01 Mar Liquor consumption patterns in South Africa
Freely available market intelligence and research on food-bev sectors is notoriously hard to come by in this country. Thus, FOODStuff SA wishes to draw attention to this comprehensive report, a four-year overview of SA’s liquor consumption habits, recently published by SAWIS, the wine industry’s information service.
The report, Liquor Consumption Patterns in South Africa, has been written by Elias Holtzkampf. Some detail:
SA LIQUOR VOLUMES
Beer in volume terms constitutes nearly eighty per cent of the market. Both wine and spirit volumes have declined slightly over the past four years.
The RTD market has increased from 8.6% to 9.5% during this period.
No reference is made to ales nor are ale volumes included. The current accepted volume estimate for ales is 70 000 000 litres. According to research recently conducted by Dr Andrew Charman more than 50% of the products sold in shebeens in the Western Cape are ales. Ales have to a certain extent replaced standard priced wine. If the estimated volume of 70 000 000 litres is added to the wine market, the wine market would have increased from 8.2% in 2006/2007 to 9.2% in 2010/2011.
SA LIQUOR VALUE
Beer dominates the market in volume terms, but in value terms it has only slightly more than half of the market, and has increased its share only marginally. The RTD market has increased substantially from 11.0% to 12.3% over the past four years.
The wine market has declined marginally, with the spirits market declining by 1.4 percentage points. The decline in spirits was mostly due to the declines in brandy volumes.
PAST TWELVE MONTHS OVERVIEW AND FORECAST
In total the liquor market grew by only 2.0% over the past twelve months. With population growth higher than 2% and adding illegal immigrants, our per capita consumption has decreased year on year. This is expected to continue into the next year.
The beer market increased by 2.5% over the past year and the same growth is expected for the next twelve months.
The RTD market grew only marginally over the past year (0.4%) but is expected to increase by 3.7% over the next 12 months. This market is driven by innovation and new products.
Last year the new range of Mainstay cocktails were launched in 3L boxes. These cocktails were so successful that they have now been launched in 1L prism packs, and a Smirnoff and Cranberry cocktail has now also been launched in a 3L box.
Building on the popularity of the ‘Zero’ concept and the popularity of Hunters Extreme, a Hunters Extreme Zero has also been launched. These innovations will definitely fuel market growth.
During the past twelve months the spirit market grew by 1%. The growth came mostly from whisky (9%) with rum (3.1%) and vodka (1.8%) also contributing. This growth was mostly at the expense of the brandy market (-5.2%). This trend is expected to continue into the new year with whisky, rum and vodka (Smirnoff) taking volumes from the brandy market. Mainstay was re-launched earlier this year and the cane market should show growth in the coming year. This will, however, lead to higher than normal sales and promotional activity on Smirnoff and will further increase the pressure on brandy.
The fortified wine market declined by 2% over the past year and is expected to regain the lost volumes during the next twelve months. This is the smallest sector of the liquor market and is dominated by the various Old Brown Sherry products. This market is made up of various smaller types of products and does not warrant further mention.
The sparkling wine market is dominated by JC le Roux; and furthermore all the sales action in this sector occurs around December and to a far lesser extent Valentine’s Day and Mother’s Day. During November and December, nearly 60% of all sparkling wine is sold into the trade with sales to the consumers occurring between 20 and 31 December. The market grew by 4% last year and another 4% volume growth is expected during the next year.
The wine market grew by just over 3% over the past twelve months and the trend is expected to continue into the next year. The super premium and premium markets performed best at 5.8% and 3.3% growth respectively, and the trend is expected to continue into the new year. All the action in this market occurs at the top end of the premium and bottom end of the super premium market.
We also saw a structural change in the premium sector. This sector was previously dominated by 5L boxes and much lower volumes in the 2L boxes. Varietal wine was only available in the smaller 2L box market. The 5L boxes were made up of Rosé, Grand Cru, Late Harvest, Stein and Dry Red. This market has now changed with 3L boxes becoming very popular. These 3L boxes also have varietal wines like Chenin blanc, Cabernet and Sauvignon blanc and this has resulted in a higher average price per litre in the premium sector.