Fighting the Market Slowdown in Alcoholic Drinks: Growth hotspots, innovation and changing consumer preferences

Fighting the Market Slowdown in Alcoholic Drinks - Growth hotspots, innovation and changing consumer preferences

Report Overview...

The global market for alcoholic drinks was worth US$979bn in 2007, equivalent to 1,460bn servings. Although sales of alcoholic drinks are typically relatively immune from recessions, although the current economic downturn has coincided with a period of higher inflation and rising prices which have dampened demand for alcoholic drinks. However, the downturn itself is likely to have a positive effect on demand. In developed markets consumers will spend more time socializing and drinking at home. In emerging markets consumers will buy fewer consumer durables and spend part of the savings on everyday treats such as beer, wine and spirits.

‘Fighting the Market Slowdown in Alcoholic Drinks: Growth hotspots, innovation and changing consumer preferences’ is a new report published by Business Insights that evaluates which regions, countries and products are expected to grow over the next five years. This report provides an understanding of underlying consumer purchasing triggers in alcoholic drinks as well as an in-depth analysis of regulatory developments and product innovations on a domestic and global scale.

Key Findings...

The volume of alcoholic drinks consumed in western Europe is forecast to decline over the period 2007-2012 by an average of 0.2% per annum.

Between 2007 and 2012 the annual sales of spirits globally is forecast to increase by over 1bn liters. 70% of this increase will take place in Asia-Pacific markets.

China is the largest beer market in the world, having overtaken the US in recent years. This growth is being driven by a growing middle class that has increasingly Western tastes plus a shift away from traditional spirits consumption.

Globally, there will be an additional 18.7bn liters of beer/cider/FABs sold in 2012 compared to 2007. 62% of this increase will take place in Asia-Pacific and 29% will be in Eastern Europe. Less than 8% of this growth will be in North America and these regional rises will be a result of the decline in the Western European market.

Use this report to...

• Quantify key beer, wine and spirits markets and growth potential based on market value and volume sales data between 2007 and 2012 by category, region, country and product tag.
• Improve the targeting and effectiveness of your NPD strategy using this report’s analysis of product launch data of 4,800 beer, wine and spirits products launched globally between 2005-2008.
• Identify key trends that are shaping the beer, wine and spirit market, and evaluate the trends likely to become important over the coming years.
• Understand consumption patterns of alcoholic drinks with this report’s detailed analysis of the changing share of throat held by beer, wine and spirits across key regions.

Key issues...
Changing consumer consumption. In terms of number of servings, spirits is the largest sector (accounting for 46% of servings), ahead of beer (43% of servings). The latter is expanding at the expense of the former and the two will almost be equal by 2012. Wine only accounts for a steady 11% of servings.

Emerging beer markets. Nine out of the ten countries with the highest levels of predicted sales over the next five years are emerging markets.

Premiumization. Multinational operators are facing increasing competition from local players that have started to develop their own premium and super-premium brands with high quality products, packaging and promotion.

Ageing population. In developed markets, the proportion of consumers in senior age groups continues to increase, and this will be reflected in increased upscale product sales. This is due to the population group having a more sophisticated palate.

Your questions answered...

• How is the share of throat held by beer, wine and spirits changing over time?
• Which alcoholic drinks categories and regions offer the greatest sales growth potential to 2012?
• What are the key trends that will shape the future of the beer, wine and spirits markets?
• Where will growth in the beer market be most significant?
• Which beer, wine and spirits product categories are growing fastest?
• What are the key consumer drivers of growth of beer, wine and spirits sales in emerging countries?
• Who is driving innovation in alcoholic drnks market?
• How is the growing trend of premiumization impacting product development and new product launches?

Table of Contents

• Fighting The Market Slowdown In Alcoholic Drinks Executive summary 11
• Market overview 11
• Beer, cider & FABs 12
• Wine 13
• Spirits 14
• Conclusions 15

Chapter 1 Market overview 18

• Summary 18
• Introduction 18
• World demand for alcoholic drinks 19
• Market drivers 19
• Growth of the young adult population 19
• Expanding middle classes 20
• Premiumization 21
• Effects of the economic downturn 22
• Regional opportunities in alcoholic drinks 23
• Growth in per capita consumption 25
• Share of throat in alcoholic drinks 27
• Competitive structure 31

