JAPANESE WINE MARKET June 2016 1
JAPANESE WINE MARKET Japan is a growing market with 55.2 million wine drinkers and a total volume of 3,600,000hL of wine Growing wine culture Annual per capita consumption of 8.6L* 7% 10.9 Million adults in Japan 53% World's 16th largest wine market Volume of still and sparkling wine is growing 9% 0,2% 3,6m hl of wine sold in 201 90% Imported wine dominates, but Japan is the most significant country of origin, accounting for 28% of market volume 28% 2.7 million of Imported wine sold in 201 72% Wine drinkers Nonwine drinkers Still light wine Sparkling wine Fortified wine Imported Domestic Source : Wine Intelligence * adult population 2
JAPANESE WINES DRINKERS Consumption trends Proportion of red, white and rosé drunk by Japanese regular drinkers Japanese regular wine drinkers have a clear preference for red wine over white or rosé, it accounting for well over half of all wine consumed by them 12% Over one third of regular wine drinkers are unaware of which white varietals they re consuming, and almost 1 in cannot name what varietals of red they ve been drinking Top 5 White varietals consumed during this last 6 month Chardonnay Sauvignon Blanc Riesling Pinot Grigio / Pinot Gris Sémillon Red wine White wine Rosé wine 31% Source : Wine Intelligence 58% Top 5 Red varietals consumed during this last 6 month Cabernet Sauvignon Merlot Pinot Noir Shiraz / Syrah Sangiovese 3
JAPANESE WINES DRINKERS Opportunities for new wines Wellbalanced, versatile wines Wines that can be drunk every day on an array of different occasions are the most likely to succeed as debutantes in the Japanese wine market This is especially the case since food pairing is increasing in importance along with an increase in wine involvement Natural and organic wines New natural and organic wines are likely to be able to ride the wave of recent success in this category Light, cool climate whites It is predicted that new entries onto the market are more likely to succeed if they are white varietals, lighter in style. Pinot Noir / Spätburgunder Alternatives to French Pinot Noirs are being searched, especially typical Burgundy style but also more fruity, well balanced Spätburgunder Sweet spot priced at 2500 Experts estimate new wines should attempt to price themselves anywhere between 1500 5000 (120 EUR), with a sweet spot at 2500 (20 EUR) Source : Wine Intelligence
EXPORTS TO JAPAN 5
Source:German Winegrowers Association EXPORTS TO JAPAN Quantity of wine exported decreased by 12.2% in 2015 with 1,032,000 hl of wines. TOP 10 COUNTRIES (hl) RK COUNTRY 201 2015 2015/201 Quantity of wine exported to Japan decreased by 3.5% but global decrease led Japan into Top10 export destinations with a market share of 2.6%. 1 USA 208,000 196,000 5.5% 2 NETHERLANDS 203,000 157,000 22.5% 3 GREAT BRITAIN 165,000 139,000 15.3% SWEDEN 93,000 8,000 10.1% 5 NORWAY 59,000 57,000 3.9% 6 CANADA 50,000 6,000 7.7% 7 FRANCE 30,000 35,000 16.0% 8 POLAND 33,000 32,000 3.% 9 CHINA 32,000 31,000 3.0% 10 JAPAN 28,000 27,000 3.5% FULL MARKET 1,17,000 1,032,000 12.1% 6
