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PUBLIC HEARING
GROWTH POTENTIAL OF THE EUROPEAN
BEER INDUSTRY
The Spanish beer sector and the on-trade
Jacobo Olalla Marañón
Director
Cerveceros de España
Prague, 5th September, 2013
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SPANISH BEER SECTOR
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Spanish Beer Sector:
� 4th biggest beer
producer in Europe
� worlwide top 10
Source: Beer Statistics. 2012 Edition. The Brewers of Europe
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Spanish Beer Sector:
An important contributor to the economy
� Brewing sector turnover: over 3 billion €
� Total contribution to national economy as value added:
around 6 billion €
� Employment : 221,128 direct and indirect job (near 84%
in the on-trade)
� About 4.5 billion € revenue generated as a result of taxes
from the beer chain
Source: The Contribution made by Beer to the European Economy. E&Y 2011.
BEER & THE ECONOMY
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Value Added
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SPAIN Value added due to the production and sale of beer :
5.9 billion euro (12% EUR Value added)
EU Value added due to the production and sale of beer : 50 billion euro
SPAIN : Direct effect brewing industry
21%
20%
56%
3%
21%
14%
63%
2%
Source: The Contribution made by Beer to the European Economy. E&Y 2011.
1.640
10.530
10.06027.840
Figures in the graph(million €)
Figures in the graph(million €)
1.913
1.244
Direct Employment
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EU Direct employment due to beer : 128,800 jobs
Source: The Contribution made by Beer to the European Economy. E&Y 2011.
6.760
Indirect employment
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EU Indirect employment due to beer : 320,000 jobs
SPAIN Indirect employment due to beer : 20,693 jobs (8% EUR indirect employment)
Source: The Contribution made by Beer to the European Economy. E&Y 2011.
39%22%
32%
39%
22%
10%
7%
1%
19%
10%
Total effect on employment
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EU Total employment due to beer : 2 million jobs
SPAIN Total employment due to beer :221,128 jobs (11% EUR employment)
Government Revenues due to Beer
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EU Government revenues
due to the production and sale of beer :
50.6 billion euro
SPAIN Direct effect brewing
industry : 2.4 billion euro
SPAIN Government revenues
due to the production and sale of beer :
4.4 billion euro (near 9% UE revenues)
7%
67%
14%
27%
16%
2%
1%
10%
24%
18%
13%
46%
4%
7%
36%
7%
Direct 326
1.605
tax
ON-TRADE SECTOR
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Don’t miss!
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On-trade:
Main figures in Spain� GDP important contributor: 7%
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Source: Hospitality Spanish Federation (FEHR)
� Evolution by subsectors
� Highest added value chain for foodstuffs
� Bars account to 62% of establishments
� Almost 24.000 bars were closed over this
period(Source: Hospitality Spanish Federation (FEHR))
� Spaniards reduced their expenditure by 4.1%
and the number of visits by 3% in 2012
(Source: Ministry of Agriculture, Foodstuffs and Environment)
2008 2011
Bars Evolution
establishments 246.574 222.840 -10%
output (million €) 59.505 53.658 -10%
Restaurants
establishments 84.879 88.009 4%
output (million €) 25.957 24.725 -5%
Cafés
establishments 15.935 17.675 11%
output (million €) 16.276 15.505 -5%
Catering
establishments 12.912 12.912 0%
output (million €) 9.477 10.351 9%
Hotels
establishments 16.461 16.980 3%
output (million €) 17.102 17.427 2%
TOTAL ESTABLISHMENTS 376.761 358.416 -5%
TOTA OUTPUT 128.317 121.666 -5%
TOTAL JOBS 1.452.500 1.391.950 -4%
(Beer consumption in) Spain is (also) different…
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We enjoy beer in a social manner , with friendsor family,
• Beer is accompanied by some food in every 82% occasion of consumption(Source: Ministry of Agriculture, Foodstuffs and Environment)
• Beer is the favourite drink to have with “tapas”
• Beer is a driver : beer + tapas account to €12 billion
(Source: Joint socioeconomic value of beer+tapas. Eratema 2011)
• Non alcoholic beverages such as water and juices (50.3%) soft drinks (39.3%) and wine (29.2%) are considered as possible drinks to replace beer if it is not available . Only 5% of beer consumers would choose spirits instead (Source: Market Resarch carried out by Quota. August 2013)
• 25% of the income of bars and restaurants is due to beer(Impact on the beer sector of tax modifications in Spain. PWC 2012)
This figure increases to more than 30% if we consider the tandem beer+food
and always with something to eat: whenever there is beer, there is some food
