Wine in BRICS

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WINE: BRICS AND THE WESTERN WALL OFMATURITY

21/05/2012

SPIROS MALANDRAKIS

ALCOHOLIC DRINKS ANALYST



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2

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WINE: BRICS AND THE WESTERN WALL OF MATURITY

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Macroeconomic Blues: Single or Double(dip)?

Snapshots: BRICs against the wall ofmaturity

Lessons from the West: Breaking the mouldLooking ahead: Red-tinted glasses?




4

-4

-2

0

2

4

68

10

12

14

20062007200820092010 2011

% g r o w

t h

Real Annual DisposableIncomes

BRICs EU US

The Good, The Bad and The Ugly

MACROECONOMIC BLUES: SINGLE OR DOUBLE (DIP)?

-6

-4

-2

0

2

4

6

8

10

12

14

2006200720082009 2010 2011

% g r o w t h

Real GDP

BRICs EU US






5

0 5 10 15

BRICs

EU

US

Unemployment as % ofactive population

2011 2006

World: 30

US: 37

UK: 40

BRICs:32

Unemployed and Getting Old or Young and Aspirational?


Median Age in Selected Markets






6

Embryonic wine culture

Favourabledemographics

Extravagant

nouveau riche Advancingmiddle classes

Sustained buoyancy

BRICs: Decanting the Macroeconomic Sediment






Macroeconomic Blues: Single or Double(dip)?


Lessons from the West: Breaking the mould

Looking ahead: Red-tinted glasses?




8

0

200

400

600

800

1000

1200

1400

1600

1800

2000

Brazil Russia India China

M i l l i o n

l i t r e s

Still Light Grape Wine volumes across the BRICs

Rosé

White

Red

A Sense of Perspective

SNAPSHOTS: BRICS AGAINST THE WALL OF MATURITY






9

Brazil: 2011 Wine breakdown

Red

Rosé

White0

20

40

Argentina Chile France Italy Portugal

M i l l i o n l

i t r e s

Shipments: Top 5 importmarkets

2006 2011

-20

0

20

40

60

2006 2007 2008 2009 2010 2011 T o

t a l v o

l u m e

%

g r o w

t h

Brazil Still light grape wine performance 2006-2011

Still Red Wine Still Rosé Wine Still White Wine

Brazil: Increasingly Mature, More Sophisticated









11

India: Bursting the Bubble?


0

10

20

3040

2006 2007 2008 2009 2010 2011

T o t a l v o l u m e % g r o w t h

India Still light grape wine performance 2006-2011

Still Red Wine Still White Wine

India: 2011 Wine breakdown

Red White

0

100200

300

Australia France Italy Spain US

T h o u

s a n d l i t r e s


2006 2011






12

China: Red Tide Still Rising


China: 2011 Wine breakdown

Red

Rosé

White

0

10

20

30

40

2006 2007 2008 2009 2010 2011

T o t

a l v o

l u m e

% g r o w

t h

China Still light grape wine performance 2006-2011


0

50

100

150

Australia Chile France Italy Spain

M

i l l i o n

l i t r e s


2006 2011






13

A View From the West: UKSNAPSHOTS: BRICS AGAINST THE WALL OF MATURITY

-10

0

10

20

3040

2006 2007 2008 2009 2010 2011

T o t a l v o l u m e %

g r o w t h

UK Still light grape wine performance 2006-2011


UK: Wine breakdown

RedRosé

White 0

100

200

300

Australia France Italy Spain US

M i l l i o n l i t r e s


2006 2011






14

A View From the West: US


-10

-5

0

510

2006 2007 2008 2009 2010 2011

T o t a l v o l u m e %

g r o w t h

US Still light grape wine performance 2006-2011


US: Wine breakdown

Red

Rosé White

0100

200300400

M i l l i o n l i t r e s


2006 2011






15

0

5

10

15

20

25

2006 2007 2008 2009 2010 2011

Still Light Grape Wine per Capita Consumption in selected

markets

China India Russia Brazil USA United Kingdom

Eye Opening Comparisons






Macroeconomic Blues: Single or Double

(dip)?


Lessons from the West: Breaking the

mould





17

0

50

100

150

200

250

300

350

400

450

500

Brazil Russia India China

M i l l i o n U S $ f i x e d e x c

h a n g e r a t e s

Food and drink internet

retailing

2006 2011

Social Media, Flash Sales and Interactivity

LESSONS FROM THE WEST: BREAKING THE MOULD






18

0%

10%

20%

30%

40%

50%

60%

70%

80%

90%100%

Wine: Packaging types breakdown

Other

Flexible

Paper

Liquid Cartons

Glass

Rigid Plastic

Metal

Packaging: Breaking the Taboos



http://everythingpackaged.com/wp-content/uploads/2011/11/Green-bottle-paper-wine.jpg







20

0

100

200

300

400

500

600

700

800

20052006200720082009 2010

M i l l i o n U S $ f i x e d e x c

h a n g e r a t e s

Fine Wine Sales in the BRICs

China

India

Russia

Brazil

Luxury: Is bling Still King?






Macroeconomic Blues: Single or Double

(dip)?


Lessons from the West: Breaking the mould





22

Divergence in living standards will only accelerate

LOOKING AHEAD: RED-TINTED GLASSES?

90

100

110

120

130

140

150160

170

180

190

200

2007 2009 2011 2013 2015

2 0 0 7 = 1 0 0

Growth of Real GDP per capita in selected economies

China

Vietnam

Indonesia

Brazil

Germany

USA

Eurozone

United Kingdom






23

0

500

1,000

1,500

2,000

2,500

3,000

M i l l i o n

l i t r e s

Forecasted Actual Volume Gains

in Still Light Grape Wine byCategory in the BRICs 2011-2016

Rosé

White

Red

0

500

1,000

1,500

2,000

2,500

3,000

M i l l i o n

l i t r e

s

Forecasted Actual Volume Gains

in Still Light Grape Wine byCountry in the BRICs 2011-2016

India

Brazil

Russia

China

The Red BRIC Road to China







24

0

500

1000

1500

2000

2500

3000

3500

4000

4500

2011 2012 2013 2014 2015 2016

T o

t a l v o

l u m e m

i l l i o n

l i t r e s

Forecasted Still Light Grape Wine Sales in the BRICs

China

India

Russia

Brazil

The Future of the BRICs: Under China’s Towering Shadow…







25

0

2

4

6

8

10

12

2011 2012 2013 2014 2015 2016

T o

t a l v o

l u m e

b i

l l i o n

l i t r e s

Forecasted Still Light Grape Wine Sales in Selected Markets

USA Western Europe United Kingdom

…While The West Remains Under Pressure







26

Country % volume CAGR

2011-2016

Actual Volume Gains

(million litres)China 17.1 2,102.3

USA 1.9 247.0

Russia 4.2 192.4

Brazil 6.1 133.3

Canada 4.6 113.9

Ukraine 5.2 61.3

Romania 4.7 60.3

Poland 6.7 36.3

Nigeria 12.5 34.4

Netherlands 1.7 32.8

Beyond The BRICs and the Usual Suspects








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Wine in BRICS