SESSION TWO NIELSEN PRESENTS: THE RIGHT PACK

Yountville, CA │ August 8, 2019 #wvpack

NIELSEN PRESENTS: THE RIGHT PACKS E S S I O N T W O

SPEAKERS: Peggy GsellKelly Nielsen

Yountville, CA │ August 8, 2019 #wvpack

S E S S I O N T W OSponsor

Copyright © 2019 The Nielsen Company. Confidential and proprietary.

NIELSEN PRESENTS:THE RIGHT PACKAugust 8, 2019 - Yountville, CA

Peggy Gsell- Nielsen Client Business PartnerKelly Nielsen- Vice President Alcohol Beverage Vertical, Nielsen Innovation BASES

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Yountville, CAAugust 8, 2019

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DISAPPEARING LINES FOR THE BEVERAGE DRINKER

BEER WINE

SPIRITS

BEYOND BLURRING: THE NEW TOTAL BEVERAGE DRINKER

WHAT WE USED TO KNOW ABOUT BEER, WINE, AND SPIRITS DRINKERS…

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INNOVATING ACROSS CATEGORIES (AND INDUSTRIES!)

Big Beer Spirits

Big Beer Wine

Wine Craft Beer

Craft Beer Spirits

Big Beer/Big Spirits Collaboration

Beyond Bev Al Collaboration

Beer Beyond BevAl

Carb Bev BevAl

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MEET YOUR (NEWER) COMPETITORS

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GROWTH IN NON-ALC BEV CATEGORIES

Source: Nielsen XAOC+Conv; YTD 6/30//19

Top 10 Fastest Growing Non-Alc Beverage CategoriesActual Dollar Change ($M) YTD vs Year Ago

1045

14691

1517

Energy BeveragesSoft Drinks

Water + Value Add WaterSparkling / Seltzer Water

Sport DrinksRTD CoffeeFruit DrinkKombuchaLiquid Tea

Tonic Water

Non-Alc Beverages +$2B YTD,

+$8B vs 4 yrs ago

$ Millions4,0003,5003,0002,5002,0001,500,0005000

% Chg

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Sparkling WaterKombuchaEnergy Beverages

Source: Nielsen Homescan Panel, Total US, 52 Weeks Ending 12/29/18

WINE & SPIRIT BUYING HOUSEHOLDS Average Annual $ Spend on Growing Non-Alcoholic Beverage Segments

+$17 +$6 +$6 +$5 +$4

WINE DRINKERS VERY ENGAGED IN NON-ALCOHOLIC BEVERAGES

Sports Drinks Value Add Water

Average HH Spirits HH Wine

$85$96

$80

$31 $32 $32 $31 $34 $34$27 $27 $27

$21 $23 $20

+$5

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HARD SELTZERS – LESS ‘RULES’ IN PACKAGING

Source: Nielsen Total U.S. All Outlets (xAOC + Liquor Plus + Conv + Military); 52 w/e 6-15-2019 (annual time periods)

100

3020

5040

7060

9080

Dol

lar S

ales

in M

illio

ns

4 Years Ago 2 Years Ago 1 Year Ago Lat. 52 Weeks

# of

Item

s Se

lling

200

6040

10080

140120

180160

3 Years Ago

Dollar Sales # of Items

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ALTERNATIVE PACKAGING – DRIVING GROWTH IN WINE

Source: Nielsen Total U.S. All Outlets (xAOC + Liquor Plus + Conv + Military); 52 w/e 7-13-2019)

$ Share $ % Chg750ml Glass 73% +2%

1.5L Glass 14% (4%)Alt Packs 13% +6%Alt Packs

(less 4/5 Glass & 5L Box) 10% +9%

580

4286193336

9331

203235226178

411

3L P

rem

ium

Box

1.5L

Box

187m

l

187m

l Gla

ss

187m

l Pla

stic

Tetr

a

500m

l Tet

ra

1L T

etra

Can

250m

l Can

375m

l Can

187m

l Can

375m

l

Pouc

h

100%

75%

50%

25%

0%

Dol

lar %

Cha

nge

Dollar Sales in Millions

Total Wine +1.6% 93

213.1%

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CANNED WINES – STILL ON A TEAR


