IRI Pulse Report Drinks - · PDF filePULSE REPORT IRI Pulse Report Drinks Welcome to the Pulse H1 2015 edition for drinks. We hope you find it useful. Please do not

PULSE REPORT

IRI Pulse Report Drinks

Welcome to the Pulse H1 2015 edition for drinks. We hope you find it

useful. Please do not hesitate to contact us if you have any questions

or comments at [email protected].

H1 2015

IRIworldwide.com

PULSE REPORT

About the Report

2

• This drinks report is one of 10 super category reports designed to show high-level

comparison and analysis for retail markets across major countries in Europe.

• This report contains data gathered from around Europe. This market was split into the

following categories: 1.) soft drinks, 2.) juices, squashes and syrups, 3.) mineral water, 4.)

coffee, 5.) tea and 6.) cocoa.

• The report highlights key metrics, such as total sales figures, market trends, category

shares, and winners and losers for Europe and for individual countries.

• The data has been sourced from IRI retail databases and Eurostat – the statistical branch

of administration for the European Commission.

• The countries included in the report are: France, Germany, Italy, the Netherlands, Spain

and the United Kingdom (UK).

• The market channels used for each country in this report are as follows:

Country Channels used

UK Hypermarkets, supermarkets, drugstores and impulse outlets

ES Hypermarkets, supermarkets, hard discounters and drugstores, including the Canary Islands

DE Hypermarkets, supermarkets, hard discounters and drugstores

NL Hypermarkets, supermarkets, hard discounters and drugstores

IT Hypermarkets, supermarkets, small self service, hard discounters and drugstores

FR Hypermarkets and supermarkets

• For analytical purposes, the data sourced from available retail databases has been

consolidated to provide consistent results. However, for some countries it has not been

possible to source data pertaining to certain categories. When this has occurred, it has been

documented in the Notes section found at the end of the report.

PULSE REPORT

On the Radar

3

ECONOMIC FIGURES INFLUENCING CONSUMER BEHAVIOUR

Source: Eurostat, June 2015

Overall value sales increased mainly with the help of a momentous increase in coffee sales in Germany. Mineral water also helped growth.

POPULATION

IN MILLIONS

UNEMPLOYMENT

(%)

AVERAGE 12

MONTHS

INFLATION

RATES

GDP IN MILLIONS

(€)

Jan.

2014

Jan.

2015

Avg.

2014

Jun.

2015

Avg.

2014

Jun.

2015 2013 2014

France 65.8 66.3 10.3 10.2 0.7 0.2 2 116 565 2 132 449

Germany 80.7 81.1 5.0 4.7 0.9 0.4 2 820 820 2 915 650

Italy 60.7 60.7 12.7 12.7 0.3 0.0 1 609 462 1 616 253

Netherlands 16.8 16.9 7.4 7.0 0.5 0.1 650 857 662 770

Spain 46.5 46.4 24.5 26.6 0.0 -0.6 1 049 181 1 058 469

United

Kingdom 64.3 64.7 6.1 5.6 1.7 0.6 2 017 193 2 222 912

PULSE REPORT

834 912 1 010 858 851 938 465 494 492 468 473 503

1 400 1 596 1 626 1 418 1 420 1 621

4 016 4 210 4 266

4 190 4 107 4 296

1 787 1 986 1 969

1 775 1 785 2 033

2 029

2 216 2 369

2 185 2 083

2 225

0

2,000

4,000

6,000

8,000

10,000

12,000

14,000

30-mar-14 29-jun-14 28-sep-14 28-dic-14 29-mar-15 28-jun-15

Eu

ro

s, in

millio

ns

Period Ending

UK

France

Germany

Italy

Netherlands

Spain

GLOBAL TRENDS

4

-1.6%

1.3%

1.0%

TOTAL EUROPE 0.3%

VALUE SALES IN MILLIONS (€)

