EUROPEAN ORGANIC WINE SUDVINBIO Cendrine VIMONT 04 99 13 30 43 CHD EXPERT Nicolas NOUCHI 01 73 73 42 01 Géraldine AMSELLEM 04 26 72 90 26 Thiébault EPP 04 26 72 90 33 Pauline GUILBON 04 26 72 90 05
Summary o Methodology and process p. 3 o Executive Summary p. 5 o Detailed results p. 26 o Whole sample p.27 o buyers p.32 o non buyers p.72 Sudvinbio_September 2012 Page 2
Methodology and process Sudvinbio_September 2012 Page 3
Process 1. Ad Hoc Market Survey CHD EXPERT o Quantitative field 113 interviews, including short surveys 2. Additional insights - Qualitative CHD EXPERT o Interviews by phone 3. Analysis and market report CHD EXPERT o o Statistical treatments (Cross tabulations and approach for volumes) Full report Sudvinbio_September 2012 Page 4
Executive summary Sudvinbio_September 2012 Page 5
Methodology Sample set: 113 interviewed restaurants 76 long surveys: firms offering organic wines to customers (67%) 37 short surveys: firms not offering organic wines to customers (33%) Telephone survey Random polling on CHD Expert s exhaustive address files. Directive questionnaire Field date: From 27/08/00 to 31/08/2012 Surveyed country: Chicago, USA Sudvinbio_September 2012 Page 6
Introduction: The U.S. Foodservice Industry Foodservice is booming in the U.S. 1 out of 2 meals are consumed away-from-home Limited Service Restaurants are predominant in terms of number of establishments. Limited Service Restaurants are establishments whose patrons generally order or select items and pay before eating. Food and drink may be consumed on premises, taken out, or delivered to customers' locations. Restaurant chains represent more than 50% of limited service restaurants sales. 315,000 Limited Service Restaurants vs. 335,000 Full Service Restaurants in the U.S. Full Service Restaurants are establishments with a relatively broad menu along with table, counter and/or booth service and a wait staff. These establishments offer meals and snacks for immediate consumption primarily on-premise, though they may also offer takeout service. Sudvinbio_September 2012 Page 7
Introduction: Wine market in USA Country that both produce wine (4th biggest in the world) and import (consumer) wine (1st worldwide) Number of wine consumers is increasing in the US (should attain 100 million consumers in 2020 vs 77 million currently). More than a quarter of wines consumed in the US are imported Number of imported wines is increasing in restaurants. Especially in Fine dining and ethnic restaurants, however French wines are not very well represented Wine is mostly consumed during meals. Wine consumption in bars and cafés is increasing, however wine is mostly consumed in restaurants (vs home) The average age of wine consumers is decreasing Beer consumption is still dominating the alcohol industry but wine is gaining on it Criteria for decision making: 1st is the grape variety, 2 nd is price, 3rd is the brand & quality of the label, 4th is the origin Sudvinbio_September 2012 Page 8
Introduction: French Wines French wines have a good image in the US. It is often consumed for special occasions French wines seemed to be unadapted to the American market. Americans find it difficult to understand labels and to pronounce the brands The value of French mid-range wines is seen as disappointing in comparison with other countries (especially compared to wines from the new world). Bordeaux and Burgundy are the two most famous regions in France Those are the most marketed wines. Burgundy wines are the first selling foreign wine in the USA. It holds a very high image. The «Côtes du Rhône», and «Languedoc-Roussillon», and wines from other French regions appear to be on the rise. The organic wine market is still very small in the USA Sudvinbio_September 2012 Page 9
Establishments interviewed Whole sample : 113 respondents Menu Type American restaurants generally offer traditional American recipes. Menus are very diversified and most of them serve breakfast/brunch. American traditional restaurant Other cuisines (Italian, Mexican, Chinese, Thai ) Gourmet restaurant French cuisine Other 35% 24% 15% 8% 19% However: The number of ethnic restaurants in our sample is similar to the number of restaurants serving American cuisine. The American population is very diverse and consumers are looking to discover ethnic / out of the ordinary cuisine. Restaurants with an ethnic menu type often offer a fusion cuisine from different countries. They have an average check above 30$ and provide a high quality experience. The most common ethnic cuisines in the US are Chinese, Thai, Indian, or Brazilian, etc. Gourmet restaurants offer higher end menus with a particular focus on flavour. Sudvinbio_September 2012 Page 10
Establishments interviewed Whole sample : 113 respondents Average check : $69 Respondents % $45 to 59$ 56 50% $60 to $99 43 38% $100 or more 12 11% Do not know / Refusal to answ er 2 2% Total 113 100% Average number of customers per day : 128 Respondents % 25 to 49 7 6% 50 to 99 38 34% 100 to 199 45 40% 200 or more 20 18% Do not know / Refusal to answ er 3 3% Total 113 100% 50% of the restaurants interviewed have an average check in-between $45 and $59. This trend reflects the selection criteria requirement. In US Foodservice, Full Service Restaurant is usually divided as fallows: Family Style: $6 - $12 Casual Dining: $10 - $25 Upscale Dining: $20 - $50 Fine Dining: > $50 Casual Dining is the most popular segment in US Foodservice. Operation type R e sponde nts % Inde pe nde nt R e staurant 98 87% A re staurant chain 15 13% T o tal 113 100% Sudvinbio_September 2012 Page 11
