Overview 1
Catalyst 1
Summary 1
TABLE OF CONTENTS 2
Table of figures 3
THE FUTURE DECODED 4
INTRODUCTION: Wine is beer's principal competitor in the global alcoholic drinks market 4
TREND: The overall alcoholic beverage market is defined by its maturity and the moderate consumption behaviors of consumers 4
Sales performance in the alcoholic beverages market highlights the contrast between the saturated, static markets of the West and the developing potential of key emerging markets 5
Trends in consumers' consumption occasions mirror the flat performance in sales volumes 8
Males remain the dominant gender in overall alcohol occasions, although female consumption is growing stronger 11
Alcohol consumption occasions decline with age as moderation behaviors rise and consumers' priorities shift 16
Moderation, driven by rising attentiveness to health issues, is increasingly characterizing many consumers' alcoholic beverage consumption behaviors 20
Moderation has also been influenced by economic circumstances, but consumers remain resistant to the concept of cutting back on alcohol for purely financial reasons 24
Alcohol abstainers: although a minority, those who never drink account for sizeable shares of LDA consumers 29
Key takeouts and implications: growth potential in the alcohol market will be centered on tapping new consumer groups and the sustenance of trading up behavior 34
TREND: Wine is a popular alcoholic beverages category that is not experiencing the same slow sustained decline seen in beer, cider & FABs 35
Wine sales figures show mixed fortunes, although the category is not in the middle of a sustained decline 35
Wine occasions are one of the key consumption occasions in the alcohol market but frequencies in some developed markets are falling 40
Although men typically enjoy more wine occasions, the category is not subject to the pronounced male bias seen in both beer and spirits 45
Wine consumption is still skewed towards older age groups 51
Categorization of wine consumers can cross typical demographic groupings with differing mindsets having important lessons for the industry 54
Key takeouts and implications: the outlook for wine remains more positive than that for other major categories despite the downturn 56
TREND: On and off-trade dynamics in the wine market: consumers' off-trade consumption is the fundamental driver of category sales 57
The shift in alcohol sales from the on-trade to the off-trade reflects a trend predating the global economic downturn 57
The economic climate is however influencing consumers' propensity to consume on-trade and also their product choices 63
Recent trends show increased motivation among consumers to consume off-trade 67
Time scarcity and related external pressures on alcohol consumption occasions adds impetus to the move to the off-trade 72
The frequency and location of on-trade consumption habits around the world underlines preferences for moderate relaxed drinking occasions 75
Consumers drink with greater frequency when at home than they do on-trade 80
Brand choice is being influenced by price both on and off-trade, although this is, perhaps surprisingly, more marked off-trade 84
The wine category is rooted in the off-trade in most key markets 90
Wine is less dependent on on-trade occasions than the overall alcohol market FINISH!!!!! 94
Particular pressures on the wine market in the off-trade stem from the so-called 'discount trap' 98
Key takeouts and implications: the strength of the off-trade in the wine market continues to offer a reasonable degree of security for the wine industry 100
INSIGHT: Changing consumer preferences in the wine market: food and health associations are strong points for wine 101
Some consumers are shifting between categories based on price and value-for-money considerations, but habit and experiential attributes remain highly important 101
Wine's continued success is heavily based on its strong association with eating 107
Wine's popularity by occasion type peaks when matched with food 109
Wine is a fundamentally social consumption experience, influencing its suitability for different types of occasions 118
The influence of health on alcohol choice: wine benefits from widespread awareness and acceptance of certain healthy attributes but still faces challenges in maintaining a credible healthy positioning 119
The popularity of lower alcohol versions of brands reflects both health awareness and the general trend for moderation, but presents problems for the wine market 124