Total EU 44 959

DE 16 858

FR 7 562

UK 8 861*

IT 6 084

ES 3 657

NL 1 936

TOTAL DRINKS VALUE SALES AND % CHANGE VERSUS PRIOR YEAR

*based on an exchange rate of €1.27 to the pound

0.1%

-0.7%

1.0%

TOTAL DRINKS VALUE SALES FOR THE PAST SIX QUARTERS

Source: IRI retail databases; period ending 28 June 2015

PULSE REPORT

17 559

9 305 9 266

5 891

2 228

-1.5 2.1 4.2

-3.1 0.8

Eu

ros,

in m

illio

ns

Euro Sales % € vs. YA

39.1%

20.7%

20.6%

13.1%

5.0% 1.6%

Soft Drinks Mineral Water Coffee Juices, Squashes & Syrups Tea Cocoa

Europe

5

17 559

9 305 9 266

5 891

2 228

710

Euro Sales

Eu

ros,

in m

illi

on

s

CATEGORY VALUE SALES IN THE PAST YEAR

CATEGORY SHARE OF VALUE IN THE PAST YEAR

Europe includes: France, Germany, Italy, the Netherlands, Spain and the United Kingdom

TOP 5 CATEGORIES: EVOLUTION

Value sales (€) and % change versus year ago


KEY TRENDS

• After two consecutive years of decline in

the drinks category, the first half of 2015

shows a positive growth of 0.3%.

• In Europe, soft drinks have recorded the

highest value sales, but have seen a

decline in all the measured European

countries apart from France, where the

category displays a slight growth of 0.3%.

• Mineral water has seen positive growth

across Europe, where growth is primarily

driven by the UK. Mineral water’s ‘natural

and healthier’ positioning, and

‘convenience of use,’ are driving demand

for the category.

• Coffee is the biggest contributor in the

growth of the overall drinks category with

a value growth of 4.2%, driven by high

priced coffee pods. Germany alone

contributes approximately 94% to the

coffee value growth in Europe.

PULSE REPORT

Europe

6

CATEGORY INSIGHTS

• The largest sub-category, soft drinks, dropped further with all the measured countries

posting decline (except France where the growth was led by fresh tea). Germany posted the

highest loss (mainly from spritzer/water with add-ons and cola) accounting for almost half of

the total loss in Europe. The category decline is being driven by lower consumption.

• With continued focus on ‘health and wellness’, mineral water (mainly still water) continued

its positive growth in all the measured countries. The UK accounted for approximately 57%

of its growth, while Germany and Italy together brought 21% growth for this category. In the

UK, the mineral water segment also specifically benefitted from a price hike and has

managed to take away sales from soft drink’s market.

• Coffee growth in Europe is almost single-handedly led by Germany as it contributes to more

than 90% of its growth. Its growth is helped by heavy promotions and mainly driven by roast

& ground coffee and premium priced roasted coffee pods. France and Italy are the only

countries which posted decline, while the remaining countries posted growth. Even the

Netherlands showed the biggest growth for coffee after years of decline with increased prices

in the ground coffee segment and more premium concepts such as cups and beans.

Europe includes: France, Germany, Italy, the Netherlands, Spain and the United Kingdom


TOP LOSERS: VALUE SALES CHANGE VERSUS A YEAR AGO (€)

TOP WINNERS: VALUE SALES CHANGE VERSUS A YEAR AGO (€)

370.6

191.2

17.9

0 200 400

Coffee

Mineral Water

Tea - 3.9

- 190.0

- 268.2

-300 -200 -100 0

Cocoa

Juices, Squashes &Syrups

Soft Drinks

Millions Millions

PULSE REPORT

2 372

1 784

1 589

1 266

359

0.3 0.3

-2.7

-1.4 1.1

Eu

ros,

in M

illio

ns


31.4%

23.6%

21.0%

16.7%

4.8% 2.5%

Soft Drinks Mineral Water Juices, Squashes & Syrups Coffee Tea Cocoa

France

7

KEY TRENDS

• Price wars between retailers is continuing

to impact value trend. Creating a nearly

1.5 point growth gap between value and

volume trends.

