Post on 20-Apr-2015
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TRENDS AND OPPORTUNITIES SHAPING
THE GLOBAL WINE INDUSTRY
MERWIN GROOTBOOM
© Euromonitor International
31ST MAY 2011 – SAWIS INFORMATION CENTRE OPEN DAY
MERWIN GROOTBOOMREGIONAL BUSINESS DEVELOPER: SUB-SAHARA AFRICA
2
•MACRO VIEW
•STATE OF THE GLOBAL WINE MARKET
•GROWTH OPPORTUNITIES
© Euromonitor International
•GROWTH OPPORTUNITIES
•GLOBAL TRENDS AND PROSPECTS
3
© Euromonitor International
Macro View
4A FRAGILE RECOVERY IS UNDERWAYMACRO VIEW
4
6
8
10
% g
row
th
Real GDP Growth by Region: 2009-2011
2009: 892010: 17
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-8
-6
-4
-2
0
2
% g
row
th
2009 2010 2011
2010: 17
Number of
countries which
saw negative real
GDP growth in
2009 & 2010
5UNEMPLOYMENT SEEN AS THIRD WAVE OF CRISIS
8
10
12
14
16
20
25
30
% c
ha
ng
e
Un
em
plo
ym
en
t ra
te -
% E
AP
Unemployment Rate in World’s Worst Affected Countries 2010
MACRO VIEW
14Number of countries
with an unemployment
rate above 10% in
2007
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-4
-2
0
2
4
6
8
0
5
10
15
% c
ha
ng
e
Un
em
plo
ym
en
t ra
te
Unemployment rate 2010 Change since 2007
2007
25Number of countries
with an unemployment
rate above 10% in
2010
6HOW WILL THE ECONOMY PERFORM?
� Near term outlook remains uncertain
� Growth to be driven by emerging markets – especially in Asia
� Unemployment to remain high
� Consumer spending still under pressure
MACRO VIEW
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� Government debt to remain a key area of concern
� Shift in global power to emerging markets will continue
7
State of the Global Wine Market
© Euromonitor International
8� State of the global wine market
3 9 litre cases of
wine sold in 2010
BILLION
1.3
PERCENT
© Euromonitor International
1.3 CAGR volume growth
for wine globally between
2005 and 2010
4of wine is
consumed per cap globally
LITRES
PERCENT
9GLOBAL WINE PER CAPITA CONSUMPTION IN 2010STATE OF THE GLOBAL WINE MARKET
© Euromonitor International
Portugal Highest Per Cap
Consumption Globally
10AFTER THE SLUMP...STATE OF THE GLOBAL WINE MARKET
3
4
5
2
2.5
3
3.5
% G
row
th
Bil
lio
n 9L
Cases
Global Wine Sales 2005-2010
© Euromonitor International
0
1
2
3
0
0.5
1
1.5
2005 2006 2007 2008 2009 2010
% G
row
th
Bil
lio
n 9L
Cases
Wine volumes in billion 9L Cases % Total volume growth % Total value growth US$ fixed
11BEER TAKES SHARE FROM WINE AND SPIRITSSTATE OF THE GLOBAL WINE MARKET
78.0%
78.4%
8.3%
8.1%
11.4%
11.2%
2010
2015
Alcoholic Drinks by Category – Total Volume
© Euromonitor International
75.1%
76.8%
10.0%
8.6%
13.1%
12.2%
0% 20% 40% 60% 80% 100%
2000
2005
Beer Cider/Perry RTDs/High-Strength Premixes Spirits Wine
12
© Euromonitor International Growth opportunities
13ASIA PACIFIC WILL CONTINUE TO DRIVE WINE SALES GROWTH OPPORTUNITIES
Asia Pacific
Eastern EuropeMiddle East and Africa
6
8
10
12
% T
ota
l V
olu
me
CA
GR
20
10
-15
Wine Sales by Region 2010-2015
© Euromonitor International
�Global wine volumes are expected to grow by 3% CAGR between 2010-15
�Still light grape wine will remain the largest category
Australasia
Eastern Europe
Latin America
and Africa
North America
Western Europe
-2
0
2
4
-4 -2 0 2 4 6 8 10 12% T
ota
l V
olu
me
CA
GR
20
10
% Total Value CAGR 2010-15
14
USA12%
Italy12%
Others31%
Largest Still Grape Wine Markets Globally in Volume 2010
China15%
USA
Others30%
Largest Still Grape Wine Markets Globally in Volume 2015
US IS LARGEST CONSUMER BUT CHINA WILL BE BY 2015GROWTH OPPORTUNITIES
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12%
France10%
Germany8%
China7%
United Kingdom