Consumers' origin and style preferences within wine are influenced by quality, sensory and value factors 128
Distribution channel preferences among consumers are shifting in favor of supermarkets and convenience stores 130
The online channel is influencing consumers' purchase behavior and is a valuable tool in tracking their changing preferences 131
Authenticity is a growing consumer motivator and stronger point for the wine market 131
Key takeouts and implications: wine continues to capitalize on its association with eating and actively benefit from the moderation of non-food related drinking occasions 133
INSIGHT: Innovation trends in wine: upscale and natural/ethical halo claims lead in new product releases 134
Recyclable is the leading product claim associated with wine, underlining the growth of issues such as ethicality and sustainability in the market 135
Manufacturers have continued to focus on meeting the upscale/premiumization trend despite the economic crisis 137
Mature has emerged as a tag in wine as manufacturers and marketers embrace the core older consumer base more openly 139
Organic claims have become increasingly relevant as a premium measure, but 141
Private label wine releases have been given impetus by the economic backdrop and increased credibility among consumers 143
Key takeouts and implications: tracking the key consumer mega-trends is essential to directing innovation in the wine market 144
ACTION POINTS 145
ACTION: Build a compelling case for brand loyalty in the off-trade 145
ACTION: Be aware of the risks of discounting and promotions to post-recessionary sales and brand equity 147
Pursue approaches that offer price-conscious consumers more flexibility in their spending 149
Be measured in pricing strategies and educate consumers that less is not always better 150
ACTION: Target comfort-based and social occasions 150
ACTION: Look at inorganic growth opportunities through co-operation and consolidation 152
ACTION: Online distribution is a major opportunity for the wine industry 153
ACTION: Social Media presents opportunities for targeting younger wine drinkers 155
ACTION: Enhance approaches to effectively educate consumers 158
Make wine descriptions more useful to consumers 159
ACTION: Be ready for renewed trading up opportunities during the post-recessionary period 159
Maintain a strong focus on innovation and R&D during times of economic uncertainty 159
Start planning for the longer term by continually tracking consumers as an economic recovery begins to become a reality 160
APPENDIX 162
Methodology 162
Further reading and references 163
Ask the analyst 164
Datamonitor consulting 164
Disclaimer 164
LIST OF FIGURES
Figure 1: Alcoholic beverages market value and growth, 15 countries, across Europe, North and South America, and Asia Pacific 6
Figure 2: Alcoholic beverages market value (US$ millions) and volume (liters millions), by country, Europe, 2003-2013 7
Figure 3: Alcoholic beverages market value (US$ millions) and market volume (liters millions), Brazil and the US, 2003-2013 7
Figure 4: Alcoholic beverages market value (US$ millions) and market volume (liters millions) by country, Asia Pacific, 2003-2013 8
Figure 5: Number of alcoholic beverage occasions (millions), in 15 countries across Europe, the Americas and Asia Pacific, 2004-2014 10
Figure 6: Number of LDA per capita alcoholic beverage occasions, in 15 countries across Europe, the Americas and Asia, 2004-2014 11
Figure 7: Male dominance in expenditure on alcohol mirrors that seen in occasion numbers 13
Figure 8: Number of alcoholic beverage occasions (millions), Europe, comparison by gender, 2009 13
Figure 9: Number of alcoholic beverage occasions (millions), Europe, BY GENDER, 2004-2014 14
Figure 10: Number of alcoholic beverage occasions (millions), US & Brazil, comparison by gender, 2009 14
Figure 11: Number of alcoholic beverage occasions (millions), US & Brazil, BY GENDER, 2004-2014 15
Figure 12: Number of alcoholic beverage occasions (millions), Asia Pacific, comparison by gender, 2009 15
Figure 13: Number of alcoholic beverage occasions (millions), Asia Pacific, BY GENDER, 2004-2014 16
Figure 14: Number of alcoholic beverage consumption occasions (millions), by age, in 15 countries across Europe, the US, South America and Asia Pacific, 2004-2014 18
Figure 15: Number of per capita alcoholic beverage consumption occasions, by age, in 15 countries across Europe, the US, South America and Asia Pacific, 2004-2014 19
