Wine consumption in Spain

Wine consumption in Spain

Rafael del ReyGeneral Manager

XVIII Giornata Internazionale Vitivinicola - Siena, 28 maggio 2005

2

How much is consumed?

How has consumption evolved?

What type of wines are consumed and where?

At what prices?

By whom?

3

Unfortunately, nobody really knows how much wine is actually consumed in Spain…

Source Latest year FigureMM Hltrs

Ministry of Agriculture (viticultural balance: rest of…)

Jul 2004 13,90

Ministry of Agriculture(Inquiry on food & Beverage consumption)

Dec 2004 11,98

Institute of Statistics*

* Total sales minus exportsDec 2003 16,85

Nielsen Dec 2004 6,58

... Although it should be around

12/13 million

hectoliters

4

Therefore, differences arise on how has consumption evolved…

18,5

16,6

15,9

17,216,8

16,316,0

15,3

14,5 14,5 14,6 14,814,3 14,2

13,8 13,8 13,9

18,1

16,2

15,214,7

13,513,2

13,512,9

12,0

13,0

13,9 14,213,7

13,1

12,312,0

11,612,0

6,7 6,7 6,5 6,7 6,7 6,5 6,4 6,5 6,6 6,3 6,26,5

6,8 6,7 6,6

1987 1988 1989 1990 1991 1992 1993 1994 1995 1996 1997 1998 1999 2000 2001 2002 2003 2004

M of Ag (balance)

M of Ag (inquiry)

Inst. Stat.

AC Nielsen

… although most indicators show clear decrease.

-24,8%; -4,6 Mill.

-25,9%; -4,2 Mill.

1988 to 2004

5

Something similar (different sources) happens in terms of value…

2.461 2.414 2.461 2.422

1.094 1.1291.190

1.472

1.875 1.894

2.060

1.812

2.050

858983

1.1081.164

1.305 1.354 1.376

2.795

1995 1996 1997 1998 1999 2000 2001 2002 2003 2004

M of Ag (inquiry)

Inst. Stat.

AC Nielsen (still wine)

… although most reliable figures show increase.

1995 to 2003: +956 Mill. € (+8,2% p.a.)

2000 to 2004: +334 Mill. € (+3,2% p.a.)

1996 to 2004: +518 Mill. € (+6,1% p.a.)

6

In terms of per capita wine consumption:46,6

41,438,8

37,3

34,3 33,3 34,132,6

30,533,0

35,1 35,6 34,332,7

30,6 29,628,2 28,4

1987 1988 1989 1990 1991 1992 1993 1994 1995 1996 1997 1998 1999 2000 2001 2002 2003 2004

Total wine (Ltrs/capita)

Ltr/person/year %

Ltr/person/year %

AO 6,3 8,2 1,9 30,3%Table 36,4 18,2 -18,2 -50,0%

Sprakling 1,9 1,1 -0,8 -43,2%Other 2,0 0,9 -1,1 -56,0%

Total wine 46,6 28,4 -18,2 -39,1%Beer 64,4 59,1 -5,3 -8,2%Other alcoholic 6,5 6,3 -0,2 -3,1%Fruit juice 6,7 18,4 11,7 175,2%Mineral water 23,0 66,6 43,6 189,7%Soft drinks 57,6 66,0 8,4 14,6%

Total beverages 204,8 244,9 40,1 19,6% 204,8 244,9 40,1 19,6%

151,1 63,8 73,1%

117,5 93,8 -23,7 -20,2%

1987-042004

87,3

1987-041987

Total beberages (Lit per capita)

2004 1987

Consumo en España 2004

The same decrease in wine (-39% since 1987) takes place...

… which is not caused by the increase of other alcoholic beverages, but is due to growth of non-alcoholic.

