Growing wine Globally, an International...
Transcript of Growing wine Globally, an International...
Growing wine Globally,
an International
Perspective
Jane Robertson
Category Development
Director
GAME CHANGERS: CHANGING THE WINE &
BRANDY INDUSTRY’S LANDSCAPE
Analysis of market and
consumer trends per key market
and formalising global trade
agenda
The objective of this project was to build a customised model for market
opportunities for South African Wine, explore up to 5 individual markets in more
depth and support the dissemination of insight to stakeholders. The markets that
are being focused thusfar include China, Africa and the USA. This complements
the generic export promotion body Wines of South Africa (Wosa) strategic
framework.
Is South African Wine
Sexy?
Make South African
wine Sexy…
“Premiumisation remains one of the
leading influences on market
trends.”
IWSR Global Trends Report 2015
Influencing the growth of
‘Craft’ Wine knowledge is
improving
Millenials and Females setting
more of the Agenda
Prosecco Flavours
Where does South African wine sell?
Dec 2013 to
Nov 2014
Dec 2014 to
Nov 2015 Share Change Packaged % Change Bulk % Change
UK 12,120,406 11,888,387 28.3% -2% 36% -7% 64% 1%
GERMANY 8,838,152 8,992,122 21.4% 2% 20% 16% 80% -2%
FRANCE 2,691,077 2,945,696 7.0% 9% 100% 0% 9%
SWEDEN 2,792,522 2,786,076 6.6% 0% 74% -7% 26% 18%
NETHERLANDS 2,391,323 2,551,966 6.1% 7% 71% 29% 24%
CANADA 2,093,264 2,143,177 5.1% 2% 43% -3% 57% 6%
DENMARK 2,245,181 2,085,282 5.0% -7% 42% -19% 58% 1%
RUSSIA 2,822,376 1,774,135 4.2% -37% 0% 100% -37%
CHINA 835,160 1,220,143 2.9% 46% 75% 57% 25% 12%
BELGIUM 1,026,749 1,171,844 2.8% 14% 55% -2% 45% 35%
U.S.A. 1,020,313 1,095,367 2.6% 7% 100% 7% 0%
ANGOLA 587,110 590,826 1.4% 1% 100% 1% 0%
JAPAN 659,919 550,621 1.3% -17% 55% -5% 45% -31%
FINLAND 503,180 472,200 1.1% -6% 100% -6% 0%
KENYA 385,587 378,254 0.9% -2% 100% -2% 0%
UAE 397,516 360,125 0.9% -9% 100% -9% 0%
THAILAND 372,898 351,126 0.8% -6% 0% 100% -6%
SWITZERLAND 631,513 322,659 0.8% -49% 0% 100% -49%
CZECH 218,181 287,761 0.7% 32% 0% 100% 32%
A quick tour of the UK – Total Grocery
Price deflation means market growth and
shoppers are buying more and trading up Shoppers are looking
around for Retailers they
trust.
Retailers are looking for Simplicity and are
streamlining their ranges and their supplier base
Volume and Value is
now shrinking in still
wine.
There’s a lot of adults that
drink wine
422.1
439.1
522.5531.8
494.7
£400.0
£420.0
£440.0
£460.0
£480.0
£500.0
£520.0
£540.0
MAT WE 10.12.11 MAT WE 08.12.12 MAT WE 07.12.13 MAT WE 06.12.14 MAT WE 05.12.15
Total Coverage | South Africa Wine | Value sales £Ms
South Africa
South African Wine experienced strong growth until 2013/14.
Performance plateaued and is now in decline for the latest MAT.
£m’s Value Sales
Value -7% vs YA
Volume -7% vs YA
Source: Nielsen ScanTrack Data to WE 05.12.15
South African Wine is the 6th biggest origin in the Off Trade. In the
last 5 months Spain has over taken while Chile and New Zealand
have recently gained ground. South Africa is experiencing the
biggest declines of all the major New World players.
