Mark Meek, IWSR

WHISKIES & SPIRITS CONFERENCEMark Meek, CEOThursday, 30 March 2017

Contents• The Numbers • Global• United States• Europe• Asia-Pacific

• Key Global Trends

• Key Whisk(e)y Trends

Global Beer, Wine, Spirits & Cider Summary

• Beer grew by 4.2% from 2010 to 2015 and is forecast to grow 4.8% from 2016 to 2021.

• Wine grew by 4.4% from 2010 to 2015, but we forecast that growth to decline -0.3% from 2016 to 2021.

• Spirits grew by 9.7% from 2010 to 2015 and are forecast to grow 1.4% from 2016 to 2021.

• Cider grew by 33.6% from 2010 to 2015 and is forecast to grow 22.6% from 2016 to 2021.

Overall

• Wine grew by 21.1% from 2010 to 2015 and is forecast to grow 20.3% from 2016 to 2021.


Premium-and-Above

Source: The IWSR 2016 Global Database

Global Growth – All Qualities

2010 2011 2012 2013 2014 20150

100,000

200,000

300,000

400,000

500,000

600,000

489,263 483,640 485,070 486,157 483,630 474,989

322,609343,869 356,862 366,411

379,112 390,551

146,273 150,118 149,907 146,341 143,005 141,826

57,289 55,936 54,160 53,079 53,939 55,097

23,877 24,723 25,973 26,794 27,618 28,771

Vodka Whisk(e)y Rum Gin & Genever Tequila

Figures in ‘000s nine-litre cases Data for domestic consumption Source: The IWSR

Global Growth – Premium-and-Above

2010 2011 2012 2013 2014 20150

10,000

20,000

30,000

40,000

50,000

60,000

70,000

44,04747,273

50,33552,301

53,839

57,753

22,08623,769 25,423 26,404 27,287 27,434

5,545 6,175 6,967 7,704 8,249 9,093

4,528 4,867 5,345 6,246 6,721 7,254

Whisk(e)y Vodka Tequila Gin & Genever Rum


Overall

United States – Beer, Wine, Spirits & Cider Summary

• Beer declined -0.3% from 2010 to 2015, but is forecast to grow 3.7% from 2016 to 2021.






Premium-and-Above


United States: Growth – Premium-and-Above

2010 2011 2012 2013 2014 20150

5,000

10,000

15,000

20,000

25,000

14,66115,736

17,016

18,490

19,423

22,297

16,221

17,34818,478 18,803

19,272

19,318

4,632 5,1145,759

6,352 6,7357,372

2,352 2,545 2,682 2,839 2,924 3,043

1,152 1,301 1,573 1,710 1,826 1,995

Whisk(e)y Vodka Tequila Gin & Genever Rum


United States: Fastest-Growing Spirits Brands – Premium-and-Above


Crown Royal Apple Whisky

Tito's Vodka

Hennessy VS Cognac

Jack Daniel's Tennessee Fire Whiskey

Jack Daniel's Whiskey

1,480

800

350

329

171

2014 to 2015

2014 to 2015

Online Sales in the US: Top 10 Brands1. Bud Light2. Tito’s Vodka3. Corona Extra4. Bulleit Bourbon5. Coors Light6. Stella Artois7. Álamos Wine8. Svedka Vodka9. Absolut Vodka10. Grey Goose Vodka

Source: The IWSR Analysis of top 20 US cities,Drizly, Mini Bar, Total Wines pooled data 2015

Europe – Beer, Wine, Spirits & Cider Summary

• Beer declined -2% from 2010 to 2015 and is forecast to decline -0.1% from 2016 to 2021.

• Wine declined -5.5% from 2010 to 2015 and is forecast to decline by -2.7% from 2016 to 2021.

• Spirits declined -6.2% from 2010 to 2015 and are forecast to decline -0.2% from 2016 to 2021.


Overall

• Wine grew by 3.8% from 2010 to 2015 and is forecast to grow 8% from 2016 to 2021.


Premium-and-Above


United Kingdom: Growth – Premium-and-Above

2010 2011 2012 2013 2014 20150

500

1,000

1,500

2,000

2,500

1,983 2,005 2,0332,118

2,186

2,354

357 371453

552

686

966

172

222 245324 359 382

224207 229 246 278

330

10 14 22 26 32 43

Whisk(e)y Gin & Genever Vodka Rum Tequila


United Kingdom: Fastest-Growing Spirits Brands – Premium-and-Above


Jack Daniel's Whiskey

Bombay Sapphire Gin

Bombay Original Gin

Tanqueray Gin

Hendrick's Gin

121

97

83

26

25

2014 to 2015

2014 to 2015

Asia-Pacific – Beer, Wine, Spirits & Cider Summary

• Beer grew by 7.4% from 2010 to 2015 and is forecast to grow 8.1% from 2016 to 2021.