Chapter 2 Key regions, share of throat and key players in beer, cider & FABs 34

• Summary 34
• Introduction 35
• Market volume 35
• Share of throat 37
• Key players 39
• Anheuser-Busch InBev 39
• SABMiller 39
• Heineken 40
• Private label 41
• Beer 42
• Key regions 43
• US 43
• China 44
• Russia 45
• Eastern Europe 46
• Thailand 47
• India 49
• Brazil 50
• Vietnam 51
• Growth in per capita consumption 52
• By segment 52
• Cider 54
• Key regions 54
• UK 54
• France 55
• Ireland 55
• Other opportunities 56
• FABs 56
• Key regions 57
• Russia 57
• Germany 58
• Mexico 59

Chapter 3 Key regions, share of throat and key players in wine 62

• Summary 62
• Introduction 63
• Market Volume 63
• Share of throat 65
• Growth in per capita consumption 66
• Key players 67
• Private label 68
• By region 69
• Russia & Ukraine 72
• Romania 75
• US 75
• Less elitism 76
• Premiumization 79
• Personal pack sizes 79
• Canada 81
• UK 81
• China 84
• Australia 85
• Brazil 86
• By segment 87
• Red wine 87
• White wine 89
• Rosé wine 91
• Sparkling wine 92
• Champagne 95
• Fortified wine 97

Chapter 4 Key regions, share of throat and key players in spirits 102

• Summary 102
• Introduction 103
• Market volume 103
• Share of throat 105
• Growth in per capita consumption 106
• Key players 107
• Diageo 107
• Local producers 107
• Private label 107
• By region 109
• India 112
• US 113
• Asia 115
• By segment 116
• Whiskey 116
• Rum 117
• Vodka 118
• Tequila 121
• Liqueurs 123
• Brandy 125
• Gin 127
• Other opportunities 128

Chapter 5 Conclusions 130

• Summary 130
• 10 key trends for the future 131
  
  1. Globalization of mass consumption 131
  2. The rise of senior consumers 131
  3. Smaller cities in emerging markets 132
  4. Healthier products 132
  5. Personal pack sizes 132
  6. Craft products 132
  7. Premium products 133
  8. Non-Western premium brands 133
  9. Beer mega-brands 133
  10. New global spirits combines 134

List of Figures

• Figure 1.1: Alcoholic drinks sales value by region, 2002-2012 23
• Figure 1.2: Growth of alcoholic drinks sales value by region, 2002-2012 24
• Figure 1.3: Additional servings in 2012 cf 2007 26
• Figure 1.4: Alcoholic drinks sales value by product group, 2002-2012 27
• Figure 1.5: Alcoholic drinks servings by product group, 2002-2012 28
• Figure 2.6: Additional beer, cider & FABs sales volume by region, 2007-2012 36
• Figure 2.7: Additional beer sales volume by country (top 10), 2007-2012 43
• Figure 2.8: Engel Spezial for the Russian female market 46
• Figure 2.9: Federbrau for the Thai premium beer market 49
• Figure 2.10: Apple Frost for the French cider market 55
• Figure 2.11: New products for the Russian FABs market 58
• Figure 2.12: Examples of beer mixes from Germany 59
• Figure 2.13: New products for the Mexican FABs market 59
• Figure 3.14: Additional wine sales volume by market, 2007-2012 64
• Figure 3.15: Additional wine sales volume by region, 2007-2012 71
• Figure 3.16: New products for the Russian imported wine market 74
• Figure 3.17: Vinesse for the US young adult wine market 77
• Figure 3.18: Products designed for shelf stand out 78
• Figure 3.19: Products designed for ease of navigation 78
• Figure 3.20: Wines in personal pack sizes 80
• Figure 3.21: New products for the UK wine market 84
• Figure 3.22: New products for the Australian wine market 86
• Figure 3.23: New products for the red wine market 88
• Figure 3.24: Vinowell for the healthier white wine market 90
• Figure 3.25: Gallo wine for the UK rosé market 92
• Figure 3.26: New products for the sparkling wine market 94
• Figure 3.27: Pommery Pop for the Champagne market 96
• Figure 3.28: New products for the Russian, Ukrainian fortified wine markets 97
• Figure 3.29: New sake for the US fortified wine market 98
• Figure 3.30: New products for the European fortified wine market 99
• Figure 4.31: Additional spirits sales volume by market, 2007-2012 104
• Figure 4.32: Intermarché private labels for the French spirits market 108
• Figure 4.33: Additional spirits sales volume by region, 2007-2012 111
• Figure 4.34: New products for the Indian whisky market 113
• Figure 4.35: New products for the US female spirits market 114
• Figure 4.36: New entrants into the US spirits market 115
• Figure 4.37: Diet Mate for the Indian whisky market 116
• Figure 4.38: Absolut Los Angeles for the US flavored vodka market 119
• Figure 4.39: New products for the Brazilian vodka market 120
• Figure 4.40: New products for the European liqueurs market 123
• Figure 4.41: New products for the Japanese cocktail liqueurs market 124
• Figure 4.42: Bejois for the Indian brandy market 126