Source:German Winegrowers Association EXPORTS TO JAPAN Value of exported wines also declined by 5.2% Quality improvement caused global quantity and value decrease. Nevertheless Japan got a rise of 0.7% and remained at the 8 th rank of export destinations with a market share of 3.8%. TOP 10 COUNTRIES (1.000 Euro) RK COUNTRY 201 2015 2015/201 1 USA 78,000 82,000 5.0% 2 NETHERLANDS 39,000 32,000 15.8% 3 GREAT BRITAIN 33,000 27,000 19.9% NORWAY 26,000 2,000 5.2% 5 CANADA 16,000 15,000 2.5% 6 SWEDEN 15,000 1,000 7.2% 7 CHINA 13,000 1,000 5.6% 8 JAPAN 11,000 11,000 0.7% 9 SWITZERLAND 6,000 8,000 33.7% 10 POLAND 7,000 7,000 0.6% FULL MARKET 315,000 299,000 5.2% 7
JAPANESE WINE MARKET ANALYSIS 8
JAPANESE WINE MARKET ANALYSIS Imports of wine in Japan rocketed this last years by 63% up since 2008. However German wines imports are almost stagnating around 33.000 hl per year since 2008. Imports have declined dramatically since their 1998 importation peak. 1998 was the golden year for wine imports in Japan and especially for German sweet wines. After market readjustment, the total wine market has increased overall and stabilized for a few years before a growth trend started around 2008. The German wines kept declining since 1998. 9
199 1995 1996 1997 1998 1999 2000 2001 2002 2003 200 2005 2006 2007 2008 2009 2010 2011 2012 2013 201 2015 JAPANESE WINE MARKET ANALYSIS Wines importations in Japan (hl) 3.500.000 3.000.000 2.500.000 2.000.000 1.500.000 1.000.000 500.000 Source: Japanese Customs 10
199 1995 1996 1997 1998 1999 2000 2001 2002 2003 200 2005 2006 2007 2008 2009 2010 2011 2012 2013 201 2015 JAPANESE WINE MARKET ANALYSIS German wines importations (hl) 200.000 180.000 160.000 120.000 100.000 80.000 60.000 0.000 20.000 Source: Japanese Customs 11
JAPANESE WINE MARKET ANALYSIS German and Total market importations trend (hl) 3.000.000 2.500.000 +63% 0.000 3 2.000.000 30.000 1.500.000 2 20.000 1.000.000 1 500.000 2008 2009 2010 2011 2012 2013 201 2015 Germany Imported wines Total Imported wine market Source: Japanese Customs 12
Source: Japanese Customs JAPANESE WINE MARKET ANALYSIS Germany is the 7th importers of wine in Japan in value. TOP 10 COUNTRIES (SHARE / TOTAL MARKET) RK COUNTRY 2010 2011 2012 2013 201 2015 1 FRANCE 9.56% 9.33% 7.58% 5.39% 3.66% 52.10% 2 CHILE 9.65% 9.89% 11.08% 12.61% 1.32% 13.00% 3 ITALY 1.8% 15.39% 15.10% 15.67% 15.82% 12.81% USA 9.1% 8.98% 9.22% 10.02% 9.92% 7.51% 5 SPAIN 5.3% 5.55% 6.5% 6.66% 6.53% 6.55% 6 AUSTRALIA.65%.16% 3.8% 3.18% 3.0% 2.80% 7 GERMANY 2.17% 2.08% 1.78% 1.75% 1.55% 1.12% 8 ARGENTINA 1.9% 1.7% 1.55% 1.38% 1.6% 0.99% 9 S AFRICA 1.0% 0.8% 1.05% 1.0% 1.30% 0.95% 10 NEWZEELAND 0.92% 0.9% 1.06% 1.03% 1.03% 0.78% 13
