Table of Contents
Alcoholic Drinks in Australia - Industry Overview
EXECUTIVE SUMMARY
Low consumer confidence contributes to atmosphere of moderation
Challenging the notion of a “nation of beer drinkers”
Foster’s on top despite demerging beer and wine divisions
Sales of alcohol increasingly concentrated in the “big two” grocery retailers
Creative solutions to diversified usage occasions to drive future growth
KEY TRENDS AND DEVELOPMENTS
“Premiumisation”: The market shifts towards more discerning drinkers
A “sense of place” gains relevance in Australia
Tax: A price on carbon and a growing focus on volumes
Key new product launches
Summary 1 Key New Product Developments 2010-2011
Specialist retailers
Summary 2 Leading Specialist Retailers 2011
Market merger and acquisition activity
Summary 3 Merger and Acquisition Activity 2010-2011
MARKET BACKGROUND
Legislation
Table 1 Number of On-trade Establishments by Type 2006-2010
TAXATION AND DUTY LEVIES
Summary 4 Taxation and Duty Levies on Alcoholic Drinks 2011
Table 2 Typical Wholesaler and Retailer Off-trade Mark-ups by Selected Categories 2011
Table 3 Selling Margin of a Typical Beer Brand 2011 – Victoria Bitter
Table 4 Selling Margin of a Typical Wine Brand 2011
Table 5 Selling Margin of a Typical Spirits Brand 2011 – Johnny Walker Red Label
OPERATING ENVIRONMENT
Contraband/parallel trade
Duty free
Cross-border/private imports
MARKET INDICATORS
Table 6 Retail Consumer Expenditure on Alcoholic Drinks 2006-2011
MARKET DATA
Table 7 Sales of Alcoholic Drinks by Category: Total Volume 2006-2011
Table 8 Sales of Alcoholic Drinks by Category: Total Value 2006-2011
Table 9 Sales of Alcoholic Drinks by Category: % Total Volume Growth 2006-2011
Table 10 Sales of Alcoholic Drinks by Category: % Total Value Growth 2006-2011
Table 11 Sales of Alcoholic Drinks by Category by On-trade vs Off-trade Split: Volume 2011
Table 12 Sales of Alcoholic Drinks by Category by On-trade vs Off-trade Split: Value 2011
Table 13 Sales of Alcoholic Drinks by Category by On-trade vs Off-trade Split: % Volume 2011
Table 14 Sales of Alcoholic Drinks by Category by On-trade vs Off-trade Split: % Value 2011
Table 15 Company Shares of Alcoholic Drinks by Global Brand Owner 2007-2011
Table 16 Off-trade Sales of Alcoholic Drinks by Distribution Format: % Value Analysis 2006-2011
Table 17 Off-trade Sales of Alcoholic Drinks by Category and Distribution Format: % Volume Analysis 2011
Table 18 Forecast Sales of Alcoholic Drinks by Category: Total Volume 2011-2016
Table 19 Forecast Sales of Alcoholic Drinks by Category: Total Value 2011-2016
Table 20 Forecast Sales of Alcoholic Drinks by Category: % Total Volume Growth 2011-2016
Table 21 Forecast Sales of Alcoholic Drinks by Category: % Total Value Growth 2011-2016
DEFINITIONS
Published data comparisons
Summary 5 Research Sources
Alcoholic Drinks in Australia - Company Profiles
Casella Wines Pty Ltd in Alcoholic Drinks (Australia)
STRATEGIC DIRECTION
KEY FACTS
COMPANY BACKGROUND
PRODUCTION
COMPETITIVE POSITIONING
Summary 7 Casella Wines Pty Ltd: Competitive Position 2011
Coopers Brewery Ltd in Alcoholic Drinks (Australia)
STRATEGIC DIRECTION
KEY FACTS
COMPANY BACKGROUND
PRODUCTION
Summary 10 Coopers Brewery Ltd: Production Statistics 2011
COMPETITIVE POSITIONING
Summary 11 Coopers Brewery Ltd: Competitive Position 2011
De Bortoli Wines Pty Ltd in Alcoholic Drinks (Australia)
STRATEGIC DIRECTION
KEY FACTS
COMPANY BACKGROUND
PRODUCTION
COMPETITIVE POSITIONING
Vok Beverages Pty Ltd in Alcoholic Drinks (Australia)
STRATEGIC DIRECTION
KEY FACTS
COMPANY BACKGROUND
PRODUCTION
COMPETITIVE POSITIONING
Summary 14 Vok Beverages Pty Ltd: Competitive Position 2011
Woolworths Ltd in Alcoholic Drinks (Australia)
STRATEGIC DIRECTION
KEY FACTS
INTERNET STRATEGY
COMPANY BACKGROUND
Chart 1 Woolworths Ltd: Dan Murphy’s in Alexandria, NSW
PRIVATE LABEL
Summary 18 Woolworths Ltd: Private Label Portfolio
COMPETITIVE POSITIONING
Summary 19 Woolworths Ltd: Competitive Position 2011
Beer in Australia - Category Analysis
HEADLINES
TRENDS
The key emerging trends in Australian beer are “premiumisation” and a growing demand for more flavoursome offerings. Consumers are drinking less beer but are drinking better quality products. Consumers opting for higher-value products enabled review period growth of imported lagers, low carbohydrate lagers, dry lagers and craft beers.
