Tag: ecommerce

Drinks E-commerce to grow exponentially in three years – IWSR Report

The total value of the e-commerce sector in headline markets is expected to grow at an unprecedented rate between 2022-2025, according to IWSR.

Over the next five years e-commerce sales of alcohol across key global markets are predicted to expand by +66% to reach more than US$42 billion, according to a comprehensive strategic study published by IWSR Drinks Market Analysis.

Among the 16 focus markets examined in the IWSR report (Australia, Brazil, Canada, China, Colombia, France, Germany, Italy, Japan, Mexico, Netherlands, Nigeria, South Africa, Spain, the United Kingdom and the United States), e-commerce value increased by about +12% in 2019, and then by almost +43% in 2020 during the height of the pandemic.

The report states: “Looking ahead to 2025, e-commerce is projected to represent about 6% of all off-trade beverage alcohol volumes, compared to less than 2% in 2018. The greatest forecast e-commerce value growth will come from the US, thanks to average annual growth in the country of about +20%, which will see it become the top global market for online beverage alcohol.”

The newly released IWSR study also found that online business models for alcohol sales are becoming more diverse, leading consumers to increasingly shift between channels and retailers according to their specific needs at any given time.

“In general terms, the online beverage alcohol space can be perceived as two distinct, but overlapping, worlds: more ‘traditional’ e-commerce – often omnichannel or online specialists – accessed via websites and used by older consumers seeking good prices and known brands and who are prepared to wait for delivery; and more ‘modern’ app-driven e-commerce – often on-demand or marketplaces – used by younger legal drinking age consumers willing to pay for rapid delivery and looking for interesting/premium brands,” the report states.

Guy Wolfe, strategic insights manager, IWSR Drinks Market Analysis, commented: “Given the pandemic and overall changing consumer shopping behavior, it’s certainly not surprising that alcohol e-commerce is growing very quickly. But what’s interesting is to see the significant variations that have developed both across and within markets in how different consumer groups shop via e-commerce and what their priorities are.

“E-commerce has clearly become engrained for many consumers, cementing its place as the third sales channel for beverage alcohol purchase,” confirms Wolfe.

 

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Italy’s online wine sales increased 310% H1

E-commerce in Italy is on the fast track. According to the latest Nomisma Wine Monitor Report (collaboration with Nielsen), online wine sales in Italy have increased by 310% in the first half of the year compared to the same period last year. The value grew by 350%.  Overall, this segment currently accounts for two percent of retail wine sales.

“The average price of wines bought online is 38% higher for still wines and 19% higher for sparkling wines than for wines bought on the shelf, a difference that results from the different composition of the two shopping carts – typologically as well as in terms of brand and packaging,” says Denis Pantini, head of Agribusiness and Wine Monitor at Nomisma.

 

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Moët Hennessy and Campari team up for joint venture ecomms business

Moët Hennessy has teamed up with Italian company Campari to launch a joint venture ecommerce business to sell premium wines and spirits across Europe.

The new business venture will see both companies invest in the pure-play digital retailer, which will be based on Campari’s existing ecommerce channel Tannico, which was launched by the Italian drinks producer. Tannico also owns a majority stake in the e-commerce platform Ventealapropriete.com, which sells premium wines and spirits in France. Together, the two platforms generated pro-forma aggregated sales of over €70 million in 2020.

Under the terms of the agreement, Campari is to transfer its stake in Tannico into the newly set up joint venture.  Under the terms of the agreement, Campari  is to sell half of the joint-venture’s equity capital to Moët Hennessy for 25.6 million euros ($30 million) in cash,  the company said.

The combined business will be headed up by Marco Magnocavallo, CEO of Tannico, who remains a key minority shareholder in the business, along with his management team.

Philippe Schaus, President & CEO, Moët Hennessy says “The partnership represented a significant step forward in the company’s global ecommerce development strategy.”

“While e-commerce was already a growing channel for wines and spirits, the global pandemic has triggered a significant acceleration,” he noted.

Bob Kunze-Concewitz, CEO of Campari Group says “It would allow Tannico to grow and further strengthen its footprint and expertise in the online retailing of spirits & wines.”

Magnocavallo agreed, saying that with the backing of the two companies, the new business would have the “firepower” to consolidate the fragmented European e-commerce sector and “offer a qualitative, sizeable and integrated route to market option catering to the needs of all its wines and spirits suppliers”.