• Wine grew by 29.8% from 2010 to 2015, but is forecast to decline by -2.1% from 2016 to 2021.



Overall


• Spirits declined -6.2% from 2010 to 2015, but are forecast to grow 21.2% from 2016 to 2021.

Premium-and-Above


Category Blur

Key Global TrendsPremiumisation Consumer Evolution

Health Consciousness Appetite for Flavours Desire for Convenience

Manifested by trends including:- Continuing growth of craft- Premium niches (e.g. mezcal,

Japanese whisky)- Aged brown spirits

But economic problems limiting premiumisation in some regions

Erosion of boundaries between categories:- Products spanning multiple

categories, e.g. ‘speers’- Increased switching from one

category to another

Vodka

Cider

Premium gin/Brown spiritsProsecco/beer

New consumer groups challenging the status quo:- Millennials in developed

markets- Female consumers and

emerging middle class in less developed markets

- Ethnic groups in the US

Consumers adopting healthier lifestyles and more aware of dangers of excessive alcohol consumption:- Less but better trend- Demand for ‘lighter’ drinks- Consumption occasions

changing- Future impact of centennials

Consumers seeking out new experiences and tastes:- Flavour innovation still strong,

though appears to be slowing- Increasing popularity of

cocktails and mixed drinks

Key factor behind many recent developments:- New formats, e.g. canned

wines, Heineken ‘Sub’ at home draught beer device

- Growth of mixed drinks partly due to convenience

- Increase in online sales

Key Whisk(e)y Trends• Blended Scotch Whisky• Malt Scotch Whisky• US Whiskey• Irish Whiskey

Overview of Total Whisk(e)yHeadlines • Total whisk(e)y has grown 3.1% on a three-year

CAGR to 2015, adding almost 12m cases in the last year; this is heavily influenced by the Asia-Pacific region.

• Whisk(e)y has grown its presence within total spirits and the trend is set to continue.

• In addition to the Asia-Pacific, the Americas and Africa & Middle East regions are growing; Europe and duty free are flat; and the CIS is declining.

• With the exception of blended Scotch, exciting growth levels are being seen with the other whisk(e)y segments.

+4.2%+4,172k cases

1. Diageo2. Beam Suntory3. Brown-Forman

Jack Daniel’s (+5.9%)

+3.5%+8,676k cases

1. Diageo2. Pernod Ricard3. ABD

Officer’s Choice (+22.7%)

-2.6%-1,055k cases

1. Diageo2. Bacardi Ltd3. Pernod Ricard

William Lawson’s (-3.4%)

DUTY FREE

WHISK(E)Y WORLD VIEW VOLUME DASHBOARDAMERICAS EUROPE CIS ASIA-PACIFIC AFRICA & MIDDLE

EAST+0.7%+1,054k cases

1. Pernod Ricard2. Diageo3. Brown-Forman

Jack Daniel’s(+7.8%)

+2.1%-1,065k cases

1. Diageo2. Pernod Ricard3. Westside

Johnnie Walker (+5.9%)

WORLD VIEW

+3.1%+11,440k cases

1. Diageo2. Pernod Ricard3. ABD

Officer’s Choice (+22.1%)

+0.8%-353k cases

1. Diageo2. Pernod Ricard3. Brown-Forman

Johnnie Walker (+1.8%)

Market GrowthThree-year CAGRActual cases diff

Top owners

Number one brand

Source: IWSR 2015 volume data. Rankings based on largest volume in 2015. Three-year volume CAGR growth % used (2012 -2015). Actual cases diff = actuals versus previous year.

Whisk(e)y’s share of total spirits is forecast to continue to climb having seen continued growth for the last four consecutive years.

2007 2008 2009 2010 2011 2012 2013 2014 2015 F2016 F2017 F2018 F2019 F2020 F20210

0.05

0.1

0.15

0.2

0.25

0.0%

2.0%

4.0%

6.0%

8.0%

10.0%

12.0%

14.0%

16.0%

0.1841801198873730.1820551519862510.187628357442920.2018872698941070.215857146931290.221250246934228

10.8% 10.9%11.5% 11.3% 11.3% 11.5%

11.8%12.2%

12.5%12.9%

13.3%13.7%

14.1%14.5%

15.0%

IWSR 2015 Data – Whisk(e)y share of total spirits

Global Whisk(e)y Value Share Global Whisk(e)y Volume Share

Valu

e sh

are

Volu

me

shar

e


Overview of Blended Scotch WhiskyHeadlines • Blended Scotch accounts for 20% of total

whisk(e)y sales, but is the only segment to decline.