10

0

30

20

50

40

70

60

90

80

100

Dol

lar

Sal

es in

Mill

ions

4 Years Ago 2 Years Ago 1 Year Ago Lat. 52 Weeks

# of

Item

s S

ellin

g

50

0

150

100

250

200

350

300

450

400

500

3 Years Ago

Dollar Sales # of Items

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YOUNGER WINE CONSUMERS ATTRACTED TO ALTERNATIVE PACKAGING


YOUNGER WINE CONSUMERS ATTRACTED TO ALTERNATIVE PACKAGING

0

% o

f $

Total W

ine

20

40

60

80

100

187m

l Spark

ling

187m

l Tab

le

375m

l Glas

s

3L Prem

ium Box

500m

l Tetr

a

1L Tetr

a

250m

l Can

375m

l Can

Wine Pouch

Wine Glas

s

10

14

21

23

32

14

13

28

22

24

710

36

18

29

16

13

20

18

32

14

26

16

18

26

15

17

28

15

25

6

15

38

26

15

35

21

19

10

15

17

21

34

25

4

13

18

19

19

31

711

17

11

54

21-34 35-44 45-54 55-64 65+


PACKAGING EFFECTIVENESSExploring Alternative Wine Packaging

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ACROSS INDUSTRIES, ALTERNATE PACK FORMATS AND SIZES DRIVE INCREMENTAL INNOVATION

Solve unmet consumer needs

Expand usageoccasions

Change the way consumers interact

with the category

Mini Cans Occasion Appropriate Containers Taster Sets

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EXPLORING ALTERNATIVE WINE PACKAGING: WHAT DO CONSUMERS THINK?

Nielsen’s Design Solutions are used to understand consumer perceptions of wine packaging.

• Alternative wine packages identified

• Removed branding to focus on pack form

• Red and white labels added for clarity

• Category buyers recruited

• Consumers evaluated pack forms

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UNBRANDED WINE PACK FORMS EVALUATED

Glass Bottle(Standard)

Aluminum Cans(250 ML)

Aluminum Can (375 ML)

Aluminum Wine Bottle

(250 ML)

Box (3L)

Box (5L)

Plastic Bottle Four Pack

(187 ML)

Tetra Pack (1L)

Tetra Pack(500 ML)

Wine Glass

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OPPORTUNITY FOR NEW PACKS IN OUTDOOR CONSUMPTION

30%

40%

50%

60%

70%

80%

90%

100%

At Home Smal l Get Together(At Home)

CasualBar/Restaurant

Fancy/Romatic Meal Nightclub Concert/MusicVenue

Special Event BBQ/Picnics Beach/Pool Tailgating/SportingEvent

Camping/Hiking

OCCASIONSTop 2 Box: Completely or somewhat agree

Glass Bottle (750ml) Aluminum Cans 4PK (250ML) Aluminum Can (375ML) Aluminum Wine Bottle (250ML)Box (3L) Box (5L) Plastic Bottle 4PK (187ML) Tetra (1L)Tetra (500ML) Wine Glass Single Serve

While the standard glass bottle leads in at-home occasions, new forms show promise outside of the home.

AT HOME; MEAL OCCASIONS VENUE & EVENT OUTDOORS

This is a product that I would consume at [insert occasion]. 5-Scale Results: Completely Agree -> Completely Disagree.

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3L BOX, PLASTIC BOTTLE 4PK, AND ALUMINUM BOTTLEARE ASSOCIATED WITH UNIQUE OCCASIONS

Box 3L Plastic Bottle 4 Pack (187 ML) Aluminum Wine Bottle (250 ML)

BBQ/Picnics BBQ/PicnicsBeach/Pool Tailgating/Sporting Event

BBQ/Picnics Beach/Pool Tailgating/Sporting Event

Concert/Music Venue

Camping/ Hiking

Camping/ Hiking

“Box is great if outdoors on the patio, no need to keep getting up to refill your glass.”

