US Drinks Conference 2010
Translating Industry Trends Into
Actionable Insights
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Overview
Using Beer, Wine and Spirits category
trends to make informed decisions on
building your brands
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Agenda
• Macro Consumer Trends Impacting The Industry
• Total Beverage Alcohol Consumption Trends
• Spirits Category Consumption Trends
• Wine Category Consumption Trends
• Beer Category Consumption Trends
• Summary Of Key Takeaways
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Macro Trends
Impacting The
U.S. Beverage
Alcohol Industry
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Master Trends
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Macro
Economic
• The U.S. Economy
• Shifting Consumer Behavior
• U.S. Population Size And Growth
• Growing Ethnic Diversity
• Seeking Out New Drink Experiences
• Premiumization And Affordable Luxury
U.S. Drinks Conference 2010
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U.S.
Economy
• Unemployment is beginning to go down but remains high at
9.6% and is expected to remain elevated for 2-5 years
• Mortgage foreclosures will continue to impact the housing
market
• Tight credit is dampening consumer spending
• Consumers focus more on debt reduction and savings rather
than over-indulgence
• Consumer confidence is improving marginally and spending is
starting to improve
Sources: U.S. Bureau Of Labor Statistics and Market Harmonics
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Shifting
Consumer
Frugality is fashionable
and deals and value
for the money are key
U.S. Drinks Conference 2010
Consumers drinking
more at home to save
money
Consumers drinking
more but trading down
across all categories
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titleGrowth
style
U.S.
Population
Size And
U.S. population over 300 million with legal drinking age
consumers growing by 20 million every 10 years
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Sources:
U.S. Census Bureau – Demographic Trends in the
20th
Century, Nov. 2002.
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Growing
Diversity
The fast growing multi-ethnic population is fueling interest in
new drink experiences from around the world such as Cachaça
from Brazil and Pisco from Peru
Sources:
U.S. Census Bureau
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Seeking
Experiences
Consumers are actively seeking out new taste experiences
across beer, wine and spirits through a wider selection of new
and undiscovered brands, varietals and categories
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Premiumization
Affordable
Luxury
Consumers aspire to luxury across all segments with Premium
Beverage Alcohol offering “Affordable Luxury”
High-end Beverage Alcohol has grown to about 20% of category
Beverage Alcohol
High-end Market Share
Everyday Luxury Items
Source: DISCUS and Next Level Marketing Consumer Research
High-End Beverage Alcohol
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Total Beverage
Alcohol Trends
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Sources
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The data in this presentation comes from the Beverage
Information Group’s 2010 Liquor, Wine and Beer Handbooks.
These Handbooks contain the most current and complete
statistics on the Spirits, Wine and Beer categories.
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2009 Click
Total to
U.S.
Beverage
Consumption
Beverage Alcohol ranks as the 4th largest beverage type in the
U.S. Market and sales have been flat during the recession
Source: B.I.G. 2010 Handbook Advance
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Total U.S. Beverage Alcohol Industry
• The U.S. market size is 3.3B 9L cases and $188B in retail sales
• Beer dominates consumption with an 85% volume share
• Spirits are much more important on a dollar share basis
Retail Sales Of $189 Billion
Volume Of 3.3 Billion 9L Cases
Spirits 5%
Spirits 34%
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3.3 Billion 9L Cases
$188 B Retail Sales
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The B.I.G. 2010 Liquor , Wine And Beer Handbooks
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Volume
Trends
Total Beverage Alcohol consumption fell by 1.8% driven by a
2.1% decline in Beer but led by growth in Wine and Spirits
+1.6%
+0.8%
-1.8%
-2.1%
The B.I.G. 2010 Liquor , Wine And Beer Handbooks
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toDollar
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2009
Sales title
Trends
Total Beverage Alcohol sales dollar fell by 0.4% driven by Beer
volume declines, Wine trade-down and Spirit trade-up
+1.9%
-0.4%
-1.1%
-3.2%
The B.I.G. 2010 Liquor , Wine And Beer Handbooks
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Five
Year
Growth
Rates
Over the last five years, Spirits and Wine consumption have
grown much faster than Beer consumption
The B.I.G. 2010 Liquor , Wine And Beer Handbooks
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styleSales
On Vs.