Figure 16: Consumer Survey: the level of attention given to 'ensuring you do not drink too much alcohol in general', by age, in 15 countries across Europe, the Americas, and Asia Pacific, 2008 19
Figure 17: Consumer Survey: How much attention do you give towards the following? Potential weight gain from drinking alcohol 21
Figure 18: In Europe, Italians are showing the highest overall commitment to consciously moderating their alcohol consumption 22
Figure 19: Over a quarter of US drinkers strongly agree that they are making an effort to moderate consumption 22
Figure 20: Asia Pacific consumers, compared to consumers globally, are less committed to moderating their alcohol intake despite relatively high levels of interest in restraint overall 23
Figure 21: Consumer Survey: Please indicate to what extent do you agree or disagree with the following statements: I make a conscious effort not to drink too much alcohol 24
Figure 22: Europeans are highly attentive to alcohol spend but its impact on overall consumption is limited 26
Figure 23: Brazilians and Americans show greater likelihood to cut consumption and are more attentive than Europeans, but a stark gap is still apparent 26
Figure 24: Asia Pacific exhibits a similar attentiveness/behavior gap in their alcohol consumption 27
Figure 25: Consumer Survey: How much attention do you give towards the following? The amount of money you spend on alcohol 28
Figure 26: Consumer Survey: In the past six months, please indicate to what extent have you done the following more or less frequently? Cut down on the overall amount of alcohol you buy/consume 29
Figure 27: Rate of alcohol abstention (% of LDA population and number of abstainers, millions), in 15 countries across Europe, the Americas, and Asia Pacific, 2009 32
Figure 28: Rate of alcohol abstention (% of LDA population), by gender, in 15 countries across Europe, the Americas, and Asia Pacific, 2009 33
Figure 29: Rate of alcohol abstention (% of LDA population), by age, in 15 countries across Europe, the Americas, and Asia Pacific, 2009 34
Figure 30: Wine market value (US$ millions) and volume (liters millions), by country, Europe, 2003-2013 37
Figure 31: Wine market value (US$ millions) and volume (liters millions), Brazil and the US, 2003-2013 38
Figure 32: Wine market value (US$ millions) and volume (liters millions), by country, Asia Pacific, 2003-2013 40
Figure 33: Number of Wine consumption occasions (millions), Europe, Brazil, the US, and Asia Pacific, 2004-2014 44
Figure 34: Per capita wine consumption occasions, Europe, Brazil, the US, and Asia Pacific, 2004-2014 45
Figure 35: Number of per capita wine consumption occasions, by gender, Europe, 2009 47
Figure 36: Number of per capita wine consumption occasions, by gender, Brazil and the US, 2009 47
Figure 37: Number of per capita wine consumption occasions, by gender, Asia Pacific, 2009 48
Figure 38: Number of wine consumption occasions (millions), by gender, Europe, Brazil, the US and Asia Pacific, 2004-2014 49
Figure 39: Percentage share of wine consumption occasions, by gender, Europe, Brazil, the US and Asia Pacific, 2004-2014 50
Figure 40: Wine marketers are more directly targeting women consumers, especially female Young Adults 50
Figure 41: Number of wine consumption occasions (millions), by age group, in 15 countries across Europe, the Americas and Asia Pacific, 2009 53
Figure 42: Number of per capita wine consumption occasions, by age group, in 15 countries across Europe, the Americas and Asia Pacific, 2009 54
Figure 43: Overall alcoholic beverage market volume sales (liters millions), by on-trade versus off-trade, in 15 countries across Europe, the Americas and Asia Pacific, 2003-2008 59
Figure 44: Share of overall alcoholic beverage market volume sales (%), by on-trade versus off-trade, in 15 countries across Europe, the Americas and Asia Pacific, 2003-2008 60
Figure 45: Share of overall alcoholic beverage consumption occasions, by on-trade versus off-trade, Europe, 2009 61
Figure 46: Share of overall alcoholic beverage consumption occasions, by on-trade versus off-trade, Brazil and the US, 2009 61
Figure 47: Share of overall alcoholic beverage consumption occasions, by on-trade versus off-trade, Asia Pacific, 2009 62
Figure 48: Number of on-trade alcoholic beverage consumption occasions (millions), in 15 countries across Europe, the Americas, and Asia Pacific, 2004-2014 62
Figure 49: Number of off-trade alcoholic beverage consumption occasions (millions), in 15 countries across Europe, the Americas, and Asia Pacific, 2004-2014 63