List of Tables

• Table 1.1: Alcoholic drinks sales value and volume, 2002-2012 19
• Table 1.2: Young Adults' alcoholic spend as a percentage of all groups' spend (%), US & Europe, 2000-2010 20
• Table 1.3: Alcoholic drinks servings by region, 2002-2012 25
• Table 1.4: Additional alcoholic drinks servings per capita by region, 2007-2012 25
• Table 1.5: Alcoholic drinks servings by product group, 2002-2012 28
• Table 1.6: Share of throat by alcoholic drink product by region, 2007 29
• Table 1.7: Change in share of throat by alcoholic drink product by region, 2007-2012 31
• Table 1.8: Market share of private label by product and region, 2006 31
• Table 1.9: Market share of top 3 companies by product and region, 2007 32
• Table 2.10: Beer, cider & FABs sales volume by region, 2002-2012 35
• Table 2.11: Beer, cider & FABs sales volume by market, 2002-2012 37
• Table 2.12: Additional beer, cider & FABs sales volume by market, 2007-2012 37
• Table 2.13: Share of throat for beer, cider & FABs by region, 2007 38
• Table 2.14: Change in share of throat for beer, cider & FABs by region, 2007-2012 38
• Table 2.15: Market share of leading brewers by region, 2007 40
• Table 2.16: Market share of private label beer, US & Europe, 2001-2011 41
• Table 2.17: Additional beer sales volume by country (top 10), 2007-2012 42
• Table 2.18: Additional beer sales volume per capita by country (top 10), 2007-2012 52
• Table 2.19: Share of beer types in Europe, the US and Japan, 2007 53
• Table 2.20: Share of throat by beer type in Europe, the US and Japan, 2007-2012 53
• Table 2.21: Additional cider sales by country (top 5), 2007-2012 54
• Table 2.22: Additional FAB sales by country (top 5), 2007-2012 57
• Table 3.23: Wine sales volume by market, 2002-2012 63
• Table 3.24: Share of throat by wine type by region, 2007 65
• Table 3.25: Change in share of throat by wine type by region, 2007-2012 66
• Table 3.26: Additional wine sales volume per capita by country (top 10), 2007-2012 67
• Table 3.27: Market share of leading vintners by continent, 2006 68
• Table 3.28: Market share of private label wine, US & Europe, 2001-2011 69
• Table 3.29: Wine sales volume by region, 2002-2012 69
• Table 3.30: Wine sales value by region, 2002-2012 70
• Table 3.31: Additional wine sales volume by country (top 10), 2007-2012 72
• Table 3.32: Additional red wine sales by country (top 10), 2007-2012 89
• Table 3.33: Additional white wine sales by country (top 10), 2007-2012 89
• Table 3.34: Additional rosé wine sales by country (top 5), 2007-2012 92
• Table 3.35: Additional sparkling wine sales by country (top 10), 2007-2012 93
• Table 3.36: Additional Champagne sales by country (top 5), 2007-2012 96
• Table 3.37: Additional fortified wine sales by country (top 5), 2007-2012 98
• Table 4.38: Spirits sales volume by market, 2002-2012 103
• Table 4.39: Share of throat by spirits type by region, 2007 105
• Table 4.40: Change in share of throat by spirits type by region, 2007-2012 106
• Table 4.41: Additional spirits sales volume per capita by country (top 10), 2007-2012 106
• Table 4.42: Market share of private label spirits, US & Europe, 2001-2011 107
• Table 4.43: Market share of leading distillers by region, 2007 109
• Table 4.44: Spirits sales volume by region, 2002-2012 110
• Table 4.45: Spirits sales value by region, 2002-2012 110
• Table 4.46: Additional spirits sales volume by country (top 10), 2007-2012 112
• Table 4.47: Additional whiskey sales volume by country (top 10), 2007-2012 117
• Table 4.48: Additional rum sales volume by country (top 10), 2007-2012 118
• Table 4.49: Additional vodka sales volume by country (top 10), 2007-2012 121
• Table 4.50: Additional tequila sales volume by country (top 5), 2007-2012 122
• Table 4.51: Additional liqueurs sales volume by country (top 5), 2007-2012 125
• Table 4.52: Additional brandy sales volume by country (top 5), 2007-2012 127
• Table 4.53: Additional gin sales volume by country (top 5), 2007-2012 127