Volume declines continue, whilst value growth stagnates
The total volume decline in 2012 for alcoholic drinks was greater than the slight overall decline seen during the review period. Factors responsible for this included the consumer purchasing of smaller quantities of higher-quality beer, the move from beer to other alcoholic drinks by consumers, the poor weather conditions of the 2011-2012 summer, the reduced 2012 grape harvest and negative media coverage of the RTDs category.
In addition, total value sales growth of alcoholic drinks in 2012 was below average review period growth. This was largely due to strong pre-global financial crisis growth rates and the following reduction in higher-priced on-trade consumption, a general tightening of consumer discretionary spending and increased off-trade discounting during the economic downturn.
Dynamic craft sector growth stimulates the market
Craft producers, particularly within beer, continued to create considerable changes within New Zealand alcoholic drinks during 2012. Market shares of mainstream beer brands are suffering and attempts by large players to replicate craft offerings are now commonplace. Premium craft brands are exhibiting growth and new craft players are entering the market, resulting in significant increases in the number of breweries operating in the market. In addition, overall volumes are decreasing whilst unit prices rise as craft products generally have higher prices and individuals consequently consume less.
Intense competition sees the power of the duopoly decline
Lion Pty Ltd and DB Breweries Ltd continued to lead the industry in 2012, though their overall market shares continued to show slight declines. Third-placed Independent Liquor (NZ) Ltd continued to gain market share through aggressive marketing, alignment with consumer trends and significant expansion-focused investment. All three leading players are now foreign owned; however, small, domestic players continued to make headway in 2012, often through more innovative, premium offerings.
On-trade continues to suffer as consumers remain cautious, whilst supermarkets gain
Off-trade sales continued to outperform on-trade in 2012 as discretionary spending pressures brought about by the subdued economic climate in New Zealand maintained the trend of in-home entertaining. In addition, supermarkets continued to gain off-trade value share in 2012, as due to economies of scale, supermarkets generally offer lower prices and significant levels of discounting.
Growth improvements forecast in line with economic recovery
The expected improvement in regards to the forecast total constant value performance from 2012 to 2017, as compared to 2012, and the review period is largely due to expected economic improvement in New Zealand. Total forecast volume growth rate over the forecast period is also expected to improve compared to 2012. However, if economic recovery is not seen during the forecast period, this will negatively impact upon alcoholic drinks in terms of both total value and volume sales. In addition, governmental regulatory changes such as the Alcohol Reform Bill and weather conditions will also play a significant role in the future performance of alcoholic drinks.
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The Alcoholic Drinks in New Zealand market research report includes:
- Analysis of key supply-side and demand trends
- Detailed segmentation of international and local products
- Historic volumes and values, company and brand market shares
- Five year forecasts of market trends and market growth
- Production, imports by origin, exports by destination
- Robust and transparent market research methodology, conducted in-country
Our market research reports answer questions such as:
- What is the market size of Alcoholic Drinks in New Zealand?
- What are the major brands in New Zealand?
- Have there been any alcoholic drinks legislative changes over the past 12 months?
- How is the alcoholic drinks industry affected by the recession?
- What is consumed more; beer, wine or spirits?
- What have been the key trends seen in new product developments?
- Do alcoholic drinks consumers want value for money or added value?
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This industry report originates from Passport, our Alcoholic Drinks market research database.