WHAT’S GOING ON – ALL AROUND US? · RTD Coffee Sports Drinks Liquid Tea Lactose Red./Free Milk...

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Copyright © 2017 The Nielsen Company. Confidential and proprietary.

Wine Market Council Membership Meeting – May 9, 2019Danny Brager - SVP, Nielsen Beverage Alcohol Practice

WHAT’S GOING ON –ALL AROUND US?

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PER CAPITA ALCOHOL CONSUMPTION IS FLATWe’re in a battle for share – within & beyond Alcoholic Beverages

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Spirits & Wine Gaining Share – at Beer’s Expense

Source: BW166

0%

10%

20%

30%

40%

50%

60%

70%

80%

90%

100%

2003 2004 2005 2006 2007 2008 2009 2010 2011 2012 2013 2014 2015 2016 2017 2018

Share of Servings – Total Bev Al = 100%

Beer Wine Spirits

56.0% 48.0%53.5% 51.0%58.3%

29.7% 34.4%31.1% 32.4%28.2%

14.3% 17.5%15.4% 16.6%13.6%

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Volume

• Entering distribution: +1.2%

• Wholesaler depletions: -0.6%

• Off Premise: -0.4%

• Restaurants/Bars: +0.9%

• DtC shipments: +8.9%

Consensus on Wine Sales Slowing - for the last 2 years –and continuing to decelerate thru Q1 2019

Annual 2018…. percent change vs prior year

+2.2%

+1.2%

+11.6%

Dollars

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Consumers (in Particular Occasionals) – Reinforce SlowdownChange in wine consumption vs a couple of years ago

Base: Age 23+ and Drink Wine several times a year or more often (n=1,180)Q: How has your consumption of Wine changed compared to a couple of years ago?Source: Survey conducted online by The Harris Poll in partnership with Nielsen (January 7-9, 2019); n=1,964 U.S. adults 21+

59%

23%18%

About thesame

Less More

Highest “Net” Negatives at Younger & Older Ages

46% 43%45%

25%

9%

32%

High FrequencyConsumer

OccasionalConsumer

Same More Less

Source: Wine Market Council ORC Segmentation Survey June/July 2018


What’s Happening Out There?

THE BIG PICTURE

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U.S. CURRENT STATE OVERALL

Economic indicators

improving, but headwinds

remain

Overall CPG sales volume flat

but dollars up; growth in

perimeter and e-commerce

Store Brands winning

Bifurcation of wants:

health & wellness versus

indulgence

Connecting With Shoppers

Digital Shopping& Digital Retailing

Winning the Occasion

Price & Value

Right Products

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Drinking “better” (not a lot more) Mindful Drinking/Health & Wellness

Convenience – What, How, & Where

Category/Brand/Channel Promiscuity

Blurring - Categories & Channels

Sharing – Everything

Combined Drink & Food Occasions

Fusions & Flavor Diversity

Cannabis; Non Alc Beverages

Authenticity; Transparency

Seeking “Experiences”

Local, Local, LocalMulti-Cultural

Smaller Serves

CONSUMERS - Challenges & Opportunities

Generational DiversityLittle Pop’n Growth; Ageing Pop’n

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Wine Still Premiumizing ($11+) – but at a Slower Rate

Source: Nielsen Total U.S. All Outlets (xAOC + Liquor Plus + Conv + Military); 52 w/e 4-20-2019

-8

-6

-4

-2

0

2

4

6

8

10

12

14

4 Yr Ago 3 Yr Ago 2 Yr Ago 1 Yr Ago Lat 52 wks Lat 26 wks Lat 13 wks

Table Wine Glass Dollar Growth Rates – by Price Tier (per 750 ML EQ)

$15-$20$11-$15$20-$25

$4-$8<$4

$8-$11

$25+

$11-$15

$15-$20$20-$25

$25+

$8-$11

$4-$8<$4

PREMIUMIZATION

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Experience

CONSUMER DRIVEN EXPERIENCES

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Rise in Ordering in, and Staying In –Headwind for Drinking in the On Premise

CONVENIENCE

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0 1,000,000 2,000,000 3,000,000

Beer

Spirits

Wine

Current Year Prior Year

Bev Al E-Commerce – Wine Leads, by Far!!!Beval Ecom Buyers by Category- total U.S.52 w/e 1-31-2019 vs prior year

Source: Nielsen e-commerce measurement powered by Rakuten Intelligence

9%13%

78%

US Bev Al online $ share - 2018

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Base: Drink Alcohol Several Times A Year Or More Often (n=1,525)Q: How much effort are you currently making to reduce your overall consumption of alcohol beverages?

