ausdrinks 2014 conference - australian beverages · ausdrinks 2014 conference ... usp: uses stevia,...

© Euromonitor International

1

AUSDRINKS 2014 CONFERENCE

FIZZLE OR SIZZLE: WHAT’S NEXT FOR THE AUSTRALIAN BEVERAGE INDUSTRY?

MARCH 2014, GOLD COAST


2

EUROMONITOR COVERAGE

SOFT DRINKS ANALYSIS

HEALTH & WELLNESS

DIGITAL REVOLUTION

CONVENIENCE

FOODSERVICE

CONCLUSION


3

EUROMONITOR: SOFT DRINKS COVERAGE


Carbonates

Concentrates

Fruit/vegetable juice

Bottled water

Sports/energy drinks

RTD Tea

RTD Coffee

Asian speciality drinks


4

EUROMONITOR: HEALTH & WELLNESS DEFINITIONS


Organic (O)

Fortified/Functional (FF)

Better For You (BFY)

Naturally Healthy (NH)

Euromonitor International’s

Health and Wellness

Taxonomy


5



HEALTH & WELLNESS

DIGITAL REVOLUTION

CONVENIENCE

FOODSERVICE

CONCLUSION


6

SOFT DRINKS ANALYSIS: SNAPSHOT 2013


Soft drink categories in Australia by volume

Bottled Water

Carbonates

Concentrates

Juice

RTD Coffee

RTD Tea

Sports andEnergy Drinks

A$12.2 billion

4.09 billion litres

3% value growth 2013

1% vol growth 2013


7

SOFT DRINKS WINNERS & LOSERS – VOLUME GROWTH


-4.0

-2.0

0.0

2.0

4.0

6.0

8.0

10.0

Bottled Water Carbonates Concentrates Juice RTD Coffee RTD Tea Sports andEnergy Drinks

% growth Soft drinks volume growth in 2013

Commentary

• Sports & energy drinks lead with 8% growth, primarily due to energy drinks

• RTD Tea follows at volume growth of 7%, sugar-free variants emerging

• Negative volume growth for carbonates and juice, while value growth positive


8

SOFT DRINKS FORECAST: SNAPSHOT 2018


A$14.1 billion

4.13 billion litres

2.8% value CAGR

0.2% vol CAGR

-4.0

-2.0

0.0

2.0

4.0

6.0

BottledWater

CarbonatesConcentrates

Juice RTD Coffee RTD Tea Sports andEnergyDrinks

Soft drinks volume CAGR 13-18


9



HEALTH & WELLNESS

DIGITAL REVOLUTION

CONVENIENCE

FOODSERVICE

CONCLUSION


10

HEALTH & WELLNESS: DRIVERS


Ageing population

Rising incomes

Disease/illness


11

THE AGEING POPULATION


• Mean age of Australia’s population grew from 35.9 in 2000 to 37.7 in 2013 37.7

• 2000: 12% of population

• 2013: 15% of population 65+

• 2000: 3% of population

• 2013: 4% of population 80+


12

LIFESTYLE DISEASES


10.0

12.0

14.0

16.0

18.0

20.0

22.0

24.0

26.0

28.0

30.0

2000 2002 2004 2006 2008 2010 2012

Obese pop %

Australia's obese population

Diabetes affects 8% of the Australian population

Declining smoking prevalence, but still significant at 18%

28.6%

17.8%


13

RISING INCOMES


0.0

10,000.0

20,000.0

30,000.0

40,000.0

50,000.0

60,000.0

70,000.0

80,000.0

2000 2002 2004 2006 2008 2010 2012 2014 2016 2018

$US per cap income

Average gross income (current terms)

World

Australia

New Zealand

Canada

USA

United Kingdom

Average gross income in Australia expected to grow at

4% CAGR between 2013-18


14

REDUCED SUGAR SOFT DRINKS


Market size of $1.4 billion in 2013

Reduced sugar carbonates dominates the category

-5.0%

0.0%

5.0%

10.0%

15.0%

20.0%

25.0%

30.0%

0.00

0.20

0.40

0.60

0.80

1.00

1.20

1.40

1.60

1.80

2.00

2003 2005 2007 2009 2011 2013 2015 2017

% growth A$ billion Reduced Sugar Soft Drinks Value Sales


15

LOW SUGAR & STEVIA NEW PRODUCT DEVELOPMENT


Company: Schweppes Australia Pty Ltd

Brand: Pepsi Next

Year: 2012

Pack size: 1.25 litre, A$2.16

USP: Uses stevia, 30% less sugar than

regular Pepsi

Company: Unilever Australia Pty Ltd

Brand: Lipton Ice Tea Sparkling Zero

Year: 2013

Pack size: 440 ml, A$2.71

USP: Claims zero sugar, Two calories

per 100 ml


16

THE GLOBAL RISE OF STEVIA

Stevia is the fastest growing sweetener in the soft drinks market

Other strong growth categories include naturally sourced sweeteners, e.g. sucrose