PRODUCTION, IMPORTS AND EXPORTS
COMPETITIVE LANDSCAPE
Carlton United Brewers and Lion Nathan have very strong brand portfolios consisting of both their own and licensed brands. The two companies account for 89% of beer volume sales in 2011, slightly decreasing from 2010.
PROSPECTS
“Premiumisation” will be the most significant trend over the forecast period. Total beer volumes will gradually decline as consumers will choose to drink less but higher quality beer. As consumers will seek more flavour-driven beers with which they will be better able to engage, growth will be seen in dark ales and pale ales as these types of beer offer a broader canvas to express complex flavours. The total beer market is expected to see a contraction 1% CAGR in volume sales over the forecast period whilst dark beer is expected to see a positive volume CAGR of 3%. This growth will be led by the more approachable pale ale category within dark beer.
CATEGORY BACKGROUND
Lager price band methodology
Summary 20 Lager by Price Band 2011
Table 22 Number of Breweries 2006-2011
CATEGORY DATA
Table 23 Sales of Beer by Category: Total Volume 2006-2011
Table 24 Sales of Beer by Category: Total Value 2006-2011
Table 25 Sales of Beer by Category: % Total Volume Growth 2006-2011
Table 26 Sales of Beer by Category: % Total Value Growth 2006-2011
Table 27 Sales of Beer by On-trade vs Off-trade Split: Volume 2006-2011
Table 28 Sales of Beer by On-trade vs Off-trade Split: Value 2006-2011
Table 29 Sales of Beer by On-trade vs Off-trade Split: % Volume Growth 2006-2011
Table 30 Sales of Beer by On-trade vs Off-trade Split: % Value Growth 2006-2011
Table 31 Beer: Production, Imports and Exports: Total Volume 2005-2010
Table 32 Beer Imports by Country of Origin: Total Volume 2005-2010
Table 33 Beer Imports by Country of Origin: Total Value 2005-2010
Table 34 Beer Exports by Country of Destination: Total Volume 2005-2010
Table 35 Beer Exports by Country of Destination: Total Value 2005-2010
Table 36 Company Shares of Beer by National Brand Owner 2007-2011
Table 37 Company Shares of Beer by Global Brand Owner 2007-2011
Table 38 Brand Shares of Beer 2008-2011
Table 39 Forecast Sales of Beer by Category: Total Volume 2011-2016
Table 40 Forecast Sales of Beer by Category: Total Value 2011-2016
Table 41 Forecast Sales of Beer by Category: % Total Volume Growth 2011-2016
Table 42 Forecast Sales of Beer by Category: % Total Value Growth 2011-2016
Cider/Perry in Australia - Category Analysis
HEADLINES
TRENDS
Cider/perry witnessed stellar growth and many new product developments over 2011. The cider revolution that hit the UK seven years ago is now in full swing in Australia. The category is now valued at A$552 million with a volume of 57 million litres.
PRODUCTION, IMPORTS AND EXPORTS
COMPETITIVE LANDSCAPE
Carlton United Brewers is the largest player in cider in Australia. The company has a market volume share of 65%. The company benefits from recognisable brands and extensive nationwide distribution. Carlton United Brewers produces Strongbow, Bulmers, Mercury and Matilda Bay’s Dirty Granny cider. Carlton United Brewers’ cider portfolio and distribution network meant the company was superbly placed to benefit from the strong growth in cider. The company produces both pear and apple cider.