Source: Japanese Customs JAPANESE WINE MARKET ANALYSIS Even though, the importation value increased by 1% during the last 6 years, Germany keep losing market share as the overall market increased by 76%. TOP 10 COUNTRIES (MILLION JPY) RK COUNTRY 2010 2011 2012 2013 201 2015 +/ 6 YEARS 1 FRANCE 57,079 58,765 68,235 79,63 89,762 91,80 61% 2 CHILE 7,177 7,63 10,169 1,53 18,050 22,913 219% 3 ITALY 12,62 13,920 16,287 20,873 23,289 22,573 79% USA 7,051 7,113 8,59 11,515 12,335 13,20 88% 5 SPAIN 6,553 6,801 8,900 11,18 12,236 11,59 76% 6 AUSTRALIA 3,951 3,71,089,337,60,951 25% 7 GERMANY 1,735 1,689 1,738 2,16 2,080 1,982 1% 8 ARGENTINA 1,15 1,166 1, 1,669 1,93 1,739 52% 9 S AFRICA 1,13 723 1,071 1,291 1,73 1,671 6% 10 NEWZEELAND 688 739 96 1,193 1,307 1,383 101% FULL MARKET 99,966 103,159 122,71 19,511 168,799 176,281 76% 1
Source: Japanese Customs JAPANESE WINE MARKET ANALYSIS Germany is the 9th importer of wine in volume with a market share of 1.18%. TOP 10 COUNTRIES (SHARE / TOTAL MARKET) RK COUNTRY 2010 2011 2012 2013 201 2015 1 CHILE 29.67% 28.5% 27.52% 25.76% 2.32% 28.20% 2 FRANCE 18.56% 19.39% 20.08% 23.8% 27.71% 2.37% 3 ITALY 15.3% 16.20% 16.05% 15.20% 15.0% 15.33% SPAIN 10.15% 10.37% 12.96% 11.70% 10.86% 12.01% 5 USA 12.57% 12.93% 11.83% 12.1% 10.60% 8.7% 6 AUSTRALIA.90%.38% 3.85% 3.58% 3.6%.86% 7 ARGENTINA 2.09% 1.51% 1.65% 2.02% 2.5% 1.83% 8 S AFRICA 3.02% 2.82% 2.55% 2.23% 2.21% 1.59% 9 GERMANY 1.7% 1.9% 1.61% 1.7% 1.27% 1.18% 10 NZEELAND 0.% 0.3% 0.9% 0.8% 0.9% 0.5% 15
Source: Japanese Customs JAPANESE WINE MARKET ANALYSIS Volume are stable with a slight decreasing trend meanwhile the overall keeps increasing: 50% these last 6 years. TOP 10 COUNTRIES (HL) RK COUNTRY 2010 2011 2012 2013 201 2015 +/ 6 YEARS 1 CHILE 321,817 363,99 65,352 565,553 672,909 787,89 15% 2 FRANCE 596,387 616,972 736,372 712,52 695,578 680,702 1% 3 ITALY 305,520 36,327 27,70 12,355 25,866 28,03 0% SPAIN 225,706 25,88 36,218 38,33 30,609 335,90 9% 5 USA 226,85 28,567 279,193 297,29 257,320 23,999 8% 6 AUSTRALIA 93,81 90,881 99,526 96,67 99,305 135,78 5% 7 ARGENTINA 52,981 53,55 59,87 5,81 56,08 51,205 3% 8 S AFRICA 38,77 30,15 0,68 9,570 61,26,53 15% 9 GERMANY 32,789 38,319 39,76 37,282 33,131 33,00 1% 10 NZEELAND 7,992 8,618 11,67 11,87 12,13 12,517 57% FULL MARKET 1,927,213 2,071,07 2,557,618 2,617,53 2,690,762 2,792,972 5% 16
DISTRIBUTION ANALISYS 17
DISTRIBUTION ANALISYS Most German wines are in price levels from 5001500 Yen 16.000 1 1.000 13.000 12.000 11.000 9.000 8.000 7.000 6.000.000 3.000 2.000 1.000 0 German wines sales evolution by price range (hl) 2010 2011 2012 2013 201 2015 18
DISTRIBUTION ANALISYS German wines lost market shares even in entry level price ranges where they are more present 20.000 1 < 500 JPY 83% +13% 2011 2012 2013 201 2015 1.000.000.000 20.000 1 500 1,000 JPY 8% +37% 2011 2012 2013 201 2015 1.000.000.000 TOTAL IMPORTED WINES TOTAL IMPORTED WINES 20.000 1 1,000 1,500 JPY % 1.000 +38%.000.000 2011 2012 2013 201 2015 TOTAL IMPORTED WINES 20.000 1 1,500 2,000 JPY 2% 1.000.000 +38%.000 2011 2012 2013 201 2015 TOTAL IMPORTED WINES Evolution from 2011 to 2015 Unit hl Source : WANDS 19