6%Argentina
5%
Spain4%
Russia3%
Portugal2%
USA11%
Italy10%
France8%
Germany7%United
Kingdom6%
Argentina4%
Spain4%
Russia3%
Brazil2%
15WESTERNATION, PREMIUMISATION AND HEALTH DRIVE WINE
15
20
25
1500
2000
2500
3000
%To
tal
vo
lum
e C
AG
R
Mil
lio
n l
itre
s
China: Wine by Type Performance 2010-2015
GROWTH OPPORTUNITIES
40
50
60
70
80
Mil
lio
n l
itre
s
Chinese Wine Imports By Origin 2005-2010
© Euromonitor International
0
5
10
0
500
1000
1500
%To
tal
vo
lum
e C
AG
R
Mil
lio
n
2010 2015 2010-15 % CAGR
0
10
20
30
40
Mil
lio
n
2005 2010
16FAVOURABLE DEMOGRAPHICS AID WINE SALES IN BRAZIL
�Still light grape wine 2 L/cap 2010
� 6% total volume CAGR 2010-2015
�More women in the labour force
GROWTH OPPORTUNITIES
© Euromonitor International
�2009: 50% of the population reached the middle class
�Northeast region growing
�Urbanisation key
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© Euromonitor International Global Trends and Prospects
18WINE KEY DRIVERS AND TRENDS GLOBAL TRENDS AND PROSPECTS
Cocooning
ConvenienceInternet /
Technology
© Euromonitor International
Polarisation
Healthier Options
Simplified Offerings
Eco-Credentials
Value for Money
19ON-TRADE SUFFERS AS COCOONING ACCELERATES GLOBAL TRENDS AND PROSPECTS
2
3
4
5
1.5
2
2.5
3
% v
olu
me g
row
th
Bil
lio
n 9
L c
ases
Global Wine On- vs. Off-Trade Performance 2005-2015
© Euromonitor International
-1
0
1
2
0
0.5
1
1.5
2005 2006 2007 2008 2009 2010 2011 2012 2013 2014 2015
% v
olu
me g
row
th
Bil
lio
n 9
L c
ases
Wine - Off-trade Volume Wine - On-trade VolumeWine - Off-trade Volume Wine - On-trade Volume
20QUALITY WINE IN BAG-IN-BOX SUITED TO HOME CONSUMPTIONGLOBAL TRENDS AND PROSPECTS
6
8
10
12
14
16
100
120
140
160
180
% V
olu
me
CA
GR
20
05
-20
10
Mil
lio
n u
nit
s
Leading Off-trade Markets for Bag-in-Box 2010
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-6
-4
-2
0
2
4
0
20
40
60
80
% V
olu
me
CA
GR
20
05
Off
-tra
de
–M
illi
on
un
its
21VALUE FOR MONEY EVIDENT IN OFF-TRADEGLOBAL TRENDS AND PROSPECTS
Small Grocery Retailers
Food/drink/tobacco specialists
Wine Off-trade Channel Performance 2005-2010
© Euromonitor International
-4 -2 0 2 4 6 8 10 12 14 16
Supermarkets/Hypermarkets
Internet Retailing
Discounters
2005-2010 % Volume CAGR
22WINE: PREMIUMISATION, POLARISATION AND AFFORDABILITYGLOBAL TRENDS AND PROSPECTS
Red wine:
Greece2005 2010
Under EUR3.5 2.7% 3%
EUR3.51 to EUR5.5 6% 7.5%
EUR5.51 to EUR6.5 7% 9%
Red wine:
China
2005 2010
Under RMB19.99 30% 21%
RMB20 to RMB29.99 30% 30%
RMB30 to RMB49.99 29% 30%
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EUR6.51 to EUR8 20.3% 21%
EUR8.01 to EUR9.4 22.2% 22%
EUR9.41 to EUR11 23.8% 21%
EUR11.01 and above 18% 16.5%
Total 100% 100%
RMB49.99 29% 30%
RMB50 to RMB59.99 8.5% 13.5%
RMB60 to RMB89.99 1.5% 3%
RMB90 and above 1% 2.5%
Total 100% 100%
23UN-TRADITIONAL SIZES MORE DYNAMICGLOBAL TRENDS AND PROSPECTS
4567
15
20
25
% C
AG
R 2
010-2
014
Bil
lio
n U
nit
s
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-101234
0
5
10
15
% C
AG
R 2
010
To
tal V
olu
me -
Bil
lio
n U
nit
s
Total volume 2010
% CAGR 2010-2014
24CONVENIENCE PRODUCT EXAMPLES GLOBAL TRENDS AND PROSPECTS
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25CANS – THE NEXT BIG THING?GLOBAL TRENDS AND PROSPECTS
5
10
15
20
30
40
50
60
trad
e v
olu
me C
AG
R
–m
illi
on
un
its
Leading Off-trade Markets for Cans in 2010
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-10
-5
0
5
0
10
20
30
% O
ff-t
rad
e v
olu
me C
AG
R
Off
-tra
de v
olu
me –
Off-trade volume 2010
% CAGR 2010-2014
26PET BOTTLES – SLOW TO CATCH ON
�‘Smaller’ on shelf profile – “Is that a half bottle?”