Source: Nielsen ScanTrack Data to WE 05.12.15
Total Coverage | Value Share % | Light Wine by Origin | MAT TY vs YA
3.6%
-5.4%
-5.1%
-6.3%
-0.2%
-7.0%
3.2%
9.6%
29.1%
-13.1%
Value Chg vs. YA (%)
What has caused the
drop in sales?
ScanTrack KPI Tree Trended - Total Coverage - South African Wine - MAT vs. Year Ago
Source: Nielsen ScanTrack Data to: WE 05.12.15
There fewer stores to sell in; and South Africa is selling less per store
Sku count down
13% in the top 4
This year
0.0%
5.0%
10.0%
15.0%
20.0%
25.0%
Australia Italy France USA Spain SouthAfrica
Chile NewZealand
Argentina Germany
MAT 2YA WE 07.12.13 MAT YA WE 06.12.14 MAT TY WE 05.12.15
Grocery Multiples | Share of Display | Total Light Wine | MAT TY
Source: Nielsen Scantrack Data to WE 05.12.15
South African wine has seen volume on deal drop for the second year in a
row, share of Display has been squeezed as key origins such as Australia
and emerging markets fight for space
The On Trade anis a great area to showcase what can be done,
especially in Restaurants. The trick is converting distribution gains to an increase in sales
• South Africa is the sixth largest country with a 15%
volume share (+0.4% YoY)
• South Africa is currently outperforming the market, being
the only New World country other than New Zealand to
grow value
• Also sees highest distribution growth, and smallest RoS
and volume decline (excluding New Zealand)
Sauce: CGA Strategy Brand Index MAT data to P07 2015
Value Volume Distribution RoS
39% 37%
Volume Sales
1.2m 9L
Value Sales
£0.2bn
• Consumers are able to spend more on
treating
• Going out is a treating occasion and
restaurants are benefitting from this trend
• South Africa is in a good position to take
advantage of this trend with its strength in
Restaurants
48% like seeing brands they
recognise on pub / bar wine lists
47% often choose a recognised
brand when buying wine in a pub / bar
55% would expect to pay more for
a recognised brand in a pub / bar compared to a
supermarket
An area where you can build brands
South African
Brand Equity
Is South Africa Losing it’s Branded Identity?
South African Growth has been
built on these top 4 Brands
MAT vs YA = -£25.8 M
The top 5 brands are in strong decline which isn’t off set by those who are growing
MAT vs YA = +£22.4 M Source: Nielsen Scantrack Data to WE 05.12.15
Total Coverage | Value sales in £ | Top Brands & Winners | MAT TY
The Stealth squeeze however is coming from Own Label
£4.46
£4.58
£4.74
£4.60
£4.66
£4.48
£4.61
£4.71
£4.78
£4.30
£4.40
£4.50
£4.60
£4.70
£4.80
£4.90
Volume2 Yrs Ago
Volume LY Volume
Exclusives Private Label Lead Brand
48.0% 49.3% 45.0%
21.2% 24.5% 30.7%
30.8% 26.2% 24.3%
0%
10%
20%
30%
40%
50%
60%
70%
80%
90%
100%
Volume2 Yrs Ago
Volume LY Volume
Exclusives Private Label Lead Brand …and its being done on price
Price 2
years
ago
Price
Last
year
Price
This
year
Running Duck
False Bay
Stowell’s Signature
Kumala
YoY Actual volume change (9LCs) 5.4%
(+2.2%)
2.9%
(-1.3%)
3.6%
(+0.7%)
3.1%
(-0.1%)
1.2%
(-0.4%)
Volume share Change
Sauce: CGA Strategy Brand Index MAT data to P05 2015
Kumala outperforms
the market, primarily
due to competitive
pricing and high
consumer
recognition
The view in the on trade is somewhat different – recognisable
brands are helping to spread South African wine and grow sales
What do consumers
think?
