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Champagne and Sparkling Wine - UK - February 2010

ISSUES IN THE MARKET
Definition
Abbreviations
FUTURE OPPORTUNITIES
Making a virtue of slow production
Capitalising on home advantage
Targeting the Baby Boomers
MARKET IN BRIEF
Recession causes slowdown in Champagne market…
… but sparkling wine is coming of age
What will the future bring?
INTERNAL MARKET ENVIRONMENT
Key points
Societal attitudes towards alcohol changing
Figure 1: Changing shares of main categories of UK spend, at current prices, 1998-2008
Figure 2: Drinking trends, 2005-09
In-home drinking is increasingly the key revenue stream
Premiumisation and the effects of the recession
Figure 3: Trends in agreement with statements on luxury/status, 2005-09
Champagne under pressure from sparkling competitors
Figure 4: Champagne main export markets in 2008
BROADER MARKET ENVIRONMENT
Key points
Rising duty and strong euro undermine margins
Figure 5: Trends in excise duty rates for Champagne/sparkling wine, April 2000-09
An ageing population
Figure 6: Structure of the UK 18+ population, by age, 2004-14
An upwardly mobile population
Figure 7: Structure of the UK population, by socio-economic group, 2004-14
Still in the grip of a recession
Figure 8: Forecast of trends in PDI and consumer expenditure at real (2004) prices, 2004-14
COMPETITIVE CONTEXT
Key points
The battle for market share intensifies
Figure 9: Alcoholic drink types drunk in past year, 2005-09
Rising importance of gender politics
Figure 10: Percentage consumption of drinks on a ‘big night out’ compared to a ‘big night in’, July 2009
STRENGTHS AND WEAKNESSES IN THE MARKET
Strengths
Weaknesses
WHO’S INNOVATING?
Key points
Evolution in formats
Eco-friendly bubbly
Playing around with flavours
A direct dialogue with the consumer
Champagne as healthy?
MARKET SIZE AND FORECAST
Key points
Champagne’s fortunes tied to economic recovery
Figure 11: Forecast of volume and value retail sales of the total Champagne market, in current and real prices, 2004-14
Sparkling wine continues its ascent
Figure 12: Forecast of volume and value retail sales of the total sparkline wine market, in current and real prices, 2004-14
Factors used in the forecast
SEGMENT PERFORMANCE
Key points
7 in 10 bottles sold are sparkling wine
Figure 13: UK: volume and value retail sales of Champagne and sparkling wine, 2005-09
Declining Champagne sales driven by poor performance in on-trade
Figure 14: UK: Volume and value retail sales of Champagne in the off-trade, 2004-09
Figure 15: UK: Volume and value retail sales of Champagne in the on-trade, 2004-09
Growth of sparkling wine led by on-trade
Figure 16: UK: Volume and value retail sales of sparkling wine in the off-trade, 2004-09
Figure 17: UK: Volume and value retail sales of sparkling wine in the on-trade, 2004-09
MARKET SHARE
Key points
Major Champagne brands under pressure
Figure 18: Trends for market share in value for top-selling Champagne brands in the off-trade, 2008-09
Own-label is building momentum
Retailers target smaller, grower brands
Premium sparkling wine brands are leading the market
Figure 19: Trends for market share in value for top-selling sparkling wine brands, in the off-trade, 2008-09
COMPANIES AND PRODUCTS
Key points
Boizel Chanoine
Constellation
Cordoníu
Freixenet
Laurent-Perrier
Mentzendorff
Moët Hennessy
Pernod Ricard
Rémy Cointreau
Vranken-Pommery Monopole
BRAND ELEMENTS
Key points
 BRAND MAP
Figure 20: Attitudes towards and usage of Champagne and sparkling wine brands, January 2010
 BRAND QUALITIES OF CHAMPAGNE AND SPARKLING WINE BRANDS
Champagnes top the style stakes
Figure 21: Personalities of various Champagne and sparkling wine brands, January 2010
 EXPERIENCE OF CHAMPAGNE AND SPARKLING WINE BRANDS
Jacob’s Creek most popular, Bollinger has aspirational image
Figure 22: Consumer usage of various Champagne and sparkling wine brands, January 2010
 BRAND CONSIDERATION FOR CHAMPAGNE AND SPARKLING WINE BRANDS
Bollinger most considered, sparkling wines least so
Figure 23: Consideration of various Champagne and sparkling wine brands, January 2010
 BRAND SATISFACTION FOR CHAMPAGNE AND SPARKLING WINE BRANDS
Champagnes mean satisfaction
Figure 24: Satisfaction with various Champagne and sparkling wine brands, January 2010
 BRAND COMMITMENT TO CHAMPAGNE AND SPARKLING WINE BRANDS
Occasions all round
Figure 25: Commitment to various Champagne and sparkling wine brands, January 2010
 BRAND INTENTIONS FOR CHAMPAGNE AND SPARKLING WINE BRANDS
Jacob’s Creek the safe standby