Establishments interviewed Whole sample : 113 respondents Demographic layout: Respondents % New York (NY) 54 48% Texas (TX) 13 12% Illinois (IL) 11 10% Californie (CA) 9 8% Colorado (CO) 5 4% Massachusetts (MA) 5 4% Ohio (OH) 4 4% Pennsylvanie (PA) 3 3% Géorgie (GA) 3 3% District de Colum bia (DC) 3 3% Floride (FL) 2 2% Oregon (OR) 1 1% Total 113 100% Cities : Top 3 Respondents % NEW YORK 22 19% CHICAGO 11 10% HOUSTON 6 5% BOSTON 5 4% DENVER 5 4% DALLAS 4 4% SAN FRANCISCO 4 4% SAN ANTONIO 3 3% LOS ANGELES 3 3% ASTORIA 3 3% Total 113 100% Sudvinbio_September 2012 Page 12
Whole sample : 113 respondents Buyers and non-buyers of european organic wine Short surv ey 33% 33% Respondents not buying European organic wine 67% of the surveyed sample buy s 67% Respondents buying Surv eyed 67% Effe ctifs % Surveyed 76 67% Short surv e y 37 33% T otal 113 100% Sudvinbio_September 2012 Page 13
European organic Wines buyers profile Buyers 76 respondents American traditional restaurant 32% Other cuisines (Italian, Mexican, Chinese, Thai ) 30% Gourmet restaurant 17% French cuisine 11% Other 11% Sudvinbio_September 2012 Page 14
Organic wine : Main trends Do you know what a is? Whole sample : 113 respondents Organic wine perception 1% No Very good 44% No 21% Pretty good 20% Yes 79% Neither good nor bad 26% Yes 79% 79% of establishments interviewed are familiar with European organic wine. Pretty bad Very bad 3% 1% Among them, 64% have a positive perception of organic wines. Do not know/ Refusal to answer 6% Sudvinbio_September 2012 Page 15
Organic wine : Main trends Whole sample : 113 respondents 67% of establishments buy s. 78% of establishments offering organic wines have a positive perception. Yes 67% Buyers 76 respondents Very good 59% Yes but not at this time 4% The organic wine market is still small but it is growing in the USA. FYI this survey mainly deals with high end restaurants. Pretty good 19% No 29% Buyers 76 respondents Neither good nor bad 20% Among establishments who offer organic wines, 62% also offer organic dishes on their menu. 37% do not offer these types of menus. Re sponde nts % Ye s 47 62% Ye s but not at this time 1 1% No 28 37% T otal 76 100% Pretty bad 76% of respondents are satisfied with the quality of. Sudvinbio_September 2012 Page 16 2%
Organic wines perception Buyers 76 respondents Evolution of the perception of organic wines Has improved a lot 41% 65% of establishments think that their perception of organic wine has increased since their first purchase. 41% of these respondents believe that their perception has improved a lot. H as slightly improved 24% Buyers with improved perception 49 respondents Factors increasing perception Top 3: The overall quality has increased 55% B etter product availability 31% B etter deal / price from suppliers 29% Has not changed 36% The overall perception of the quality of organic wines is higher for French wines compared to other countries (62%). Regarding the perception of product availability, Italy come first (34%) Regarding the perception of suppliers price, Spain wines are ranked the best (39%). Sudvinbio_September 2012 Page 17
Future perception Buyers 76 respondents Increase 71% 71% of restaurants believe that in the future they will offer more organic wine. Remain stable 24% Decrease 3% Do not know/ Refusal to answer 3% Sudvinbio_September 2012 Page 18
Organic wine: Main trends Buyers 76 respondents Organic wines sales history Half of the respondents have sold organic wines to their customers for 3 to 10 years. Up to 1 year The longer establishments work with organic wine producers, the better their perception of organic wine is. 1 to 3 years 8% 25% 62% of establishments that have been referencing organic wines for 10 years consider that their perception of organic wine has increased. 3 to 10 years 50% More than 10 years 17% Sudvinbio_September 2012 Page 19
Organic wines buyers Buyers 76 respondents Number of countries referenced: best represented countries on menu list Spain, Italy and France are the main producers of organic wines They represent 80% of the EU organic wine fields. Italy 66% France 43% Spain 38% French wines maintain a high reputation in the USA. Even if most of the wine consumed in the USA is Californian, more than a quarter of the wines consumed in the country is from foreign origin. P ortugal 13% G e rmany 8% G re e ce 3% O the r countrie s 3% The higher the average check is, the broader wine options become Restaurant with a check above 100$ have an average of 3 references. Respondents Sudvinbio_September 2012 Page 20 Average $45 to 59$ 39 1,6 $60 to $99 26 1,5 $100 or more 11 2,6 Total 76 1,7
