Liquor State of the Industry 2017-18 AUSTRALIAN RETAIL LIQUOR TRENDS · 2018. 8. 10. · retail...
Transcript of Liquor State of the Industry 2017-18 AUSTRALIAN RETAIL LIQUOR TRENDS · 2018. 8. 10. · retail...
IRI Australia Channel Development
July 2018
AUSTRALIAN RETAIL LIQUOR TRENDS
Liquor State of the Industry 2017-18
© 2018 Information Resources Inc. (IRI). Confidential and Proprietary. 2
AGENDA: 6 sections, 30 themes, released in July and August 2018
Retail Liquor Overview Retail Trends in Beer Retail Trends in Cider
Accelerated Growth Moderate Growth Cider Contracts
Locally Convenient Mainstream Malaise Mainstream Malaise
Online Outperforms Modern Moderation Modern Moderation
Ranging Rethink Locally Authentic Locally Authentic
Booming Brands World Beer Hotpots Canned Convenience
Available w/c July 02, 2018 Available w/c July 16, 2018 Available w/c July 30, 2018
Key c
ate
gory
them
es
Source: IRI analysis
This is part 1 of a 6 part
series reviewing
performance trends in the
major liquor categories
© 2018 Information Resources Inc. (IRI). Confidential and Proprietary. 3
AGENDA: 6 sections, 30 themes, released in July and August 2018
Retail Trends in RTD Premixes Retail Trends in Glass Spirits Retail Trends in Wine
RTD Resurgence Slowing Growth Consistent Gains
Mainstream Momentum Mainstream Malaise Price-Format Contrasts
Bold & Refined Light & Versatile Concentrated Growth
Modern & Refreshment Masstige Momentum Champagne Cools
Brand/Format Overlap Super/Ultra Premium New Directions
Available w/c August 13, 2018 Available w/c August 27, 2018 Available w/c August 27, 2018
Key c
ate
gory
them
es
Source: IRI analysis
© 2018 Information Resources Inc. (IRI). Confidential and Proprietary. 4
Retail Liquor Overview
Retail Liquor Overview
Retail Trends in Beer
Retail Trends in Cider
Retail Trends in RTD Premixes
Retail Trends in Glass Spirits
Retail Trends in Wine
© 2018 Information Resources Inc. (IRI). Confidential and Proprietary. 5
Retail liquor continues to record respectable annual dollar growth
Accelerated Growth
• All categories except cider recorded YOY growth
• Robust 3.0% dollar uplift (vs. 2.3% YA) contrasts slight volume losses
• All states recording annual sales gains
Locally Convenient
• Above average growth of convenience-led operators is bolstered by ‘little-and-often’ shopping
• Liquorland and BWS rising to prominence due to a range of impactful retail evolutions
Online Outperforms
• E-commerce is outperforming bricks & mortar in total retail, and in retail liquor
• Addressing the ‘digital shelf’ is key as liquor shoppers adopt an ‘everything now’ mindset
Ranging Re-think
• Proliferation in beer SKUs contrasts wine rationalisation
• Brands in decline (2,898) still exceed those posting growth (2,547)
• Led by beer, private label is recording faster growth
Booming Brands
• Great Northern remains, by some distance, the major driver of topline liquor growth
• The top 10 growth brands are generally recording growth momentum over at least 2 years
1 2 3 4 5
Source: IRI analysis; IRI MarketEdge, MAT To 03/06/18
© 2018 Information Resources Inc. (IRI). Confidential and Proprietary. 6
Australia’s $17.6bn retail liquor channel is growing at 3.0% annually
TOTAL LIQUOR
$17.64bn($17.12bn)
3.0%(2.3%)
0.9%(2.4%)
$518m($390m)
-0.5%(0.4%)
ACTUAL
GROWTH
DOLLARS LITRES UNITS
Improved annual growthRobust dollar gains in spite of
marginally contracting volumes
Value outpacing volume gainsValue gains continually superior to
volume increases over 2 years
Broad category strengthPositive dollar growth in all
categories except cider
Accelerated Growth Locally Convenient Online Outperforms Ranging Rethink Booming Brands
Source: IRI MarketEdge, MAT To 03/06/18;
NB: Bracket value denotes prior YOY performance
© 2018 Information Resources Inc. (IRI). Confidential and Proprietary. 7
Growth contribution from RTD premixes notably over-indexes vs. share
158m
Beer SpiritsWine RTD Cider
178m 166m 106m
-4m
Share of Total Retail Liquor Dollar Growth
31% 28% 27% 16% -1%
Share of Total Retail Liquor
Accelerated Growth Locally Convenient Online Outperforms Ranging Rethink Booming Brands
129m
9m
142m
4m
Source: IRI MarketEdge, MAT To 03/06/18
145m 138m
81m
37% 21%26% 14% 3%
© 2018 Information Resources Inc. (IRI). Confidential and Proprietary. 8
Liquor gains are broadly comparable to total retail, and other FMCG
LIQUORTOTAL RETAIL*
$314bn($306bn)
PACKAGED GROCERY
P&C OTC PHARMACY
