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Growth Strategies in Alcoholic Drinks: Emerging trends in beer, wine and spirits
Scripp Business Insights, April 2007, Pages: 160
The global alcoholic drinks market is undergoing fundamental changes that are redefining the way manufacturers develop, produce and market their products. Consumers are choosing to trade up to better quality products, whilst moderating consumption. At the same time, changes in demographics are creating new opportunities for alcoholic drinks manufacturers.
Growth Strategies in Alcoholic Drinks: Emerging trends in beer, wine and spirits is a new management report analyzing all product development and product introductions in the global alcoholic drinks market between 2004 and 2006. It examines the emerging trends and sets these against changing market conditions to identify those that will become mainstream in the future. Create more effective new product development strategies and increase returns on investment with this new report.
“Europe had the largest share of new alcoholic drink product introductions in 2006. This was driven by the wine category which amassed a share of 58% of all new product introductions in Europe. The wine category has been driven forward by opportunities in emerging European markets and by the trend towards healthier alcoholic products...”
Some key findings from this report...
- The value of the European and US alcoholic drinks market combined is expected to reach $745.1bn by 2010. The highest rate of value growth is projected to come from Sweden at 13.3% between 2006 and 2010.
- Premiumization is the major trend defining the alcoholic drinks market. Value and volume sales projections to 2010 show that this trend is set to continue in both mature and emerging markets.
- The Asia-Pacific and Eastern European markets will provide the greatest growth potential over the next 5 years. In particular 55.1% of industry executives rated Asia-Pacific highly.
- Wine product launches represent 46.1% of all alcoholic drinks launches, growing from 32.2% in 2004. This share has been driven by increases in launches in the UK and Russian markets. The most new product launches were within red wine.
- Private label sales of alcoholic drinks are projected to rise by 28% in Europe and the US over the next 5 years. However, industry executives expect premium branded products to see better sales growth.
“Productscan revealed that the organic product tag was one of the few to increase in use on alcoholic drinks, increasing from 2.1% in 2004 to 4.0% in 2006. This shows the continued strength of this trend. For product marketers, the organic trend will be increasingly important moving forward, particularly within the European market and will therefore represent increased opportunity within the future...”
This new report will enable you to...
- Identify and target new and emerging growth opportunities using this report’s alcoholic drinks market value and volume forecasts to 2010 by category and country.
- Understand the key market drivers in the alcoholic drinks market across population changes, advertising regulations, portfolio proliferation and private label.
- Improve the effectiveness of your NPD strategies with this report’s analysis of innovation by category, region and product tag using Productscan data from 8,000 alcoholic drinks product launches between 2003 and 2006.
- Benchmark leading executives' opinions on the future of alcoholics drinks using this report’s analysis of our proprietary global survey detailing the key issues affecting the future of NPD and innovation in the alcoholic drinks market.
“Asahi Honnama Aqua Blue is an example of a beer product formulated to appeal to a more health conscious consumer. Launched in January 2006 it is claimed to be made with barley extract and water from deep below the surface of the sea. It also contains DNA and seaweed extract that is rich in minerals. Carbohydrate has been cut by 50%, enabling Asahi Breweries to position this as a healthier alternative...”
Key issues examined in this report...
- Health. Industry executives consider ‘increased health consciousness’ to be the greatest threat to alcoholic drinks over the next 5 years. Consumers are choosing to moderate their drinking,
impacting volume sales projections to 2010.
- Advertising. Restrictions on advertising are deemed by industry experts to be the second greatest threat to the industry between now and 2010. Advertising has come under particular scrutiny because of the growing binge-drinking culture of the under 25 age segment.
- Mature and emerging markets. The US beer market will show minimal growth in value and volume to 2010. Key industry players heavily dependant on this market will struggle for growth. Diversification into new emerging markets is becoming a key trend.
- Premiumization. Many consumers now want to enjoy better quality, more indulgent products whilst moderating drinking to avoid health issues.
"Industry executives were asked to rate the importance certain alcoholic drinks packaging features will have in NPD over the next five years. 62.9% rated rarity and exclusivity as significantly or the most important. In an increasingly competitive premium marketplace the need to convey the premium positioning through packaging will gain importance..."
Your questions answered...
- Which alcoholic drinks categories and regions offer the greatest sales growth potential to 2010?
- What are the key drivers of innovation in alcoholic drinks?
- How can manufacturers communicate products to under 25 year olds whilst working within advertising regulations?