Sucrose and stevia blends are expected to perform well in the future



17

ORGANIC SOFT DRINKS


0.0

5.0

10.0

15.0

20.0

25.0

30.0

35.0

0.0

5.0

10.0

15.0

20.0

25.0

30.0

35.0

40.0

2003 2005 2007 2009 2011 2013 2015 2017

% growth A$ million Organic Soft Drinks Market size of $28.3

million in 2013

Organic juice dominates

the category

“Organic” bottled water

comes under fire

Potential for organic RTD

tea, RTD coffee

4% vol CAGR 13-18


18

COCONUT WATER


Demand for coconut water grows

More brands entering grocery channel

Hydration/energy positioning

Advertised as offering electrolytes, potassium

New flavour variants expected


19

ORGANIC & NATURALLY HEALTHY NPD


Company: C Coconut Water Pty Ltd

Brand: C Coconut Water

Year: 2011


USP: Organic, 100% coconut

Certification: USDA Organic

The following product demonstrates

both the organic and naturally healthy

trend, with the release of an organic

coconut water


20

HEALTH & WELLNESS: IMPLICATIONS


New FSANZ standards dealing with nutrition & health claims

Potential for consumer apathy

Private label


21



HEALTH & WELLNESS

DIGITAL REVOLUTION

CONVENIENCE

FOODSERVICE

CONCLUSION


22

THE DIGITAL REVOLUTION


Smartphones

account for

86% of all

mobile phones

in 2013

Mobile internet

subscriptions

grew by 17%

in 2013

19.4 million

internet users

in Australia in

2013


23

0

1,000

2,000

3,000

4,000

5,000

6,000

7,000

8,000

9,000

2007 2008 2009 2010 2011 2012 2013 2014 2015 2016 2017

Vo

lum

e (

00

0's

un

its)

Australia smartphone & feature phone sales (000's units)

Feature Phones Smartphones

MOBILE PHONES IN AUSTRALIA


iPhone 3GS launched

June 2009


24

0

250

500

750

1,000

1,250

1,500

1,750

2,000

2,250

2,500

2,750

3,000

2007 2008 2009 2010 2011 2012 2013 2014 2015 2016 2017

Vo

lum

e (

00

0's

un

its

)

Australia tablet sales (000's units)

Apple iPad launched

May 2010

Samsung Galaxy Tab

launched Sep 2010

TABLETS IN AUSTRALIA


Sales of tablets and other portable computers in Australia


25

M-COMMERCE


Payment transactions

conducted via a mobile handset

Consumers now more likely to use

smartphones

M-commerce in Australia grows by

30% in 2012

Peak usage during commute times

M-commerce


26

THE DIGITAL REVOLUTION IN ACTION


Facebook campaigns integral to marketing strategies of major soft drink

manufacturers in Australia and globally


27

THE DIGITAL REVOLUTION IN ACTION


Mobile websites & apps increasingly

used by fast food operators to facilitate

online ordering

Supermarkets also using traditional

websites, mobile websites & apps for

internet sales


28

DIGITAL REVOLUTION: IMPLICATIONS


Digital revolution introduces new ways to engage with customers

Also increases potential for negative publicity, e.g. Facebook complaints

Does consumer engagement with social media result in increased soft drink sales?

Important to understand why consumers use social media


29



HEALTH & WELLNESS

DIGITAL REVOLUTION

CONVENIENCE

FOODSERVICE

CONCLUSION


30

CONVENIENCE: DRIVERS


0.0

10.0

20.0

30.0

40.0

50.0

60.0

70.0

80.0

90.0

100.0

1978 1983 1988 1993 1998 2003 2008 2013

% Labour force participation in Australia

Female labour force participation Male labour force participation

Increasingly busy

consumer lifestyles

Driven by a number of

factors, including

growing female labour

force participation

Two-income households

result in less time to

prepare food and other

domestic tasks

Convenience becomes

a key factor in

purchasing decisions

50.4%

70.2%

86.6% 82.0%


31

PACKAGING TRENDS - POUCHES


Company: The Sunraysia Natural Beverage Company

Brand: Sunraysia Organic

Year: 2013


USP: Organic 100% juice in single-serve pouch,

suitable for lunchboxes

Company: Parmalat Australia Ltd

Brand: Vaalia Kids

Year: 2013

Pack size: 140g, A$2.10

USP: Pro-biotic yoghurt in freezable pouches

Company: EnzaFoods New Zealand Ltd

Brand: Fast & Fruity Pourable Chunky Fruit

Year: 2013

Pack size: 500g, A$4.33

USP: Packaged fruit in a resealable pouch (competes

with canned/preserved fruit)


