Market trends: How do they touch the beverage alcohol industry? Pamela Lawson Marketing Director, Customer Insights and CRM September 23, 2010
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1 Market trends: How do they touch the beverage alcohol industry? Pamela Lawson Marketing Director, Customer Insights and CRM September 23, 2010
2 The Economic Crisis effect still on the table Consumers: Still cautious and more likely to continue consuming at home Apprehensive to premiumize their consumption (still buying cheaper brands) The aversion to risk and spending concerns are still stressing the tried and true over experimentation. Upscale was the trend between 2005 and 2008, but priorities have changed: Environmental choices (i.e. light weight, packaging) Ethical and safety worries are also rising Re-review of the value proposition and communication messages Local and craft products will continue to experience growth OPPORTUNITIES Healthy or products with functional benefits will continue to get the buzz and interest of consumers Value for the money (this does not equate cheap)
3 Which is the next big idea?
4 A cross-industry mindset can become the source for the next big thing No doubt Healthy, green and organic alternatives are still hot topics Competition s moves/launches are also a driver of the industry HOWEVER Looking at our industry is no enough to predict market opportunities Our competition could be anyone: other beverages, other entertaining options, other gifting solutions. Customers are spending their play money on goods and services that enhance their experiences, their excitement, their satisfaction at a given moment (i.e. iphone4 is sold-out) Risk: resting on laurels- becoming a follower, not an innovator
5 Market Opportunities: Value generosity, sharing and collaboration Tesco Wine Finder App.
6 Market Opportunities: Value generosity, sharing and collaboration Lonely Planet offers its iphone travel apps free
7 How to reach the Emotional Connection? EMOTIONAL CONNECTION B. HEALTH OVERVIEW B.HEALTH LCBO SEGMENTS
8 Market Opportunities: Never stop surprising your customers Schweppes re-vamped its packaging
9 Market Opportunities: Local: your world is where you live Absolut Cities Series
10 What can we leverage for our market?
11 Lovemarks
12 Lovemarks
13 What is expected from Spirits? The Spirits market is forecasted to have steady sales during the coming years. Top performers continue to be vodka and rum Spiced rum is one of the big drivers of flavored spirits The cocktail trend has been fueled by the rediscovery of the classics Licensees: opportunity to have their signature cocktails (distinction) and to include alcohol as part of their menu ingredients Female market: fashion, health and overall uniqueness can be build by creating unique and tasty cocktails and mixed drinks
14 P6 Civic Holiday Sale FSI Featured product sales were up 279% from the previous weekend.
15
16 What to expect from the wines category? Wines market is expected to continue growth, particularly Ontario wines and New World wines. Consumers are still trading down in price point; LTO and Air Miles a positive tactic for mid range price wines. Shopping the WINES category can be confusing and causes some anxiety. The LCBO will continue to promote strategies to relieve stress (i.e. shelving, education)
17
18 Beer summer shine! Beer continues to have strong sales. Hot summer, the large product assortment, and its overall value proposition. Beer Trends: Single serve beer: important to the LCBO sales Continued explosion of Ontario craft beer Beer gifts and sampler packs gaining popularity Customers returning to value - Lower priced imports and single serve domestic brands
19 How can we better communicate with our customers?
20 LCBO customers are not all the same Distribution of cross purchasers One category purchasers (19%): Almost half of those buying one category buy wine exclusively. Only 3% of annual revenue 28% 19% Cross-category purchasers (81%): 56% of customers buy three or more categories during a given year. Represent 83% of annual revenue 28% 24% One cate. Three categ. Two cate. Four cate.
21 The Future Segments, Geo Demo s and Products CUSTOMER Segments Adventurers Moderates Inexperience Party People Homebodies GEO DEMOGRAPHIC Segments Prizm - MapInfo PRODUCT PPGs Global Roots Big Brands Mainstream Spirits Cool Convenience Premium Destination Beer & Chasers Up-spend Mainstream Active Retailing: Linking Shoppers with Products Faster, for Greater Profits
22 THANK YOU!
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