47%

66%54%

44%36%

25%

52%46% 48%

RegularDrinkers

21-34 35-44 45-54 55-64 65+ Beer Wine Spirits

Source: Survey conducted online by The Harris Poll in partnership with Nielsen (January 7-9, 2019); n=1,964 U.S. adults 21+

% Indicating Strong/Moderate Effort to Reduce Consumption of Alcohol

Efforts To Moderate Alcohol Consumption Led By Younger LDA’s – Mindful Drinking

SOCIAL MODERATION

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#1 reason for drinking less is

“opting for healthier lifestyle”

Source: Survey conducted online by The Harris Poll in partnership with Nielsen (January 7-9, 2019); n=1,964 U.S. adults 21+

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Battle for Occasions –Hearts, Minds, & Wallets

Cannabis

Non Alc Bev

Competition All Around Us…

Beer

Spirits

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32%36%

19%

10%

Vodka Whiskey Craft Beer Table Wine

Loyalty Average for top 12 brands in Category (Dollars)

Source: Nielsen Homescan Panel (All Outlets: Period 2-25-2018 thru 2-23-2019

Wine Brand Loyalty is Relatively Low; Product Exploration, Promiscuity, and Discovery is High

How to Read:

Across top Wine brands, buyers satisfied 10% of their overall Wine purchasing via that brand; 90% with others

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17

Competition – Other Beverage Categories

Non-Alc Bev $7B bigger today vs 4 years ago

HardCider

HardTea

HardSeltzer

HardKombucha

HardCoffee

HardWater

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WHAT’S GROWING ACROSS THE BEVERAGE AISLE

Source: Nielsen measured Off Premise channels -xAOC + Convenience (and Liquor channel for Beer) -all categories thru 12-22-2018,except Milk products thru 1-12-2019; Milt/Dairy Alt – Almond Milk, Soy Milk, Coconut Milk, Rick Milk, Oat Milk, Blend/Rem Milk; Beer

2018 $ (MM) $13,074 $12,293 $2,826 $2,433 $6,132 $4,448 $1,162 $553 $1,558 $137

CAGR +3.9% +3.7% +11.7% +9.0% +2.0% +2.7% +11.8% +35.5% +5.0% +12.6%

$-

$500

$1,000

$1,500

$2,000

$2,500

Water(Reg+Value

Add)

EnergyBev

Spkg/SeltzerWater

RTDCoffee

SportsDrinks

LiquidTea

LactoseRed./Free

Milk

Komb/ ProbDrks

Milk/Dairy Alt

AloeDrinks

Mill

ions

of D

olla

rs

Large/Growing Non-Alc Beverage Categories 2018 vs 2014 Dollar Change ($MM)

WHAT’S DECLINING:

COW’S MILKFRUIT JUICECARB SOFT DRINKS

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19

Where Does the Competitive Landscape Begin and End?

“all the spirit without the spirits”

“we found ourselves chatting about not wanting to drink as often, or as much, as we had before. When in

a cocktail state of mind, we wanted something sipable, delightfully

complex and interesting, and not an overly sweet mocktail”

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HARD SELTZERS


$0

$100,000,000

$200,000,000

$300,000,000

$400,000,000

$500,000,000

$600,000,000

$700,000,000

4 Yr Ago 3 Yr Ago 2 Yr Ago 1 Yr Ago Lat. 52 weeks

Hard Seltzers22 BRANDS/147 ITEMS

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• new range of modern and sophisticated spirits • crafted with zero sugar• infused with natural flavors & essence of real botanicals

Smirnoff Zero Sugar Infusions!

• distilled with real botanicals and infused with natural fruit and botanical essences.