Accelerated Growth Locally Convenient Online Outperforms Ranging Rethink Booming Brands
Source: IRI MarketEdge, MAT To April-June 2018 (depending on channel);
*Australian Bureau of Statistics
3.0%DOLLARS
3.0%DOLLARS
3.4%DOLLARS
2.3%DOLLARS
2.6%DOLLARS
© 2018 Information Resources Inc. (IRI). Confidential and Proprietary. 9
Annual dollar growth in retail liquor is evident state-wide
3.5%(2.9%)
3.7%(4.3%)
3.5%(0.9%)
0.8%(-1.7%)
2.9%(2.2%)
1.8%(-1.1%)
2.6%(3.9%)
denotes share of total
retail liquor dollar sales
25%
28%
12%
2%
7%
%
3%
Nationwide growthAll states recording annual
revenue gains
Fastest growth in NSW Stronger growth across the
ESB states, and in SA
WA and NT turnaroundReturn to growth a
welcome boost nationally 23%
Accelerated Growth Locally Convenient Online Outperforms Ranging Rethink Booming Brands
Source: IRI MarketEdge, MAT To 03/06/18;
NB: Bracket value denotes prior YOY performance
$
$
$
$
$
$
$
© 2018 Information Resources Inc. (IRI). Confidential and Proprietary. 10
Negative YOY volume growth has been shaped by two latest quarters
Successive qtrs. of
volume declines Negative volume
growth so far in 2018
Accelerated Growth Locally Convenient Online Outperforms Ranging Rethink Booming Brands
Source: IRI MarketEdge, 8 quarters from 04/09/16 To 03/06/18
3.3
0.4
2.73.1
2.6
3.44.1
1.8
2.1
-2.5
1.1 1.4
0.20.7
-0.8
-2.0
Qtr To04/09/16
Qtr To04/12/16
Qtr To05/03/17
Qtr To04/06/17
Qtr To03/09/17
Qtr To03/12/17
Qtr To04/03/18
Qtr To03/06/18
Total Retail Liquor Dollar Growth % YA
Total Retail Liquor Litres Growth % YA
Seasonal influenceQ1 spike and Q2
slowdown influenced
by timing of Easter
Value outpacing
volume gains Inflationary impact of
excise gains, CDS
scheme in NSW, and
choice premiumisation
© 2018 Information Resources Inc. (IRI). Confidential and Proprietary. 11
Broadly upbeat trading statements reflect a mostly robust industry
Positive comparable sales
growth for consecutive
quarters over 2 years
Next phase: range
simplification, price
investment, and growth of
exclusive labels
Strong transaction
growth, with Liquorland
the key driver
Progressing a 5-
year transformation
strategy
Aiming to be the
“world's best
drinks retailer”
BWS and Dan Murphy’s
driving solid growth for
Endeavour Drinks
Dan’s: best price, widest
range, knowledgeable
service
BWS: convenient local
bottle shop with tailored
range
FY18: overall group
sales up 5.7%
Very, very strong sales
performance again
Continue to benefit from
people buying and
consuming more locally
Drive premiumisation the
consumer is looking for
Clear focus on
premiumisation and
trading customers up
Accelerated Growth Locally Convenient Online Outperforms Ranging Rethink Booming Brands
Source: IRI analysis; Company Trading Statements in 2017 and 2018
All relentlessly competing to be the easiest place in Australia to buy best-value drinks
© 2018 Information Resources Inc. (IRI). Confidential and Proprietary. 12
Six key factors underpin strengthening BWS performance
Created an aura of something
special happening every day
over summer
100 Days of Summer Delivery Enhancement Sporting Event Activations
Ramping up faster delivery
and one hour Click & Collect
across key metro areas
H2 2017 growth credited to
“strong execution around
key sporting events”
Repositioning as the “local
bottle shop” by empowering
store CEOs in ranging decisions
Improved price perception
and NPS by organising offers
into clear categories
Localised Range Improved Price Perception Rewards Alignment
Woolworths Rewards program
at a time of increased traffic in
Woolworths Supermarkets
Accelerated Growth Locally Convenient Online Outperforms Ranging Rethink Booming Brands
Source: IRI analysis; POPAI; Company Trading Statements
© 2018 Information Resources Inc. (IRI). Confidential and Proprietary. 13
Addressing the ‘digital shelf’ in liquor has never been so important
16%DOLLARS
16%DOLLARS
GROCERY LIQUOR
20%DOLLARS
>20%DOLLARS
17%PENETRATION
Australians
shopping for
liquor online
Accelerated Growth Locally Convenient Online Outperforms Ranging Rethink Booming Brands
Source: NAB Online Retail Sales Index; IRI Shopper Panel Survey;
Company Trading Statements in 2017 and 2018
15.1%(10.1%)
DOLLARS
Total
E-commerce
$25bn($21.7bn)
$3.3bnACTUAL
GROWTH
SHARE OF
TOTAL RETAIL
8%
66% of
shoppers
learn
about
products
onlinebefore
purchasing…
© 2018 Information Resources Inc. (IRI). Confidential and Proprietary. 14
Liquor retailers are meeting elevated expectations for ‘everything now’
10-15%MONTHLY
BWS Quick Service
