Table of Contents
Alcoholic Drinks in the Philippines - Industry Overview
EXECUTIVE SUMMARY
Stable volume sales in better economic conditions in 2011
Trends in new launches: flavoured, light and strong alcoholic drinks
Widespread use of celebrity endorsements to improve image of local brands
Craft beer and wine importers help to improve on-trade sales
Growth in volume and value sales is projected between 2012 and 2016
KEY TRENDS AND DEVELOPMENTS
Expansion of consumer base remains a key priority for companies
Below-the-line marketing activities improve craft beer and wine consumption
Widespread use of celebrity endorsements improves image of local brands
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 Speculated Merger and Acquisition Activity 2011-2012
MARKET BACKGROUND
Legislation
Table 1 Number of On-trade Establishments by Type 2006-2011
TAXATION AND DUTY LEVIES
Table 2 Taxation and Duty Levies on Alcoholic Drinks 2011 – (a)
Table 3 Taxation and Duty Levies on Alcoholic Drinks 2011 (b)
Table 4 Typical Wholesaler and Retailer Off-trade Mark-ups by Selected Categories 2011
Table 5 Selling Margin of a Typical Beer Brand 2011 - San Miguel Pale Pilsen
Table 6 Selling Margin of a Typical Wine Brand 2011 - Carlo Rossi
Table 7 Selling Margin of a Typical Spirits Brand 2011 - Johnnie Walker Black Label
OPERATING ENVIRONMENT
Contraband/parallel trade
MARKET INDICATORS
Table 8 Retail Consumer Expenditure on Alcoholic Drinks 2006-2011
MARKET DATA
Table 9 Sales of Alcoholic Drinks by Category: Total Volume 2006-2011
Table 10 Sales of Alcoholic Drinks by Category: Total Value 2006-2011
Table 11 Sales of Alcoholic Drinks by Category: % Total Volume Growth 2006-2011
Table 12 Sales of Alcoholic Drinks by Category: % Total Value Growth 2006-2011
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 Sales of Alcoholic Drinks by Category by On-trade vs Off-trade Split: % Volume 2011
Table 16 Sales of Alcoholic Drinks by Category by On-trade vs Off-trade Split: % Value 2011
Table 17 Company Shares of Alcoholic Drinks by Global Brand Owner 2007-2011
Table 18 Off-trade Sales of Alcoholic Drinks by Distribution Format: % Value Analysis 2006-2011
Table 19 Off-trade Sales of Alcoholic Drinks by Category and Distribution Format: % Volume Analysis 2011
Table 20 Forecast Sales of Alcoholic Drinks by Category: Total Volume 2011-2016
Table 21 Forecast Sales of Alcoholic Drinks by Category: Total Value 2011-2016
Table 22 Forecast Sales of Alcoholic Drinks by Category: % Total Volume Growth 2011-2016
Table 23 Forecast Sales of Alcoholic Drinks by Category: % Total Value Growth 2011-2016
DEFINITIONS
Published data comparisons
Summary 4 Research Sources
Alcoholic Drinks in the Philippines - Company Profiles
Asia Brewery Inc in Alcoholic Drinks (Philippines)
STRATEGIC DIRECTION
KEY FACTS
COMPANY BACKGROUND
PRODUCTION
COMPETITIVE POSITIONING
Summary 7 Asia Brewery Inc: Competitive Position 2011
Destilería Limtuaco & Co Inc in Alcoholic Drinks (Philippines)
STRATEGIC DIRECTION
KEY FACTS
COMPANY BACKGROUND
PRODUCTION
COMPETITIVE POSITIONING
Summary 9 Destilería Limtuaco & Co Inc: Competitive Position 2011
Emperador Distillers Inc in Alcoholic Drinks (Philippines)
STRATEGIC DIRECTION
KEY FACTS
COMPANY BACKGROUND
PRODUCTION
COMPETITIVE POSITIONING
Summary 11 Emperador Distillers Inc: Competitive Position 2011
Ginebra San Miguel Inc in Alcoholic Drinks (Philippines)
STRATEGIC DIRECTION
KEY FACTS
COMPANY BACKGROUND
PRODUCTION
COMPETITIVE POSITIONING
Summary 14 Ginebra San Miguel Inc: Competitive Position 2011
Ralph’s Wines & Spirits Inc in Alcoholic Drinks (Philippines)
STRATEGIC DIRECTION
KEY FACTS
INTERNET STRATEGY
COMPANY BACKGROUND
Chart 1 Ralph’s Wines & Spirits Inc: Ralph’s Wines & Spirits in Taguig City
PRIVATE LABEL
COMPETITIVE POSITIONING
Beer in the Philippines - Category Analysis
HEADLINES
TRENDS
Beer is at the peak of its growth stage as most Filipinos consume it, however consumption is still lower compared to other Asian countries. In 2011, domestic manufacturers such as San Miguel Brewery continued to invest in below-the-line activities that enabled better recall and generated higher volume sales. The company maintained its yearly events, including San Miguel Pale Pilsen’s Sarap Mag Babad (literally means wonderful to soak) summer party, Oktoberfest, SMB Takes You to the Philippines and Red Horse Muziklaban, while adding a few new elements to further interest consumers.