Figure 26: Future usage intentions for various Champagne and sparkling wine brands, January 2010
 BRAND RECOMMENDATION FOR CHAMPAGNE AND SPARKLING WINE BRANDS
Accessible or aspirational – as long as it’s good quality
Figure 27: Recommendation of various Champagne and sparkling wine brands, January 2010
 BOLLINGER
What the consumer thinks
Figure 28: Attitudes towards the Bollinger brand, January 2010
 FREIXENET
What the consumer thinks
Figure 29: Attitudes towards the Freixenet brand, January 2010
 LANSON
What the consumer thinks
Figure 30: Attitudes towards the Lanson brand, January 2010
 JACOB’S CREEK
What the consumer thinks
Figure 31: Attitudes towards the Jacob’s Creek brand, January 2010
 MOëT ET CHANDON
What the consumer thinks
Figure 32: Attitudes towards the Moët et Chandon brand, January 2010
BRAND COMMUNICATION AND PROMOTION
Key points
Advertisers primarily relying on below-the-line activity
Figure 33: Total above-the-line advertising spend, for Champagne and sparkling wine, 2005-09
Moët Hennessy is the biggest spender
Taittinger takes to the skies
Figure 34: Above-the-line advertising spend, by top ten Champagne companies, 2007-09
Freixenet outspends sparkling wine competitors
Figure 35: Above-the-line advertising spend, by top ten sparkling wine companies, 2007-09
Top 20 spending brands
Figure 36: Above-the-line brand spend, by top 20 suppliers in the total Champagne and sparkling wine market, 2007-09
CHANNELS TO MARKET
Key points
Champagne increasingly more reliant on off-trade
Figure 37: Trends in the proportion of Champagne volume sales in the on- and off-trade, 2004-09
Figure 38: Trends in online supermarket discounting for Champagne/sparkling wine, December 2007-November 2009
Figure 39: Trends in the volume sales distribution of Champagne in the off-trade, 2007-09
Sparkling wine is growing its share of the on-trade
Figure 40: Trends in the proportion of sparkling wine volume sales in the on- and off-trade, 2004-09
CONSUMER USAGE – CHAMPAGNE
Key points
Less frequent drinking affecting Champagne sales
Figure 41: Trends in consumption of drinking Champagne, 2007-09
Champagne use is peaking too soon
Figure 42: Trends in Volume Importance Index (VII)* of Champagne drinkers, by age group, gender and socio-economic group, 2009
‘Share-ability’ a major advantage for in-home market
CONSUMER USAGE – TYPES OF CHAMPAGNE AND SPARKLING WINE
Key points
Consumption of Champagne and sparkling wine over the past year
Figure 43: Consumption of Champagne and sparkling wine in the past 12 months, December 2009
Own label’s stock is rising
Figure 44: Proportion of Champagne drinkers who drink own-label and branded, December 2009
Cava blazes a trail but English sparkling wine is one to watch
Sparkling wine has an older profile
Figure 45: Trends in index of usage* of Champagne and sparkling wine drinkers, by age group, gender and socio-economic group, December 2009
Key points
Still special but there are warning signs
Figure 46: % occasions drinkers of Champagne and sparkling wine buy the product for, December 2009
Sparkling wine is capitalising on burgeoning in-home market
Men more influenced by status of Champagne
Figure 47: Net difference* of occasions men and women buy Champagne and sparkling wine for, December 2009
ATTITUDES TOWARDS CHAMPAGNE AND SPARKLING WINE
Key points
Sparkling wine is closing the gap in perception of quality
Figure 48: Attitudes of drinkers towards sparkling wine and Champagne, December 2009
2.3 million consumers feel that heavy discounting is cheapening the product
The Champagne brand is more powerful than individual labels
Over-45s more likely to notice improvements in quality of sparkling wine
Figure 49: Attitudes of drinkers towards sparkling wine and Champagne
APPENDIX – BROADER MARKET ENVIRONMENT
Figure 50: UK Consumer confidence index, January 2006-December 2009
APPENDIX – CONSUMER USAGE
Figure 51: Champagne and sparkling wine bought in the last year, by demographics, December 2009
Figure 52: Champagne and sparkling wine bought in the last year, by demographics, December 2009 (continued)
APPENDIX – DRINKING OCCASIONS: CHAMPAGNE VERSUS SPARKLING WINE
Figure 53: Occasions for which consumers bought Champagne, by demographics, December 2009
Figure 54: Occasions for which consumers bought sparkling wine, by demographics, December 2009
APPENDIX – ATTITUDES TOWARDS CHAMPAGNE AND SPARKLING WINE
Figure 55: Attitudes towards Champagne and sparkling wine, by demographics, December 2009

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