DISTRIBUTION ANALISYS + 12%.000 3.000 2.000 1.000 German wines are getting shares on 2,000 JPY & 10,000 JPY price ranges, but disapeared from the highest range. 2,000 3,000 JPY +0% 2011 2012 2013 201 2015 2.000.000 1.000.000 + 0%.000 3.000 2.000 1.000 3,000 5,000 JPY +2% 2011 2012 2013 201 2015 2.000.000 1.000.000 TOTAL IMPORTED WINES TOTAL IMPORTED WINES + 50% 1.000 800 600 00 200 5,000 10,000 JPY 2011 2012 2013 201 2015 +50% 00.000 200.000 TOTAL IMPORTED WINES 100% 1.000 800 600 00 200 > 10,000 JPY 2011 2012 2013 201 2015 +70% 00.000 200.000 TOTAL IMPORTED WINES Evolution from 2011 to 2015 Unit hl Source : WANDS 20
DISTRIBUTION ANALISYS German wines are mostly sold in supermarkets HoReCa sector is growing but remains limited 16.000 1.000 German wines sales evolution among distribution channels (hl) 12.000 8.000 6.000.000 2.000 SUPERMARKETS HORECA DISCOUNT STORES WINE MERCHANT CONVENIENCE STORES OTHER DEPARTMENT STORES 2011 2012 2013 201 2015 21
DISTRIBUTION ANALISYS 30.000 2 20.000 1 30.000 2 20.000 1 3% 0% Distribution of German wines rose up in HoReCa and Online channels while gaps increased in traditionnal channels 2011 2012 2013 201 2015 Wine Merchant 2011 2012 2013 201 2015 Supermarkets +38% +3% 50.000.000 TOTAL IMPORTED WINES 50.000.000 TOTAL IMPORTED WINES 30.000 2 20.000 1 + 5% 30.000 2 20.000 1 1% 2011 2012 2013 201 2015 Departement Stores 2011 2012 2013 201 2015 HoReCa +2% 2% 50.000.000 50.000.000 TOTAL IMPORTED WINES TOTAL IMPORTED WINES 50% 30.000 2 20.000 1 Convenience Stores 2011 2012 2013 201 2015 +151% 50.000.000 TOTAL IMPORTED WINES The biggest gap concerns distribution of German wines in Convenience Stores + 63% 30.000 2 20.000 1 2011 2012 2013 201 2015 Others* +15% 50.000.000 TOTAL IMPORTED WINES * Others channels include onlinesales, pure players Evolution from 2011 to 2015 Unit hl Source : WANDS 22
JAPANESE REGULAR WINE DRINKERS 23
JAPANESE REGULAR WINE DRINKERS Japanese regular wine drinkers repartition Japanese population of wine drinkers Kanto, Kansai and Chubu count 85% of Japanese regular wine drinkers Approximately one third of regular wine drinkers in Japan are aged over 55 Age LDA2 Age 253 Age 35 Age 55 Age 556 Age 65 and over Adult population Wine drinkers Regular (i.e. at least once a month) wine drinkers Weekly wine drinkers 10.9 million 55.2 millions 36.1 million 22 million Kanto 6% Kansai 17% Chubu 12% Kyushu 8% Tohoku 6% Hokkaido 5% Chugoku % Shikoku 2% 100% 90% 80% 70% 60% 50% 0% 30% 20% 10% 0% 5% 5% 11% 10% 11% 10% 11% 9% 7% 8% 6% 7% Male Female Source : Wine Intelligence 2
JAPANESE WINES DRINKERS Most Japanese regular wine drinkers never drank even once German wines. For those who did, it was sweet wine. Frequency Non drinkers or lapsed drinkers All Japanese regular drinkers 253 35 85% 86% 85% Rarely 5% % 3% Occasionally 8% 9% 11% Frequently 2% 1% 1% Very frequently 1% 1% 0% Image of German wines is generally limited to : White sweet affordable wines Wines of 50 years old people who appreciated it during 80s and 90s Source : Wine Intelligence, Vinitrac Japan : Source : Wands April 2016 25