Alcohol Retailing: Off vs On Trade - Ireland - July 2007

Table of Contents

• Issues in the Market
• Key themes in the report
• RoI on-trade hit hard by smoking ban
• Groceries Order has led to price war
• Increased in home drinking is good news for the off-trade
• More focus on tackling binge drinking
• On-trade competes for leisure time
• Definition
• Abbreviations
• Geographical, national and regional definitions
• Conversion factors
• Market in Brief
• Volume sales are falling in the on-trade
• Off-trade sales
• Groceries Order makes competition difficult for independent off-licences
• Beer remains most popular drink in pubs and restaurants
• The challenge lies in increasing visits to the pub
• Internal Market Environment
• Key Points
• Drinking alcohol remains a popular pastime
  • Figure 1: Adults who have drunk alcohol in the last 12 months, RoI and NI, 2002-06
  • Figure 2: Percentage of adults who agree with each statement, NI & RoI, 2002-06
• Health agencies spend more to advise against alcohol
• Binge drinking will get worse as prices continue to drop
  • Figure 3: Percentage of adults who agree with the statement: ' the point of drinking is to get drunk' , NI & RoI, 2006
• Underage still spending on alcohol
• Less but more often is the key
  • Figure 4: Percentage of adults who agree with the statement ' A real man can down several pints of beer at one sitting' , NI & RoI, 2002-06
• Low-alcohol drinks could benefit from health aware generation
• Smoking ban is good for health -- bad for sales
• Healthy pub grub
• Pricing
• Multiples in the off-trade continue to lower prices
  • Figure 5: Off-trade and on-trade price changes, RoI, 2005-06
• ' Locals' are finding it hard to compete
• Broader Market Environment
• Key Points
• Growing population will maintain demand
  • Figure 6: Population and projected growth, all-Ireland, 2000-20
• Aging population in Northern Ireland should spur growth of drinks consumed by those aged 55+
  • Figure 7: Population change, by age group, NI, 2000-20
• Increase in RoI population indicates positive future
  • Figure 8: Population change by age group, RoI, 2000-20
• Increase in money but spending power squeezed
  • Figure 9: Average weekly earnings by age group, NI, 2006
• Family life starts later
• Figure 10: Average age of women at birth of first child, NI and RoI, 1991-2005
• Go to the pub? Or cinema? Or shopping? Or...
• Market Size and Forecast
• Key Points
  • Figure 13: Total market volume & divide between volume sales on- and off-trade, all-Ireland, 2000-12
• All-Ireland volume sales of alcohol
  • Figure 14: Market volume index, on- and off-trade, all-Ireland, 2000-12
  • Figure 15: Market value and volume, on- and off-trade, all-Ireland, 2000-12
• NI on-trade volume sales will fall as smoking ban is introduced
• Figure 16: Market volume index, on- and off-trade, NI, 2000-12
• Increase in NI on-trade value sales due to increasing prices
  • Figure 17: Market value and volume, on- and off-trade, NI, 2000-12
• Future of NI volume sales will experience great growth in the off-trade
• RoI on- and off-trade gap will widen at a slower rate in the future
  • Figure 18: Market volume index, on- and off-trade, RoI, 2000-12
• Rising sales in RoI off-trade
  • Figure 19: Market value and volume, on- and off-trade, RoI, 2000-12
• RoI sales will begin to steady out
• Segment Performance
• Key Points
• Northern Ireland
• Beer is the most popular drink in the on-trade
  • Figure 20: Segmentation of volume of sales, on-trade and off-trade, NI, 2006
  • Figure 21: Segmentation of value* and volume of sales, on-trade, NI, 2004 & 2006
• Cider is growing in popularity in the off-trade
• Figure 22: Segmentation of value & volume of sales, off-trade, NI, 2004 & 2006
• RoI
• Cider popular in on-trade
  • Figure 23: Segmentation of volume of sales, on-trade and off-trade, RoI, 2006
  • Figure 24: Segmentation of value and volume of sales, on-trade, RoI, 2004 & 2006, (Millions)
• Off-trade
  • Figure 25: Segmentation of value and volume of sales, off-trade, RoI, 2004 & 2006
• Channels to Market
• Key Points
• An increase in alcohol-selling establishments
  • Figure 26: Number of on- and off-trade premises with alcohol licences, NI, 2004 and 2005*
  • Figure 27: Number of on- and off-trade premises with alcohol licences, RoI, 2005 and 2006
• Issues facing on- and off-trade premises in Ireland
• Licensing changes in NI
• Independent off-licences suffer due to abolishment of Groceries Order
• Companies in the Market
• Key Points
• Figure 28: Examples of on- and off-trade premises, NI & RoI
• Multiples
• ASDA
• Tesco
• Superquinn
• Centra
• Off-licence chains
• Wineflair
• Curleys
• Next Door
• Cheers
• Pubs chains
• Botanic Inns Ltd
• Beannchor
• Carmichael Group
• Capital Bars
• Fitzgerald group
• Thomas Read Group
• Consumer: Where People Drink
• Key Points
• Consumers are not put off drinking
  • Figure 29: Total number of adults who have drunk alcohol in the last 12 months, RoI and NI, 2006
• NI more likely to drink in home than RoI
  • Figure 30: Percentage of adults who have drunk alcohol in the home in the last 12 months, NI and RoI, 2002-06
• Lower pub sales has not resulted in lower pub visits
  • Figure 31: Percentage of adults who have drunk alcohol elsewhere in the last 12 months, NI and RoI, 2002-06
• Pubs are more popular than clubs
• NI consumers are more likely to visit a pub than a club
  • Figure 32: Percentage of adults who have drunk alcohol in a club/pub in the last 12 months, NI, 2002-06
• More 45+ year-olds drink on-trade in RoI than NI
  • Figure 33: Demographics of consumers who drink on-trade and off-trade, NI and RoI, 2006
• Pub' s a favourite among RoI consumers
  • Figure 34: Demographics of consumers who drink in pubs/bars & nightclubs/other, NI and RoI, 2006
• Consumer: What Do People Drink?
• Key Points
• Pint in the pub, wine at home
  • Figure 35: The percentage of adults who drank which type of alcoholic drinks in the home & out of home, NI and RoI, 2006
• Beer is more popular with men
• NI most likely to drink draught lager
  • Figure 36: Penetration of selected alcoholic drinks by gender and age, NI, 2006
• Older men in RoI most likely to drink draught stout
  • Figure 37: Penetration of selected alcoholic drinks by gender and age, RoI, 2006
• Wine is more popular with women
• 1 in 2 NI women drink bottled table wine
  • Figure 38: Demographics of what consumers drink, by wine type drinks, NI, 2006
• More drink champagne in RoI than NI
  • Figure 39: Demographics of what consumers drink, by wine type drinks, RoI, 2006
• Vodka remains the most popular spirit
• Younger women drink FABs in NI
  • Figure 40: Demographics of what consumers drink, by spirit type drinks, NI, 2006
• RoI' s older men drink Irish whiskey
  • Figure 41: Demographics of what consumers drink, by spirit type drinks, RoI, 2006
• The Future
• Key Points
• Drinks sales should remain stable
• Smoking ban in NI
• Tobacco style health warnings
• Competitiveness on EU/global basis
• Longer opening hours-better value for money?
• On-trade has a future -- but a very different future!
• Appendix
• Definitions for RoI off-trade establishments
• NI drink in the pub in the evening
  • Figure 42: Frequency of where consumers drink, NI, 2002-06