Figure 50: Europeans, especially the French, Germans and Italians, are showing a tendency to restrain their eating out in light of recessionary conditions 65
Figure 51: Americans and Brazilians are showing an above average propensity for cutting back on their eating out due to the downturn 66
Figure 52: South Koreans stand out in Asia Pacific through their significant cut backs in on-trade eating 66
Figure 53: Europeans are making a greater effort to drink more frequently at home than they are to change the frequency of their on-trade visits 68
Figure 54: Brazilians and Americans are notably contrasting in their behavior towards changing the balance and relative frequency of drinking both on and off-trade 69
Figure 55: The more developed markets of the Asia Pacific region have seen only a limited change in on and off-trade drinking behavior compared to the emerging markets 70
Figure 56: Consumer Survey: In the past SIX MONTHS, please indicate to what extent have you done the following more or less frequently? Cut down on the number of times you drink in bars, restaurants, etc. 71
Figure 57: Consumer Survey: In the past SIX MONTHS, please indicate to what extent have you done the following more or less frequently? Made a conscious effort to drink more frequently at home 72
Figure 58: Consumer Survey: In the last MONTH, on average how many times did you have a drink in a bar, restaurant, pub, etc? 74
Figure 59: Consumer Survey: In the last MONTH, on average how many times did you have a drink at home or in somebody else's home? 75
Figure 60: Europeans' propensity for alcohol consumption on-trade is particularly strongly tied to their restaurant-going 77
Figure 61: US consumers' moderate drinking patterns on-trade favor restaurants and local bars 78
Figure 62: Brazilian consumers' on-trade drinking is more frequent across most channels than their US or European peers 79
Figure 63: Asia Pacific consumers show a greater propensity for more frequent alcoholic beverage consumption in restaurants and local bars 80
Figure 64: European drinking patterns reflect a trend for regular off-trade social drinking and propensity for frequent weekly drinking at home 82
Figure 65: Half of US drinkers are prone to social drinking in others homes several times a month 83
Figure 66: Brazilians' show a high propensity for regular weekly alcohol consumption in the home 83
Figure 67: Asian consumers exhibit a much lower propensity for social drinking in the homes of others 84
Figure 68: UK and Spanish consumers show the most striking tendency to trade down in brand terms off-trade compared to on-trade 86
Figure 69: A quarter of Brazilians are switching to cheaper alcohol brands both on and off-trade 87
Figure 70: Australians have shown a particular tendency to purchase cheaper brands for off-trade consumption in recent months 88
Figure 71: Consumer Survey: In the past SIX MONTHS, please indicate to what extent have you done the following more or less frequently? Buy cheaper brands of alcoholic drinks when drinking in bars, restaurants, etc. 89
Figure 72: Consumer Survey: In the past SIX MONTHS, please indicate to what extent have you done the following more or less frequently? Buy cheaper brands of alcoholic drinks when drinking at-home 90
Figure 73: Overall wine market volume sales (million liters), by on-trade versus off-trade, in 15 countries across Europe, the Americas, and Asia Pacific, 2003-2008 93
Figure 74: Share of overall wine market volume sales (%), by on-trade versus off-trade, in 15 countries across Europe, the Americas, and Asia Pacific, 2003-2008 94
Figure 75: Share of wine consumption occasions, by on-trade versus off-trade, Europe, 2009 95
Figure 76: Share of wine consumption occasions, by on-trade versus off-trade, Brazil and the US, 2009 96
Figure 77: Share of wine consumption occasions, by on-trade versus off-trade, Asis-Pacific, 2009 96
Figure 78: Number of on-trade wine consumption occasions (millions), in 15 countries across Europe, the Americas, and Asia Pacific, 2004-14 97
Figure 79: Number of off-trade wine consumption occasions (millions), in 15 countries across Europe, the Americas, and Asia Pacific, 2004-14 98
Figure 80: Consumer Survey, factors influencing consumers' alcoholic beverage choices, 2008 103
Figure 81: Italians and Spanish consumers have shown a particular tendency to switch types of drink based on price 105
