Satisfying the wine consumer

- the Swedish way!

AGENDA

• Why we exist and

who we are

• How we work

• Wine sales

• The South African

success

• The future

2014-05-20

3

Systembolaget

Uppdraget Alkoholens avigsidor Svensk alkoholpolitik Alkoholpolitik i Europa Systembolagets forskningsfond

2014-05-20 4

Systembolaget

Our History

1850

First local

monopoly on spirit

1919

Ration books

introduced

Monopoly

including wine

1955

Ration book abolished

Systembolaget as today

established

1977

Beer > 3,5%

included in

monopoly

1991

First self service

store opened

1995

Sweden

joining EU

Import monopoly

abolished

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Systembolaget

Our mandate:

To help limiting the harmful

effects of alcohol

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Systembolaget

Our mandate means:

• Limited access via

• Number of stores

• Opening hours

• Sales regulations

• No maximisation of profits

or additional sales

• Brand neutrality,

transparency and equal

treatment.

• Balancing responsibility

with service.

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Systembolaget

Our vision:

A society where everyone can

enjoy alcoholic drinks with due

regard to their health and

without harming themselves

or others.

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Systembolaget

Our business concept:

To sell alcoholic beverages

responsibly while offering a first-

class standard of service and

sharing our knowledge of

alcohol and health

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Systembolaget

Systembolaget in brief

• 413 stores

• 500 agents

• 114 million customers/ year

• 4 900 employees

• Turnover SEK 23.3 billion

• 410 suppliers

• 3 100 articles

• 8 000 articles in ordering range

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Systembolaget

Store formats

• Small stores

• Medium sized stores

• Large stores

• Superstores

Wine cellar stores

Food Hall stores

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Systembolaget

Key figures – opinion index OPI

0

10

20

30

40

50

60

70

2002 2003 2004 2005 2006 2007 2008 2009

AGENDA

• Why we exist and

who we are

• How we work

• Wine sales

• The South African

success

• The future

We consider…

8 trends

The ’ME’ brand

Convenience

Product range strategy

Our focus:

• Consideration • The environment

• Human rights

• Health

• Knowledge and expertise- diversity with breadth & depth

• Inspiration

• Value for money

Brand neutrality

Quality control

Efficiency

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Systembolaget

Product range structure

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Systembolaget

Launch plan

Launch plan

Request

for

tenders

Tender

examination

Tasting and

purchasing Sensory &

laboratory

Quality

control

Tasting for

product

descriptions

Tasting for

wine writers First order

from stores

Launch

Lead time app 25 weeks

Purchasing process

Blind tastings

• 13 000 samples tasted

out of 18 000 tenders

• Best price/ quality ratio in

relation to specifications

and taste profile as

described in tender

request.

• Brand neutral

Quality control

• To ensure that the same style and quality winning the

blind tasting also ends up on shelf.

AGENDA

• Why we exist and

who we are

• How we work

• Wine sales

• The South African

success

• The future

The market today

449

million

litres

23,5

billion

SEK

Wine sales/ category 2009

Volume share different packaging 2009

Volume old vs new world 2000- 2009

Volume share wine/ country 2000- 2009

AGENDA

• Why we exist and

who we are

• How we work

• Wine sales

• The South African

success

• The future

SA wine sales vs total (excl fortified wine)

Sanctions lifted-

first wines in Sweden December 1993

• KWV Chardonnay 92

• Boschendal Grd Cuvée Sauvignon Blanc 92

• Nederburg Pinotage 90

• Meerlust Rubicon 87

Key success factors SA: 1. Conditions

• Climate giving full-bodied wines- in favour

by many Swedish consumers

• Several big, brand building export companies

• Flexible wine legislation English speaking

• Winemakers being customer driven

• WOSA understanding the potential

Key success factors SA: 2. Offer

• Over delivering on quality in both entry-

and premium segments

• Diversified styles

• Early on bag-in-box

Key success factors SA: 3. Swedish market

• Many importers early engaged in the SA wines

• High amount of press coverage- SA 20 mill. vs other

NW countries 2 mill. hits on Google.

• Systembolaget to follow customer

preference- many new launches.

• Transparent sales statistics

• Swedes travelling to SA- building

friendship

AGENDA

• Why we exist and

who we are

• How we work

• Wine sales

• The South African

success

• The future

The future

• Excellent service

• Customer segmentation

• Corporate Social

Responsibility

2014-05-20

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Systembolaget

www.systembolaget.se

Customer segmentation

Cautious traditionalists (17%)

• Dutiful and traditional

• Only drink on special

occasions

• Women and men

• Over represented in the

60+ age group

Handicrafts

Books

Crosswords

Music

38%19%

12%

31%

Wine

Beer

Spirits

Cider

Blokes who yearn to learn (8%)

• High interest in alcoholic drinks

• Men aged 30-60,

• Beer is a major hobby

• Consumption during boys’ nights out, mostly beer and whisky

• Buy new products on each occasion

TV

Hunting & Fishing

Motor sport

Partying

Gambling

(horce-racing,

lottery, poker)

26%20%

5%

49%

Wine

Beer

Spirits

Cider

Sophisticated connoisseurs (13%)

• Considerable interest

• Sociable, like organised parties

• Men and women aged 50+

• Consume during meals with friends, mainly wine

• Buy new products on each occasion Cooking

Travel

Sailing/Golf

Culture

Books

58%

18%

3%

21%

Wine

Beer

Spirits

Cider

Unpretentious bon vivants (13%)

• Not that knowledgeable about alcoholic drinks but keen to learn more

• Alcohol a large part of everyday life

• Men and women 40+

• Reasons for consumption: feels slightly luxurious and might have health benefits

48%

19%

4%

29%

Wine

Beer

Spirits

Cider

Cooking

Travel

Sailing/Golf

Social experience seekers (10%)

• Young, inquisitive and enjoy

challenges

• Alcohol has a social context

• Women and men aged 18-30

• Reasons for consumption: to

feel more relaxed/exhilarated,

to get drunk and get away

from everyday life for a bit.

Fashion

Eating out

34%17%

13%

36%

Wine

Beer

Spirits

Cider

Partying

Music

TV/Computer

games

Healthy security seekers (13%)

• Not particularly knowledgeable about alcohol but keen to try new things

• Appearance is important

• Women aged 20-39

• Buy new products each time Working out

Home styling

38%17%

15%

30%

Wine

Beer

Spirits

Cider

Fashion

Eating out

Partying

Folksy bargain hunters (13%)

• Traditional and do not stand out

• Price is important

• Think that there’s too much snobbery associated with wine

• Men and women 50+

• Consume in their leisure time, mainly wine and beer. However, they drink more spirits than the average.

Clubs/

Associations

Watching

sports

Music

Books

Travel

35%24%

8%

33%

Wine

Beer

Spirits

Cider

Multifaceted connoisseurs (1.4%)

• Alcoholic drinks are their main interest

• ”They are expert allrounders”

• Men 50+

• Consume mostly wine, usually during weekday dinners

• Buy new products each time

62%

17%1%

20%

Wine

Beer

Spirits

Cider

Clubs/

Associations

Travel

Cooking

Sailing/Golf

Culture

Those who don’t drink alcohol (11%)

Systembolaget customer satisfaction index-

in comparison with other retail

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Systembolaget

Social responsibility

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Systembolaget

A Nordic monopoly co-opertaion on CSR

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Systembolaget

Long-term commitment for a sustainable

supply chain

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Systembolaget

Vision & Affärsidé Etik & Värderingar Försäljningsregler Historia Nyckeltal Dotterbolagen Systembolaget i korthet

T hankyou!