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NEWS: ILG STUDY TOUR
Industry insights and trends from the ILG Study Tour
The Independent Liquor Group visited Amsterdam and Paris for its 2023 International Study Tour with key suppliers providing an update on the current state of the industry.
Luke Van Staveren, National Account Manager-Wholesale, Pernod Ricard Australia
Rising interest rates are contributing to cost of living pressures and mortgage shock. The RBA expects this to normalise by the end of FY24, but this is still affecting spending trends.
During Covid, household savings rose to 20-25 per cent of household income, compared to the average of five per cent. Now, this buffer is depleted, and savings are closer to two or three per cent of household income.
Consumers preferred independent retailers during Covid and have continued to patronise independent liquor stores despite returning to chain groceries.
Spirits are in decline, despite predictions of growth through Covid. However, dark spirits are still growing, as well as premium and above – though not as much as previous years. Areas for growth are hard seltzers, non-alc, and unique flavour innovations.
In wine, $20+ Chardonnay and rosé are underperforming in independent retail compared to chain retail. Champagne and premium sparkling are promising, especially with increased availability of vintages post Covid.
Ben Koetsier, Head of Sales Independents, CUB Beer
While consumer confidence in the beer category is low, spend is high. The last quarter was characterised by a decline in value but growth in volume, and we can expect confidence to increase, and spend to plateau. Recruiting Gen Z and first-generation Australians to the category is important for its longevity.
Beer is vital because it drives traffic and loyalty to the offpremise, and reaches the widest section of customers. It has a high spend, second only to spirits, high purchase frequency, and is a highly planned purchase. Retailers need to position beer in the right place in-store and provide a stretch range to attract all demographics.
Offering a broad range of products increases category retention. Local relevance is also important, but the definition of ‘local’ varies from Australian made to within the same town or city. A selection should be available for immediate consumption, and signposting will increase ease of shopping in this diverse category.
Mikaela Noonan, National Key Account Manager, Moët Hennessy
The Australian wine market is seeing some resilience, both in terms of weather and vintage, and in market performance.
Older wine consumers are continuing to purchase wine despite going out less, and younger generations are still going out, but opting for fewer and cheaper wines.
Australian wine drinkers have dropped by two per cent, but frequency has increased. Seventy per cent of wine drinkers are consuming most days of the week and 82 per cent are consuming at least once.
Value and super premium are seeing growth. Champagne in particular is seeing growth, as drinkers choose Champagne for non-celebratory occasions and as an affordable luxury. Rosé is also performing well among Gen Z and millennials, especially in the super premium, $30+ per bottle category. Lighter-style reds are another sector to watch, and Pinot Noir remains a key category.
Glenn Crisp, Key Account Manager, CUB Premium Beverages
Ginger beer blurs the line between the beer and RTD categories. Queensland has 41 per cent of the national market share, followed by Western Australia with 22 per cent. Sixty-six per cent of beer drinkers have never had an alcoholic ginger beer, but 21 per cent would consider it.
Bundaberg’s alcoholic ginger beer led to an increase in other brands, but sales are still led by the four major brands of Brookvale Union, Bundaberg, James Squire, and Matso’s. We can expect more innovation in the category. Unfortunately, ginger beer is not a traffic driver for the off-premise, and is not the main item in a basket.
However, retailers should consider expanding the fridge space allocated to this growing category. Queensland is the largest driver of RTD growth, followed by Victoria and NSW. While established brands with low innovation are declining, their total sales are still higher than brands driving category growth.
Core dark RTD and innovative RTD are in growth. Flavour, function, and format are the key areas for innovation. Nostalgic and unique flavours are in demand, as well as higher ABV and low sugar options. Cans are still king, and the 10-pack is the most popular pack size, as cases are unpopular due to inflation.
Contemporary RTDs, which include seltzers, pre-batched cocktails, and nostalgic flavours, are drawing in new shoppers. To grow the category, it needs to keep up with Gen Z as well as drawing in older generations.