7

By place of

consumption:

Home; 483,35;

40%

Horeca; 714,44;

60%

By type of wine:

Sparkling; 45,7; 4%

Other; 37,1; 3%

Table; 768,2; 64%

AO; 346,7; 29%

8

By type of wine and place of consumption:

Home AO9%

Home other2%

Home Sparkling

2%

Horeca other1%

Horeca Sparkling

2%

Home table27%

Horeca AO20%

Horeca table37%

Products & channel %Home AO 103,8Home table 327,8Home sparkling 25,9Home other 25,8Horeca AO 242,9Horeca table 440,4Horeca sparkling 19,8Horeca other 11,3Total wine domestic 1.197,8 1.197,8 100,0%

483,4

714,4

2004 (million ltr)

40,4%

59,6%


Mill Ltrs % Mill Ltrs %Home AO 35,78 52,6%Home table -565,02 -63,3%Home sparkling -22,83 -46,8%Home other -12,46 -32,6%Horeca AO 65,89 37,2%Horeca table -81,36 -15,6%Horeca sparkling -6,99 -26,1%Horeca other -28,77 -71,7%Total wine domestic

-615,75 -34,0% -615,75 -51,4%

EVOLUTION BY PRODUCT AND CHANNEL

Var. 1987-04 By product

-564,52

-51,23

-53,9%

-6,7%

Var. 1987-04 By channel


Var. 1987 - 2004 in million Ltrs

36

-23

-12

66

-81

-7

-29

-565

-616

Home AO

Home table

Home sparkling

Home other

Horeca AO

Horeca table

Horeca sparkling

Horeca other

Total wine domestic

3070

9

By average price (according to Nielsen):

30,3

31,0

19,0

7,6

8,8

3,3

5,7

26,2

23,9

13,1

20,6

10,6

Price per unit off-trade (year 2004)

8,13€/bot

4,82€/bot

3,33€/bot

2,46€/bot

1,49€/bot

0,73€/litro

IN VOLUMEN IN VALUE

62% of total wine is sold below 1,50 € /bot-Ltr, which only represent 32% of total value of domestic wine consumption

10

By region of consumption (home

consumption):

1.999 Wine at home 2.004 Wine at

home

Cantabria 26,81 Cantabria 21,19País Vasco 22,34 Cataluña 16,99Cataluña 21,08 Baleares 13,61Asturias 19,30 Asturias 13,29Galicia 19,21 Galicia 11,89Baleares 15,57 País Vasco 11,63Navarra 15,57 Total España 11,51Total España 15,20 Navarra 11,15Madrid 14,99 La Rioja 10,86Castilla-LM 14,50 Castilla y León 10,80Castilla y León 13,70 Madrid 10,41Valencia 13,60 Valencia 10,40Aragón 12,36 Andalucía 10,38Andalucía 11,78 Castilla-LM 9,93La Rioja 11,75 Aragón 9,22Murcia 11,52 Extremadura 8,90Canarias 8,62 Murcia 7,85Extremadura 6,91 Canarias 7,63


Var. 2001 - 04 in Ltrs/person/year

-3,69

-4,58

-1,40

-3,67

-0,99

1,99

-3,14

-6,01

-10,71

-5,62

-3,20

-4,57

-1,96

-4,42

-2,90

-7,32

-0,89

-4,09

-21%

-19%

-13%

-31%

-38%

-48%

-24%

-28%

-8%

-21%

-31%

-24%

-12%

-32%

-25%

29%

-32%

-11%

Cantabria

Cataluña

Baleares

Asturias

Galicia

País Vasco

Total España

Navarra

La Rioja

Castilla y León

Madrid

Valencia

Andalucía

Castilla-LM

Aragón

Extremadura

Murcia

Canarias

Spain is divided into northern consumers with 10 Lit/head and over, and central, southern and eastern consumers below the average, with:

•The Balearic Islands in the leading group; and

• Aragon in the North though well below the averageNote: Large increase in population in recent

years

11

Above 15 Lit/person/year

Between 11 an 15 Lit/person/year

Between 10 and 11 lit/person/year

Below 10 Lit/person/year

Is it more difficult to drink wine in warmer areas?

