Beer, Wine and Spirit Consumption Preferences: Exploring Consumer Needs and Switching Behavior

Table of Contents

• CHAPTER 1 EXECUTIVE SUMMARY
  • The hot topic
  • The future decoded
  • Action points
• CHAPTER 2 THE FUTURE DECODED
  • Introduction
  • TREND: Alcohol consumption is flat or decreasing in most Western markets
    • Alcohol volumes are languishing across Europe and the US
    • The popularity of the beer category is fluctuating
    • Spirits are coming back into fashion but this is not reflected in volume growth
    • Trends in wine consumption vary by country
  • INSIGHT: Beer consumption is dominated by males in a time of changing consumer perceptions and preferences
    • Beer remains a male preserve
    • Midlifers are the core beer volume drinkers while Young Adults account for the most per capita consumption
      • The popularity of beer declines with age
      • Falling birth rates represents a threat to future growth prospects in beer
    • Consumers often turn to beer as a facilitator of social connections
      • Re-prioritizing family/friend time has grown in importance although consumers are finding it hard to do so in practice
      • Beer is considered an inherently social product
      • Beer' s sociability drives sales during major sporting events
      • But discounting is potentially undermining the volume gains being made
    • Consumers' perceptions of beer are slowly changing after its image became somewhat old-fashioned and stodgy
      • Young Adults in particular have begun to see beer as old-fashioned
      • The SAB-owned Fosters brand in the US has been tackling this problem head on with an innovative tack
      • Consumer perceptions of beer can be shaped by effective marketing
      • Beer is also fighting against decline in the European brewing stronghold countries by focusing on quality
      • The reality is that beer drinkers are increasingly seeking out quality and credibility
      • The premiumization trend seen in many industrialized countries is very much in evidence in the lager market
    • Consumers are worried about the negative health impact of beer consumption espcially with regard to calories
      • Consumers are worried about the fattening properties of beer
      • Low alcohol and low calorie beers have traditionally been viewed as a compromise
      • The low alcohol market has generally failed to match expectations despite some growth
      • Uncompromising consumers with specific perceptions of a tasty beer will be difficult to convince
    • Beer' s ' naturalness' is well-aligned with consumer trends
      • Consumer attitudes towards organic products generally suggests considerable potential for organic beers
      • The German case highlights scope for brewers to leverage the natural brewing process
      • Consumers are generally unaware that beer has its own health-boosting credentials
    • Consumers' propensity to consume beer is affected by seasonality
      • Beer sales in Italy are strongest in summer
      • New Product Development is needed to boost winter sales of beer
      • Launches of seasonal winter beers are bouncing back after decline
  • INSIGHT: European and US consumers are showing an increased propensity to switch to wine
    • Wine is gaining preference on more occasions in both Europe and the US
      • Wine sales in the US are growing from a comparatively small base
      • Wine consumption in Europe is a more ingrained cultural norm but market growth is nonetheless impressive
    • Wine retains its sophisticated image and per capita consumption is still dominated by mature consumers
      • Gender-based value consumption of wine is relatively even
      • But research has shown that women are less knowledgeable about wine
      • More sophisticated tastes of older consumers drives an age-consumption correlation
    • Wine consumption in traditional beer markets is taking off
      • But long-term problems may lie in wait because of demographic shifts
      • More sophisticated wine consumption is far from guaranteed by using entry level products such as wine coolers
      • Economic slowdown would hit wine more than other drinks categories
    • The wine category has not yet seen a significant premiumization
      • Wine consumption has become more accessible, rather than quality focused
      • Growth in volume of the wine market has yet to translate into trading up
    • Packaging is an important factor influencing wine preferences and perceptions
      • Women use packaging cues to define product quality more frequently because they are less knowledgeable about wine
      • Screw tops are gaining favor among consumers although there are country variances
      • Ease of opening is something that is important to all consumers
      • Traditional packaging formats are often unappealing for younger age cohorts
      • Glass bottles are still the preferred wine packaging
    • Wine consumption is increasingly focused on the home
      • Restaurant mark-ups are inhibiting further progress of on-trade wine sales
  • INSIGHT: Spirits are on the rise everywhere
    • Mature consumers remain the core spirits consumers
