Beer market decline in UK

BEER MARKET DECLINE IN UK

Team 10:Magda Filipska, Michal Guzik, Louise Colin,Nicolas Lamaire, Kenzie Leanerts, Ruben Geavert,

1. Introduction of the case

2. Method

3. Our application

a. Procedure

b. Results

4. Weaknesess

‘The UK population drinks less since

2004’’:

‘The UK population drinks less since 2004’:

DRINKING IN PUBS BECAME

TOO EXPENSIVE

LESS SUITABLE FOR IN-HOME DRINKING

LACK OF INNOVATION

Source: Mintel report, ‘Beer – UK’, December 2011

What is the reason

for beer market

decline in UK?

HYPOTHESIS

1. Market declines because of economical crisis

2. Market declines because of healthy lifestyle of consumers

3. Market declines because of bad weather

*assumption: if people google ‘beer’, they will buy it

WHAT IS OUR METHOD ?

TRENDSPOTTING

Technique of tracking general tendencies in consumer interest and behaviour.

Use of:

OUR APPLICATION

H1: People search for „cheap beer” in times of crisis

Cheap beer

Cheap beer

Beer offers

Tesco beer Beer prices

Beer deals

Crisis

GDP Unemploy-ment rate

1) Google Trends: search for terms related with cheap beer

2) Google Public Data Explorer: indicators for crisis

3) Check correlations between crisis and cheap beer indicators

H1: People search for „cheap beer” in times of crisis

• When unemployment rate gets higher, more people search for beer offers (r=0,91)

• When unemployment rate gets higher, less people search for beer prices (r=-0,63)

• GDP is positively correlated with Google users interest in „cheap beer” (r=0,43)

H1: People search for „cheap beer” in times of crisis

cheap beer beer offers tesco beer beer deals beer prices

Unemployment rate -0,20454 0,909714 0,464214 - -0,62532

GDP 0,432173 -0,23236 0,146774 - 0,271101

H2: People are not interested in buying beer because they want to live healthy

„Healthy lifestyle” „Beer”

1) Google Trends: search for „heathy lifestyle”

2) Google Trends: search for term „beer”

3) Check correlations between beer and healthy lifestyle

H2: People are not interested in buying beer because they want to live healthy

r = -0,23

H3: People drink less beer because of bad weather

Weather

Min. temperature

Rain (mm)

Max. temperature

Sun hours

„Beer”

1) Google Trends: search for „beer”

2) Meteorological office UK: temperature, rain, sun (Oxford)

3) Select meteorological data only for summers (June – September)

4) Calculate average max. and min. temperature, sum of rain mm, sum

of sun hours for each summer (2006-2012)

5) Calculate average number of „beer” searches in each summer

6) Calculate correlations between „beer” searches and weather

indicators

H3: People drink less beer because of bad weather in summer

Max. temp Min. temp Rain (mm) Sun hours„Beer” 0,069662 0,075526 0,354535 0,299066

Summer (OXFORD) "Beer" Max temp Min temp Rain mm Sun hoursJ un - Sep 2006 83 23,525 13,3 242,1 873,6J un - Sep 2007 74 20,5 11,45 240,2 695,9J un - Sep 2008 70 20,175 12 307,8 564,1J un - Sep 2009 69 21,825 11,925 177,7 769,9J un - Sep 2010 72 21,775 11,925 251,1 676,3J un - Sep 2011 81 20,525 10,625 194,6 677,4J un - Sep 2012 84 19,9 11,75 394,9 648,1

1. Averages and sums for beer search and weather indicators

2. Correlations between „beer” and weather indicators

WEAKNESSES OF THE METHOD

• Hard to apply for FMCG• Different data sources = different time span• Noise – people search for beer also when they

mean i.e. beer festivals, beer pong, beer glasses• Data exported to excel file inconsistent with

graphs presented by Google Trends• Relative numbers instead of real number of

searches

THANK YOU!