 

Global alcohol consumption will bounce back to pre-Covid levels by 2023

Global alcohol consumption will return to pre-Covid levels by 2023, according to recent IWSR data, with the market already showing signs of recovery.

Projected to grow by 2.9% in volume by the end of 2021, the research forecasts that total alcohol consumption will reach pre-Covid levels within two years and will continue to increase steadily until 2025.

Total alcohol volume decreased by 6.2% globally during 2020, affected by lockdowns and other restrictions.   Total wine and beer volumes are both forecast to be down about -9% in 2020 and are unlikely to regain volumes for several years.   However, within the wine sector, sparkling wine volume consumption is anticipated to recover to 2019 levels by 2023, along with the rest of the alcohol market. Premium-and-above Prosecco is expected to be least impacted by Covid, and premium-and-above still wine forecast to recover lost volumes by 2022.

This growth will be boosted by several factors including the growth of ecommerce which is up 45% from 2019; to reach US $29 bn in 2020, and RTD’s, the industry quickly adapting in key markets and the increasing sophistication of the at home occasion in many markets.

“In many global markets Covid-19 accelerated the impact and growth of key industry drivers, such as the development of ecommerce, premiumization, the rise of the home premise, moderation and the need for convenience in product formats,” said the IWSR’s CEO Mark Meek.

“These are the trends that will also underpin the industry’s resilience as it pivots to meet consumers where they are in the years to come. Additionally, across many markets, some segments of the population now have significantly more disposable income than they did in 2019, some of which will be spent on beverage alcohol products.”

Another trend set to give alcohol a leg up is product premiumization, according to the IWSR, with premium-and-above wine and spirits forecast to increase by 25.6% in total volume between 2020-2025 compared to 0.8% volume growth over the same period for brands in lower price tiers.

Meredith uses AI to sell wine

Meredith Corporation the US largest brand-powered food, lifestyle and entertainment media company, and Ste. Michelle Wine Estates, the third-largest premium wine company in the U.S., are exclusively partnering to position the remarkably broad and deep Ste. Michelle Wine Estates portfolio as the perfect wine pairings of choice through the use of Meredith’s smart technology capabilities, including proprietary first-party data, real-time consumer insights and predictive advertising capabilities. This alliance marks the first time a major advertiser has joined forces with Meredith to create and deliver a program rooted in artificial intelligence.

The program taps machine learning techniques to automatically classify recipes on Allrecipes, the world’s largest recipe site with a reach of 55 million consumers, and the diverse wines in the Ste. Michelle Wine Estates portfolio. An AI-based algorithm then combines the classifications to automatically generate specific wine pairings for each recipe. Suggested pairings appear adjacent to recipes and are automatically linked directly to local grocery stores or to e-commerce partners such as Instacart and Amazon Fresh for fulfillment using Meredith’s proprietary Shopper Marketing platform. Automated wine and side dish pairings can also appear in interactive meal plans which permit users to customize various elements of the meal based on their personal preferences.

Real-time insights generated from this program include user location store proximity, impressions by channel, trending products and trending recipes to help create usage occasions that reinforce the Ste. Michelle Wine Estates wines of choice, keeping the brand top of mind for all entertaining purposes. As part of the campaign, high-impact and targeted media also engages users with Ste. Michelle Wine Estates across Meredith platforms, including strategic video alignments, custom native content, high-impact media and editorial sponsorships.

“We are very excited to partner with Meredith to accelerate consumer engagement with our portfolio of world-class wines,” said Jim Mortensen, President and CEO of Ste. Michelle Wine Estates. “This data-driven approach represents a smarter, more impactful, results-oriented form of advertising, allowing us to reach high-value consumers at the point at which their wine purchasing decisions are made.”

Corbin deRubertis, Head of Innovation for Meredith, commented, “Consumers are increasingly expecting media platforms to do more than just present search results. They’re gravitating to smart platforms that take into account all available data to make intelligent recommendations. Picking the perfect wine to pair with a new dish is exactly the type of challenge we can solve at scale, and we’ve combined our deep, first-party insights, including our unparalleled context taxonomies, with new machine learning and AI techniques to deliver a next-generation consumer experience that also drives brand equity and product purchase for our client.”

In addition to investing with Allrecipes, Ste. Michelle Wine Estates will leverage Meredith’s scale by extending its exclusive partnership across the company’s O&O assets. Meredith owns the largest premium content digital network for American consumers, reaching 175MM engaged consumers across its platforms.