• No major weather impact for this period.

• Soft drinks maintain a positive trend in

value thanks to fresh tea. A sharp

slowdown due to colas with a decline in

both volume and value.

• Mineral water is now growing in both

volume and value thanks to new products

and an increase of promotional activity.

2 372

1 784

1 589

1 266

359

191

Euro Sales

Eu

ros,

in m

illi

on

s

CATEGORY VALUE SALES IN THE LAST YEAR

CATEGORY SHARE OF VALUE IN THE LAST YEAR



Value sales (€) and % change versus a year ago

PULSE REPORT

- 5.9

- 17.9

- 43.7

-100 -80 -60 -40 -20 0

Cocoa

Coffee


France

8

CATEGORY INSIGHTS

• Private label continues to decline throughout all of the categories this year, as with all fast-

moving consumer goods (FMCG).

• Juices are always declining, mainly due to private labels and lower priced options.

• In mineral water, Nestlé Waters and Cristalline explained the growth of the market. The

Cristaline brand is demonstrating growth, thanks to its low price positioning and Nestlé

activated several levers such as promotion, new products especially Volvic Juicy.

• Soft drinks – Coca-Cola Life (with Stevia) was launched in December with good first results

but with a lot of investments (promotions and media). Two products are now in the top 10 of

new soft drink products.

• In the coffee market, pods continue to grow, while other coffees are facing declines.

• Pods and green teas are always driving growth within the tea sector.



6.8

5.5

4.0

0 2 4 6 8

Soft Drinks

Mineral Water

Tea


Millions Millions

PULSE REPORT

5 742

4 010

3 540

2 699

693 -2.3

9.5

0.5 -2.3 5.6

Eu

ros,

in M

illio

ns


34.1%

23.8%

21.0%

16.0%

4.1% 1.0%

Soft Drinks Coffee Mineral Water Juices, Squashes & Syrups Tea Cocoa

Germany

9

KEY TRENDS

• The overall value sales of drinks

increased by 1.3%, whereas the volume

declined by 2.6%; the decline in volume

is driven by non promoted sales.

• Coffee has shown substantial growth of

9.5% which was driven by increase in

price and managed to increase its share

by 1.8 point.

• The growth in drinks was fueled by

national brands, while private labels

registered a decline in all categories

except coffee and tea.

• The decline in hard discounters was

offset by the positive development in

other channels contributing to overall

growth.

• Coffee is the major contributor toward

growth in drink sales followed by tea

while soft drinks and juices, squashes &

syrups are in a decline.

5 742

4 010

3 540

2 699

693

175

Euro Sales

Eu

ros,

in m

illi

on

s






PULSE REPORT

Germany

10

CATEGORY INSIGHTS

• Coffee has shown significant growth across all channels. The growth is powered by roast &

ground coffee and roasted coffee pods. The growth in roast & ground coffee can be attributed

to price increase, while coffee pods have grown due to gain in volume (7.1%). Contribution

of promotional sales in coffee is very prominent with 41.9% sales coming from promotions.

• Growth in tea looks sustainable with all its segments showing positive development. Herbal

tea is a major driver of growth followed by black tea. Contribution from promotional sales is

limited suggesting the inherent inclination of consumers toward tea.

• Sales for mineral water have been flat (0.6%). There have been a decline in volume sales

(-1.7%) but an increase in prices managed to offset the value decline. Decline in volume is

driven by carbonated mineral water and water with little CO².

• Cocoa managed to register a growth of 1.1%, which was fueled by national brands. Private

label pulled down the category growth with declines in both normal and promotional sales.

• Soft drinks declined across all segments. Water with add-ons and cola observed maximum

decline. Energy drinks was the only growing segment in soft drinks. Performance of private

label was poor across all segments.

• Sales for juices, squashes & syrups declined by 2.3% which was driven by private label in

hard discounters. The growth from promotional sales was not sufficient to offset the decline

in normal sales.