PROSPECTS
The strong volume growth seen in cider over the review period is expected to continue for at least the first half of the forecast period as the market continues to mature. The category can expect to see further new product developments and brand extensions as producers grapple for a share of the fast growing category. Volume sales of cider are expected to achieve a CAGR of 21% over the forecast period.
CATEGORY DATA
Table 43 Sales of Cider/Perry: Total Volume 2006-2011
Table 44 Sales of Cider/Perry: Total Value 2006-2011
Table 45 Sales of Cider/Perry: % Total Volume Growth 2006-2011
Table 46 Sales of Cider/Perry: % Total Value Growth 2006-2011
Table 47 On-trade vs Off-trade Sales of Cider/Perry: Volume 2006-2011
Table 48 On-trade vs Off-trade Sales of Cider/Perry: Value 2006-2011
Table 49 On-trade vs Off-trade Sales of Cider/Perry: % Volume Growth 2006-2011
Table 50 On-trade vs Off-trade Sales of Cider/Perry: % Value Growth 2006-2011
Table 51 Company Shares of Cider/Perry by National Brand Owner 2007-2011
Table 52 Company Shares of Cider/Perry by Global Brand Owner 2007-2011
Table 53 Brand Shares of Cider/Perry 2008-2011
Table 54 Forecast Sales of Cider/Perry: Total Volume 2011-2016
Table 55 Forecast Sales of Cider/Perry: Total Value 2011-2016
Table 56 Forecast Sales of Cider/Perry: % Total Volume Growth 2011-2016
Table 57 Forecast Sales of Cider/Perry: % Total Value Growth 2011-2016
RTDs/High-Strength Premixes in Australia - Category Analysis
HEADLINES
TRENDS
The tax rate applicable to “other excisable beverages not exceeding 10% by volume of alcohol” was increased from A$39.36 to A$66.67/litre pure alcohol in April 2008. These changes to the alcohol excise regime became known as the RTD or “alcopop” tax, and were intended to close a loophole created in 2000 with the introduction of the goods and services tax (GST) which made RTDs cheaper than if consumers bought the spirits and mixed them themselves. RTDs had previously been taxed at the same rate as full-strength beer, although in comparison to beer, RTD products were not exempt on the first 1.15 ABV points. The excise revision was also cited as necessary to assist in the reduction of teenage binge drinking. The tax did not reduce binge drinking, but significantly increased the unit price of RTDs and caused an immediate decline in sales. It originally drove consumers from RTDs to other types of alcoholic drinks, particularly spirits and to a lesser extent, cider. Consumers have now started to accept the higher price of RTDs, which resulted in positive growth in the category in 2011.
COMPETITIVE LANDSCAPE
Diageo Australia leads with a 31% share of total volume sales in 2011. The company has a range RTDs including various Bundaberg, Smirnoff, UDL, Johnnie Walker and Gordon’s extensions in regular or premium strength expressions, with better-for-you sugar-free or diet variants available. Diageo Australia is furthermore acknowledged as being at the forefront of RTS development.
PROSPECTS
RTDs/high-strength premixes is anticipated to achieve CAGRs of 3% in total volume sales and constant value sales over the forecast period, with growth being led by spirit-based RTDs.
CATEGORY DATA
Table 58 Sales of RTDS/High-strength Premixes by Category: Total Volume 2006-2011
Table 59 Sales of RTDS/High-strength Premixes by Category: Total Value 2006-2011
Table 60 Sales of RTDS/High-strength Premixes by Category: % Total Volume Growth 2006-2011
Table 61 Sales of RTDS/High-strength Premixes by Category: % Total Value Growth 2006-2011
Table 62 On-trade vs Off-trade Sales of RTDS/High-strength Premixes: Volume 2006-2011
Table 63 On-trade vs Off-trade Sales of RTDS/High-strength Premixes: Value 2006-2011
Table 64 On-trade vs Off-trade Sales of RTDS/High-strength Premixes: % Volume Growth 2006-2011
Table 65 On-trade vs Off-trade Sales of RTDS/High-strength Premixes: % Value Growth 2006-2011
Table 66 Company Shares of RTDS/High-strength Premixes by Global Brand Owner 2007-2011
Table 67 Company Shares of RTDS/High-strength Premixes by National Brand Owner 2007-2011
Table 68 Brand Shares of RTDS/High-strength Premixes 2008-2011
Table 69 Forecast Sales of RTDS/High-strength Premixes by Category: Total Volume 2011-2016
Table 70 Forecast Sales of RTDS/High-strength Premixes by Category: Total Value 2011-2016
Table 71 Forecast Sales of RTDS/High-strength Premixes by Category: % Total Volume Growth 2011-2016
Table 72 Forecast Sales of RTDS/High-strength Premixes by Category: % Total Value Growth 2011-2016
Spirits in Australia - Category Analysis
HEADLINES
TRENDS
Spirits registered growth of 2% in both volume and value terms in 2011. In an environment of consumer uncertainty and reduced discretionary spending, the category has essentially been held steady by consumers responding favourably to competitive price platforms for premium spirits. Over the review period, strong growth was recorded in 2009 following the so-called “alcopop” tax, which saw the price of ready-to-drink (RTD) premixes increase as the products attracted the same excise as full strength bottled spirits (FSBS). In 2010/2011 there was evidence of consumers transitioning back to spirit-based RTDs as they became more accepting of the higher prices.