PRODUCTION, IMPORTS AND EXPORTS
COMPETITIVE LANDSCAPE
San Miguel Brewery maintained its dominance in beer, accounting for 88% of total volume sales in 2011. The company’s strong position is due to the superior performance of its San Miguel Pale Pilsen, Red Horse and San Mig Light brands, which are preferred by local drinkers. A mixture of volume-generating events, tri-media advertising and exclusive on-trade selling agreements also assisted the domestic beer producer to record the biggest volume share increase. Its volume share increased by less than once percentage point in 2011.
PROSPECTS
Although beer is at the peak of its growth, there is still a bright outlook for the category as per capita consumption in the Philippines is still relatively low in comparison to other Asian countries. Players are anticipated to introduce new consumption occasions over the forecast period by participating in festivals across the country and organising summer parties to further stimulate demand. Collaborating with on-trade establishments is also foreseen, offering promotions during happy hour to boost volume sales.
CATEGORY BACKGROUND
Lager price band methodology
Summary 17 Lager by Price Band 2011
Table 24 Number of Breweries 2006-2011
CATEGORY DATA
Table 25 Sales of Beer by Category: Total Volume 2006-2011
Table 26 Sales of Beer by Category: Total Value 2006-2011
Table 27 Sales of Beer by Category: % Total Volume Growth 2006-2011
Table 28 Sales of Beer by Category: % Total Value Growth 2006-2011
Table 29 Sales of Beer by On-trade vs Off-trade Split: Volume 2006-2011
Table 30 Sales of Beer by On-trade vs Off-trade Split: Value 2006-2011
Table 31 Sales of Beer by On-trade vs Off-trade Split: % Volume Growth 2006-2011
Table 32 Sales of Beer by On-trade vs Off-trade Split: % Value Growth 2006-2011
Table 33 Beer: Production, Imports and Exports: Total Volume 2005-2010
Table 34 Beer Imports by Country of Origin: Total Volume 2005-2010
Table 35 Beer Imports by Country of Origin: Total Value 2005-2010
Table 36 Beer Exports by Country of Destination: Total Volume 2005-2010
Table 37 Beer Exports by Country of Destination: Total Value 2005-2010
Table 38 Company Shares of Beer by National Brand Owner 2007-2011
Table 39 Company Shares of Beer by Global Brand Owner 2007-2011
Table 40 Brand Shares of Beer 2008-2011
Table 41 Forecast Sales of Beer by Category: Total Volume 2011-2016
Table 42 Forecast Sales of Beer by Category: Total Value 2011-2016
Table 43 Forecast Sales of Beer by Category: % Total Volume Growth 2011-2016
Table 44 Forecast Sales of Beer by Category: % Total Value Growth 2011-2016
Cider/Perry in the Philippines - Category Analysis
HEADLINES
TRENDS
In 2011, volume sales of cider remained negligible as most Filipinos are not aware of and have never tasted it. Availability continued to be limited, usually offered in mid-range and high-end on-trade establishments that serve a wide range of alcoholic beverages, and supply in most cases is inconsistent. Majority of off-trade sellers, including specialist retailers, do not carry cider in their selection because it is unprofitable due to the lack of demand.