- 63.1

- 133.5

-150 -100 -50 0


Soft Drinks

347.7

37.0

18.9

1.9

0 200 400

Coffee

Tea

Mineral Water

Cocoa

Millions Millions Millions

PULSE REPORT

1 857

1 679

1 366

841

273 1.1

-4.6 -1.3 -4.0 6.1

Eu

ro

s, in

Mil

lio

ns


30.5%

27.6%

22.5%

13.8%

4.5% 1.1%

Mineral Water Soft Drinks Coffee Juices, Squashes & Syrups Tea Cocoa

Italy

11

KEY TRENDS

• Italian gross domestic product (GDP) is

slightly positive after several years of a

negative trend.

• The FMCG trend is positive both in volume

and value despite decreasing promotional

pressure. The increase of sales is spread

across all sectors, but mainly beverages.

• The trends have been impacted by

temperatures with values above average (in

the beginning of the year and May): positive

for water, energy drinks, ready-to-drink

(RTD) tea, but negative for soft drink

categories (colas, orangeades) facing

‘wellness choice’ in consumer behavior.

• The Italian market in the first half of 2015

showed a positive trend in the water

category thanks to still segments that

continue to gain market share (low price

and wellness positioning).

• Negative trends for high price hot beverages

such as coffee, with the exception of the

pod segment, but a positive increase for tea

(less expensive alternative).

•

1 857 1 679

1 366

841

273

69

Euro Sales

Eu

ros,

in m

illi

on

s






PULSE REPORT

Italy

12

CATEGORY INSIGHTS

• In 2015 some positive opportunities come from the economic scenario and FMCG:

− GDP is slightly positive

− Low level of inflation rate

− Positive trend in total consumption (particularly in durable goods)

− Strengthening of consumer demand

− FMCG positive trend in the first half of 2015: 2.1% value change and 1.8% in

volume

• In Italy, price and a strong wellness positioning are supporting growth of the still water

segment which, in turn, is supporting the overall mineral water category.

• The carbonated soft drinks (CSD) and juices sector experienced strong decline during the

past year. Many segments (colas, orangeades, lemon lime, tonic, Chinotto) recorded

negative trends despite a positive beginning to hot season.




- 4.0

- 18.1

- 34.9

- 80.3

-100 -60 -20

Cocoa

Coffee


Soft Drinks

20.8

15.6

0 10 20

Mineral Water

Tea

Millions Millions

Millions

PULSE REPORT

882

657

157 133 95

-1.2 4.1 -3.4

5.2 2.1

Eu

ros,

in M

illio

ns


45.6%

33.9%

8.1%

6.9% 4.9%

0.6%

Soft Drinks Coffee Juices, Squashes & Syrups Tea Mineral Water Cocoa

The Netherlands

13

KEY TRENDS

• Total drinks is growing in the Netherlands,

in value (0.3%), but declining in volume

(-4.1%).

• Price increases and lower promotional

pressure have impacted volume negatively.

• Hot and cold drink sectors saw volume

decline due to price increases. Cold drinks

also saw sales decline, but value for hot

drinks grew because of premium coffee

concepts such as cups and beans.

• Market share of Aldi keeps decreasing

despite having Coca-Cola and Fanta in the

assortment.

882

657

157 133 95

11

Euro Sales

Eu

ros,

in m

illi

on

s






PULSE REPORT

The Netherlands

14

CATEGORY INSIGHTS

• The winner is coffee. With price increases in the ground coffee segment and more premium

concepts such as cups and beans, the category is growing after years of decline.

• Tea is also growing in the Netherlands. The largest segment (black tea) only grows in value

because of price increases, but segments such as green tea and herbal tea both grew in

value and volume.

• Growth in syrups and squashes continues in the Netherlands. The growth comes along with

increased value and volume within water, indicating that consumers might change from

drinking soft drinks to drinking lemonades and waters.

• Sales within juice is declining, mainly driven by the fact that more places offer consumers

the ability to tap their own fresh orange juice in-store.