1.31 Ltrs
-2.5%
Volume per
Trip
2015
Repeat
Buyers
2015
1.28 Ltrs
-2.9%
Volume per
Trip
2014
Repeat
Buyers
2014
55.1%
+1.7%
Behaviour changes that we are seeing in the South Africa
Category
55.8%
+1.3%
8.8 x
+1%
Frequency
2015
8.7%
+8 % Frequency
2014
Off Set
Penetration
2015
Penetration
2014
32.7%%
30.9%
-5.5%
Off Set
South African Wine is losing to more premium Countries, only gains made
from Germany
£5.07
£5.26
£5.34 £7.16 £5.37
Average Price per 75cl
(Total Coverage)
Nielsen – Homescan & Scantrack – Data to 18.07.15
Trading up – or showing
off South African wines
Pricing hierarchy or ‘the ladder of Trust’
The shape of South Africa’s Wine Category
Total Light Wine & South Africa Price Band | GB Off Trade – Volume | MAT TY
58.5% of wine sells at £5 and under.
Some exciting development over £6
Nielsen – Scantrack – Data to 05.12.15
Low end is beginning to see
change, with volume share
flat and a decline in RoS
RoS in managed outlets
-
5.00
10.00
15.00
20.00
25.00
30.00
<£15 £15 to £20 >£20
MAT YA MAT TY
In the On Trade growth is in the mid tier as well as premium
wines
High end South African
wine seeing solid
volume and RoS growth
Mid is in RoS growth
Differentiating to make a mid tier
Succeeding with
Varietals
South African Sauvignon Blanc has been the back bone of growth
Sauvignon Blanc declined by -
£0.6M vs. MAT YA, accounting
for -1% of South African Decline
However… progress
slowed as New
Zealand Sauvignon
Blanc has recovered.
Value % Chg YA – Sauvignon Blanc
(12 week periods)
Nielsen – Scantrack – Data to 05.12.15
Avg Price - £5.22 Avg Price - £5.19
Shoppers are beginning to Switch to Chilean Sauvignon
Blanc!
Shiraz was another key contributor MAT YA, however £5m has been lost
TY as Australian Shiraz gains another £9M
Source: Nielsen ScanTrack Data to WE 05.12.15
Total Coverage | Value sales in £ | Top 10 Varietal | MAT TY
-9.7% +5.3
%
South Africa’s strength is in its own identity.
Chenin and Pinotage are not yet the heroes of the South
African Category
£0
£20,000,000
£40,000,000
£60,000,000
£80,000,000
£100,000,000
£120,000,000
£140,000,000
£160,000,000
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PIN
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MAT 2YA MAT YA MAT TY
Chenin Blanc is
the largest white
South African
varietal by volume,
however, it is seeing
a continued volume
decline losing -34% over the past 4
years
Pinotage is the largest red
South African varietal by
volume and has held onto
most of its growth in the
long term, despite
declining -4.9% this year
Nielsen – Scantrack – Data to 05.12.15
The grapes that could help turn the category around are yet to be fully
exploited
-16.4% vs YA (Volume chg.)
Nielsen – Scantrack – Data to 05.12.15
+3.6% vs YA (Volume chg.)
More support for wine’s that command a higher price point
will stop the premium Pinotage market from suffocating.
Chenin Blanc decline is driven by Private Label, here more
premium lines are in strong growth
+14.3% vs YA (Volume chg.)
- 12.6% vs YA (Volume chg.)
Total Coverage | Volume growth chg. vs. YA | Pinotage & Chenin Blanc | MAT TY
Is South African Wine
Sexy?
Not really.
Situation - South African Wine sales have fallen back -7% in value and
Volume over 2015 following strong growth in the years preceding this.
Complication - South African Wine continues to operate in the under
£5 market, a sector which is in market decline.
Success in recent years has been built on International varietals such as
Sauvignon Blanc and Shiraz. Progress on both has slowed down.
Key Brand performance has fallen dramatically as the category turns to lesser
known products for volume.
Make South African
wine Sexy
The Answers
A credible mid tier will help consumers discover
the great wines South Africa has to offer
Lets be proud of the regions and the grapes. Native varietals such
as Chenin Blanc and Pinotage offer differentiation and growth
potential
Strong Brands are vital for the future success of South
African Wine
International varietals such as Sauvignon Blanc and Shiraz have
helped the category grow, they serve a purpose and shouldn’t be
ignored. However there future is largely dependant on other
countries (e.g. NZ, Australia)