Wine consumption at home by region:

12

By size of the city (home consumption): more wine is consumed in small towns than in larger cities

14,36

-1,84

11,63

-5,12

11,69

-3,91

12,86

-3,02

11,55-2,82

Less than2.000

2.000 to 10.000 10.000 to100.000

100.000 to500.000

More than500.000

Lit/person/year 2003

Change 1992-2003

More detail on consumers at home (1):

11,55

-3,89

11,64

-6,43

12,83

-3,14

12,16

-3,97

Low Medium-low Medium High andmedium-high

Lit/person/year

Change 1997-2003

By socio-economic status (home consumption): slightly more wine is consumed in houses with a medium and high status and larger decrease takes place in medium-low and low income families.

Rosé; 55.341,15;

13%

White; 100.686,57;

23%

Red; 275.635,28;

64%

By color (home still wine): two thirds are red wine, 23% white and 13% rosé

13

By age of the house lady (home consumption): wine consumption is clearly associated to elder age6,14

-4,83

9,65

-4,84

15,04

-4,95

19,74

-3,64

Below 35 years old Between 35 and 49years old

Between 50 and 64years old

65 years old andmore


Change 1997-2003


9,64

-1,89

13,51

-4,88

Working outside home Work at home


Change 1997-2003 By activity of the house lady (home consumption): much more wine is consumed in traditional houses, where, however, decrease has being much larger.

!!!!

Does wine in our countries have a problem of acceptance among young people?

14

By size of the family (home consumption): the larger the family, the lesser wine is consumed, and only in houses with one person (old / young??) consumption has grown

20,09

2,03

19,2

-4,22

12,08

-6,419,72

-4,45

8,05-4,87

1 2 3 4 5 and +


Change 1997-2003


16,21

-4,56,29

-3,75

9,26

-3,79

No children Children > 6 yr Children between 6 and 15


Change 1997-2003 By age of the children (home consumption): more wine is consumed in houses with no children and those with elder children, as compared to houses with young sons and daughters

More children probably means younger

15

Conclusions:• Clear decrease of wine consumption in Spain (as in the other traditional wine

producing countries)

• Mainly in table (popular) wine consumed at home, while AO wine is growing, particularly on-trade (also AO regions grow)

• Probably due to changes in patterns of consumption– Less basic products in exchanged for few higher quality

– Less traditional lunch (big, quite, followed by a “siesta”), though good dinners outside

– More quick meals

– Problems with traffic (How much can be consumed?)

• Affected (distribution, presentation, advertisement) by the consideration of wine as a dangerous alcoholic drink (legally associated with drugs) need to separate wine from other drinks Wine Act 24/2004

• Not very attractive for younger generations (“a parent’s drink”); consumption directly link to age urgent need to make it an attractive beverage (presentation, degree of alcohol, innovation, etc), also as way to learn/enter moderation

• Not due to prices, although too expensive in restaurants innovation in distribution (direct sales? Enoturism?) growth of firms (balance of powers between wineries versus distributors)

16

Conclusions (2):• We are loosing a generation of consumers while wine is less attractive to

young people (as opposed to young generations in Anglo-Saxon markets) need to innovate, marketing, presentations

• The great importance of on-trade consumption – makes it comfortable for small bodegas to exist and limits possible entrance of

foreign competitors, but,

– on the other hand, limits growth of domestic firms, increases power of distributors (and regional administrations and unions) on the medium term and makes needed export less attractive.

• Off-trade distribution is concentrating everywhere and may contribute to increase consumption at home (following trends in northern countries).

• The need to supply larger amounts of quality wine in stablestable terms at competitive prices, both domestically and abroad, generates doubts on the EU policy regarding quality wine associated to specific producing regions increasing need of flexible laws on presentation and AO

17

At the end,…… two questions arise:

• Is it reasonable to expect a large increase in

domestic demand to absorb our larger production?

If not, export will be required, but then:

• Can we face export markets with the same criteria

and mentality than we do our domestic markets?

Thank you

Rafael del Rey

XVIII Giornata Internazionale Vitivinicola - Siena, 28 maggio 2005

Documents

Wine consumption in Spain