Figure 82: Consumers in the Americas are switching alcohol types based on price more than their global peers 106
Figure 83: Consumers across Asia Pacific are more likely to trade down in type of alcoholic drink than their peers globally 106
Figure 84: Consumer Survey: In the past SIX MONTHS, please indicate to what extent have you done the following more or less frequently? Chosen cheaper type of drinks (e.g. beer instead of spirits) 107
Figure 85: Consumer Survey: In the past SIX MONTHS, please indicate to what extent have you done the following more or less frequently? Chosen alcohol on the basis of how well it goes with food 109
Figure 86: Wine is particularly popular in the home as an accompaniment to food 112
Figure 87: Wine is dominant in most countries as the choice for accompanying a meal in the home 113
Figure 88: Wine is a popular choice for a relaxing drink at home, but beer remains more popular overall for this purpose 114
Figure 89: Wine is the most popular option when enjoying food in the on-trade, but beer is a close second 115
Figure 90: Beer remains the dominant on-trade drink although wine is second choice in many countries 116
Figure 91: Wine is not particularly favored for high-energy nights out 117
Figure 92: Wine is comfortably the most popular choice at dinner parties, emphasizing the sophistication and connoisseurship associated with the category 118
Figure 93: Southern Europe and Russia stand in contrast to the rest of Europe in how much health influences alcoholic beverage choice 122
Figure 94: Health is a below average influence on US consumers' alcoholic beverage choice 122
Figure 95: Australian and Japanese consumers stand out regionally with their lower concern for health in their drinks choices 123
Figure 96: Consumer Survey: Please tell us how much influence the following factors have in your alcoholic beverage choice: Health 124
Figure 97: The most mature European markets have seen relatively limited shifts in behavior favoring low-alcohol versions of well known brands 126
Figure 98: The contrast between Brazil and the US highlights the limited traction of health as a factor in alcoholic drinks purchases in mature markets compared to a greater degree of openness in emergent ones 127
Figure 99: Australia and Japan contrast the growing interest in lower alcohol brands in the Asian region's emerging markets and South Korea 127
Figure 100: Consumer Survey: In the past SIX MONTHS, please indicate to what extent have you done the following more or less frequently? Opted for lower alcohol versions of favorite brands 128
Figure 101: Wine distribution (% of volumes sales), by channel, total for 15 countries across Europe, the US, Brazil, and Asia Pacific, 2003-08 130
Figure 102: The top 10 product claims in wine, across 15 countries in Europe, the US, Brazil, and Asia Pacific, 2004-2009 135
Figure 103: Case study: Cowhorn and Sainsbury's wines highlight practical strategies for increasing the sustainability of wine packaging 136
Figure 104: Recyclable was a very popular tag in 2006 and 2007, but its usage has faded dramatically in the past two years 137
Figure 105: The upscale tag has been fairly consistently popular since 2005 138
Figure 106: Upscale product releases in wine have continued apace, positioned to capture the emergent post-recessionary consumer 139
Figure 107: Companies have begun to use mature as a tag for wine in the last three years 140
Figure 108: Organic has become a popular tag in all industries and this has fluctuated somewhat in the wine industry 142
Figure 109: Organic and natural ingredients rank low on consumers' list of influences on purchase choice for alcoholic drinks 142
Figure 110: Private label releases increased significantly in the wine industry in 2009 143
Figure 111: Manufacturers and retailers looking to deliver value-for-money must in the provision of factors associated with the PPI, but while also offering consumers lower than expected prices 149
Figure 112: Case Study: Majestic wines responds to recessionary consumers needs with increased flexibility in minimum volume purchases 150
Figure 113: Caste Study: iflorist demonstrates an effective, convenient way to tap into consumers' trading up impulses when presenting wine as a gift 152
Figure 114: Case Study: Naked Wines brings niche wines to a wider UK audience online 155
Figure 115: Datamonitor's Recession and Recovery portal will facilitate forward thinking planning for those leading companies that start planning for the longer-term 161
