Gareth Pearson - BMI

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Gareth Pearson - BMI

  1. 1. The Promotional Effectiveness of Wine in SA 30 August 2012Presented by Gareth Pearson BMi Research
  2. 2. Setting the AmbianceWe are all mortal until the first kiss and the second glass of wine : EduardoGaleano, Uruguayan author (1940-)Wine is bottled poetry : Robert Louis Stevenson, Scottish author and poet(1850-1894)Where there is no wine there is no love : Euripides, Greek playwright (480-406BC)Wine improves with age - the older I get, the better I like it : AnonymousIf a life of wine, women and song becomes too much, give up the singing :Anonymous 2
  3. 3. More AmbianceIf a life of wine, women and song becomes too much, give up thesinging : AnonymousWine is wont to show the mind of man : Theogenis, Greek poet (6thcentury)Drink wine, and you will sleep well. Sleep, and you will not sin. Avoidsin, and you will be saved. Ergo, drink wine and be saved : MedievalGerman sayingWhether wine is a nourishment, medicine or poison is a matter ofdosage : Paracelsus (Phillip von Hohenheim), Swiss alchemist, physicianand astrologer (1493-1541)Life is too short to drink bad wine : Anonymous 3
  4. 4. The Size of the Glass 4
  5. 5. The Size of the Pint Total SA Beverage Market 2012 (E) 31 689 Million Litres Alcohol 26.7% Rest of Market 73.3%Note: Reconstituted volumes Includes powdered beverages Includes tap water estimate – 1.4 litres p.p.p.d 5
  6. 6. Total Beverage Trends Total Beverage Trends for SA market Still feeling effects of slowdown in economy Consumers are spending but more aware of options and alternatives Promotional activities still continuing Continued influence of health and wellness Consumers seeking value/promotions Increased launches of functional beverages – prominent internationally 6
  7. 7. Wine Promotional Effectiveness Promotions Shopper Print Promotional Marketing TrackingShelf Health Media Tracking In store
  8. 8. Wine Promotions Promotion choices available to the Wine Industry Broadsheet Media - TV, Radio and Print In store – POS On consumption – POC Wine tasting Direct marketing Online Sponsorship
  9. 9. Retail Liquor Development Rate of store expansion in the liquor market by majorsOutlets June 2005 June 2012TOPS 156 600Pick n Pay 16 140 93Shoprite Checkers 7 90 new storesGame p.a. - 4Total 179 834 9
  10. 10. Promotional Effectiveness Wine Point of Sale, Print Collateral & Graphic Design “Winery print collateral and point of sales material is meant to be noticed, handled, read and re- read. More importantly, its meant to cause the consumer to go out and buy a few bottles of wine. Sometimes a good accolade isnt enough. Effective wine point-of-sales and print collateral takes a brand message and incorporates a strong take-away that the consumer can relate to and use in the future.” Source: www.intwinemarketing.com
  11. 11. In Store PromotionIn store promotion
  12. 12. Instore PerformanceIn store performance factors
  13. 13. Major Liquor SponsorshipSponsor Sport Property TermCarling Black Label Soccer Carling Black Label Cup 2011 - 2013Carling Black Label Rugby Varsity Cup Supplier 2009 - 2012Castle Cricket Test events : Test Team : ODI Team 2012 - 2015Castle Rugby Springbok Supplier ; SuperRugby Supplier : Castle 2011 - 2016 ChampionshipCastle Soccer Bafana Bafana : PSL Supplier 2012 - 2017Smirnoff Lifestyle Smirnoff CT Comedy FestivalSmirnoff Music The Smirnoff ExperienceAmstel Music Amstel Golden Hour - Music 2010 -Amstel Programme ClassAct – SABC1 AFP 2011 -Bells Golf Bells Experience Golf DayBells Fly Fishing Bells Experience Fly FishingCaptain Morgan Adventure Kingsley Holgate Malaria Expedition On goingCaptain Morgan Angling Billfish Classic - Angling 2010 -Heineken Lifestyle Taste of Johannesburg and Cape Town 2010 -Heineken Music SAMA Awards Partner 2011 - 2013J&B Horse Racing J & B Met 2010 - 2015Johnnie Walker Motor Sport Contribution to McLaren F1 On goingWindhoek Arts KKNKWindhoek Canoeing Berg river Canoe Marathon 2010 - 2012Windhoek Rugby Sharks Supplier 2011 - 2013 13
  14. 14. Print Promotional Tracking Wine print promotional tracking and analysis Who are the top retailers promoting wines? Which brands are being promoted ? Which geographic regions are promotion dominant?