Off-Premise
Casetitle
/ Dollar
Across all categories on-premise does about 25% of cases and
off-premise does 75% but dollar sales are split equally
77%
53%
44%
23%
20%
80%
75%
56%
48%
47%
52%
25%
The B.I.G. 2010 Liquor , Wine And Beer Handbooks
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On Click
And Off-Premise
Growth
Trends
The Off-premise channel is now the key growth driver for Beer,
Wine and Spirits as today’s cash conscious consumers have
shifted towards more at home consumption
+3.2%
+2.6%
-0.1%
-3.3%
-3.9%
-5.9%
The B.I.G. 2010 Liquor , Wine And Beer Handbooks
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Spirit Category
Trends
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titleTrend
style
Distilled
Spirits
Sales
Spirit consumption has grown steadily to a record level of
188,630 million 9-liter cases with 1.6% growth in 2009
Source: Adam’s 2008 Advance
The B.I.G. 2010 Liquor Handbook (Thousands 9-Liter Cases)
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10 edit
Markets
Fortitle
Spirits
The top 10 states account for 60% of U.S. Spirits volume
MI
NY MA
IL
OH
PA
VA
CA
NJ
TX
FL
The B.I.G. 2010 Liquor Handbook
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MasterVolume
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Imported
Domestic
Share
Domestics Spirits account for 60% of volume with Imports
making up 40% and both showing growth in 2009
The B.I.G. 2010 Liquor Handbook (Thousands 9-Liter Cases)
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Imported
Vs.edit
Domestic
Trend
Prior to the Recession, Imports were driving Spirits category
growth with both continuing to grow
+5.4%
+5.0%
+2.1%
+1.1%
+2.3%
+2.0%
+1.8%
-1.4%
The B.I.G. 2010 Liquor Handbook
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Master
SpiritClick
Volume
And
Sharetitle
By style
Category
Vodka dominates the Spirits category with a 31% volume
31.0%
13.3%
10.7% 10.6%
8.3%
6.0%
5.9%
5.5%
4.7%
3.4%
0.6%
The B.I.G. 2010 Liquor Handbook
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Spirits
By Category
Irish Whiskey, Vodka, Rum and Tequila continue to be the key
growth driving spirits categories
+13.0%
+5.9%
+1.6%
+1.1%
+0.2%
+0.1%
+0.9%
-0.6%
-1.0%
-2.4%
-3.6%
The B.I.G. 2010 Liquor Handbook
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Top 25
Spirit
Brandtitle
Trends
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The B.I.G. 2010 Liquor Handbook (Thousands 9-Liter Cases)
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Wine Category
Trends
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Wine
Trend
Wine consumption has grown steadily posting 0.8% growth in
2009 to reach a record level of 296,960 million 9-liter cases.
The B.I.G. 2010 Wine Handbook (Thousands 9-Liter Cases)
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title
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Topto
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Markets
For
Wine
The top 10 states account for 60% of U.S. Wine volume
WA
NY MA
IL
OH
VA
CA
NJ
TX
FL
The B.I.G. 2010 Wine Handbook
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MasterVolume
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Imported
Domestic
Share
Domestics Wine accounts for 75% of volume with Imports
making up 25% and declining slightly in 2009
The B.I.G. 2010 Wine Handbook (Thousands 9-Liter Cases )
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Imported
Domestic
Wine
Trend
Prior to the Recession, Imports were driving Wine category
growth but they have declined for the past two years
+7.3%
+5.6%
+2.7%
+2.9%
+2.9%
-1.7%
+1.8%
-2.2%
The B.I.G. 2010 Wine Handbook (Thousands 9-Liter Cases)
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Wineto
Consumption
By Type
Table Wines represent over 91% of U.S. Wine consumption and
they continued to show growth of almost 1% in 2009
U.S. Drinks Conference 2010
Source: Adam’s 2008 Advance. Volume Stated On A Thousands Of 2.25-gallon Cases Basis.
