Pulse Report Drinks Q4 2012

7/28/2019 Pulse Report Drinks Q4 2012

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Drinks

SymphonyIRI

Welcome to the Pulse Q4 2012 edition for Drinks. We

hope you find it useful. Please do not hesitate to

contact us if you have any questions or comments [email protected]

Pulse


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Drinks SymphonyIRI Pulse Q4 2012

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About the Report

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: Soft Drinks, Juices Squashes & Syrups, Mineral

Water, Coffee, Tea, Cocoa.

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

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

The data has been sourced from Symphony IRI Group retail databases and

Eurostat the statistical branch of administration for the EuropeanCommission.

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

Spain and the UK.

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

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.

Country Channels used

UKHypermarkets, Supermarkets, Drugstores and

Impulse Outlets

ESHypermarkets, Supermarkets, Hard Discounters,

Drugstores and includes the Canary Islands

DEHypermarkets, Supermarkets, Hard Discounters,

Drugstores and Beverages Specialty Stores

NLHypermarkets, Supermarkets, Hard Discounters

and Drugstores

ITHypermarkets, Supermarkets, Small Self Service,

Hard Discounters and Drugstores

FRHypermarkets and Supermarkets


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In the Radar

Economic figures influencing consumer behaviour

Source Eurostats, December 2012

Population in Millions Unemployment (%)

Average 12 Months

Inflation Rate GDP in Millions ()

January

2011

January

2012

Dec

2011

Dec

2012

Dec.

2011

Average

2012

2011

(Estimate)

2012

(Estimate)

France 65.0 65.3 9.7 10.2 +2.3 +2.2 1,987,699 2,029,877

Germany 81.7 81.8 5.9 5.5 +2.5 +2.1 2,567,000 2,643,900

Italy 60.6 60.8 8.4 10.7 +2.9 +3.3 1,586,209 1,565,916

Netherlands 16.6 16.7 4.4 5.3 +2.5 +2.8 607,435 601,086

Spain 46.1 46.1 21.6 25.0 +3.1 +2.4 1,074,940 1,048,490

United

Kingdom 62.4 62.9 8.4 8.0 +4.4 +2.8 1,747,315 1,898,520

The Drinks category in 2012 was mainly affected byexternal effects like the economic crises and

a rise in raw material costs which resulted in higher

consumer prices.

Bjrn Steinbach

Consultant Client Solutions, Cold Beverages, SymphonyIRI Group

Germany Contact: [email protected]

Tel : +49 (0) 211 / 361 19 - 150


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Global Trends

+3.5%

+1.3%

+3.5%

TOTAL EUROPE +2.4%

Value Sales in Millions ()

Total EU 44,881

DE 17,015

UK 7,878*

FR 7,536

IT 6,466

ES 4,149

NL 1,837

1,105 976 965 1,053 1,145 985

448 445 442 473 474 448

1,7991,479 1,484 1,679

1,8371,466

4,3314,193 4,171

4,3454,334

4,166

1,922

1,752 1,784

1,9462,030

1,776

2,012

1,841

1,9942,106

1,9381,897

0

2,000

4,000

6,000

8,000

10,000

12,000

14,000

2-Oct-11 1-Jan-12 2-Apr-12 1-Jul-12 1-Oct-12 30-Dec-12

Millions

Period Ending

UK

France

Germany

Italy

Netherlands

Spain

*based on an exchange rate of 1.150 to the pound

Positive Trend

Static Trend

Negative Trend

+4.2%

+1.6%

Value sales and growth and decline in the last year

Value sales for the last six quarters

+3.7%

Source: SymphonyIRI Retail Databases; Period Ending 30 Dec, 12


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17,855

5,977

2,125

8,456

9,553

3.11.11.3

2.8 2.9

Soft Drinks Coffee Mineral

Water

Juices,

Squashes

& Syrups

Tea

Millions

Total Sales % vs. YA

Top 5 Categories Evolution

39.8%

21.3%

18.8%

13.3%

4.7%

2.0%

Soft Drinks Coffee

Mineral Water Juices, Squashes & SyrupsTea Cocoa

Europe

Value Sales () and % Change vs. Yr Ago

17,855

9,5538,456

5,977

2,125915

0

2,000

4,000

6,000

8,000

10,000

12,000

14,000

16,000

18,000

20,000

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

MillionsEuros

Category Value Sales and Share of Value in the Last Year


Key Trends

In 2012 consumer prices wererising in all European countries.Hence value sales rose as a result.