• There seems to be three major reasons for the strong decline in soft drinks, mainly driven

by cola, orange and fruit flavoured still drinks. First, the public discussion about the high

amount of sugar in soft drinks. Second, the upcoming competition from beer alternatives

(i.e. Radler) with 0% alcohol seems to impact the soft drink turnover. Shoppers seem to

switch from soft drinks to these more ‘mature’ alternatives. And third, the promotional

pressure for soft drinks is down versus last year.




- 5.5

- 10.9

-12 -8 -4 0


Soft Drinks

25.8

6.6

1.9

1.0

0 10 20 30

Coffee

Tea

Mineral Water

Cocoa


PULSE REPORT

1 875

842

704

140 83

-2.2 4.3 0.2 5.6 4.3

Soft Drinks MineralWater

Coffee Tea Cocoa

Eu

ros,

in M

illio

ns


51.3%

23.0%

19.3%

3.8%

2.3%

0.3%

Soft Drinks Mineral Water Coffee Tea Cocoa Juices, Squashes & Syrups

Spain

15

KEY TRENDS

• The decline of the soft drink segment has

deflated the whole drink industry in Spain.

• Indian tonic sales continue with a strong

increase both in value and volume, due to

gin and tonic coming back in fashion.

• Iced tea, tinto de verano, sport drinks,

ginger and energy drinks also experienced

a rise in sales both in volume and value.

• Mineral water had a positive evolution in

value and volume, Coca-Cola Co. being the

manufacturer that benefits most from the

strongest sales increase of the category.

1 875

842

704

140 83

12

Euro Sales

Eu

ros,

in m

illi

on

s






PULSE REPORT

CATEGORY INSIGHTS

• In soft drinks, private label has successfully increased sales, but only for value. All

manufacturers experienced a decrease in sales both in volume and in value. Hopefully, the

rebrand by Coca-Cola Co. will show its effect during the second half of 2015. The Coca-Cola

rebrand in Spain focused on the can design and grouped all Coca-Cola products together on

the store shelf, not mixing the brand with products from other manufacturers. This should

contribute to change colas challenging situation (-2.1% in volume, -1.3% in value for the

first half of 2015 versus one year ago).

• JGC continue with their reduction price campaign, that has implied a further sales growth,

both in volume and value for iced tea.

• Mineral water without gas increases sales in volume (2.2%) and in value (2.5%). Still water

continues to increase its sales thanks to manufacturer brands and innovation, both in

formats and in flavors. Mineral water with gas have seen faster growth in sales than water

with no gas (2.7% in volume and 3.0% in value).

• Coffee pods are the only segment that show a sales increase in coffee (8.8% in volume and

10.0% in value).

• During the first half of 2015 there were innovations in juices both in format and formulas,

bringing them closer to other segments like energy drinks (Pascual added caffeine and

guaraná to Bifrutas, a juice and milk drink) or sport drinks (Orangina Schweppes with its

Sunny Sport).

Spain

16




- 0.7

- 42.1

-50 -30 -10


Soft Drinks

34.4

7.4

3.4

1.4

0 10 20 30 40

Mineral Water

Tea

Cocoa

Coffee


PULSE REPORT

56.5%

14.3%

13.4%

7.1% 6.7% 2.0%

Soft Drinks Coffee Mineral Water Tea Juices, Squashes & Syrups Cocoa

5 008

1 263 1 187

630 593

-0.2 2.6 10.2

-7.7 -6.6

Eu

ros,

in M

illio

ns


The United Kingdom

17

KEY TRENDS

• Soft drinks, the biggest segment, has seen

growth rate slow down compared to the

mineral water segment due to price

pressure from discounters, in-store

promotions and greater focus on healthier

lifestyles.

• Tea continues to see declines (7.7%) as

the growth in fruit, herbal and green teas

are not enough to offset the losses in black

tea.

• Coffee is seeing growth (2.6%) as

consumers continue to trade up to more

premium instant coffees and pods.

