Case profile: Alcohol Retailing on the European Forecourt

Case profile: Alcohol Retailing on the European Forecourt

Introduction
 
Despite the existence of some restrictions on the sale of alcohol on the European forecourt, there is no mistaking the fact that petrol stations are a convenient distribution channel for this product. Based on our Interactive Consumer Database, this case profile outlines the growth in alcohol demand across 19 markets, presenting strategies to maximize its sale at petrol stations.
 

 
Scope
 
An examination of the size of the market as well as historic and forecast growth for beer, wine and spirits across 19 European markets.
 
A country comparison of the growth in off-trade consumption and data on the number of at-home drinking occasions.
 
An assessment of the various strategies employed on the forecourt, and beyond, in the sale of alcoholic beverages
 
A set of practical recommendations for those wishing to pursue or grow the sale of alcohol on the European forecourt
 
Highlights
 
The fastest growing markets for beer are Italy, Poland, Greece and Spain, although it is only the latter two that are experiencing growth rates in excess of 2%. The Spanish market experienced a compound annual growth rate (CAGR) of 5.09% from 1999 to 2004 and is forecast to grow at 6.82% year-on-year from 2004 to 2009.
 

 
The Mediterranean markets are experiencing a shift in beer and wine consumption patterns towards off-trade. Total European at-home alcohol consumption volume is forecast to increase over 2004-2009 at a CAGR of 0.4%. Despite the net number of at-home alcohol drinking occasions declining, the quantity of alcohol consumed at the weekend is increasing
 

 
To fully exploit rises in demand and to compete with others retailers, forecourt retailers must ensure multiple pack promotional offers in beer. Furthermore, they must stock 5 to 6 key brands and introduce one-off specialty beers in the context of a promotion to respond to consumers growing interest in this product.
 

 
Reasons to Purchase
 
Identify which markets offer the greatest opportunity in terms of alcohol sales through the forecourt.
 
Ensure that the changing needs of consumers are being met by offering new, improved, or replacement product types when required.
 
Assess how product placement, promotions and pricing strategies can best be manipulated to boost sales and meet customer demand.
 

TABLE OF CONTENTS
 
CHAPTER 1 EXECUTIVE SUMMARY 3
 
Trend 1 3
 
Trend 2 3
 
Trend 3 4
 
CHAPTER 2 INTRODUCTION 9
 
This case profile outlines the opportunity for selling alcohol through the forecourt and assesses its viability across core European markets 9
 
Assessing the opportunity 9
 
Seizing the innovation 9
 
Implementation 9
 
This case profile is based Datamonitor’s Interactive Consumer Database (ICD) and detailed interviews with non-fuel executives 10
 
Nineteen consumer markets are covered in the analysis 10
 
This profile is aimed at those needing a greater insight into customer requirements when selling alcohol through the forecourt 11
 
CHAPTER 3 ASSESSING THE OPPORTUNITY 13
 
Introduction 13
 
Key findings 13
 
Germany and the UK, Europe’s largest consumers of beer, have both been experiencing negative growth in the category since 1999 14
 
The fastest growing markets for beer are Spain, Italy, Poland and Greece 14
 
With a growth rate of 1.04% year-on-year until 2009, wine is the fastest growing alcoholic beverages category in Europe of those assessed 15
 
The greatest decline in wine consumption is apparent in Europe’s traditional wine-producing regions 16
 
The market for spirits is growing most rapidly in Poland, the UK and Switzerland 17
 
Five of the 19 markets assessed are forecast to experience negative growth in the consumption of spirits 17
 
The two primary consumption occasions are on-trade and off-trade, with an increase in off-trade consumption denoting a positive opportunity for forecourt retailers 18
 
The Mediterranean markets, particularly Iberia, are experiencing a shift in beer consumption patterns towards off-trade 19
 
Smaller European markets, such as Greece, Portugal and the Netherlands are experiencing a shift in wine purchasing towards off-trade channels 20
 
Of all the categories, spirits are experiencing a shift towards off-trade in the largest number of markets 21
 
At-home drinking occasions across the 19 markets are forecast to increase during the weekend 22
 
The volume of the at-home drinking market is increasing over the 19 markets although consumption per capita is forecast to remain stagnant 23
 
Legislative restrictions in some markets ensure that not all forecourt retailers are positioned to exploit the growth in the off-trade 25
 
Beer is the core alcohol category sold through the forecourt and will continue to be making it the most attractive revenue generator 26
 
CHAPTER 4 CUSTOMER FOCUS ERROR! BOOKMARK NOT DEFINED.
 
Introduction 27
 
Key findings 27
 
On the forecourt, 4, 6 or 8 packs of beer are better than single cans and bottles 28
 
Extra cold beers compete for consumers during the summer months as al fresco dining peaks 28
 
Whilst typically associated with sporting events and socialising, beer can also benefit from food pairings 29
 
Bag-in-Boxes (BIB) wine is an attractive alternative to bottled wine 30
 
Positioning wines beside complimentary food options will exploit the trend towards at-home dining 32
 
Discounted deals, such as 3 for 2 wine offers, should not be reserved for supermarkets 32
 
Premium spirits and liqueurs sell faster when displayed near check-out tills or at the end of aisles 34
 
A popular strategy is to promote and discount a specific brand of spirit each month 35
 
CHAPTER 5 IMPLEMENTATION 36
 
Introduction 36
 
There are recommendations surrounding each of the categories for forecourt retailers hoping to exploit the growth in off-trade alcohol purchasing 36
 
Beer 36
 
Wine 36
 
Spirits 37
 
CHAPTER 6 APPENDIX 38
 
Glossary 38
 
SPP writing team 38
 
LIST OF FIGURES
 
Figure 1: ICD Components 10
 
Figure 2: The Spanish beer market is forecast to grow at a compound annual rate of 6.8 per cent from 2004 to 2009 14
 
Figure 3: Ireland and Sweden are expected to experience the greatest growth in wine consumption with CAGR’s of 5.7 per cent and 4.9 per cent, respectively, over 2004-2009 15
 
Figure 4: The UK market for spirits is forecast to grow at a compound annual growth rate of 2.4 per cent from 2004 to 2009 17
 
Figure 5: Over 75% of beer consumption in the Scandinavian markets occurs in the off-trade sector 19
 
Figure 6: Spain is the only market where the majority of wine is consumed in licensed premises 20
 
Figure 7: In Ireland, 2.6 per cent of spirits volumes have shifted from on-trade to off-trade distribution channels 22
 
Figure 8: At-home drinking occasions during the weekend are forecast to grow at almost 1 per cent annually, 2004-2009 23
 
Figure 9: At-home consumption volume is forecast to increase at a CAGR of 0.4%, 2004-2009 24
 
Figure 10: The forecourt channel accounts for less than 3% of beer sales across Europe, however this is expected to increase 26
 
Figure 11: Forging an association between beer and food will increase average basket spend 30
 
Figure 12: BIB are an alternative to the traditional glass bottle and cork or screw cap option 31
 
Figure 13: Supermarkets have brought 3 for 2 wine offers to the forecourt 33
 
Figure 14: Baileys is a popular liquer option for the forecourt shop 34