  15. 15. Total Print Advertising Jan to June 2011 - 2012 Total broadsheet tracking and analysis R 200 Total MarketMillions R 180 Top 10 Spend Millions R 180 R 160 R 160 2011 – R993m R 140 2011 2012 R 120 R 140 2012 – R1 109m R 100 R 120 R 80 +11.7% R 60 R 100 R 40 R 80 R 20 2011 R0 R 60 R 40 2012 R 20 R0
  16. 16. Print Advertising Expenditure 58% increase in spend for period 70 Liquor 60 Market 50Rm Volume 40 Value Growth 30 20 Value ± 25% Volume ± 3% 10 0 Jan - Jun 09 Jan - Jun 10 Jan - Jun 11 Jan - Jun 12
  17. 17. Print Advertising Spend Selected Categories Jan - June 2011 Jan – June 2012Product Category Print Spend Product Category Print Spend %Beer - Malt R 7 764 263 Beer - Malt R 9 304 179 20%Brandy R 4 540 535 Brandy R 5 799 927 28%Cane R 378 094 Cane R 345 627 -9%Flavoured Alcohol Beverages R 4 583 531 Flavoured Alcohol Beverages R 6 701 592 46%Liqueur R 1 690 031 Liqueur R 1 572 406 -7%Rum R 1 224 597 Rum R 2 232 177 82%Sambuca R 58 764 Sambuca R 109 250 86%Shooters - Sour R 98 939 Shooters - Sour R 120 349 22%Vodka R 1 625 249 Vodka R 2 241 762 38%Whisky R 12 798 776 Whisky R 15 484 766 21%Wine R 16 034 083 Wine R 16 624 221 4% Total Total 19% R 50 796 867 R 60 536 260
  18. 18. Category Print Advertising Expenditure Share Wine accounts for 27% of total spend for period (Jan to Jun 2012) 18 16 14 12 10Rm 8 6 4 2 0
  19. 19. Top 10 Company Brands (% number of Ads)Top 10 Company Brands % no of ads MAT June 2011 vs MAT June 20126.00%5.00%4.00%3.00% MAT LY2.00% MAT TY1.00%0.00%
  20. 20. Top 10 Brands (% number of Ads) Top 10 Brands % number of ads MAT June 2011 vs MAT June 20121.40%1.20%1.00%0.80%0.60%0.40% MAT LY0.20% MAT TY0.00%
  21. 21. Top 10 Retailers (number of Ads) Top 10 retailers promoting wine in print MAT June 2011 vs MAT June 201240.00%35.00%30.00%25.00%20.00%15.00% MAT LY10.00% MAT TY 5.00% 0.00%
  22. 22. Wine Promotions Regional Share (Number of ads Jan – June 2011 vs 2012) Wine Print Ads Regional share by number of ads4000035000300002500020000 201115000 201210000 5000 0
  23. 23. Wine Media Tracking So how has wine been promoted through media this year? Which of the print, TV and radio mediums is being target ? What brands are being promoted ? What are the strategies being employed in media spend?