• Mineral water has seen strong value gains

(10.2%). Waters’ natural and healthier

positioning, and convenience of use when

on the go, are driving demand for the

category. Price inflation has helped boost

value sales.

Eu

ros,

in m

illi

on

s






5 008

1 263 1 187

630 593 180

Euro Sales

PULSE REPORT

The United Kingdom

18

CATEGORY INSIGHTS

• Pressure from discounters continued in 2015, with both Aldi and Lidl gaining share, putting

pressure on the top four grocers. In response to this, grocers are continuing to rationalise

their ranges in order to maximise profitability of store space. Therefore the competition for

space is shooting up as manufacturers fight to keep all their SKU’s (stock keeping unit) on

shelf above competitors.

• Hot drinks remain in volume decline as younger consumers shun traditional black tea and

instant coffees in favor of bottled water. However hot drinks have seen value remain stable

as consumers switch to more premium sectors.

• The tea market has seen strong growth from fruit & herbal and green sectors, where the

numbers of products available continue to increase, however standard black tea continues to

decline dramatically.

• In coffee – pods and super premium continue to see strong growth while the premium and

regular sectors of instant coffee continue to decline despite heavy promotions this year.




- 0.3

- 8.2

- 42.1

- 52.6

-60 -40 -20 0

Cocoa

Soft Drinks


Tea

109.7

31.7

0 50 100

Mineral Water

Coffee


PULSE REPORT

Final Notes

19

Notes on category definitions for countries

Due to the diverse products found in individual countries across this market it was necessary to

consolidate the available data into the categories in this report. In some cases, it was not

possible to align products across all six countries. Those exceptions are listed below:

Soft Drinks

• The UK data in this report does not contain iced tea and other tea based beverages and the

other countries do not.

Juices, Squashes & Syrups

• The German data in this report includes smoothies and refrigerated fruit juice; other

countries do not.

Mineral Water

• The French data in this report includes flavored mineral water whereas the other countries do

not.

• The Italian data in this report includes flavored sports drinks whereas the other countries do

not.

PULSE REPORT

Resources

20

About IRI. IRI is a leader in delivering powerful market and shopper information, predictive analysis and the foresight

that leads to action. We go beyond the data to ignite extraordinary growth for our clients in the CPG, retail and over-

the-counter healthcare industries by pinpointing what matters and illuminating how it can impact their businesses

across sales and marketing. Move your business forward at IRIworldwide.eu

Arlington Square, Downshire Way, Bracknell, Berkshire RG12 1WA, Tel +44 (0) 1344 746000

Copyright © 2015 Information Resources, Inc. (IRI). All rights reserved. IRI, the IRI logo and the names of IRI products and services

referenced herein are either trademarks or registered trademarks of IRI. All other trademarks are the property of their respective owners.

FOR MORE INFORMATION

Please contact Björn Steinbach,

IRI at [email protected] or

+49 (0) 211 36119 150 with questions or comments about this report.

To gain insight into opportunities across specific categories, segments, channels or retailers,

contact your IRI client service representative regarding custom analyses leveraging the

following resources:

• InfoScan Census® is a syndicated retail tracking service that enables manufacturers and

retailers to acquire industry insights used to make better business decisions. InfoScan

Census utilizes the data that IRI collects from grocery, drug, and mass merchandise retailers

to provide the most comprehensive and accurate syndicated data offering in the FMCG

sector. With access to accurate, granular detail by category, geography, measure, and time

period, clients have the tools needed to develop marketing and sales strategies based on

product performance, distribution, and promotion responsiveness. All data about drinks

comes from InfoScan Census.

• IRI Consulting provides strategic insights and advice leveraging a variety of data sources,

predictive analytics, enabling technologies, and business analyses to help FMCG

manufacturers and retailers address significant sales and marketing issues effectively.

Documents

IRI Pulse Report Drinks - · PDF filePULSE REPORT IRI Pulse Report Drinks Welcome to the Pulse H1 2015 edition for drinks. We hope you find it useful. Please do not