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Wine - Canada - October 2015

OVERVIEW
What you need to know
Definition
EXECUTIVE SUMMARY
The issues
Consumers generally stick to one varietal
Figure 1: Total CDN sales and fan chart forecast of market, at current prices, 2010-20
Educating the consumer (and particularly women) on wine
Figure 2: Know enough about wine to make an informed decision – any agree, by gender, July 2015
Consumers open to wine availability in more stores
Figure 3: Would like to be able to buy wine at more locations (grocery and convenience stores) – any agree, by province, July 2015
The opportunities
Supporting margin through premium offerings
Figure 4: Willingness to spend on wine vs price as the biggest consideration – Any agree, July 2015
Canada’s aging population supports increase in wine consumption
Figure 5: Wine usage, by age group, July 2015
Canadians open to supporting local wines
Figure 6: Support of local wineries vs preference for foreign wines, by region – Any agree, July 2015
What it means
THE MARKET – WHAT YOU NEED TO KNOW
Wine’s growth expected to continue
Canada’s aging population supports wine growth
Canada’s uncertain economy
THE MARKET – MARKET SIZE AND FORECAST
Wine sales continue to grow
Figure 7: Total CDN sales and fan chart forecast of market, at current prices, 2010-20
Figure 8: Total Canada sales and forecast of market, at current prices, 2010-20
Figure 9: Total Canada sales and forecast of market, at inflation adjusted prices, 2010-20
MARKET BREAKDOWN
Wine growth is balanced among different types
Figure 10: Trended wine sales, by segment, 2010-20
MARKET FACTORS
Canada’s aging population will continue in the coming years
Figure 11: Population aged 65 years and over in Canada, historical and projected (% of total), 1971-2061
Recent economic activities have negatively impacted consumer confidence
Figure 12: Consumer confidence index, monthly, January 2008-January 2015
Canada’s population is ethnically diverse
KEY PLAYERS – WHAT YOU NEED TO KNOW
Share of volume holds steady as industry grows
Potential legislative challenges for larger producers in Ontario
Export opportunities for Canadian wine producers
MANUFACTURER SALES IN CANADA
Top players in the Canadian wine market hold share
Constellation Brands earnings growth driven by investment in craft beer
Andrew Peller Limited investments support continued growth
Figure 13: Share of market by manufacturer, year over year
Smaller wineries holding share, but concerns raised in BC around sales at grocery stores
WHAT’S WORKING?
Wine growth supported by aging Boomer cohort
Value sales outpacing volume reflects continued industry premiumization
WHAT’S NEXT?
Potential challenges for The Wine Shop/The Wine Rack
Packaging design from around the world can influence innovation in Canada
Figure 14: Don Simon Sangria
Figure 15: Martini Gold Vermouth Wine & Martini Rosso Red Vermouth Wine
Figure 16: Spook light honey wine with natural flavours
Underdeveloped markets represent a growth opportunity
Figure 17: Top countries per capita volume growth
THE CONSUMER – WHAT YOU NEED TO KNOW
Canada’s aging population supports wine growth
Canadians are willing to pay for quality
Location wine is grown/made matters to Canadians
WINE BEHAVIOUR
Wine is popular among Canadians
Figure 18: Wine usage, by type, July 2015
White and red wine hold equal favour among consumers
Younger adults more open to less commonly consumed types of wine
Figure 19: Wine consumption (any usage), 20-34 vs over-45s, July 2015
Figure 20: Percentage of wine drinkers who stick to the same varietal, by age, July 2015
RELEVANT AREAS OF DEMAND
Canadians prefer bottles to boxes
Figure 21: Preference for bottles over boxes or cartons, July 2015
Marketing beyond the bottle
Figure 22: Reasons for choosing wine to purchase – Top five listed, July 2015
Younger consumers more likely to use different packaging sizes/formats
Advertising less effective
Consumers demand the option to buy wine outside of liquor stores
Figure 23: Preference for being able to buy wine at more locations such as grocery and convenience stores, July 2015
REASONS CONSUMERS CHOOSE WINE
Canadians are willing to pay for quality
Consumers see wine as being healthy for them
Figure 24: Agreement with drinking wine is good for one’s health, by age and gender, July 2015
Wine’s perceived contribution to health is not only physical
Figure 25: reasons for drinking wine, July 2015
Wine’s country of origin matters to consumers
Figure 26: importance of country and region, July 2015
Region matters as much as brands to wine consumers
It’s important to make decisions easy for consumers
Figure 27: Knowledge of wine and willingness to trying new varietals, July 2015
DIFFERENCES ACROSS POPULATION GROUPS
Men and women exhibit different behaviours and attitudes towards wine
Women may be less likely to experiment with varietals, but expand types (ie sweet wines)
Figure 28: Interest in wine types, by gender, July 2015
Meal pairings matter more to Baby Boomers (over-55s)
Figure 29: Heavy wine usage, by age, July 2015
Figure 30: Reasons for drinking wine: to enhance a meal, by age, July 2015
Millennials more open to new wine types
Brands and reviews more likely to influence Chinese Canadians
APPENDIX – DATA SOURCES AND ABBREVIATIONS
Data sources
Sales data
Fan chart forecast
Consumer survey data
Consumer qualitative research
Abbreviations and terms
Abbreviations
APPENDIX – THE MARKET
Figure 31: Total Canada retail sales and forecast of wine, by segment, at current prices, 2010-20
Figure 32: Total Canada retail sales and forecast of red wine, at current prices, 2010-20
Figure 33: Total Canada retail sales and forecast of red wine, at inflation-adjusted prices, 2010-20
Figure 34: Total Canada retail sales and forecast of white wine, at current prices, 2010-20
Figure 35: Total Canada retail sales and forecast of white wine, at inflation-adjusted prices, 2010-20
Figure 36: Total Canada retail sales and forecast of rose wine, at current prices, 2010-20
Figure 37: Total Canada retail sales and forecast of rose wine, at inflation-adjusted prices, 2010-20
Figure 38: Total Canada retail sales and forecast of sparkling wine, at current prices, 2010-20
Figure 39: Total Canada retail sales and forecast of sparkling wine, at inflation-adjusted prices, 2010-20

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