Organic wine buyers Buyers 76 respondents Number of countries referenced: best represented countries on menus Italy 66% Spain 38% Bordeaux 18% B ourgogne 14% Rhône Valley 14% Portugal 13% Loire 8% Germany 8% Alsace 5% Provence 3% South-West 3% Greece 3% Champagne 3% Languedoc-R ousillon 3% Poitou-C harentes 1% Other countries 3% Do not know / refusal to answer 4% The best 3 references correspond to the most renowned foreign wines. However, the highest organic wine producing regions in France are not in the top 3. Restaurant owners seem to prefer wines with a high reputation, assumed to have a good quality. Brand recognition is very important when choosing a French wine. Consumers tend to buy the most famous brands, known for their value. Amongst French wines, Bordeaux is the most exported wine. The United States is the first importer of Burgundy wines. They benefit from a good image in the USA. Sudvinbio_September 2012 Page 21
Country of origin Buyers 76 respondents Italy 66% France 43% Among European countries, Italy appears to be the top selling country for organic wines. Spain 38% Indeed, 66% of respondents buy organic wines from Italy. P ortugal 13% G e rmany 8% G re e ce 3% O the r countrie s 3% Respondents % Italy 50 66% France 33 43% Spain 29 38% Portugal 10 13% Ge rmany 6 8% Greece 2 3% Othe r countrie s 2 3% T otal 76 100% Sudvinbio_September 2012 Page 22
Advantages and disadvantages of s Buyers 76 respondents 9% of respondents do not see a downside to organic wine Some of the advantages and disadvantages most often reported : Assets of European Organic wine It's a more natural and healthy product / with less chemicals Respondents % 22 29% It tastes better 13 17% It has a large/growing customer demand /it s a niche market 12 16% It adds variety, choice for customers 8 11% It is an alternative for people who have allergies 2 3% Other 7 9% None / doesn't know 13 17% Total 76 100% VS Disadvantages of s Respondents % None / No real disadvantages 45 59% High price / costs 11 14% It is not well known / not promoted enough / there is alack of demand 7 9% It doesn't last long / lacks sulfites 4 5% Other 6 8% Doesn't know 4 5% Total 76 100% 59% of respondents don t see any disadvantages from. Sudvinbio_September 2012 Page 23
Reasons to buy s Reminder: Main reasons: Buyers 76 respondents 67% of restaurants serve s to their customers. T o improv e custome r satisfaction 53% T o wide n your target / reach organic friendly custome rs 38% T o kee p up with organic global tre nd 13% Diffe re ntiation 12% T o de ve lop the turnov er of wine 5% Differe nt contact with wine supplie rs 1% O ther re asons 17% Do not know / Refusal to answer 1% Sudvinbio_September 2012 Page 24
Reasons not to buy s Reminder: Main reasons: Non Buyers 37 respondents 33% of restaurant don t serve s to their customers. No customer demand 41% Not enough customers are interested 14% My suppliers have never offered me organic wines 11% s are too expensive 5% I don't want to change the wine list that I offer 3% The suppliers that I work with do not sale organic wines 3% My suppliers rarely have organic wines 3% The quality of s is not great 3% Other reasons 38% Do not know / refusal to answer 8% Sudvinbio_September 2012 Page 25
Changes expected Buyers 76 respondents Better value for money 22% Better deal/price 16% Protected designation of origin such as 100% Organic, AOC in France or DO in Italy 11% More product diversity and selection options 8% Larger quantity of production and more product availability 8% Organic production for the most known European wines. 3% Other reasons 18% Do not know / Refusal to answer 14% Sudvinbio_September 2012 Page 26
New regulation awareness rate Buyers 76 respondents Yes 70% of respondents have not heard about the new regulation concerning wine labelling that was put in place on August 1 st 2012. Yes 26% Do not o know 4% No 70% No 70% Re sponde nts % Ye s 20 26% No 53 70% Do not know/ Re fusal to answe r 3 4% T otal 76 100% Sudvinbio_September 2012 Page 27
To remember : key findings The target : restaurants with an average check > $45 (drinks not included) It is the most qualified audience for organic wines: Gastronomic/fine dining restaurants are more likely to offer organic wines than other categories of restaurants. Many of them offer a varied, rich and qualitative menu and tend to have a large wine selection. 79% of respondents know exactly what s are and 67% buy s. They sell organic wines in order to improve customer satisfaction (for 53% of respondents who buy s). A good overall image of s 64% of establishments who know what a is have a positive perception of organic wines. 78% of establishments offer s. Perception of organic wine has improved for 65% of establishments, especially thanks to an overall quality improvement (55% of them). 76% of respondents who offer s are satisfied with the quality. Organic wines from Italy, France or Spain 66% offer organic wines from Italy, 43% from France and 38% from Spain. Among French organic wines, the most popular regions are: Bordeaux (18%), Burgundy (14%) and the Rhone Valley (14%). An encouraging future for organic wines In the near future, the organic wine supply is expected to increase for 71% of respondents who already sell some organic wines, and should remain stable for 24% of the respondents. Sudvinbio_September 2012 Page 28