- Healthy alcoholic formulations are appearing on the market, but when will they become mainstream?
- What are the emerging trends in innovation and NPD and which product categories are growing fastest?
- How is the growing trend of premiumization impacting product development and new product launches?
- What are the key threats to the alcoholic drinks industry over the next five years?
“For manufacturers, vodka will constitute the single largest opportunity in the spirits market. Targeting the younger age group with ready-to-drink vodka cocktails will be the most mainstream opportunity. Opportunity also lies at the premium end of the market where connoisseurs are increasingly willing to pay premium prices for purity of product. Emphasizing purity is increasingly fundamental to the premium market. Vodka 14 exemplifies how the pure positioning is being sold to consumers...”
Growth Strategies in Alcoholic Drinks
Executive Summary 10
Market drivers and issues 10
Growth opportunities in alcoholic drinks 11
Overview of NPD and innovation in alcoholic drinks 12
Key trends in the alcoholic drinks market 13
Chapter 1 Market drivers and issues 16
Social and cultural change 17
Population shifts 17
The LDA-24 age segment 19
The 25-49 age segment 22
Seniors (50+) 23
The threat of private label 25
Tension between premiumization and cheaper private labels 27
Private label positioning 29
Proliferation of product portfolios 31
Advertising alcoholic drinks 35
Binge drinking 36
Legislation and self-regulation 38
New developments in advertising regulation and self-regulation 38
Advertising moving forward 43
Linking up with sports 44
Advertising to young adults 44
‘Health’ claims and advertising 45
Chapter 2 Growth opportunities in alcoholic
Alcoholic drinks market value 49
Alcoholic drinks market value by country 51
Alcoholic drinks market value by category 55
Beer, cider and FABs 55
Alcoholic drinks market volume 61
Alcoholic drinks market volume by country 62
Alcoholic drinks market volume by category 66
Beer, cider and FABs 67
Future potential 69
Chapter 3 Innovation and NPD in alcoholic
Growth of alcoholic drinks in terms of new product launches 73
Share of alcoholic drinks launched by category 75
Category analysis 76
Alcohol beverage substitutes and low alcohol 76
Beer and ale 78
Emerging markets 79
Liqueurs and other alcoholic drinks 83
Wine and wine coolers 85
Regional analysis 87
North America 90
Innovative alcoholic drinks 93
Innovation in formulation 94
Functional formulation 94
Unusual and exotic flavour combinations 99
Innovation in packaging 100
Innovation by category 107
Liqueurs and other alcoholic drinks 107
Beer and ale 109
Innovation by type of manufacturer 110
Innovative manufacturers 111
Product tags on alcoholic drinks 113
Flavour trends 116
Chapter 4 Key trends in the alcoholic drinks
Natural and organic 123
Additive free 124
Low calorie and low carbohydrate 129
Luxury and indulgence 134
Purity of ingredients 135
Gourmet, rarity and exclusivity 137
Food trends 138
Repertoire drinking 139
Fashion and alcohol 140
Packaging and convenience 144
Rarity and exclusivity 145
Environmentally friendly/recycling trend 147
Protection of integrity of ingredients 147
Easy to open/portable 148
Recreating the on-trade experience at home 150
Straight to fridge 151
Chapter 5 Conclusions 154
Market influences 155
Population shifts 155
Changes in regulations 155
Health concerns 155
Value growth outstripping volume growth in mature markets 156
Market opportunities 156
Emerging markets 158
List of Figures
Figure 1.1: Importance of consumer age groups for alcoholic drinks marketers over the next 5
Figure 1.2: Female positioning, Yazi ginger flavoured vodka 21
Figure 1.3: ‘Going out’ occasions represent 93% of young adults’ alcohol drinking occasions 22
Figure 1.4: Glenmorangie Limited Edition, Vintage 1987 24
Figure 1.5: Growth potential of alcoholic drinks brands over the next 5 years 28
Figure 1.6: InBev’s diversified product portfolio 32
Figure 1.7: Anheuser-Busch’s diversified product portfolio 34
Figure 1.8: The level of impact certain threats will have on alcoholic drinks NPD over the next 5
Figure 2.9: Le Certeza Tequila 57