The B.I.G. 2010 Wine Handbook (Thousands 9-Liter Cases )
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Table
Wine
Bystyle
Varietal
Chardonnay, Cabernet and Merlot combine for 54% of U.S. Wine
consumption by All Other Varietals represent opportunity at 24%
U.S. Drinks Conference 2010
Source:
Adam’s
2008
Advance.
Volume
Stated On A Thousands Of 2.25-gallon Cases Basis.
The
B.I.G.
2010
Wine
Handbook
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35
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TopClick
25 Domestic
Table Wine
Brands
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The B.I.G. 2010 Wine Handbook (Thousands 9-Liter Cases)
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Wine
Country
ClickImport
to editTrends
MasterBy
title
style
The top 10 countries account for 96% of U.S. Imported Wine sales
The B.I.G. 2010 Wine Handbook: Source U.S. Department Of Commerce
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Top
25 Import
Brand
Trends
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U.S. Drinks Conference 2010
The B.I.G. 2010 Wine Handbook (Thousands 9-Liter Cases )
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Beer Category
Trends
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BeertoConsumption
Trend
After three years of growth, Beer declined by 2.1% in 2009 to
2.9 Billion 2.25 Gallon Cases
The B.I.G. 2010 Beer Handbook (Millions of 2.25-Gallon Cases)
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title
style
Topto10edit
Markets
For
Beer
The top 10 states account for 53% of total U.S. Beer volume
The B.I.G. 2010 Beer Handbook
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MasterVolume
title style
Imported
Domestic
Share
Domestics Beer dominates at 87.5% of volume with Imports
declining by 6.9% in 2009
The B.I.G. 2010 Beer Handbook (000 2.25-Gallon Cases)
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Imported
Domestic
Beer
Trend
Prior to the Recession, Imports were driving Beer category
growth but they have declined for the past two years
+12.1%
+3.6%
+0.9%
-0.2%
+0.9%
-1.2%
-1.4%
-6.9%
The B.I.G. 2010 Beer Handbook
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Domestic
Beer
By Type
Domestic Light is the largest segment with a 52.8% share but
Super Premium/Craft is the fastest growing segment
U.S. Drinks Conference 2010
Source: Adam’s 2008 Advance. Volume Stated On A Thousands Of 2.25-gallon Cases Basis.
The B.I.G. 2010 Beer Handbook (000 2.25-Gallon Cases)
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TopClick
25 Domestic
Beer Brand
Trends
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The B.I.G. 2010 Beer Handbook (000 2.25-Gallon Cases)
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Beer
Country
ClickImport
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MasterBy
title
style
The top 10 countries account for 96% of U.S. Imported Beer sales
The B.I.G. 2010 Beer Handbook (000 2.25-Gallon Cases)
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Top
25 Import
Brand
Trends
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U.S. Drinks Conference 2010
The B.I.G. 2010 Beer Handbook (000 2.25-Gallon Cases)
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Summary
Of Key
Takeaways
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Summary
OfMaster
Key Takeaways
•
The U.S. Beverage Alcohol market is very large and highly
profitable at 3.3B 9L cases and $189B in retail sales
•
Despite the slow economy, there is still growth in the U.S.
Beverage Alcohol industry and the future outlook is strong
•
Macro trends in the U.S. market are very favorable to the
continued growth of the Beverage Alcohol industry
•
Consumers are trading down consistent with past recessions
but the premium end always recovers and is already doing so
•
On-premise recovery is key to future growth and trade-up as
the economy recovers
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Key
Implications
•
The number of new product launches has decreased during
the recession increasing interest in new brands.
•
Consumers and retailers are interested in discovering and
experiencing new products across all categories
•
Consumers are seeking value more than ever opening brand
building opportunities in all price segments
•
Over half of Beer, Wine and Spirit volume is concentrated in
the top 10 states so focus brand launches in key markets
•
Building beverage brands in the U.S. requires a disciplined,
hands on, long-term approach but it can be done
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Thank
You title style
Mike Ginley, Partner
Next Level Marketing
1330 Post Road East
Westport, CT 06880
USA
203-913-7723
mginley@nextlevel-co.com
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