    • Premiumization in spirits is strongest in France and Sweden
      • Premiumization varies by country and sub-category
      • Case study: Innovation and joined-up thinking combine to wow consumers
      • Young Adults prefer offering rather than receiving personal recommendations
      • Word-of-mouth and viral campaigns must be credible to succeed
    • Body image health concerns are key to the success of spirits
      • Spirits are seen as less fattening by image-conscious consumers
      • If premiumization continues it can help alleviate binge drinking concerns
    • Premium spirits show the importance of differentiated packaging
      • The image of spirits is key for Young Adults
  • INSIGHT: Consumers are changing drinking habits in response to social changes
    • Consumer health concerns will radically alter the on-trade
      • Consumers' reaction to smoking bans will polarize the on-trade and offer new opportunities in Europe
    • Home entertaining is important for US consumers
      • Home entertaining in Europe is rising among Young Adults
      • Property market fluctuations will impact home entertaining in the UK and US
  • Conclusions: implications for manufacturers and retailers
    • The declining popularity of beer is not as bad as many industry bodies suggest
    • Wine has been a real success in recent years
    • Spirits have shown positive growth in recent years across a host of countries
    • A common goal unites all categories
    • Channel dynamics are also likely to change in coming years
• CHAPTER 3 ACTION POINTS
  • Introduction
  • ACTION: Aid moderation with low alcohol content
    • Recognize that quality perceptions are often shaped by alcohol content
    • Facilitate frequent non-binge drinking by education and small/resealable formats
  • ACTION: Use marketing that reflects the changes in the beer market
    • Target the polarization of the male market
    • Address seasonality with on-trade only specials
      • Address seasonality with seasonal winter beers
  • ACTION: Capitalize on the mass market appeal that increasingly characterizes wine
    • Improve wine consistency by gradually moving to new bottle closures
    • Adopt a multi-pronged approach to attract a variety of consumers to wine
    • The drive to recruit young wine drinkers needs to start here and now
  • ACTION: Learn the lessons of spirits brands
    • Categories beyond spirits should heed the trading up lessons
    • Marketers must work with the key ' gatekeepers' in the value chain
    • Go clear: fewer congeners may reduce after-effects
• CHAPTER 4 APPENDIX
  • Supplementary data
  • Research methodology
  • Definitions
  • Further readings
  • How to contact experts in your industry
• List of Tables
  • Table 1: Consumption of alcoholic beverages by category (liters m), US & Europe, 2001-2011
  • Table 2: Beer category sales volume (liters m), US & Europe, 2001-2011
  • Table 3: Beer category (Beer, Cider&Perry, FABs) per capita sales volume (liters/person), US & Europe, 2001-2011
  • Table 4: Beer sub-category sales volume (liters m), US & Europe, 2001-2011
  • Table 5: Beer sub-category per capita sales volume (liters/person), US & Europe, 2001-2011
  • Table 6: Cider & perry sub-category sales volume (liters m), US & Europe, 2001-2011
  • Table 7: Cider & perry sub-category per capita sales volume (liters/person), US & Europe, 2001-2011
  • Table 8: FABs sub-category sales volume (liters m), US & Europe, 2001-2011
  • Table 9: FABs sub-category per capita sales volume (liters/person), US & Europe, 2001-2011
  • Table 10: Spirits category sales volume (liters m), US & Europe, 2001-2011
  • Table 11: Spirits category per capita sales volume (liters/person), US & Europe, 2001-2011
  • Table 12: Wine category* sales volume (liters m), US & Europe, 2001-2011
  • Table 13: Wine category* per capita sales volume (liters/person), US & Europe, 2001-2011
  • Table 14: Beer consumption in value terms (US$ %) by age, gender and country, US & Europe, 2005
  • Table 15: Per capita beer consumption value (US$/person) by age, gender, and country, US & Europe, 2005
  • Table 16: Specialty beer market value (US$ m), US & Europe, 2001-2011
  • Table 17: European and US sales of Premium Lager as % of lager market, by country, 2001-2011
  • Table 18: Low / no alcohol beer market value (US$ m), US & Europe, 2001-2011
  • Table 19: Consumer survey: responses to the question "How important is eating organic food and drinks in maintaining a healthy diet?", US & Europe, 2006
  • Table 20: Alcohol content of drinks segments by popular serving measures
  • Table 21: Still wine consumption in value terms (US$ %) by age, gender, and country, US & Europe, 2005
  • Table 22: Per capita still wine consumption in value terms (US$/person) by age, gender, and country, US & Europe, 2005
  • Table 23: Consumer survey: American trends in home entertaining by gender, age group & household income, 2006
  • Table 24: Consumer survey: European trends in home entertaining by gender, age group & household income, 2006
  • Table 25: Spirits consumption in value terms (US$ %) by age, gender and country, US & Europe, 2005