PRODUCTION, IMPORTS AND EXPORTS
PROSPECTS
Greater frequency of Filipinos travelling overseas on vacation or business trip is expected to improve consumption of cider over the forecast period. Exposure to the alcoholic drink, which is highly available in developed countries, is anticipated to stimulate demand. Nevertheless, cider is expected to continue to be a niche category because of the widespread presence of substitutes, which most consumers are more familiar with such as beer and spirits.
RTDs/High-Strength Premixes in the Philippines - Category Analysis
HEADLINES
TRENDS
RTDs/high-strength premixes benefited from the growing cocktail drinking culture and the continuous efforts of domestic players such as The Bar Beverage Inc and Ginebra San Miguel Inc in introducing new brands and variants. Greater availability of domestic labels expanded the consumer base, enabling even low-income drinkers to purchase these alcoholic drinks due to lower pricing. This also allowed RTDs and high-strength premixes to compete better with beer and spirits as prices became more competitive.
COMPETITIVE LANDSCAPE
Future Trade International Inc maintained its lead in 2011, accounting for a 55% volume share in RTDs/high-strength premixes. The company’s early market entry in spirit-based RTDs proved beneficial as its Kristov Vodka Cruiser and Kristov Vodka Ice shaped the Philippine RTDs market. These pioneer brands were able to establish a strong following among Filipinos, which helped it sustain its position despite the widespread availability of cheaper local alternatives.
PROSPECTS
RTDs/high-strength premixes is expected to benefit from the arrival of the cocktail drinking trend over the forecast period, due to the wider availability of lower-priced options. The expected increase of business process outsourcing offices, widespread distribution in 24-hour convenience stores and the ready-for-consumption aspect of these products are predicted to fuel greater demand between 2012 and 2016 because it enables Filipinos to consume mixed drinks at any time of the day.
CATEGORY DATA
Table 45 Sales of RTDS/High-strength Premixes by Category: Total Volume 2006-2011
Table 46 Sales of RTDS/High-strength Premixes by Category: Total Value 2006-2011
Table 47 Sales of RTDS/High-strength Premixes by Category: % Total Volume Growth 2006-2011
Table 48 Sales of RTDS/High-strength Premixes by Category: % Total Value Growth 2006-2011
Table 49 On-trade vs Off-trade Sales of RTDS/High-strength Premixes: Volume 2006-2011
Table 50 On-trade vs Off-trade Sales of RTDS/High-strength Premixes: Value 2006-2011
Table 51 On-trade vs Off-trade Sales of RTDS/High-strength Premixes: % Volume Growth 2006-2011
Table 52 On-trade vs Off-trade Sales of RTDS/High-strength Premixes: % Value Growth 2006-2011
Table 53 Company Shares of RTDS/High-strength Premixes by Global Brand Owner 2007-2011
Table 54 Company Shares of RTDS/High-strength Premixes by National Brand Owner 2007-2011
Table 55 Brand Shares of RTDS/High-strength Premixes 2008-2011
Table 56 Forecast Sales of RTDS/High-strength Premixes by Category: Total Volume 2011-2016
Table 57 Forecast Sales of RTDS/High-strength Premixes by Category: Total Value 2011-2016
Table 58 Forecast Sales of RTDS/High-strength Premixes by Category: % Total Volume Growth 2011-2016
Table 59 Forecast Sales of RTDS/High-strength Premixes by Category: % Total Value Growth 2011-2016
Spirits in the Philippines - Category Analysis
HEADLINES
TRENDS
More Filipinos preferred locally-produced spirits because of the perception that these offered more value for money given their affordable pricing and reasonable quality. As a result, imported brands, most of which are pioneers in their respective categories due to early market entry, slowly lost share to home-grown labels in 2011. For instance, Absolut and Fundador were once the top brands in vodka and brandy. However, the growing popularity of Toska and Antonov in vodka, and Emperador and Gran Matador in brandy is gradually cannibalising the market shares of these foreign labels.