32

CONSUMPTION ON-THE-GO


Dairy only flavoured milk drinks, e.g. Up & Go, surge in popularity, with volume

climbing by 6% in 2013 to reach 174 million litres

0.0%

5.0%

10.0%

15.0%

20.0%

25.0%

0.0

50.0

100.0

150.0

200.0

250.0

2001 2006 2011 2016

% growth Million litres Dairy only flavoured milk drinks

Dairy only flavoured milk drinks Dairy only flavoured milk drinks volume growth


33

PAYMENT TECHNOLOGY – THE MOBILE WALLET


Physical use of mobiles to make payments

Replacement for plastic cards and cash

Near Field Communication (NFC) leads the way

NFC-enabled smartphones and payment terminals


34

VENDING TRENDS – INCORPORATING NFC TECHNOLOGY


Cash

Contact-less cards

Smartphones

Coca-Cola Amatil trials QuickTap smartphone app in New Zealand during 2013

QuickTap already used in certain captive

environments through

prepaid card system

CCA expected to add QuickTap capability to Australian PayPass and PayWave

vending machines beginning in 2014


35

CONVENIENCE: IMPLICATIONS


Opportunity to achieve premiumisation through packaging innovation

Apple iPhone still does not possess NFC-technology

NFC-payment terminals require investment


36



HEALTH & WELLNESS

DIGITAL REVOLUTION

CONVENIENCE

FOODSERVICE

CONCLUSION


37

FOODSERVICE: TRENDS


Premiumisation

The evolving Australian palate


38

PREMIUMISATION THROUGH THE CRAFT REVOLUTION


From beer, to cider, to spirits, the “craft” industry continues

to grow

Beer

Cider

Spirits RTD’s

Constant new product development,

such as flavour innovation

Multinationals join the

craft craze

Latest craft

movement into

RTD’s


39

THE CRAFT REVOLUTION IN SOFT DRINKS


The following product demonstrates how

the craft revolution has spilled over into

the soft drinks category

Bundaberg Brewed Drinks Pty Ltd

launched a range of premium, café-style

products in 2011

The Sparkling Selection includes flavours

such as guava, passionfruit, lime, peach,

blood orange & pink grapefruit

Designed as a response to café-culture

and at-home entertaining


40

THE AUSTRALIAN PALATE EVOLVES


The evolving Australian palate

Value for

money

Cooking shows

Ethnic cuisine

Travel Migration


41

DEMAND FOR ETHNIC CUISINE


Ethnic cuisines, such as Asian and Latin American, demonstrate the highest

foodservice value growth in 2012

-1.0

0.0

1.0

2.0

3.0

4.0

5.0

0.00

0.50

1.00

1.50

2.00

2.50

3.00

3.50

4.00

Asian European LatinAmerican

MiddleEastern

NorthAmerican

Pizza Other

% val growth A$ billion Full-service restaurant value sales 2012


42

DEMAND FOR ETHNIC CUISINE


Latin American fast food value sales grew by 49% in 2012, while Middle

Eastern fast food increased by 6%

-10.0

0.0

10.0

20.0

30.0

40.0

50.0

60.0

0.00

0.50

1.00

1.50

2.00

2.50

3.00

3.50

4.00

4.50

5.00

A

sia

n

B

akery

B

urg

er

C

hic

ken

Co

nvenie

nce

Sto

res

F

ish

Ic

eC

rea

m

L

atin

Am

eri

ca

n

M

iddle

Easte

rn

P

izza

O

ther

% val growth A$ billion Fast food value sales 2012


43

BUBBLE TEA


Asian-influenced chained juice/smoothie

bars specialising in Taiwanese-style

“bubble tea”

Bubble tea refers to chilled milk tea

beverages which often feature tapioca

pearls

Major brands include Easy Way (19%

value share) and Chatime (15% value

share)

Outlet concentration in inner city regions

frequented by Asian students, e.g.

university campuses and CBD locations

Combined, Easy Way & Chatime had half

the number of Boost Juice stores in 2012


44

AT-HOME FOOD PREPARATION


Cooking shows

Value for money

At-home food

preparation

My Kitchen Rules

& Masterchef

make home-

cooking appealing

Financial

recession brought

about bargain-

hunting consumer

behaviour

Renaissance in

preparing food

and entertaining

at home


45

FOODSERVICE: IMPLICATIONS


At-home cooking & entertaining expected to remain popular

Foodservice growth to come from ethnic cuisine, such as Latin American & Asian

Premiumisation through “craft” new product development


46

CONCLUSION

Future opportunities & threats for soft drinks in Australia


+ -


47

THANK YOU FOR LISTENING

ERIKA SIRIMANNE

[email protected]

WWW.EUROMONITOR.COM

+61 2 9581 9200

SUITE 401, LEVEL 4, 134 WILLIAM STREET, SYDNEY, NSW 2011

ausdrinks 2014 conference - australian beverages · ausdrinks 2014 conference ... usp: uses stevia,...

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