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1 1
2 The wine and bag-in-box retail market of Sweden Louise Key-Hedberg, Systembolaget, 16 October
3 Outline About Systembolaget Quality Bag-in-box Consumer attitudes 3
4 Systembolaget 2005 Total sales in 2005 SEK: 18,1 billion SEK (1,9 billion Euro) Total sales in volume: wine 143 million ltrs (+3,1%) spirit 19 million ltrs (-2,3%) strong beer 179 million ltrs (+3,5%) 4,100 employees (80 SCM) 06 4
5 Systembolaget stores (50 % are self service) 3 flagship stores with wine cellar 215 self-service (All rebuilt by 2010) 255 suppliers working with SB Range: 2,700 brands (+3,500 brands on the special order list) 5
6 Our task protect public health Social responsibility Cost-efficiency Good service 6
7 Purchasing process 17 Possible delisting/ price adjustment 1 Demand and trend analysis 16 Sales evaluation 2 Launch strategy and plan 15 Sales 3 Request for tender 14 Launch 13 Production of Systembolaget catalogue for new products Purchasing Process 5 Tender examination 4 Tenders from suppliers 11 Launch samples are sent in 6 Quotation tasting 12 Tasting for product description/tasting for wine writers 7 Chemical analysis 10 Launch control 9 Order confirmation from supplier 8 Systembolaget places an order GRAPHIC: TOMAS ÖHRLING/INFO 7
8 Short background Bag-in-box 55% of total sales in volume Dominant market for quality wine in box Swedish consumers trust this package and finds it very attractive Quality problems 8
9 The Systembolaget Quality Control Programme Quality Control Programme for BIB Batch number: For traceability purposes, the batch number and tapping date (year/month/day) should be clearly visible. This date should be stamped on the top or on the frontside of the box so that consumers can find it. Tapping date should also appear on the outer packaging/wrapping. Shelf life: No more than 8-10 months storage time from date of tapping. In-store product management If a product is kept in-store for too long, the order volume will be reviewed and the item recorded as a shop write-off. Shelves are filled from behind. Stability: To increase the stability of the export pallet and to reduce the risk of boxes at the bottom being squashed, we now require dividing platforms between the different layers of goods. 9
10 The most frequent quality deviations reported Packaging, damaged at delivery to SB:s stores Taste deviations Oxidation 10
11 The Swedish wine consumer Lifestyle Package Origin Flavour characteristics 100% 80% 60% 40% M litres wine (incl import by travellers) Market Sales Shares of Wine by Origin in Different 2005 litres Packages - Wine Portugal; 3% Hungary; 4% 150 Germany; 4% USA; 1007% Chile; 8% 50 Bottles Bag-in-box Tetra Other; 7% Spain; 17% Italy; 16% 20% 0% France; 10% 0 Australia; 10% South Africa; 14% Source: LUI Marknadsinformation AB 11
12 2 out of 3 buys wine in Bag-in-box at least once a year Kunden i fokus 2006 ** q22 ** How Hur ofta often köper do you du vin buy i box BIB på wine Systembolaget? at Systembolaget Totalt Totalt 2006 Totalt % 90% 80% 70% 60% 50% 40% 41% 30% 20% 22% 18% 26% 18% 10% 2% 1% 0% Synovate LUI Varje vecka Every week Few times a Någon/ några gånger per månad month 0% Few times every Någon gång per halvår 6 months Någon gång per år Few times a year Svarsalternativet "Någon gång per halvår" saknades år % buys wine in box every month: over repr by 45+ yrs; higher consumption of wine and spirits in general than average consumer, higher income; great interest in food 2/3 red; 1/3 white 12
13 Motives for buying Bag-in-box Kunden i fokus 2006 Bag-in-box Vin i box-kunden customer (minst (at least 1 g/mån) once a 23% month) 23% ** q23 ** Vilka Which är are de två the viktigaste two most important skälen till reasons att du väljer for choosing ett vin i a box? BIB-wine? De fem mest frekvent markerade motiven 100% 90% 80% 70% 60% 60% 50% 40% 30% 20% 35% 32% 25% 20% 10% 0% Synovate LUI Bekvämt Convenient att ha to hemma keep at home Hållbarheten Keeps wellför in en openöppnad package förpackning Price Pris Lätt Easy att to ta ett take glas a glass vin of wine Lätt Easy att bära to carry hem home 13
14 Usage profile - Wine in bottle/wine in bag-in-box Kunden i fokus 2006 ** q31 **Köper Do you du buyvin wine i flaska in bottle respektive wine vin in i BIB box for the till följande following situationer? situations? Always/often (pos 1-2) "Alltid/ ofta" (pos 1-2) Bas: köper vin minst någon gång per år Base: Buys wine at least once a year Weekday dinner Vardagsmiddag Middag en vanlig helg Weekend dinner Finare middag hemma Dinner party Större fest Party Vacation/summer Semester/ sommarstuga/ cottage/boat båt etc För att ha hemma - ett lager att ta av vid behov To keep at stock for upcoming occasions Leave to mature Lagra och for dricka a couple om ett of years par år - 12% 13% 20% 37% 9% 37% 44% 36% 28% 14% 37% 8% 62% Synovate LUI - 10% 20% 30% 40% 50% 60% 70% 80% 90% 100% Vin Bottle i flaska Vin Bag-in-box i 14
15 Usage profile for wine in box average customer/heavy-user bag-in-box Kunden i fokus 2006 Bag-in-box Vin i box-kunden customer (at (minst least1 once g/mån) a month) 23% 23% ** q31 ** Köper Do you du vin buy i wine box till in följande BIB for the situationer? following situations? Always/often "Alltid/ ofta" (pos (pos 1-2) 1-2) Weekday Vardagsmiddag dinner 12% 36% Middag Weekend en vanlig dinner helg 20% 55% Finare middag Dinnerhemma party 9% 20% Större Party fest 37% 50% Vacation/summer Semester/ sommarstuga/ cottage/boat båt etc 36% 62% To För keep att ha at hemma stock - ett for lager upcoming att ta av occasions vid behov 14% 33% Synovate LUI - 10% 20% 30% 40% 50% 60% 70% 80% 90% 100% Vin-kunder Total winetotalt customer sett Vin Bag-in-box i box-kunden customer 15
16 Conclusions The monopoly market means quality and public health comes before profit Quality for bag-in-box wine is especially important since the market is so big and still growing Consumer attitudes towards boxed wine is very positive and that is a driving force to continue with quality enhancements. Quality wine in bag-in-box is a socially accepted and most wanted product in Sweden. Keep on improving! 16
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