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
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Copyright © 2017 The Nielsen Company. Confidential and proprietary.
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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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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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
Source: Nielsen Total U.S. All Outlets (xAOC + Liquor Plus + Conv + Military); 52 w/e 4-20-2019
$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
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Copyright © 2017 The Nielsen Company. Confidential and proprietary.
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
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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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Copyright © 2017 The Nielsen Company. Confidential and proprietary.
WINE TRENDS
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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
Source: Nielsen Total U.S. All Outlets (xAOC + Liquor Plus + Conv + Military); 52 w/e 4-20-2019
$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
Source: Nielsen Total U.S. All Outlets (xAOC + Liquor Plus + Conv + Military); 52 w/e 4-20-2019
$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
Source: Nielsen Total U.S. All Outlets (xAOC + Liquor Plus + Conv + Military); 52 w/e 4-20-2019
$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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. 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!!!