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Wine: Are We Becoming More European in Our Outlook? - Ireland - October 2007

ISSUES IN THE MARKET
Key themes of the report
Definition
 ABBREVIATIONS
Geographical, national and regional definitions
Conversion factors
INSIGHTS AND OPPORTUNITIES
How can a wine brand stand out from the rest?
Revitalise the ‘house’ brand concept
Local sourcing
One stop shop
MARKET IN BRIEF
Wine market flourishes in Ireland
Promotions breed promiscuity; is it too late for brands to rescue their brand loyalty?
In-home drinking is the secret to wine’s success
Ireland’s duties make wine more expensive
Wine grows compared to other alcoholic drinks
Has the wine market reached its peak in Ireland?
It’s early days
FAST FORWARD TRENDS
What is Fast Forward Trends?
Trend 1: Bling and buy
What's it about?
Context: general observations
What does the wine you drink say about you?
Trend 2: Back to my roots
What's it about?
Context: general observations
What next?
New latitudes for wine
Trend 3: Oliver's army - Celebs and social engineering
What's it about?
Context: general observations
What next?
When is wine not a wine?
Quality not quantity
INTERNAL MARKET ENVIRONMENT
Key points
Changing social habits – Irish alcohol consumption slows down
Figure 1: Adults who have drunk alcohol in the last 12 months, RoI and NI, 2002-06
Wine replaces FABs in the popularity stakes
Organic growth for rosé
Individual consumption is falling
Figure 2: Alcohol consumption, litres per population aged 15+, Ireland, 2000-06
Binge drinking less appealing to an ageing population?
Global wine popularity continues to grow
Irish consumers face higher wine prices
Figure 3: Off-trade and on-trade price changes, RoI, 2005-06
Is familiarity a strength or weakness?
Irish excise duties highest in Europe
Figure 4: Excise duties for table wine, by country, 2006
Figure 5: Excise duties for sparkling wine, by country, 2006
Trading up is key
Figure 6: Wine value at various retail price levels, 2006
Secret of wine’s success…increased in-home drinking
Figure 7: Agreement with statements on drinking habits, NI and RoI, 2002-06
New World wines compete on price and simplicity
Choosing accessibility over prestige
EU will introduce simplified labelling
Future plans for EC legislation
Two sides to the wine box argument
BROADER MARKET ENVIRONMENT
Key points
Rising spending will spur wine sales
Figure 8: Health of the economy, NI and RoI, 2002-07
Figure 9: Average weekly earnings, by age group, NI, 2006
More travel leads to expanding tastes
Figure 10: Total volume of and expenditure on holidays, all Ireland, 2001-05
Population increase = wine sales increase
Retaining consumer interest
RoI wine – life begins at middle age
Growing connoisseurship?
COMPETITIVE CONTEXT
Key points
More spent on leisure; not necessarily alcohol
Figure 11: Total expenditure on alcohol and leisure, NI and RoI, 2000-05
Wine is capturing some of FABs’ lost consumers
Figure 12: Total volume and value sales of alcoholic drinks*, NI, 2004 and 2006
Figure 13: Total volume and value sales of alcoholic drinks, RoI, 2004 and 2006
Managing change
Strengths
Weaknesses
WHO’S INNOVATING?
Key points
New product launches low in Ireland
Majority of new products based on premium claims
Figure 14: Product launches by top five claims, Ireland and UK, 2002-07*
UK supermarket brands dominate innovation
Figure 15: Product launches by brand, Ireland and UK, 2002-07*
Global outlook
Figure 16: Number of new product launches in top ten countries, 2002-07*
Figure 17: Global trends in product claims, 2002-07*
 EXAMPLE OF RECENT LAUNCHES
Packaging
Rosemount – Australian Wine, Ireland 2006
Arniston Bay – Wine in Resealable Pouches, UK 2007
2007 sees an international influx of wine in cans
Premiumisation
Krug Clos du Mesnil 1996 – Single Vineyard Champagne, UK 2007
Isake – Premium Red Sake, UK 2007
Health-conscious
Sainsbury's Red Heart – Heart-Friendly Red Wine, UK 2006
Targeting women
Rubis – Chocolate Velvet Ruby Fortified Red Wine, UK 2006
Fresita – Sparkling Rosé Wine, UK 2006
MARKET SIZE AND FORECAST
Key points
More Irish consumers spending more money on wine
Figure 18: Total volume of wine sales, NI and RoI, million litres, 2000-06
Figure 19: Total value of wine sales, NI and RoI, €million, 2000-06