Another issue in 2012 was theincreasing raw material costs (e.g.juice concentrate, sugar), which inthe end lead to the increasingconsumer prices.

Another driving force in sales isincreasing promotional activity insome categories.

Together this lead to a valuegrowth in all drinks categories for2012.

This is interesting as in thesouthern European countries theeconomic crisis is affectingconsumer demand.


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Europe

Top 5 Losers: Value Sales

chg vs. Yr Ago ()

Top 5 Winners: Value Sales

chg vs. Yr Ago ()

491.7

289.4

111.5

62.8

60.1

0 100 200 300 400 500 600

Soft Drinks

Coffee

Mineral Water

Juices,

Squashes &

Syrups

Tea

Millions

0 0 0 0 0 0 0

Millions

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


Category Insights

Coffee (+289.4m) and Soft Drinks (+491.7m) drove the European Drinks Market in2012 versus the year ago. The increase in Soft Drinks comes from all countries, mainlyGermany and UK whereas coffee is the top growing category for Italy and Spain. Noneof the Drink categories are in decline.

There are several factors for the increase of Soft Drink Value sales, especially a warmsummer, price increases and promotion activities.

Coffee Value sales rises in every country mostly through price increases, however, thedrivers vary from country to country (e.g. in 2012 Italy, which is one of the most affectedcountries by the crisis, is facing an turn from away-from-home consumption to home-

consumption). In Total Europe the Juices, Squashes & Syrups category have the lowest increase of all

Drinks categories. This is mainly due to price increases as reactions of rising concentrateprices. However, due to the growth in France and the Netherlands the category ispositive for Europe total.

Mineral Water is growing with 1.3% compared to the year ago. This is due to a warmersummer and Water seems also to benefit from the economic crisis. Having the lowestper-Liter-price of all categories Water is having a trading down effect.


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2,238

1,397

344

1,757

1,598

2.84.2

5.64.0

0.4

Soft Drinks Mineral

Water

Juices,

Squashes

& Syrups

Coffee Tea

Millions


29.7%

23.3%

21.2%

18.5%

4.6%2.7%

Soft Drinks Mineral Water Juices, Squashes & Syrups CoffeeTea Cocoa

France


2238

17571598

1397

344 202

0

500

1,000

1,500

2,000

2,500


MillionsEuros


Key Trends

Mineral water is flat in value in 2012 but

continues to develop volume (+1,6%).

The nationally brands continue to

develop their promotional activity

The Soft Drinks category growth is only

due to the tax implemented in France at

the beginning of 2012, but this tax had

an important impact on the volume,

causing decline of -3,6%. The

carbonated soft drinks are moreimpacted (cola, soda) than the non

carbonated ones.

Coffee and Juices continue to grow, but

only due to inflation of raw materials

being passed on to consumers



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Germany


34.3%

24.8%

20.0%

16.0%1.0%3.9%

Soft Drinks Coffee

Mineral Water Juices, Squashes & Syrups

Tea Cocoa

5,838

2,725

171

4,219

3,397

665

0

1,000

2,000

3,000

4,000

5,000

6,000

7,000

5,837.57

4,219.36

3,396.91

665.29

2,725.14

0.9

6.1

-1.4

3.9

-0.9

Soft Drinks Coffee Mineral

Water

Juices,

Squashes &

Syrups

Tea

Millions



MillionsEuros



Key Trends

Once more the German Drinkscategories are still affected by risingconsumer prices, caused by the costincreases for raw materials and energyin Q4. The average consumer prices fornon-alcoholic beverages (without hotdrinks, like coffee) went up 1,9%.Especially Soft Drinks (+4,4%) and FruitBased Drinks (+4,7%) drive thisdevelopment.

Volume and value development for totalnon-alcoholic beverages in this quarterare opposite. In value non-alcoholicbeverages is growing 1% whereasvolume sales decline by -0,8%.

Thus, this quarter is line with Q1 and Q22012 and Q3 just was exceptionallygood with no decline in volume.

Therefore the dominating trend for 2012was the price increases which caused avolume decrease of -1.5% and a valueincrease of 1.6% for non-alcoholic

beverages.