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Beer consumption by channel
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� 63% is consumed in the on-trade� Almost 20% of consumers who visited an on-trade establishment dran k beer� Nevertheless, beer occasions of consumption in the on-trade reduced by 4.5% ,
while consumption in the off-trade increased by 3.5%.� Beer consumption in the on-trade has decreased by 21% along the last 6 years
Source: Ministry of Agriculture, Foodstuffs and Environment
66%
32%
Beer and the hospitality sector
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Employment in the EU hospitality sector due to beer : 1.5 million jobs
Development in the on trade consumptionof beer per country in 2010 compared to 2008
(185.400 jobs)
• Large difference in percentage of on-trade and off trade
consumption by countries
• Over 60% in Ireland, Portugal, Spain and Greece, with high induced
employment
• Nevertheless there is an ongoing trend towards off-trade
consumption:
•On-trade consumption decreased in 20 Member States
•Remained stable in 5
•Only increased in 2 countries
Beer and the hospitality sector
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Volume of beer consumption in million hectolitres (left) and billion euro (right)
37%
63%71%
29%
66%
34%
83%
17%
TOURISM SECTOR IN SPAIN
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Tourism:
Main figures in Spain
� GDP important contributor: 11%
� Spain is still the second largest earner worldwide, after the USA, and the first in
Europe (US$ 56 billion)
� It ranks 4th in the world by arrivals (almost 59 million foreign visitors) spending
700 € per person)
� Sun, sand & sea are yet the first attraction
� More than 300 days of sun a year
� More than 7,900 km of coast
� 551 beaches awarded with a blue flag
� But other attractions are coming up
� Culture (2nd country in the world in terms of cultural protected sites by the
UNESCO World Heritage Centre)
� Environment (2nd country in Europe in terms of natural protected sites)
� Gastronomy (a real boom of Spanish cooks all over the world)
19Sources: Ministry of Industry, Energy and Tourism + WTO
Beer and tourism
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Direct link:on-trade, tourism
and beer sales
�According to our estimations, foreign tourists
purchase of beer accounts to more than 25%
apparent consumption
�89% of foreign visitors drank beer along their
stay (Source: Market Resarch carried out by Quota. August 2013)
�Most beer consumed by foreign visitors (87%)
was drank in the on-trade (Source: Market Resarch carried
out by Quota. August 2013)
What else can be done?
What are we doing?
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WORKING FOR THE BEER CATEGORY FOT THE PURPOSE OF RENFORCING
IMAGE AND ACHIEVING A NEW POSITION IN THE MARKET
� Beer seen as an option not only with ‘tapa’ but also with meals
� New consumption moments by creating links between gastronomy
and kinds of beer
� Beer consumption as a ritual in pubs and restaurants
� Sophisticated and aspirational product
OUR MESSAGES
� Every kind of beer with it own container
� Spanish brands offer consumers many different choices
� Beer combines with every meal and kind of food: Mexican,
Japanese, etc.
� HORECA sector guarantees perfect serve
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New imaginary: a sophisticated drink
“CERVECEAR” CAMPAIGN (Going out for a beer)
WHAT ARE WE DOING?
� Non conventional advertising in key media with beer
consumption in a sophisticated ambiance
� Perfect serve sessions with relevant chefs and bartenders
� Beer and food tasting for key target
� Press trips in order to increase knowledge about culture and
history of beer
� Blogger relations to engage lifestyle and gastronomy
influencers
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Ángel León, Chef con Estrella Michelin
New imaginary: a sophisticated drink
�Major role of the on-trade in the economy
Maintaining a reduced VAT rate
� Beer as a driver in the on-trade and the economy:
a political consensus
• Socialist party’s electoral programme: no increase in the excise rate for
beer , wine and other low alcoholic beverages
• Present government has just increased by 10% the excise rate on alcoholic
beverages but the rate has been maintained for beer, wine and other
fermented beverages
• According to the Ministry of Finance “the on-trade should not be damaged”
and “some products have more negative externalities than other”
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As a conclusion
�Beer is a very relevant hospitality driver
� Strong hospitality sector essential for job creation and growth
�Beer is a major contributor to the economy and society
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THANK YOU VERY MUCH!
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