  24. 24. Wine Media Tracking Wine Adspend TV, Radio and Print Jan to June 2011 vs 2012R 16 000 000R 14 000 000R 12 000 000R 10 000 000 R 8 000 000 2011 2012 R 6 000 000 R 4 000 000 R 2 000 000 R0 Print TV Radio
  25. 25. Top 20 Brands All Media (Print, TV and Radio)Top 20 Brands Adspend for Wine all media January to June 2011 vs 2012R 10 000 000 R 9 000 000 R 8 000 000 R 7 000 000 R 6 000 000 R 5 000 000 R 4 000 000 R 3 000 000 2011 R 2 000 000 2012 R 1 000 000 R0
  26. 26. Wine Media Tracking Print Print Adspend for Wine January to June 2011 vs 2012R 1 200 000R 1 000 000 R 800 000 R 600 000 R 400 000 2011 2012 R 200 000 R0
  27. 27. Wine Media Tracking - TV TV Adspend for Wine January to June 2011 vs 2012R 7 000 000R 6 000 000R 5 000 000R 4 000 000 2011R 3 000 000 2012R 2 000 000R 1 000 000 R0 Nederburg Drostdy Hof Namaqua Douglas Graca Two Oceans Obikwa Casillero Del Swartlands Green Diablo
  28. 28. Wine Media Tracking Radio Radio Adspend for Wine January to June 2011 vs 2012R 2 500 000R 2 000 000R 1 500 000R 1 000 000 2011 2012 R 500 000 R0
  29. 29. Wine Media Tracking Wine media trends YTD TV remains the dominant media channel for wine by spend for this period Spend in TV and Radio have grown marginally while Print has declined for this period Nederburg’s TV spend dominant as a result of Master Chef SA Nederberg combine TV and Print in this campaign Douglas Green made significant increase from 2011 to 2012 with strong TV spend and increased spend in radio Drostdy Hof and Namaqua also dominant in TV and radio spend for the period reviewed
  30. 30. In Store Shoppers making purchase decisions at shelf “Shopper marketers got it wrong when they claimed 70% of purchase decisions were made in store. It’s actually 76%, says new US research by Point of Purchase Advertising International (POPAI).” Jason Frichol MD Integer June 2012
  31. 31. Cutting through the clutter Purchase appeal Visual appeal - Labels, bottles, images Brand experience – tried it before What makes a new brand irresistible to shoppers? What type of wine drinking experience does a bottle on shelf promise? Does it evoke a sense of excitement, connoisseurship, celebration, dining ?
  32. 32. Would you buy? BLACK BOX MERLOT CAFE CULTURE COFFEE PINOTAGE CLOOF - DAISY DARLING SAUVIGNON BLANC CLOOF - HAPPY DRAGON PINOTAGE CLOOF - POSH PINOTAGE CLOOF - THE VERY SEXY SHIRAZ  ODD BINS BIN NAUGHTY GIRL FAT BASTARD SHIRAZ HAPPY DRAGON PINOTAGE SHIRAZ Or    NO NAME DRY WHITE UNNAMED SAUVIGNON BLANC WINE LOVERS COLLECTION INKSPOT PINOTAGE LEOPARDS LEAP MAGNUM MAD HATTERS WINE MAIDENS PRAYER RED WINE MEERKAT SUN ANGEL PORCUPINE RIDGE SYRAH THE CHOCOLATE BLOCK 2009 WOLFTRAP WHITE THE CRICKET PITCH TOFFEE CHUNK LADY IN RED
  33. 33. Attracting Sales
  34. 34. Catchy Themes
  35. 35. Shelf Health Shelf Health performance factors By Store OSA vs OOS – the prize is won or lost in the final 50 meters to shelf On shelf forward share Retail Selling Price vs Promotion Price On Promotion vs competitors Planogram compliance Merchandising – KPIs and measureable metrics Ranging – more critical, more scientific, more geocentric Effective communication from marketing boardroom to shelf (E2E)
  36. 36. Shelf Forward Share What is the your brand’s shelf share by store?35.00%30.00%25.00%20.00% 2011Q115.00% 2011Q210.00% 2011Q3 5.00% 0.00% Brand A Brand B Brand C Brand D Brand E 2011Q1 20.65% 6.35% 26.22% 14.95% 31.83% 2011Q2 18.22% 6.28% 27.55% 15.20% 32.75% 2011Q3 21.14% 6.58% 26.61% 13.77% 31.90%