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Germany


chg vs. Yr Ago ()


chg vs. Yr Ago ()

-37.7

-38.3

-38.4 -38.3 -38.2 -38.1 -38.0 -37.9 -37.8 -37.7 -37.6 -37.5 -37.4

Juices, Squashes

& Syrups

Coffee

Millions

216.9

38.5

31.2

11.0

0 50 100 150 200 250

Soft Drinks

Tea

Mineral Water

Cocoa

Millions


Category Insights

For Q4 and also for 2012, total cost increases and rising prices were the biggest issues in theGerman Drinks market. Price promotions and new product launches remain key drivers in recent

years.

Despite rising promotions in Q4, consumers reacted to the rising prices and volume sales saw a

declined.

Due to its price increase Soft Drinks could gain value sales and is the top growing segment in

Germany. In October the largest Soft Drink Company in Germany Coca-Cola entered Aldi in

Germany as the first brand in the Drinks segment. This revitalized Aldis Drinks category but may

have influenced other Accounts negatively. Key Drivers in the Soft Drink Market in 2012 was Non-

Sugar and the relatively new sub-segment Fassbrause. Further innovations drove sales in othercategories. Energy Drink sales rose in 2012 due to the non-sugar and the flavour variants.

The development of Juices in 2012 is also driven by price increases. Consumers reacted by a

lower level of consumption and switching to private label brands which in total resulted in

decreasing value sales.

Last but not least, Coffees value sales growth is mostly linked with a consistent consumer trend to

single portions and capsules with disproportionately high consumer prices. Moreover there had

been a price increase in 2012 which also leads to a higher consumer price. The decrease in value

sales came due to a strong decrease in the non core categories like ready to drink coffee.


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Italy

29.9%

28.5%

22.1%

14.4%1.2%3.9%

Soft Drinks Mineral Water Coffee Juices, Squashes & SyrupsTea Cocoa

1,9361,842

1,429

932

251

77

0

500

1000

1500

2000

2500



1,9361,842

1,429

932

251

-0.8-0.21.7

5.2 4.5

Soft Drinks Mineral

Water

Coffee Juices,

Squashes

& Syrups

Tea

Millions


MillionsEuros



Key Trends

Data ending MAT December 2012 shows a positive

trend for Water, Coffee and Tea, otherwise a little

decrease of Soft Drinks and Juices.

Trends are influenced by temperatures: high season

2012 (June, July, August) recorded higher temperatures

than 2011, but April, May and September were colder

than the previous year: the contribution given by climate

effects is slightly above zero.

Positive trends in value are driven by price inflation

increase across all categories, due mainly to price

increases of petrol (cost of transport, packaging PET)

and raw materials (coffee and sugar).

At the same time volumes in 2012 are positive only for

Water.

The most important segment Soft Drinks recorded

negative trends in volume and value, due to difficulties

of the Colas market from Q2 until the end of 2012: the

drop increased in Q4, December was particularly

negative (Christmas).

In general, we attribute a weakness of consumer

demand in CPG to the economic crisis that is affecting

in part the Drinks Market. CSDs suffering but Water is

benefiting from trading down phenomena versus lowprice category.


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Italy


chg vs. Yr Ago ()


chg vs. Yr Ago ()

70.4

30.5

10.7

2.2

0 20 40 60 80

Coffee

Mineral Water

Tea

Cocoa

Millions

-3.0

-7.5

-8.0 -7.0 -6.0 -5.0 -4.0 -3.0 -2.0 -1.0 0.0

Soft Drinks

Juices, Squashes

& Syrups

Millions


Insights and recommendations During 2012 some phenomena that started in 2011 continue to influence categories trends:

Weakness of consumer demand due to economic crisis

Increase of inflation rate (particularly driven by price increase of several raw material (e.g..

coffee) and petrol prices that impact: costs of transport and packaging (e.g. PET):

Retailers are transferring this on to shelf prices , the major part of costs increase

In Q4 2012 these phenomena (decrease of consumer demand and increase of inflation rate) are

accentuated further and come to plague virtually all food categories.

Coffee is the category most influenced from price increase of raw material (inflation rate more than 10%)

but in 2012 we saw a positive volume increase, not only thanks to the continuous positive trend ofcapsules superpremium segment but also thanks to normal ground coffee segment (the most important in

term of volume sales). This is a new interesting phenomena due to the economic crisis: consumers

increase at home consumption instead out of home, more expensive, breakfast.

