Abstract
Why buy this report
- Get insight into trends in market performance
- Pinpoint growth sectors and identify factors driving change
- Identify market and brand leaders and understand the competitive
environment
Product coverage
Beer; Cider/perry; RTDs/High-strength premixes; Spirits; Wine
Executive summary
Steadily improving alcoholic drinks sales
Growth in the alcoholic drinks market moved ahead in both volume and value
terms in 2007 at roughly the same levels as in the previous year. Buoyed by
the country' s strong economic performance and higher consumer disposable
income, trading up to premium alcoholic drinks across the market continued and
this trend, in effect, created a conducive environment for many premium global
brands to gain a strong foothold in the market.
RTDs with greater appeal
Volume sales of alcoholic drinks were boosted by the popularity of
spirit-based RTDs, which consistently showed up as the fastest-growing product
area over the review period, with 2007 being no exception on the back of
substantial new product launches. With one of the largest vintages ever and a
steady flow of products from Australia, the wine performance was better in
2007. Similarly, spirits also made a little headway with a fractionally
improved volume sales growth rate. However, beer, the largest sector in terms
of volume sales, continued its downward trend, significantly impacted by the
declining demand for standard and economy products. While RTDs remained the
popular alcoholic beverage among young adults, wine essentially had a strong
bond with a more mature following. Consequently, both factors adversely
impacted beer volume sales, with consumers turning to the spirits bases in the
brands of their favourite RTDs as they grow older also playing an important
role in the popularity of spirits.
Market remains highly consolidated
The alcoholic drinks market is consolidated to a relatively high degree, with
the two leading players Lion Nathan Ltd and DB Breweries Ltd controlling
almost two thirds of volume sales between them in 2006. They are the leading
players in the largest alcoholic drinks category, beer, while Lion Nathan also
had significant interests in RTDs and spirits. DB Breweries is actively
expanding into spirit-based RTDs as the company' s traditional business line of
beer is faced with limited growth opportunities and intense competition. Other
significant players were Independent Liquor (NZ), Foster' s New Zealand and
Pernod Ricard New Zealand. Meanwhile, the much-awaited Independent Liquor (NZ)
sale saw the company finally ending up in the hands of private equity partners.
Supermarkets field their own specialists chains
Despite gradually losing sales to supermarkets/hypermarkets, specialists still
dominated the retail distribution of alcoholic drinks. Although the current
regulations on alcoholic drinks retailing do not allow RTDs and spirits sales
in supermarkets/hypermarkets, beer, wine and cider sales demonstrated
remarkable progress in this channel. Independent liquor specialists are faced
with uncertain times, with mounting pressure from chained specialists, which
have increased their discount offer intensity, frequency and product range.
This was a tactical attack by chained specialists in response to the entrance
of two big supermarket groups in liquor retailing with the opening of their
own chained specialists, Duffy & Finn' s and Henry' s.
Steady outlook
Driven mainly by growth in RTDs, wine, and cider, volume sales of alcoholic
drinks are predicted to increase over the forecast period. While spirits will
see marginal volume sales growth, beer, the largest selling alcoholic product,
is unlikely to grow significantly. The shift of supermarkets/hypermarkets into
liquor retailing with the starting up of their own chained specialists will
improve consumer access to premium alcoholic drinks brands significantly due
firstly to competitive prices and secondly to the widening product range.
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