Delivery across >300
metro stores
Dan Murphy’s has accumulated
an array of industry accolades
in recent years
Majors and specialists are ensuring faster delivery and more control and curationOn-demand delivery start-ups
All bridging the gap between online
and offline, and off-and-on premise
Accelerated Growth Locally Convenient Online Outperforms Ranging Rethink Booming Brands
Source: IRI analysis; POPAI; Company Trading Statements
$
© 2018 Information Resources Inc. (IRI). Confidential and Proprietary. 15
Wine remains the only category where SKU rationalisation is evident
3%
14%
1%
5%3%
0%
2%
12%
7%
3% 3%
-3%Total Liquor Beer Cider Spirits RTD Wine
MAT To 07/05/17 MAT To 06/05/18
Percentage change in Active Products (YOY), by category
21% 4% 12% 7% 57%
37% 3% 21% 14% 26%
% of liquor SKUs
$ share of liquor
Accelerated Growth Locally Convenient Online Outperforms Ranging Rethink Booming Brands
Source: IRI MarketEdge, MAT To 03/06/18
RTD
© 2018 Information Resources Inc. (IRI). Confidential and Proprietary. 16
An imbalance in brand performance suggests range cuts will persist
Masterbrands in growth:
2,547
Masterbrands in decline:
2,898Sub-brands in decline:
5,116
Sub-brands in growth:
4,535
Focus on range optimisation
Navigating liquor is harder than ever
Active Products:
26,874
Accelerated Growth Locally Convenient Online Outperforms Ranging Rethink Booming Brands
Source: IRI MarketEdge, MAT To 03/06/18
© 2018 Information Resources Inc. (IRI). Confidential and Proprietary. 17
Dan’s Connections exemplifies how online ranging can differentiate
Accelerated Growth Locally Convenient Online Outperforms Ranging Rethink Booming Brands
Source: IRI analysis; EDG Supplier Forum; danmurphys.com.au; news.com.au
Fragmenting and rapidly changing consumer preferences demands a broader and more bespoke rangeHeightened demand for niche and specialised products increases cost and complexity in the supply chain – especially for physical
retail. Online retailing allows retailers and suppliers to optimally meet the need of niche preferences without adding undue
complexity in the supply chain for SKUs that still have limited sales velocity (e.g. gluten-free beer)
Evolve to
12,000
SKUs
Next500 suppliers,
6,000
SKUs
Now
© 2018 Information Resources Inc. (IRI). Confidential and Proprietary. 18
Aldi’s simple and focused range is enticing value conscious drinkers
Growing trust/familiarity
with other Aldi labels
Conveniently located
next to check-out
Increased frequency of
Aldi visits nationwide
Focused, easy-to-
navigate liquor fixture
Large number of award
winning exclusives
Range of seasonal/
limited time liquor
Source: IRI analysis; Roy Morgan; aldi.com.au
Accelerated Growth Locally Convenient Online Outperforms Ranging Rethink Booming Brands
DR
IVE
RS
© 2018 Information Resources Inc. (IRI). Confidential and Proprietary. 19
Improved private label growth has been a key theme of 2017-18
Accelerated Growth Locally Convenient Online Outperforms Ranging Rethink Booming Brands
PRIVATE LABEL
$1.08bn($1.04bn)
4.8%(1.4%)
2.7%(1.1%)
$50m($14m)
4.8%(0.3%)
ACTUAL
GROWTH
DOLLARS LITRES UNITS
Private label
-3% 14%
3% 2%
0% 4%
Dollar growth % YA
2016-17 2017-18
$ $
$ $
$ $
36% 14%
$ $
+$24m
+$12m
+$7m
+$4m
-22% 24%
$+$3m
SKU
count
down -6% in last 2
years
$/litre
grew by
just 1% in last 2
years
RTD
$
Source: IRI MarketEdge, MAT To 03/06/18;
NB: Bracket value denotes prior YOY performance
© 2018 Information Resources Inc. (IRI). Confidential and Proprietary. 20
Great Northern remains the major driver of topline liquor growth
+239m
46% share of
industry $
growth
13%Dollars+268m
52% share of
industry $
growth
#1 dollar growth driving brand #2-10 dollar growth driving brands**
60%DOLLARS
Source: IRI MarketEdge, MAT To 03/06/18;
*CUB’s VP Marketing quoted in 2017 **National brands only
Accelerated Growth Locally Convenient Online Outperforms Ranging Rethink Booming Brands
11%DOLLARS
2 3
5 6 7
8 9 10
4“Great Northern Brewing
Company has seen
unprecedented growth and
will be a focus for CUB. It
is a true success story”*
© 2018 Information Resources Inc. (IRI). Confidential and Proprietary. 21
+436m
+71m +71m +52m +40m +36m +30m +29m +25m +22m
A two-year view further illuminates Great Northern’s vast impact
Private label
Legendary
Bre
win
g C
o
104
weeks +811mTO
P
10 brands
+220% *NEW* +29% +993% +46% +6% +52% +149% +38% +9%
Gre
at
No
rth
ern
Ca
na
dia
n
Clu
b
Fu
rph
y
Ja
ck
Da
nie
ls
Squealin
g
Pig
Actual Dollar Growth
Dollar growth % 104 wks.