• Correspondingly, the share of total Scotch has fallen back considerably, particularly for value sales.

• The top four markets for blended Scotch are in decline. Growth comes from less mature markets such as Mexico, Poland, India and South Africa.

Other Whisky

Blended Scotch

US Whiskey

Canadian Whisky

Japanese Whisky

Malt Scotch

Irish Whiskey

3.3%

-1.3%

5.8%

7.9%

10.2%

5.0%

7.6%

Three-year volume CAGR growth to 2015

As we have seen, although blended Scotch accounts for more than 20% of whisk(e)y volume, it is the only sector to experience decline.

53.5%

21.8%

10.5%

6.8%

3.2%2.3%2.0%

IWSR 2015 Data – Global whisk(e)y volume by key sector

Other Whisky Blended Scotch US Whiskey Canadian Whisky

Japanese Whisky Malt Scotch Irish Whiskey

Total whisk(e)y 3.1%


Blended Scotch’s share of total Scotch has started to reduce in the last six years for both value and volume.

2006 2007 2008 2009 2010 2011 2012 2013 2014 201589.0%

89.5%

90.0%

90.5%

91.0%

91.5%

92.0%

92.5%

93.0%

93.5%

76.0%

78.0%

80.0%

82.0%

84.0%

86.0%

88.0%

90.0%

92.9% 92.9% 92.9% 92.9% 92.5% 92.2% 91.9% 91.5% 90.9% 90.4%

87.8% 87.8%88.1% 87.9%

86.4%

85.6%

84.8%

83.7%

82.2%

80.6%

IWSR 2015 Data – Blended Scotch’s share of total Scotch (Axis scale set to show movement)

Blended Scotch Volume Share Blended Scotch Value share

Volu

me

Shar

e

Valu

e Sh

are


Overview of Malt Scotch WhiskyHeadlines • Malt Scotch accounts for 2.3% of total

whisk(e)y and has grown by 5% on a three-year volume CAGR to 2015.

• Malt Scotch has increased its share of total Scotch by 7pts over the last decade.

• Eight of the top 10 markets for malt Scotch are in growth.

Although accounting for a small proportion of total Scotch sales, malt Scotch has grown steadily over the last decade for both volume and value.

2006 2007 2008 2009 2010 2011 2012 2013 2014 2015 -

1,000

2,000

3,000

4,000

5,000

6,000

7,000

8,000

9,000

10,000

-

1,000,000

2,000,000

3,000,000

4,000,000

5,000,000

6,000,000

6,089 6,433 6,373 6,180 6,733 7,329 7,781 8,086 8,485 9,001

2,326,396 2,557,497

2,683,236 2,669,245

3,056,095

3,548,066

3,897,456

4,245,189

4,745,802

5,309,684

IWSR 2015 Data – Long-term malt Scotch volume in ‘000s nine-litre cases and value in $000s USD.

Malt Volume Malt Value


Key Whisk(e)y Trends – Blended & Malt Scotch

High-end Scotch generally performing well• Consumers trading up across most regions in a quest for interesting

brands and/or social status.

Mixed fortunes for blends• Category performing well in most of key Europe, India, Japan, the

Philippines, Mexico and many parts of Africa.• Economic trouble in the CIS, Latin America and parts of Africa and Asia

leading to falling volumes and downtrading.• ‘Blended’ has no discernible identity in many key markets.

Interest in malts continues to expand• Benefit from the perception of sophistication in many markets.• The segment has also benefited from an association with high-quality

craft spirits, which are trending in several regions.

Non-age-statement whisk(e)y not universally accepted• Many new expressions continue to be launched, but many consumers

remain sceptical and continue to see age as an important indicator of quality.

Overview of US WhiskeyHeadlines • US whiskey has grown consistently

throughout the last decade for both value and volume.

• All but one of the top 10 manufacturers are in growth.

• Amazingly in the UK, the home market of Scotch whisky, Jack Daniel’s outperforms the Scotch whisky category at a premium level!

Good growth for US whiskey over 10 years, with year-on-year value growth exceeding volume during this period.