During 2012 volumes of Soft Drinks market were affected by price increases and Trading down

consumer behavior. Mineral Water with the lowest price per liter is the only category that increased

volumes on the yearly basis.

Ice Tea is very sensitive to climate effects: its performance benefits from very hot temperatures during the

high season (June, July, August).


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46.3%34.7%

7.8%6.6%

4.0%0.6%

Soft Drinks CoffeeJuices, Squashes & Syrups TeaMineral Water Cocoa

851

637

144 12073

110

100

200

300

400

500

600

700

800

900

Netherlands



851

637

73

120

1442.5 6.7

11.1

3.8

8.4

Soft Drinks Coffee Juices,

Squashes

& Syrups

Tea Mineral

Water

Millions


MillionsEuros



Key Trends

The total drinks market in theNetherlands is fairly stable in

volume, but showing value growth

that lies above the average market

growth in value.

Hot and Cold drinks show a similar

growth in value, but in volume cold

drinks are performing better.

Soft drinks is the biggest contributor

to this growth, although mainly pricedriven, thanks to price increases.

Also coffee is purely growing in

value (volume is down). Next to

price increases, also upgrading of

the category contribute to value

growth with more and more high

quality coffee is offered and sold in

the Netherlands.


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Netherlands


chg vs. Yr Ago ()


chg vs. Yr Ago ()

-0.1

-0.1 -0.1 -0.1 -0.1 -0.1 0.0 0.0 0.0

Cocoa

Millions

31.4

15.5

14.4

7.5

5.7

0 10 20 30 40

Soft Drinks

Coffee

Juices,

Squashes &Syrups

Tea

Mineral Water

Millions


Category Insights

Within Softdrinks, Cola is the biggest contributor to the value growth thanks to price increases. Cola

volume however is down, while more healthy perceived drinks such as mineral water and ice tea are

gaining volume. Next to that Energy drinks are still a strongly growing segment in the Netherlands.

The coffee market is still very dynamic. Ground coffee, but mainly pads are losing share to the higher

quality cups and beans. The strong decline of pads can be explained by the focus on new coffee

machines, like Senseo Sarista developed by Douwe Egberts and Philips (takes beans) and the cup

machines (like Nespresso). In Dutch Supermarkets Espress dor (a brand of Douwe Egberts) and

Nescaf Dolce Gusto (a brand of Nestl) are sold for cup machines.

Within Juices we see a shift from shelf staple juices to fresh/chilled juices. The growth in fresh juices

in mainly driven by Freshly in store squeezed orange juices. In more and more stores thesemachines are appearing and being very successful. Building further on this success we are also

seeing the first smoothie machines appear in supermarkets in the Netherlands.

Within tea we still see the trend to herbal tea and green tea increasing in value and volume share,

cannibalizing mainly on fruit flavored teas. Although in value tea is showing high growth figures, the

volumes are declining.

A remarkable long term trend is growth within Syrups. This category had been neglected for a while

but brought to life again by the main A-brand manufacturer Heinz. They have changed the

assortment, they have re-branded their products. This category is winning at the cost of other Liquid

Intake categories like dairy.


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Spain

51.9% 19.4%

18.3%

7.1%3.0%0.3%

Soft Drinks Mineral Water Coffee CocoaTea Juices, Squashes & Syrups

2,155

803 758

294126

130

500

1000

1500

2000

2500



2,155

803

294126

758

6.12.9

13.1

0.56.7

Soft

Drinks

Mineral

Water

Coffee Cocoa Tea

M

illions


MillionsEuros



Key Trends

Soft drinks (51% share of market) arehaving a positive growth during the

latest quarter.

Categories with a lower market weight

reduced product prices last year and

they have a positive value trend

(Coffee +13.1, Cocoa +6.1 and Tea

+6.7)

The segments that are experiencing

volume growth include Indian tonicand smoothies.

New taxes have been imposed by the

government during 2013.


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Spain


chg vs. Yr Ago ()


chg vs. Yr Ago ()

88.1

22.6

17.0

11.7

7.9

0 20 40 60 80 100

Coffee

Mineral Water

Cocoa

Soft Drinks

Tea

Millions

0.0 0.0 0.0 0.0 0.0 0.0 0.0

Millions


Category Insights

Sales in Indian Tonic have gone up steadily in soft drinks (+15% value) thanks to the Gin Tonic

Market. New premium products and brands have been launched during the past 12 months (

Schweppes special edition, KAS Blue, Fever Tree, etc.)