“I like the idea of having small bottles of wine. This makes things more convenient when a person is

traveling or camping”

“I like that you could take it with you and it not get crushed in your purse”

“Perfect size for one person at outdoor parties”

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WHILE RESEALABILITY ALIGNS WITH OUTDOOR USAGE, GLASS BOTTLE SCREW CAP IS ALSO GAINING TRACTION

Cork 43%Resealable Screw Cap 35%No Preference 21%

Would not purchase in cork or resealable screw cap 1%

Glass Bottle (Standard)

If this product were available with both a cork and resealable screw cap, which would you be more likely to purchase?

PREFERENCE: CORK V. SCREW CAP

FOUR YEAR GROWTH

+36%

+6%

Screw Cap

Cork

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1

2

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4

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Portable Convenient Feminine Tasty Traditional

Personality Traits – Alternative FormatsAssociation Ranking

Aluminum Cans 4PK (250ML) Aluminum Can (375ML) Aluminum Wine Bottle (250ML)

Box (3L) Box (5L) Plastic Bottle 4PK (187ML)

Tetra (1L) Tetra (500ML) Wine Glass Single Serve

THE PLASTIC BOTTLE 4PK IS PERCEIVED TO BE THE MOST PORTABLE, CONVENIENT, FEMININE, AND TASTY…

Box (5L) is the least portable/convenient. Both 5L and 3L Boxes are seen

as the most traditional.

Though fairly portable, the single serve Aluminum

Can falls short on femininity and taste

relative to other packs.

“Perfect when you'reon the go”

Which of these would you MOST/LEAST describe as [TRAIT]?Glass Bottle (750 ML)

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… WITH ALUMINUM BOTTLE SEEN AS MOST MODERN, MEMORABLE, AND HIGH-END

1

2

3

4

5

6

7

8

9

Modern Memorable Sophisticated Premium Quality


Aluminum Cans 4PK (250ML) Aluminum Can (375ML) Aluminum Wine Bottle (250ML)

Box (3L) Box (5L) Plastic Bottle 4PK (187ML)

Tetra (1L) Tetra (500ML) Wine Glass Single Serve

Aluminum Can and Wine Glass single serve packs fall

short of other alternative packs on being modern and high-end.

Which of these would you MOST/LEAST describe as [TRAIT]?

“It looks premium”“Looks very prominent”

“The shape and design looks sleek and

modern.”

Glass Bottle (750 ML)

3L Box also leads alt. packs in being perceived as memorable and high-end. Though, 5L Box

falls to bottom.

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TASTE PERCEPTIONS FOR ALUMINUM CANS COULD BE HIGHER FOR VARIETALS WITH BETTER FIT

Aluminum Cans 4 Pack Aluminum Cans

What varietals, if any, do you associate with this package?

Varietal Association (Top 4 Rank)

Sparkling White

Sparkling Red

Rose

Red Blend

Chardonnay

Aluminum cans tend to be associated with sparkling.

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TETRA PACK NEEDS TO PLAY UP DIFFERENTIATED BENEFITS/FEATURES TO CUE UNIQUE OCCASIONS…

30%

40%

50%

60%

70%

80%

90%

100%

At Home Smal l Get Together(At Home)

CasualBar/Restaurant

Fancy/Romatic Meal Nightclub Concert/MusicVenue

Special Event BBQ/Picnics Beach/Pool Tailgating/SportingEvent

Camping/Hiking

OCCASIONSTop 2 Box: Completely or somewhat agree

Glass Bottle (750ml) Aluminum Cans 4PK (250ML) Aluminum Can (375ML) Aluminum Wine Bottle (250ML)Box (3L) Box (5L) Plastic Bottle 4PK (187ML) Tetra (1L)Tetra (500ML) Wine Glass Single Serve

This is a product that I would consume at [insert occasion]. 5-Scale Results: Completely Agree -> Completely Disagree.