2006 2007 2008 2009 2010 2011 2012 2013 2014 2015 -

5,000

10,000

15,000

20,000

25,000

30,000

35,000

40,000

45,000

-

2,000,000

4,000,000

6,000,000

8,000,000

10,000,000

12,000,000

28,295 28,974 29,444 29,689 30,468 32,326 34,522 36,812 38,972 40,852

5,343,066 5,632,472

5,926,867 6,240,538

6,610,984

7,235,867

8,041,832

8,760,705

9,521,765

10,334,234

IWSR 2015 Data – Long-term US whiskey volume in ‘000s nine-litre cases and value in $000s USD.

US Volume US Value


Key Whisk(e)y Trends – US WhiskeyContinues to expand rapidly• Approachable taste profile.• High status of American products in many markets.• Rise in Millennial spending power and increasing

appeal among new consumer groups.• Craft trend and the resurgence of classic cocktails.• Renewed interest in Bourbon and rye whiskies.

Premium-and-above segment strong Jack Daniel’s still growing

• Dominates in many regions, especially outside the US.• Now the largest whisk(e)y brand by volume in the UK.• Difficulties in some emerging markets due to FX.

Flavours broadening the category’s appeal• Sweeter, accessible taste attracts new consumers.• Danger of over-proliferation, as in the case of vodka?

Overview of Irish WhiskeyHeadlines

• Irish whiskey sees significant growth and shows no signs of slowing.

• The category is dominated by Jameson, which accounts for almost 70% of sales.

• The US market is absolutely critical for success within Irish whiskey.

Forecast

The Irish whiskey category has been growing for years and shows no signs of stopping.

19851986

19871988

19891990

19911992

19931994

19951996

19971998

19992000

20012002

20032004

20052006

20072008

20092010

20112012

20132014

20152016

20172018

20192020

20210.0

2,000.0

4,000.0

6,000.0

8,000.0

10,000.0

12,000.0

Irish Whiskey Sales GloballyIWSR Data to 2015 – Volume in ‘000s nine-litre cases and forecast volumes to 2021.

Volu

me

‘000

s nin

e-lit

re ca

ses

Source: The IWSR 2016 Global Database and forecast volumes

Total Irish Whiskey

Jameson Whiskey

Tullamore Dew Whiskey

Bushmills Whiskey

Paddy Whiskey

Powers Whiskey

All Others

7.6%

9.1%

8.5%

0.8%

6.3%

-15.0%

9.1%

IWSR 2015 Data – Irish whiskey three-year CAGR volume change by brand

67.0%

12.1%

8.8%

2.7%1.3%

8.0%

IWSR 2015 Data – Irish whiskey volume share by brand

Jameson Whiskey Tullamore Dew Whiskey Bushmills Whiskey

Paddy Whiskey Powers Whiskey All Others

1. Source: The IWSR 2016 database2. Three-year volume CAGR 2012-2015

.

Accounting for almost 70% of all Irish whiskey volume in 2015, Jameson dominates the sector not only by size, but by growth – outpacing total by 1.5pts in the latest year (2015).

Key Whisk(e)y Trends – Irish Whiskey

Irish whiskey continues to grow well

• Follows trajectory of US whiskey in many markets.• Performing well in the key markets of key Europe and

North America.• Attracting interest in Australasia, Europe and Africa

where growth has primarily been driven by investment behind Pernod Ricard’s Jameson brand.

• Producers innovating and launching premium variants, which has helped to encourage greater exploration of the category.

• Focusing on developing the stories behind the brands.• Raft of new distilleries due to come on stream soon.

Overview of Japanese WhiskyHeadline

• Japanese whisky, a smaller sector of whisk(e)y, is growing strongly as it becomes available in more markets.

2006 2007 2008 2009 2010 2011 2012 2013 2014 2015 F2016 F2017 F2018 F2019 F2020 F2021 -

2,000

4,000

6,000

8,000

10,000

12,000

14,000

16,000

Japanese Whisky – IWSR 2015 volume ‘000s nine-litre cases and forecast to 2021.

Japanese

Volu

me

sale

s ‘00

0s n

ine-

litre

case

s

Though considerably smaller than other whisk(e)y sectors, Japanese whisky is also on a steady upward trajectory.


The number of countries Japanese whisky is consumed in has increased significantly over the last decade.

2006 2007 2008 2009 2010 2011 2012 2013 2014 2015

10 11 14 17 28 33 38 41 45 47

IWSR 2015 Data – Japanese whisky – number of countries consumed in.

Num

ber o

f cou

ntrie

s ava

ilabl

e in


Key Whisk(e)y Trends – Japanese WhiskyGreater interest in Japanese whisky

• Premium image and reputation for high quality.• Consumer curiosity for new and unique

products.• Approachable taste profile.• Volumes still small, and growth limited by

allocations.

Any Questions?

Mark Meek, IWSR

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