Coca Cola Co, PepsiCo and Orangina Schweppes sales decreased in the latest MAT. However,

Private Label shows a significant growth in volume and value due to increased promotional

volumes and regular pricing.

Brands like Monster and Gatorade (energetic and isotonic categories) increased sales steadily.

Growth within Ice tea is driven by Private Label.

The most important contributor to the growth of coffee segment is the new coffee capsules (+40%vs MAT last Year).

Also Mineral Water value sales is primarily growing in the branded market. The growth is again

driven by mineral water.

Mercadona is still the market leader in sales of drinks


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United Kingdom

61.4%

14.1%

7.8%

7.4%2.0% 7.2%

Soft Drinks CoffeeTea Mineral Water Juices, Squashes & Syrups Cocoa

4,838

1,112618 584 566

159

0

1000

2000

3000

4000

5000

6000



618.30584.15

1,112.28

4,837.68

566.27

3.1 1.6-2.2

9.8

2.6

Soft Drinks Coffee Tea Mineral

Water

Juices,

Squashes

& Syrups

Millions


MillionsEuros


Key Trends

Soft drinks accounts 61.4% of themarket but growth has slowed in Q4 vs.

Q3 (which included the Olympic

Games).

Coffee continues to grow strongly with

9.8% value growth. Volume is increasing

as well at but much slower at 3.42%.

Tea continues long term decline in value

and volume as the category continues to

lose consumers to other hot and cold

drink categories.

Waters in long term value growth has

slowed in the latest quarter while volume

is in decline.

Juice increased avg, volume price by

6.2% in the latest year which has been

driving value growth but volume is

declining for the 2nd consecutive year by

-5%



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United Kingdom


chg vs. Yr Ago ()


chg vs. Yr Ago ()

-13.8

-16.0 -14.0 -12.0 -10.0 -8.0 -6.0 -4.0 -2.0 0.0

Tea

Millions

144.6

99.6

15.0

9.2

8.9

0 50 100 150 200

Soft Drinks

Coffee

Mineral Water

Cocoa

Juices,

Squashes &

Syrups

Millions

Category Insights

In Q3 the Olympics has a large affect on the drinks market driving temporary acceleratedgrowth for some categories. This growth could not be replicated in Q4 especially moving

into cooler weather we have seen all growth rates reduce and the decline of Tea slightly

increase as well.

Sports Energy drinks in the latest quarter are declining by -4.3% in value while Cola and

Water are performing very well

Cocoa has increased value growth in Q4 driven by a 5% price increase and 5% volume

growth combined with cooler weather.

The success of the Coffee category has been driven by Instant coffee specifically Specialty

Instant with 12% volume growth combined with a 49% increase in average volume price

adding 21m to sales. Ground Coffee segments of Pods and Single grind have both added

over 10m to the category in the latest year

Non Black Tea categories (Fruit+Herbal, Green and Speciality) continue to grow in value

while Black Normal Tea continues value decline yr on yr despite a positive Christmas

trading period especially for Decaf Tea.



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Resources

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

your SymphonyIRI 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 SymphonyIRI Group collects from grocery, drug, and mass merchandise retailers to provide the

most comprehensive and accurate syndicated data offering in the Fast Moving Consumer Goods

(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 frozen foods are coming from

InfoScan Census.

SymphonyIRI Consulting provide strategic insights and advice leveraging a variety of data sources,

predictive analytics, enabling technologies, and business analyses to help FMCG manufacturers andretailers address significant sales and marketing issues effectively.

Contact: SymphonyIRI Group, [email protected], Tel: +33 1 30 26 81 00

About SymphonyIRI Group

SymphonyIRI group, formerly named Information Resources, Inc. (IRI), is the global leader in

innovative solutions and services for driving revenue and profit growth in FMCG, retail andhealthcare companies. SymphonyIRI offers two families of solutions: core IRI solutions for market

measurement and symphony advantage solutions for enabling new growth opportunities in

marketing, sales, shopper marketing and category management. SymphonyIRI solutions uniquely

combine content, analytics and technology to deliver maximum impact. SymphonyIRI helps

companies create, plan and execute forward-looking, shopper-centric strategies across every level

of the organization.

For more information, visit www.SymphonyIRI.eu

Documents

Pulse Report Drinks Q4 2012