PRODUCTION, IMPORTS AND EXPORTS
COMPETITIVE LANDSCAPE
Diageo Australia leads brand sales of spirits in 2011 with a 30% volume share. As a GBO, Diageo Plc holds a 32% share of total volume sales in 2011. The discrepancy emerges due to a local distribution agreement with Vok Beverages, through which Vok has been responsible for the distribution of local and global brands such as J&B Rare whisky, Captain Morgan rum, Pimm’s No 1 Cup, Ruski RTDs and Bulleit bourbon from 2002. Due to a revision of the deal in December 2010, Diageo is again responsible for the distribution of Bushmills Blackbush, Bushmills 10YO and Bushmills 16YO Irish whiskey, Bells whisky and Gilbey’s Gin as of 31 January 2011.
PROSPECTS
Spirits is forecast to register a CAGR of 3% in total volume sales and a 3% CAGR in constant value sales over the 2011-2016 forecast period.
CATEGORY BACKGROUND
Vodka, gin and other blended Scotch whisky price band methodology
Summary 21 Benchmark Brands 2011
CATEGORY DATA
Table 73 Sales of Spirits by Category: Total Volume 2006-2011
Table 74 Sales of Spirits by Category: Total Value 2006-2011
Table 75 Sales of Spirits by Category: % Total Volume Growth 2006-2011
Table 76 Sales of Spirits by Category: % Total Value Growth 2006-2011
Table 77 Sales of Spirits by On-trade vs Off-trade Split: Volume 2006-2011
Table 78 Sales of Spirits by On-trade vs Off-trade Split: Value 2006-2011
Table 79 Sales of Spirits by On-trade vs Off-trade Split: % Volume Growth 2006-2011
Table 80 Sales of Spirits by On-trade vs Off-trade Split: % Value Growth 2006-2011
Table 81 Sales of Gin by Price Platform 2006-2011
Table 82 Sales of Other Blended Scotch Whisky by Price Platform 2006-2011
Table 83 Sales of Vodka by Price Platform 2006-2011
Table 84 Sales of Flavoured vs Non-flavoured Vodka 2006-2011
Table 85 Spirits Production, Imports and Exports: Total Volume 2005-2010
Table 86 Spirits Imports by Country of Origin: Total Volume 2005-2010
Table 87 Spirits Imports by Country of Origin: Total Value 2005-2010
Table 88 Spirits Exports by Country of Destination: Total Volume 2005-2010
Table 89 Spirits Exports by Country of Destination: Total Value 2005-2010
Table 90 Brandy & Cognac Production, Imports and Exports: Total Volume 2005-2010
Table 91 Gin Production, Imports and Exports: Total Volume 2005-2010
Table 92 Rum Production, Imports and Exports: Total Volume 2005-2010
Table 93 Vodka Production, Imports and Exports: Total Volume 2005-2010
Table 94 Whiskies Production, Imports and Exports: Total Volume 2005-2010
Table 95 Company Shares of Spirits by National Brand Owner 2007-2011
Table 96 Company Shares of Spirits by Global Brand Owner 2007-2011
Table 97 Brand Shares of Spirits 2008-2011
Table 98 Forecast Sales of Spirits by Category: Total Volume 2011-2016
Table 99 Forecast Sales of Spirits by Category: Total Value 2011-2016
Table 100 Forecast Sales of Spirits by Category: % Total Volume Growth 2011-2016
Table 101 Forecast Sales of Spirits by Category: % Total Value Growth 2011-2016
Wine in Australia - Category Analysis
HEADLINES
TRENDS
“Premiumisation” is the key trend in Australian wine. The movement away from a volume-orientated approach to wine sales in Australia will be achieved by innovation and a greater emphasis on regionality. Implementing a new approach focused on greater value for money is difficult in the current environment of both local and global oversupply. Eventually a greater number of Australian wines will sell at higher price points.