PRODUCTION, IMPORTS AND EXPORTS
COMPETITIVE LANDSCAPE
Ginebra San Miguel Inc remained the leader in 2011 with a 47% volume share. It also recorded the biggest increase in volume share, despite the relatively small increase of less than half a percentage point in 2011. The company benefited from the strong performance of Ginebra San Miguel, GSM Blue, Gran Matador and Vino Kulafu, continuous expansion in on-trade and off-trade distribution, affordable pricing, as well as sound advertising and marketing support.
PROSPECTS
Premiumisation is expected because of the brighter economic outlook in the Philippines. However, the trend will not be universal as most Filipinos will continue to have limited disposable incomes. Trading up is anticipated to be more visible among wealthy drinkers who have the resources to regularly consume premium and super-premium brands. The majority of consumers will continue to consume home-grown labels and reserve the more expensive variants for special occasions.
CATEGORY BACKGROUND
Vodka, gin and other blended Scotch whisky price band methodology
Vodka
Gin
Other blended Scotch whisky
Summary 18 Benchmark Brands 2011
CATEGORY DATA
Table 60 Sales of Spirits by Category: Total Volume 2006-2011
Table 61 Sales of Spirits by Category: Total Value 2006-2011
Table 62 Sales of Spirits by Category: % Total Volume Growth 2006-2011
Table 63 Sales of Spirits by Category: % Total Value Growth 2006-2011
Table 64 Sales of Spirits by On-trade vs Off-trade Split: Volume 2006-2011
Table 65 Sales of Spirits by On-trade vs Off-trade Split: Value 2006-2011
Table 66 Sales of Spirits by On-trade vs Off-trade Split: % Volume Growth 2006-2011
Table 67 Sales of Spirits by On-trade vs Off-trade Split: % Value Growth 2006-2011
Table 68 Sales of Gin by Price Platform 2006-2011
Table 69 Sales of Other Blended Scotch Whisky by Price Platform 2006-2011
Table 70 Sales of Vodka by Price Platform 2006-2011
Table 71 Sales of Flavoured vs Non-flavoured Vodka 2006-2011
Table 72 Spirits Production, Imports and Exports: Total Volume 2005-2010
Table 73 Spirits Imports by Country of Origin: Total Volume 2005-2010
Table 74 Spirits Imports by Country of Origin: Total Value 2005-2010
Table 75 Spirits Exports by Country of Destination: Total Volume 2005-2010
Table 76 Spirits Exports by Country of Destination: Total Value 2005-2010
Table 77 Brandy & Cognac Production, Imports and Exports: Total Volume 2005-2010
Table 78 Gin Production, Imports and Exports: Total Volume 2005-2010
Table 79 Rum Production, Imports and Exports: Total Volume 2005-2010
Table 80 Vodka Production, Imports and Exports: Total Volume 2005-2010
Table 81 Whiskies Production, Imports and Exports: Total Volume 2005-2010
Table 82 Company Shares of Spirits by National Brand Owner 2007-2011
Table 83 Company Shares of Spirits by Global Brand Owner 2007-2011
Table 84 Brand Shares of Spirits 2008-2011
Table 85 Forecast Sales of Spirits by Category: Total Volume 2011-2016
Table 86 Forecast Sales of Spirits by Category: Total Value 2011-2016
Table 87 Forecast Sales of Spirits by Category: % Total Volume Growth 2011-2016
Table 88 Forecast Sales of Spirits by Category: % Total Value Growth 2011-2016
Wine in the Philippines - Category Analysis
HEADLINES
TRENDS
The wine drinking culture remained highly concentrated in Manila, the country’s capital. However, it also became more apparent in other metropolitan cities such as Cebu and Davao in 2011. Distributors capitalised on the on-going health and wellness trend to improve consumption and increase their consumer base, highlighting the health benefits, including the reduction in heart disease that can be achieved through regular moderate intake of wine.