AT HOME; MEAL OCCASIONS VENUE & EVENT OUTDOORS

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… AND DRIVE DISTINCT PERCEPTIONS; THERE MAY BE OPPORTUNITY TO OWN SUSTAINABILITY

1

2

3

4

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9

Modern Portable Convenient Feminine Memorable Sophisticated Premium Quality Tasty Traditional


Aluminum Cans 4PK (250ML) Aluminum Can (375ML) Aluminum Wine Bottle (250ML)Box (3L) Box (5L) Plastic Bottle 4PK (187ML)Tetra (1L) Tetra (500ML) Wine Glass Single Serve

Which of these would you MOST/LEAST describe as [TRAIT]?

“It doesn't have the sophistication or elegance

associated with bottled wine.”

“While this is portable, it isn't the most sophisticated”

“Sustainablepackaging”

“As environmentally-friendly as this packaging is, it

still looks cheap”

“Recyclable; Great for the environment”

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WHILE 3L & 5L BOXES AND PLASTIC BOTTLE 4PK CUE FORM LEADER BRAND ASSOCIATION…

Box 3L Box 5L Plastic Bottle 4 Pack 187ML

Brand Associated 86% 91% 81%

Top Brand Association Black Box Franzia Sutter Home

No Brand Associated 14% 9% 19%

Brand Association

What brands, if any, do you associate with this package?

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…THERE’S GREATER OPPORTUNITY TO OWN NEW TYPES LIKE ALUMINUM, TETRA, AND SINGLE SERVE

Aluminum Cans 4 Pack

250ML

Aluminum Can 375ML


250MLTetra Pack 1L Tetra Pack

500MLWine Glass Single Serve

Brand Association 70% 63% 63% 71% 72% 61%

No Brand Association 30% 37% 37% 29% 28% 39%

Brand Association

What brands, if any, do you associate with this package?

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DESIGN IS THE GREATEST INFLUENCE ON CONSUMER BRAND & PRODUCT PERCEPTIONS

Package Design

Advertising

Trade Promotion

Consumer Promotion

Social Media

LowCost

HighlyStrategic

HighReach

Only Pack Design:

• Reaches 100% of likely buyers at the first moment of truth where 50-80% of purchase decisions are made

• Requires a relatively low investment

• Embodies the brand and product strategy

Sources: PRS; Nielsen CPG Package Design Study

Design and branding drives equity and sets expectations at shelf.

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TOP BRANDS ALSO EVALUATED FOR EACH PACK FORM

Glass Bottle(Standard)

Aluminum Cans(250 ML)

Aluminum Can(375 ML)


(250 ML)

Box (3L)

Box (5L)

Plastic Bottle Four Pack

(187 ML)

Tetra Pack (500 ML)

Tetra Pack (1 L)

Wine Glass

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BRANDED

BLACK BOX BRANDING ELEVATES UNBRANDED 3L BOX’S CHEAP PERCEPTIONS TO PREMIUM AND QUALITY

UNBRANDED

FREE ASSOCIATION: BOX 3L

“Cheap”

“It has a sophisticated and elegant design that stands out and looks premium”

“Beautiful packaging. So sophisticated and lovely. Premium quality packaging”

“I feel that box packaging suggest short term storage and not high quality”

“It doesn't seem as premium as bottled wine and looks generic”

“Premium”“Quality”“Tasty”

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FREE ASSOCIATION: TETRA 1L

BRANDING AND CORRESPONDING DESIGN MAY HELP TETRA FORM PLAY IN UNIQUE SPACES AND STAND OUT

BRANDEDUNBRANDED

“I’m just not sure quality wine comes like this”

“Convenient opening without the need for a corkscrew”

“The scenery is simple, yet unique and captivating like it's telling a story”

“Convenient to open/close, preserves wine and makes very portable”

“Cheap”“Convenient”“Portable”

“Modern”“Portable”“Unique”

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• Alternative packaging is driving growth in wine

• New pack forms offer potential category disruption

• Incremental opportunity with unique, active occasions

• Leverage design & branding to reframe and elevate pack perceptions beyond the functional benefits of pack form

IN SUMMARY:

ALTERNATIVE WINE PACKAGING ON THE RISE


[email protected]@nielsen.com

Documents

SESSION TWO NIELSEN PRESENTS: THE RIGHT PACK