  37. 37. What is my share of type of display in the store? Promotional activity competitor check – by store 50.00% 45.00% 40.00% 35.00% 30.00% 25.00% 20.00% 15.00% 10.00% 5.00% 0.00% Brand 1 Brand 2 Brand 3 Brand 4 Brand 5Dump Bin 6.38% 44.68% 4.26% 12.77% 31.91%Free Standing unit 28.70% 18.52% 14.81% 16.67% 21.30%Full Gondola End 26.47% 25.74% 11.03% 23.53% 13.24%Shared Gondola End 38.75% 8.75% 1.25% 5.00% 46.25%
  38. 38. On-shelf availability  Capturing the lost sales  Driving short, medium and long term solutions
  39. 39. Retail Execution – On Shelf Availability Ensuring the products a customer wants to buy are actually available when they want to buy them  European Out Of Stock rates are typically 8.3%  OOS costs the industry €4bn in Lost Sales EVERY YEAR  20% of all OOS remain for more than 3 days  Inventory counts are typically 65% inaccurate  Chance of finding all 40 items on your shopping list? 4%
  40. 40. The size of the prize When faced with an OOS shoppers will:  31% will switch stores  26% will buy another brand  19% of the time buy brand variant  15% will buy at a later time  9% will buy nothing If a manufacturer can improve OSA by 3%, it’s worth 1% increase in sales If a retailer can improve OSA by 2%, it’s worth 1% increase in salesSource: ECR Europe
  41. 41. Shopper Marketing Understanding Trip Missions for effective sales Trip targeting Adding incremental items Requires a much more scientific approach  Uncapping own internal data  Skilling up internally
  42. 42. Shopper Marketing Shopper Marketing Shifts BEFORE NOWCPG marketers operated under CPG organizations are two separate silos: integrating these two disciplines1) Shopper Insights to form Shopper Marketing Focused on the consumer‘s needs, attitudes, usage, etc.2) Category Management Focused on product definition and role, performance mgmt, go-to- market/sales strategies, etc.
  43. 43. Shopper Marketing Derived Value of Market Leader Characteristics Market Leader Value to Retailer and Characteristics Manufacturer Understanding the Shopper Develop Shopper Occasion Centric Occasion as the Foundation for Merchandising and Marketing Insights StrategiesJoint Planning Assures Alignment with Retailer & Manufacturer Elevate Relationships for Better Objectives Collaboration and Success Execution Informed by the Trip Mission and the Store Improve Store Level Effectiveness Fostering an Environment of Continuous Learning Ongoing Cycle of Improvement and and Innovation Increased Relevance to Shopper
  44. 44. Trip Mission Profiling the Trip mission Profiling the trips reveals:  Which trips are most important?  Which do we want to grow?  Where do we want to win? Metrics include:  Share: % of trips, units, sales  Trip Details: units and Rands  Discount/deal characteristics  Basket contents (e.g. top categories)  Time of Day/ Day of week  Geographic distribution
  45. 45. International Trends What is happening globally? SA is a net follower of international trends What are beverage trends doing globally?
  46. 46. Beverage Consumption – Emerging MarketsDeveloped vs Emerging Source : Canadean
  47. 47. Drivers of ChangeBut a number of themes have been key in shaping the beverage industry over recent years Source : Canadean
  48. 48. Retailer Expansion – Private LabelB Brand currently under pressure globally from PL Source : Canadean
  49. 49. Global Growth Forecast95% of the forecast contribution to growth comes from emerging markets Source : Canadean
  50. 50. Global Growth ForecastWhat the beverage future could look like Source : Canadean
  51. 51. Growth ForecastAfrican dream or future? Source : Canadean
  52. 52. Thank Youwww.bmi.co.za 52

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