PRODUCTION, IMPORTS AND EXPORTS
COMPETITIVE LANDSCAPE
Bel Mondo Italia Corp retained its leadership in 2011, with a 25% volume share of wine. It also recorded the highest volume share growth, improving over three percentage points in 2011. The company’s success was due to the strong following for its Novellino brand – the top brand in still light grape wines – due its sweet flavour, which was specifically created to suit the taste of local drinkers. Using a low pricing strategy also proved to be beneficial because it appealed to novice drinkers who put more importance on price rather than taste.
PROSPECTS
As it is still at an early stage of growth, the wine drinking culture is expected to spread to other metropolitan areas of the Philippines between 2012 and 2016. The health and wellness trend as well as the availability of various price points for wines is anticipated to facilitate greater demand among all income segments. Hence, higher volume consumption is projected over the forecast period compared to the review period.
CATEGORY DATA
Table 89 Sales of Wine by Category: Total Volume 2006-2011
Table 90 Sales of Wine by Category: Total Value 2006-2011
Table 91 Sales of Wine by Category: % Total Volume Growth 2006-2011
Table 92 Sales of Wine by Category: % Total Value Growth 2006-2011
Table 93 Sales of Wine by On-trade vs Off-trade Split: Volume 2006-2011
Table 94 Sales of Wine by On-trade vs Off-trade Split: Value 2006-2011
Table 95 Sales of Wine by On-trade vs Off-trade Split: % Volume Growth 2006-2011
Table 96 Sales of Wine by On-trade vs Off-trade Split: % Value Growth 2006-2011
Table 97 Volume Sales of Still Red Wine by Price Segment 2006-2011
Table 98 Volume Sales of Still White Wine by Price Segment 2006-2011
Table 99 Volume Sales of Still Rosé Wine by Price Segment 2006-2011
Table 100 Volume Sales of Other Sparkling Wine by Price Segment 2006-2011
Table 101 Sales of Still Red Wine by Grape/Varietal Type 2006-2011
Table 102 Sales of Still White Wine by Grape/Varietal Type 2006-2011
Table 103 Sales of Still Rosé Wine by Grape/Varietal Type 2006-2011
Table 104 Sales of Still Red Wine by Quality Classification 2006-2011
Table 105 Sales of Still White Wine by Quality Classification 2006-2011
Table 106 Sales of Still Rosé Wine by Quality Classification 2006-2011
Table 107 Wine Production, Imports and Exports: Total Volume 2005-2010
Table 108 Wine Imports by Country of Origin: Total Volume 2005-2010
Table 109 Wine Imports by Country of Origin: Total Value 2005-2010
Table 110 Wine Exports by Country of Destination: Total Volume 2005-2010
Table 111 Wine Exports by Country of Destination: Total Value 2005-2010
Table 112 Company Shares of Still Light Grape Wine by National Brand Owner 2007-2011
Table 113 Company Shares of Still Light Grape Wine by Global Brand Owner 2007-2011
Table 114 Brand Shares of Still Light Grape Wine 2008-2011
Table 115 Company Shares of Champagne by National Brand Owner 2007-2011
Table 116 Company Shares of Champagne by Global Brand Owner 2007-2011
Table 117 Brand Shares of Champagne 2008-2011
Table 118 Company Shares of Other Sparkling Wine by National Brand Owner 2007-2011
Table 119 Company Shares of Other Sparkling Wine by Global Brand Owner 2007-2011
Table 120 Brand Shares of Other Sparkling Wine 2008-2011
Table 121 Company Shares of Fortified Wine and Vermouth by National Brand Owner 2007-2011
Table 122 Company Shares of Fortified Wine and Vermouth by Global Brand Owner 2007-2011
Table 123 Brand Shares of Fortified Wine and Vermouth 2008-2011
Table 124 Forecast Sales of Wine by Category: Total Volume 2011-2016
Table 125 Forecast Sales of Wine by Category: Total Value 2011-2016
Table 126 Forecast Sales of Wine by Category: % Total Volume Growth 2011-2016
Table 127 Forecast Sales of Wine by Category: % Total Value Growth 2011-2016