NI consumers drinking more cheap wine
Figure 20: Total value and volume of wine sales, NI, 2000-12
Success in RoI wine growth may start to slow
Figure 21: Total value and volume of wine sales, RoI, 2000-12
Wine’s future remains strong
EU legislation may promote stronger sales in New World wines
Drinking less but more often
SEGMENT PERFORMANCE
Key points
Sparkling grows but still wine is dominant
Figure 22: Volume and value sales of wine, by still/sparkling/other*, all-Ireland, 2000-06
Figure 23: Volume sales of wine, by still/sparkling/other*, all-Ireland, 2002 and 2006
Red wine remains the most popular but slight growth in rosé
Figure 24: Volume sales of wine, by red/white/rosé*, all-Ireland, 2002 and 2006
Red wine holds its position
Figure 24: Volume and value sales of red wine, NI and RoI, 2002-06
White pales in comparison
Figure 25: Volume and value sales of white wine, NI and RoI, 2002-06
Rosé: no longer pink with embarrassment
Figure 26: Volume and value sales of rosé wine, NI and RoI, 2002-06
COMPANIES IN THE MARKET
Barry Fitzwilliam Maxxium (BFM)
Diageo
C&C Group plc
Dillon Bass
Direct Wine Shipments
InBev
United Wine Merchants
CHANNELS TO MARKET
Key points
Wine is an ‘in-home drink’
Figure 27: Total volume of wine sales, on- and off-trade, Ireland, 2000-06
An increase in alcohol-selling establishments
Figure 28: Number of on- and off-trade premises with alcohol licences, NI, 2004 and 2005*
Figure 29: Number of on- and off-trade premises with alcohol licences, RoI, 2005 and 2006
THE CONSUMER – WINE CONSUMPTION
Key points
Room for growth
Figure 30: Wine penetration, by product, NI and RoI, 2006
NI catches up on RoI
Figure 31: Bottled wine penetration, NI and RoI, 2001-06
Mid-thirties to mid-fifties are the core target group
Too accessible?
THE CONSUMER – TYPES OF WINE
Key points
No spark for sparkling wine
Figure 32: Type of bottled wine, by still and sparkling, NI and RoI, 2002-06
Figure 33: Types of alcoholic drinks drunk in the home and out of home, NI and RoI, 2006
Australia rules…wines
Figure 34: Percentage of red wine, by region, RoI and NI, 2006
Awareness of alcohol content
Figure 35: Percentage of white wine, by region, RoI and NI, 2006
THE CONSUMER – CONSUMPTION OCCASIONS
Key points
Irish consumers drink a bottle of wine a month
Figure 36: Bottled wine usage, number of bottles drunk each month, NI and RoI, 2006
Heavier usage of bottled wine in the home
THE CONSUMER – EXPENDITURE ON WINE
Key points
Irish consumers are attracted by lower-priced wine
Figure 37: Expenditure on a single bottle of wine on normal and special occasions, NI, 2006
Making the leap
Figure 38: Expenditure on a single bottle of wine on normal and special occasions, RoI, 2006
APPENDIX
Broader market environment
Figure 39: Population change, by age group, NI, 2000-20
Figure 40: Population change, by age group, RoI, 2000-20
Channels of Distribution
Figure 41: Examples of on- and off-trade premises, NI and RoI, 2007
 MULTIPLES
ASDA
Tesco
Superquinn
Centra
 OFF-LICENCE CHAINS
Wineflair
Curleys
Next Door
Cheers
 PUBS CHAINS
Botanic Inns Ltd
Beannchor
Carmichael Group
Capital Bars
Fitzgerald Group
Thomas Read Group
Who’s Innovating?
Figure 42: Own-label product launches, Ireland & UK, 2002-07*
Figure 43: Product launches, by top ten EU countries, 2002-07*
Consumer demographics
Figure 44: Percentage of adults who have drunk alcohol in the home in the last 12 months, NI and RoI, 2002-06
Figure 45: Percentage of adults who have drunk alcohol elsewhere in the last 12 months, NI and RoI, 2002-06
Figure 46: Percentage of adults who have drunk alcohol in a club/pub in the last 12 months, NI, 2002-06
Figure 47: Demographics of consumers who drink on-trade and off-trade, by gender, age and socio-economic group, NI and RoI, 2006
Figure 48: Demographics of consumers who drink in pubs/bars and nightclubs/other, by gender, age and socio-economic group, NI and RoI, 2006
Consumer demographics
Figure 49: Bottled wine penetration, by gender, age and socio-economic group, NI and RoI, 2004 and 2006
Figure 50: Bottled wine usage, in home and elsewhere, NI and RoI, 2002-06
Figure 51: Demographics of what consumers drink, by wine-type drinks, NI, 2006
Figure 52: Demographics of what consumers drink, by wine-type drinks, RoI, 2006

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