PRODUCTION, IMPORTS AND EXPORTS
COMPETITIVE LANDSCAPE
In June 2011 Constellation Australia was rebranded Accolade Wines Australia after being acquired by Champ Private Equity earlier in the year. Accolade Wines is the leading player in wine in Australia, with a volume share of 16% in 2011. The company is dominant in still light grape wine where it has an 18% volume share. It is the second largest player in other sparkling wine, where it has a 5% volume share in a highly fragmented market. Accolade Wines is focused on making its offerings more premium, thereby in line with market trends. However, the company has lost market share in Australia due to the rise in imported wines and private label offerings.
PROSPECTS
“Premiumisation” will continue in Australian wine throughout the forecast period. However, removing the supply and demand imbalance will initially be the major focus. To achieve this, production volumes are expected to decline over the forecast period. The number of wine grape growers in Australia is in significant decline - a decline that will continue until the supply imbalance has been resolved.
CATEGORY DATA
Table 102 Sales of Wine by Category: Total Volume 2006-2011
Table 103 Sales of Wine by Category: Total Value 2006-2011
Table 104 Sales of Wine by Category: % Total Volume Growth 2006-2011
Table 105 Sales of Wine by Category: % Total Value Growth 2006-2011
Table 106 Sales of Wine by On-trade vs Off-trade Split: Volume 2006-2011
Table 107 Sales of Wine by On-trade vs Off-trade Split: Value 2006-2011
Table 108 Sales of Wine by On-trade vs Off-trade Split: % Volume Growth 2006-2011
Table 109 Sales of Wine by On-trade vs Off-trade Split: % Value Growth 2006-2011
Table 110 Volume Sales of Still Red Wine by Price Segment 2006-2011
Table 111 Volume Sales of Still White Wine by Price Segment 2006-2011
Table 112 Volume Sales of Still Rosé Wine by Price Segment 2006-2011
Table 113 Volume Sales of Other Sparkling Wine by Price Segment 2006-2011
Table 114 Sales of Still Red Wine by Grape/Varietal Type 2006-2011
Table 115 Sales of Still White Wine by Grape/Varietal Type 2006-2011
Table 116 Sales of Still Rosé Wine by Grape/Varietal Type 2006-2011
Table 117 Sales of Still Red Wine by Quality Classification 2006-2011
Table 118 Sales of Still White Wine by Quality Classification 2006-2011
Table 119 Sales of Still Rosé Wine by Quality Classification 2006-2011
Table 120 Wine Production, Imports and Exports: Total Volume 2005-2010
Table 121 Wine Imports by Country of Origin: Total Volume 2005-2010
Table 122 Wine Imports by Country of Origin: Total Value 2005-2010
Table 123 Wine Exports by Country of Destination: Total Volume 2005-2010
Table 124 Wine Exports by Country of Destination: Total Value 2005-2010
Table 125 Company Shares of Still Light Grape Wine by National Brand Owner 2007-2011
Table 126 Company Shares of Still Light Grape Wine by Global Brand Owner 2007-2011
Table 127 Brand Shares of Still Light Grape Wine 2008-2011
Table 128 Company Shares of Champagne by National Brand Owner 2007-2011
Table 129 Company Shares of Champagne by Global Brand Owner 2007-2011
Table 130 Brand Shares of Champagne 2008-2011
Table 131 Company Shares of Other Sparkling Wine by National Brand Owner 2007-2011
Table 132 Company Shares of Other Sparkling Wine by Global Brand Owner 2007-2011
Table 133 Brand Shares of Other Sparkling Wine 2008-2011
Table 134 Company Shares of Fortified Wine and Vermouth by National Brand Owner 2007-2011
Table 135 Company Shares of Fortified Wine and Vermouth by Global Brand Owner 2007-2011
Table 136 Brand Shares of Fortified Wine and Vermouth 2008-2011
Table 137 Forecast Sales of Wine by Category: Total Volume 2011-2016
Table 138 Forecast Sales of Wine by Category: Total Value 2011-2016
Table 139 Forecast Sales of Wine by Category: % Total Volume Growth 2011-2016
Table 140 Forecast Sales of Wine by Category: % Total Value Growth 2011-2016