• Made with 100% non-GMO grain• 30% ABV spirit • no carbs, no artificial flavors, no added sugars,

no artificial sweeteners and only 73 calories (40% fewer calories than a glass of white wine)

Ketel One Botanical

Seedlip - “nonalcoholic spirit” • macerating herbs and botanicals in

neutral grain spirit and water• copper-pot distillation• flavors powerfully concentrated.• mimics that of a spirit

Heineken 0.0 • alcohol free • 69 calories per bottle• Made with natural

ingredients• Expands “drinking”

occasions

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MANY COMPANIES READY TO

POUNCE IF FDA APPROVES CBD FROM HEMP in INGESTIBLES

CBD from Hemp already on the scene in non-consumable forms, but…

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0 Cal/ 0 Carb

Cannabis – Bev Al Style

Less than 50%* of the Legal Cannabis market is now “FLOWER”

Source


BEVERAGE ALCOHOL

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Volume Value Volume Value

Total CPG -0.7% +1.7%Beer/FMB/Cider -0.5% +1.3% -1.6% +0.3%

Wine-0.8% +2.0% +0.9% +1.3%-0.7% n/a

Spirits+2.1% +4.5% +1.5% +2.0%+3.7% +6.7%

1) Spirits Leading and Accelerating; Beer Lagging, Wine in the Middle; 2) Consumers Trading Up

Off premise On premise

Source: Nielsen Off Premise channels –52 w/e 4-20-2019Source: Total CPG – Nielsen xAOC + C-store – 52 w/e 3-3-2019NABCA – thru February 2019

Source: Nielsen CGA On Premise channels – 52 w/e 2/23/2019Restaurants/Bars’

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Total Store* CPG vs. Bev Al Rolling 52 Week Dollar Trends

SPIRIT GROWTH GAP WIDENING – WINE IN LINE WITH TOTAL STORE GROWTH

*Total Store Definition – Includes Departments Bakery, Baby Care, Dairy, Deli, Frozen, General Merchandise, Grocery, Health & Beauty Care, Household Care, Meat, Pet Care, Produce…. Does NOT Include Alcohol and Tobacco Products (UPC Coded + Random Weight)

1.31.42.0

2.5

4.6

2.52.3

0.3Rolling 52

Wks -04/20/19

Rolling 52Wks -

03/23/19

Rolling 52Wks -

02/23/19

Rolling 52Wks -

01/26/19

Rolling 52Wks -

12/29/18

Rolling 52Wks -

12/01/18

Rolling 52Wks -

11/03/18

Rolling 52Wks -

10/06/18

Rolling 52Wks -

09/08/18

Rolling 52Wks -

08/11/18

Rolling 52Wks -

07/14/18

Rolling 52Wks -

06/16/18

Rolling 52Wks -

05/19/18

Rolling 52Wks -

04/21/18

Rolling 52Wks -

03/24/18

Rolling 52Wks -

02/24/18

Rolling 52Wks -

01/27/18

BEER WINE SPIRITS TOTAL STORE

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DM Premium

DM Below Premium

DM Super Premium

Mexican

Craft

FMB

Imports ex Mexico

Cider

-14

-12

-10

-8

-6

-4

-2

0

2

4

6

8

10

12

14

16

18

-12 -10 -8 -6 -4 -2 0 2 4 6 8 10 12 14 16 18

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Value Percent Change

Mexican, DM Super Premium, Hard Seltzers (in FMB) Leading Growth; Craft Stalled

Total U.S. - Off Premise

Source: Nielsen Total U.S. All Outlets (xAOC + Liquor Plus + Conv + Military); 52 w/e 4-20-2019; Bubble = Annual $ Share; Total Beer/FMB/Cider

55% Fewer Carbs than a Glass of White Wine

– Lighter/sessionable styles, but Higher ABV IPA style’s too

– Juicy/Hazy/NE Style IPA’s– Sour styles– Cans– Local, local, local

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Vodka

Whiskey

CordialsBrandy

Cognac

Rum

Tequila

Gin

RTD's

-6

-5

-4

-3

-2

-1

0

1

2

3

4

5

6

7

8

9

10

11

12

13

14

15

-4 -3 -2 -1 0 1 2 3 4 5 6 7 8 9 10 11 12 13 14 15

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Value Percent Change

Tequila, Whiskey, & RTD’s Leading

Source: Nielsen Total U.S. All Outlets (xAOC + Liquor Plus + Conv + Military); 52 w/e 4-20-2019 (Bubble = Annual $ Share)

Share of Whiskey % chgAmerican (46.9%) +7.6%Canadian (23.7%) +5.5%Scotch (20.8%) +3.5%Irish (7.8%) +11.3%Japanese (0.8%) +24.2%

Tequila also leads On Premise (+8%)

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$20

$31 $31 $31

$71

$33

$56

$22$32 $34 $32

$76

$35

$60

SeltzerWater

Kombucha SparklingWater

Kombucha Craft Beer Flav MaltBev

Tequila

Average Buying HH US HH Wine Buying HH

WINE DRINKERS ARE INCREASINGLY ENGAGED IN MANY OTHER BEVERAGES

Average U.S. Household vs Wine Buying Households -Average Annual $ Spend on Other Beverage Segments