Source: IRI MarketEdge, 104 Wks. To 03/06/18
Ya
k A
les
Asa
hi
Accelerated Growth Locally Convenient Online Outperforms Ranging Rethink Booming Brands
Ja
me
so
n
Ja
co
b’s
Cre
ek
© 2018 Information Resources Inc. (IRI). Confidential and Proprietary. 22
Developments on the horizon…
LEADING GROWTH BRANDS, ESPECIALLY IN BEER, ENDURE
- The primary battleground will revolve around ongoing share accumulation of Great Northern and Iron Jack. For the foreseeable future, the brands will remain the number 1 and 2 category drivers due to momentum sustaining investment
- The expansion of Furphy outside of Victoria will augment the brand’s success to-date, but will (further) impinge on select mainstream craft and classic beers
‘FRICTION-FREE’ RETAILING WILL PROGRESS
- Consumers will embrace online shopping across a broader range of product formats to more comprehensively include FMCG items (including liquor) in their repertoire
- Established liquor retailers will amplify efforts to enable more personalised choices, personalised promotions and seamless collection/delivery via improved e-commerce
- Online evolution will be key to catering for fragmenting/niche consumer preferences
DIRECT-TO-CONSUMER (DTC) RETAILING TO EMERGE
- Online is also an apt way for suppliers to personally engage and sell directly to consumers, underpinned by the authenticity and connection of the producer. The model inherently suits the burgeoning demand for craft beer and craft distilling
- Moët Hennessy’s Clos19 initiative internationally highlights that larger suppliers too can creatively utilise DTC in order to boost online sales, and in bringing-to-life quality focused brand experiences (e.g. choice/usage curation, exclusive content etc.)
Source: IRI analysis; clos19.com
© 2018 Information Resources Inc. (IRI). Confidential and Proprietary. 23
Coming next in this series: Retail Trends in Beer
Retail Liquor Overview Retail Trends in Beer Retail Trends in Cider
Accelerated Growth Moderate Growth Cider Contracts
Locally Convenient Mainstream Malaise Mainstream Malaise
Online Outperforms Modern Moderation Modern Moderation
Ranging Rethink Locally Authentic Locally Authentic
Booming Brands World Beer Hotpots Canned Convenience
Available w/c July 02, 2018 Available w/c July 16, 2018 Available w/c July 30, 2018
Key c
ate
gory
them
es
Source: IRI analysis
This is part 1 of a 6 part
series reviewing
performance trends in the
major liquor categories
© 2018 Information Resources Inc. (IRI). Confidential and Proprietary. 24
Look out for upcoming additional insights and inspiration from IRI…
Liquor State of the Industry
Mid-Year Update
Five Wellbeing Trends Shaping
Liquor Choices
Boundary Blurring Influences
in Liquor NPD and Marketing
• Retail Liquor Overview • Moderation & Abstention Trends • Cross-Category Barrel Aging Trends
• Retail Trends in Beer • Less-of-the Best: Trade-Up Trends • Flavour Infusion & Blending Trends
• Retail Trends in Cider • The Rise of Lower ABV • Cross-Category NPD Adaptation
• Retail Trends in Glass Spirits • Healthier Liquor Attribute Trends • Promotional Co-Branding
• Retail Trends in RTD Premixes • The Rise of Alcohol-Free
• Retail Trends in Wine
© 2018 Information Resources Inc. (IRI). Confidential and Proprietary. 25© 2018 Information Resources Inc. (IRI).
Confidential and Proprietary.25
IRI AustraliaBuilding F, Level 3 Homebush Bay Drive,
Rhodes, NSW 2138
Email: [email protected]
Follow us on Twitter: @IRIworldwide
FOR MORE INFORMATION, CONTACT US…