Figure 2.10: Vodka 14, ‘pure’ positioning 58
Figure 2.11: Regions that will provide the most sales growth potential for alcoholic drinks
manufacturers over the next 5 years 70
Figure 3.12: % growth of alcoholic drinks in terms of growth of share of new product launches,
Figure 3.13: Share of alcoholic drink launches by category, 2004-2006 75
Figure 3.14: Suntory’s Chu-Hi Calorie and Mercian’s Honshibori Chu-Hi 78
Figure 3.15: Global brands introduced to the emerging Russian market 79
Figure 3.16: Beer NPD, broadening appeal in mature markets 80
Figure 3.17: SAB Miller’s Micky Stinger 81
Figure 3.18: Healthier beer positioning 82
Figure 3.19: Drinking less but of the best 84
Figure 3.20: Premiumization, the importance of message and packaging 87
Figure 3.21: % share of alcoholic drinks launched in each region, 2004-2006 87
Figure 3.22: Organic wine introductions 89
Figure 3.23: Supermarket private label brands in growing in Europe 90
Figure 3.24: Sparks Plus drinks 91
Figure 3.25: Healthier alcoholic drinks, launched in Japan 2006 93
Figure 3.26: Healthy beer formulations launched in the US and Europe 96
Figure 3.27: Energy formulations, launched in the US and Brazil 98
Figure 3.28: Formulation; unusual and exotic flavour combinations 100
Figure 3.29: Creating collectable packaging 102
Figure 3.30: Environmentally friendly packaging 103
Figure 3.31: Functional, convenient packaging 105
Figure 3.32: Technical innovation in packaging – cooling systems 106
Figure 3.33: Innovation in alcoholic drinks, 2003-2006 107
Figure 3.34: Innovation in liqueurs and other alcoholic drinks; novelty packaging 108
Figure 3.35: Types of companies that have the most influence on innovation in alcoholic drinks
now and will have over the next 5 years 110
Figure 3.36: Diageo - leading with product innovation 113
Figure 4.37: Importance of health features in alcoholics drinks NPD over the next 5 years 122
Figure 4.38: Organic product offers distributed in the UK by Vintage Roots 124
Figure 4.39: Pure: Hawaii Sea Spirits, New Ocean Vodka 125
Figure 4.40: Healthy formulations 127
Figure 4.41: Low calorie and low carbohydrate alcoholic drinks 129
Figure 4.42: Energy drinks targeted at young male consumers 131
Figure 4.43: The importance of premium positionings in alcoholic drinks NPD over the next 5
Figure 4.44: EZE ready-to-drink cocktails 135
Figure 4.45: Pure positioning 136
Figure 4.46: Premiumization; food and alcohol 138
Figure 4.47: Premium sample sets 140
Figure 4.48: Premiumization; fashion and alcohol 141
Figure 4.49: Premium offers driven by popular culture 142
Figure 4.50: First ‘Urban Wine’ Brand 143
Figure 4.51: Importance of packaging features in alcoholics drinks NPD over the next 5 years 144
Figure 4.52: Rarity and exclusivity, conveyed through packaging 146
Figure 4.53: Beer cooling system 148
Figure 4.54: Portable packaging 149
Figure 4.55: Premiumization; home centred quality 151
Figure 4.56: Fridge packs 152
List of Tables
Table 1.1: Adult population by age group, m, Europe & the US, 2000-2010 18
Table 1.2: Seniors' alcoholic drinks market value and volume, litres of pure alcohol, m, Europe &
US, 2000-2010 23
Table 1.3: Private label penetration and sales, by country, $m, Europe & US, 2001-2011 25
Table 1.4: European and US private label drinks market, $m, 2001-2011 27
Table 2.5: Alcoholic drinks market value, $m, Europe & US, 2006-2010 49
Table 2.6: Alcoholic drinks market value, $m, by category, Europe & US, 2006-2010 51
Table 2.7: Alcoholic drinks market value by type, $m, Europe and US, 2006-2010 55
Table 2.8: Alcoholic drinks market volume, litres, m, Europe & US, 2006-2010 61
Table 2.9: Alcoholic drinks market volume, litres, m by category, Europe & US, 2006-2010 63
Table 2.10: Alcoholic drinks market volume by category, litres m, Europe & US, 2006-2010 66
Table 3.11: % of types of innovation within innovative alcoholic drinks products, 2003-2006 94
Table 3.12: Top 10 innovative alcoholic drinks manufacturers 111
Table 3.13: Top 20 product tags on new product packaging - % of all alcoholic drinks launched,
Table 3.14: Top 20 flavours of new product introductions - % of all alcoholic drinks launched,
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