22