Source: Nielsen Homescan Panel, Total US, 52 Weeks Ending 12/29/18

+$3vsYA +$6 +$.05+$6 +$1.5+$3 +$3

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With Wine Growth Decelerating, More Important Than Ever To Focus On Pockets of Growth

Nielsen: Total U.S. Off Premise Measurement (52 w/e 4-20-2019); Dollars

SIZE VERY SMALL SMALL MEDIUM LARGE

VarietalCab FrancGruner Veltliner

RoséProseccoSauv Blanc/NZ

Origin Austria Portugal Oregon FranceNew Zealand

Packaging 375 ml glass1 L glass

Cans1/1.5L box

Tetra 3L Box

Other Wine Cocktails Sangria

Wine Segments with Strong Growth

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ROSE’ WINE


$0

$100,000,000

$200,000,000

$300,000,000

$400,000,000

$500,000,000

$600,000,000

$700,000,000

$800,000,000

4 Yr Ago 3 Yr Ago 2 Yr Ago 1 Yr Ago Lat. 52 weeks

Rose‘ (Table & Sparkling)

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CANNED WINE


$0

$10,000,000

$20,000,000

$30,000,000

$40,000,000

$50,000,000

$60,000,000

$70,000,000

$80,000,000

$90,000,000

4 Yr Ago 3 Yr Ago 2 Yr Ago 1 Yr Ago Latest 52 weeks

Canned Wine – Annual Dollar Volume

22 BRANDS/386 ITEMS

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WINE BASED COCKTAILS


$0

$10,000,000

$20,000,000

$30,000,000

$40,000,000

$50,000,000

$60,000,000

$70,000,000

$80,000,000

$90,000,000

2 Yr Ago 1 Yr Ago Lat. 52 weeks

Wine-Based Cocktails

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The Cleanest Alcohol Available Today

We love our workouts but we also love our wine!With less sugar, fewer sulfites and no flavoradditives, we’re proud to say we’ve created.

GREAT TASTING WINES TO ENJOY TONIGHT WITHOUT SACRIFICING TOMORROW.

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21-34 Are Still Under-Represented Contributors to Wine Volume

0%

5%

10%

15%

20%

25%

30%

21-34 35-44 45-54 55-64 65+

Age Contribution to Wine% of Adults % of Buyers % of Volume

• Source: Nielsen Spectra (Simmons); Data Version – Dec 2018; Base: 2018 Census Adult Pop’n

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Younger Generations Buying Rate Well Behind Older Age Groups – in a Linear Fashion

• Source: Nielsen Homescan; Total U.S. Off Premise – All Outlets – 52 week period

0

20

40

60

80

100

120

140

HH AGE21-24

HH AGE25-29

HH AGE30-34

HH AGE35-39

HH AGE40-44

HH AGE45-49

HH AGE50-54

HH AGE55-64

HH AGE65+

WINE - Dollar Buying Rate by Age Group compared to Overall Category = 100

mid-2018

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Gender equality; broad age reach

Generational & Multi-cultural challenges

Hyper “Experience” spending

Growth hot horses

Growth in Drink & Food Occasions

Diversity – varietals; origin

DtC Shipments; e-CommerceE-Commerce gaps

Social moderation attitudes

Beer, Spirits, NA Bev, Cannabis

Expansion in Wine selling outlets

HEADWINDS TAILWINDS

Occasionals drinking less High Frequency drinking more

Little pop’n growth; Ageing pop’n

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What You Should Take Away

n Wine growth has slowed amidst rapid consumer shifts, and challenges from within and beyond Bev Al. We must FIGHT for share!

o Premiumization still a factor (north of $11) – but at reduced levels p Focus intensely on growth pockets where you can play/stand out

(distribution channels, product segments) but also be prepared to adjust q It’s imperative for us to meet the needs of younger consumers, while

also retaining Boomers into their Golden yearsr Give consumers what THEY want, where & how THEY want it –

INNOVATE! – Others are Doing It!!!


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WHAT’S GOING ON – ALL AROUND US? · RTD Coffee Sports Drinks Liquid Tea Lactose Red./Free Milk...

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Transcript of WHAT’S GOING ON – ALL AROUND US? · RTD Coffee Sports Drinks Liquid Tea Lactose Red./Free Milk...