�Associated with soft drinks
�Shorter shelf life
�Taste perceptions – “I don’t want my wine to taste plasticky”
Challenges
�Changing consumption culture –buy to drink now
�Lighter/safer to transport
�Single serve sizes – most of the weight is wine, not package
�Green perceptions – if the consumer
Opportunities
GLOBAL TRENDS AND PROSPECTS
© Euromonitor International
wine to taste plasticky” �Green perceptions – if the consumer can be educated
27ECO-CREDENTIALS PRODUCT EXAMPLESGLOBAL TRENDS AND PROSPECTS
© Euromonitor International
28MILLENNIALS ARE TECH SAVVY AND WORD OF MOUTHERS
Civic-minded/socially conscious
Tolerant
Technology adopters
GLOBAL TRENDS AND PROSPECTS
Technology adopters
Online community
Egocentric
Hedonistic spenders
Fashion influencers
Media mistrusters/spin detectors
© Euromonitor International
Online community
Media mistrusters/spin detectors
Mass-advertising rejecters
Word of mouthers
Civic-minded/socially conscious
Mass-advertising rejecters
Word of mouthers
Debt incurrers
Work/life balancers
Obedient, but not subservient
Tolerant
Apathetic and sometimes frivolous
29INTERNET CONTINUES TO RESHAPE THE WORLDGLOBAL TRENDS AND PROSPECTS
20
30
40
50
% o
f w
orl
d p
op
ula
tio
n
More than 40% of the world’s population will be on the
Internet in 2020
70%
80%
90%
100%
% o
f w
orl
d’s
In
tern
et
use
rs
Half of all Internet users will be in Asia
Asia Rest of world
© Euromonitor International
0
10
20
2000 2010 2020
% o
f w
orl
d p
op
ula
tio
n
0%
10%
20%
30%
40%
50%
60%
70%
2000 2010 2020
% o
f w
orl
d’s
In
tern
et
use
rs711 millionChinese Internet users in 2020
281 millionUS Internet users in 2020
30INTERNET / TECHNOLOGY EXAMPLESGLOBAL TRENDS AND PROSPECTS
© Euromonitor International
31TO SUM UPGLOBAL TRENDS AND PROSPECTS
• Wine offerings will have to justify their prices to increasingly price-savvy audiences in a new era of thrift.
Value for Money
• Countries like China and Brazil are key as future opportunity markets but lets not forget about the developed markets.
Emerging Markets Key
• Centuries of traditional glass bottle use have resulted in one of the most consolidated categories for packaging, this pack type will remain key for premium wines.
Glass keeps the top spot
© Euromonitor International
wines.
• Reducing distribution and breakage costs, while answering environmental concerns, will force manufacturers to go the extra mile in terms of packaging innovation.
Green packaging formats
• Appealing to the new wine consumer, standing out on a shelf full of glass bottles, the shaped liquid carton, metal can and small size PET bottles are all taking share.
Differentiation via innovativepackaging
• Social networking, online retail, consumer reviews “word of mouse” etc. will continue to play a huge role in shaping consumer trends.
Internet/ Technology
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THANK YOU FOR LISTENING
Merwin Grootboom
Regional Business Developer: Sub-Sahara Africa
merwin.grootboom@euromonitor.com
© Euromonitor International
merwin.grootboom@euromonitor.com