  • Table 26: Per capita spirits consumption value (US$/person), by age, gender, and country, US & Europe, 2005
  • Table 27: Price Per Unit (PPU) (US$/liter) of spirits, US & Europe, 2001-2011
  • Table 28: Importance of calorie counting to consumers by country, US & Europe, 2006
  • Table 29: Trends in consumer attitudes to smoking, US, 2006
  • Table 30: Trends in consumer attitudes to smoking, Europe*, 2006
  • Table 31: Trends in home entertaining, by gender, age & household income, US, 2005-06
  • Table 32: Trends in home entertaining, by gender, age & household income, Europe*, 2005-06
  • Table 33: Consumer survey: trends in home entertaining by gender, age group & household income, France, 2006
  • Table 34: Consumer survey: attitudes to smoke-free on-trade premises, by gender, age group & household income France, 2006
  • Table 35: Consumer survey: attitudes to smoke-free on-trade premises, by gender, age group & household income, Germany, 2006
  • Table 36: Consumer survey: trends in home entertaining by gender, age group & household income, Germany, 2006
  • Table 37: Consumer survey: attitudes to smoke-free on-trade premises, by gender, age group & household income, Italy, 2006
  • Table 38: Consumer survey: trends in home entertaining by gender, age group & household income, Italy, 2006
  • Table 39: Consumer survey: attitudes to smoke-free on-trade premises, by gender, age group & household income, Netherlands, 2006
  • Table 40: Consumer survey: trends in home entertaining by gender, age group & household income, Netherlands, 2006
  • Table 41: Consumer survey: attitudes to smoke-free on-trade premises, by gender, age group & household income, Spain, 2006
  • Table 42: Consumer survey: trends in home entertaining by gender, age group & household income, Spain, 2006
  • Table 43: Consumer survey: attitudes to smoke-free on-trade premises, by gender, age group & household income, Sweden, 2006
  • Table 44: Consumer survey: trends in home entertaining by gender, age group & household income, Sweden, 2006
  • Table 45: Consumer survey: attitudes to smoke-free on-trade premises, by gender, age group & household income, UK, 2006
  • Table 46: Consumer survey: trends in home entertaining by gender, age group & household income, UK, 2006
  • Table 47: Summary of smoking bans in US & Europe
  • Table 48: Definitions used in the report
• List of Figures
  • Figure 1: Time series survey data suggests that consumers are finding it difficult to spend more time with family and friends
  • Figure 2: The sociability of beer is a key selling point, especially for men
  • Figure 3: Quality, experience orientated marketing campaigns can help to change consumer perception of all alcoholic drinks
  • Figure 4: Heineken' s ' Culture Biìere' is an attempt to reinvigorate the image of beer
  • Figure 5: More than a third of European and US consumers traded up more frequently to higher quality packaged goods for extra indulgence and enjoyment in 2005-06
  • Figure 6: Premium lagers account for a growing share of the lager market in most countries
  • Figure 7: Launches of low calorie & low carbohydrate beer, US & Europe, 2001-06
  • Figure 8: Launches of reduced alcohol beers, US & Europe, 2001-06
  • Figure 9: Carling' s C2 is the best conceived approach yet to the low-alcohol beer category
  • Figure 10: Volume of beer sales by month, Italy, 2003-2005
  • Figure 11: New product launches of seasonal winter beers, US & Europe, 2001-2006
  • Figure 12: New product launches of seasonal winter beers as % of overall beer launches, US & Europe, 2001-2006
  • Figure 13: Wine is also the fastest-growing category in the US alcoholic drinks market
  • Figure 14: The wine category has been and will continue to be the best performer in the European alcoholic drinks market
  • Figure 15: Wine consumption is closely linked to GDP growth in the US
  • Figure 16: The average price of (still) table wine is growing slowly in the US & Europe
  • Figure 17: The transition to modern closures in the wine category must be gradual
  • Figure 18: Balancing quality perceptions and convenience is key to positioning good quality accessible wines
  • Figure 19: French Rabbit has used environmentalism in its positioning to promote wine cartons
  • Figure 20: Today' s homes are not just shut-off havens; they are used to facilitate connections
  • Figure 21: Premium packaging is essential but not a long-term advantage
  • Figure 22: Smoking bans will inevitably impact the on-trade and off-trade
  • Figure 23: Low alcohol content on its own is not enough
  • Figure 24: Format variety can facilitate a host of consumption occasions
  • Figure 25: Polarization of the beer brings both opportunities and threats
  • Figure 26: Seasonal beers offer many positioning opportunities
  • Figure 27: Alcohol control states are present across the US
  • Figure 28: Core wine drinkers in the US are found on both coasts
  • Figure 29: Roadmap for the future expansion of the wine category in the US
  • Figure 30: Education is key to protecting future wine sales
  • Figure 31: Targeting key gatekeepers is vital for on-trade success
  • Figure 32: Reducing impurities has untapped market potential