Professional Documents
Culture Documents
Sector Stream – Beverages
Final Report
October 2011; v1.8
www.foodandbeverage.govt.nz
This information was prepared by Coriolis solely for the use of our client; it is not to be relied on by any third party without prior written consent.
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It draws conclusions on potential industry strategic directions
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It forms a part of the wider Food & Beverage Information Project
and will be updated annually.
PAGE 3
TABLE OF CONTENTS
Section Page
Contents 4
Glossary of terms 5
Methodology & data sources 6
F&B IP Overview 7
Summary & conclusions 9
Sector overview 17
Wine 43
Appendices 62
GLOSSARY OF TERMS
This report uses the following acronyms and abbreviations
PAGE 5
METHODOLOGY & DATA SOURCES
Data was from a variety of sources, and has a number of identified limitations
- This report uses a range of information sources, both qualitative - Coriolis makes no representation, warranty or guarantee,
and quantitative. whether express or implied, as to the quality, accuracy,
reliability, currency or completeness of the information
- The numbers in this report come from multiple sources. While we provided in the report.
believe the data are directionally correct, we recognise the
limitations in what information is available. - All trade data analysed in all sections of the F&B Information
- In many cases different data sources disagree (e.g. project are calculated and displayed in US$. This is done for a
Statistics New Zealand vs. FAO vs. UN Comtrade). range of reasons:
- Many data sources incorporate estimates of industry 1. It is the currency most used in international trade
experts. 2. It allows for cross country comparisons (e.g. vs. Denmark)
- As one example, in many cases, the value and/or volume 3. It removes the impact of NZD exchange rate variability
recorded as exported by one country does not match the 4. It is more comprehensible to non‐NZ audiences (e.g. foreign
amount recorded as being received as imports by the investors)
counterparty [for understood reasons]. 5. It is the currency in which the United Nations collects and
tabulates global trade data
- In addition, in some places, we have made our own clearly noted
estimates. - The opinions expressed in this report represent those of the
industry participants interviewed and the authors. These do not
- Coriolis has not been asked to independently verify or audit the necessarily represent those of Coriolis Limited or the New
information or material provided to it by or on behalf of the Zealand Government.
Client or any of the data sources used in the project.
- The information contained in the report and any - If you have any questions about the methodology, sources or
commentary has been compiled from information and accuracy of any part of this report, please contact Tim Morris, the
material supplied by third party sources and publicly report’s lead author at Coriolis, on +64 9 623 1848
available information which may (in part) be inaccurate or
incomplete.
PAGE 6
F&B INFORMATION PROJECT
The New Zealand Food & Beverage Information Project is designed to be the foundation of facts and figures on
which a range of audiences can build
Structure of the New Zealand Food & Beverage Information Project
(2011)
PAGE 7 Note: Every year two subsectors are completed in more detail. This year it is Seafood and Nutraceuticals
BEVERAGES SECTOR ANALYSIS
This analysis of the New Zealand beverages sector forms a part of the wider Food & Beverage Information
Project
Structure of the New Zealand Food & Beverage Information Project
(2011)
PAGE 8
TABLE OF CONTENTS
Section Page
Contents 4
Glossary of terms 5
Methodology & data sources 6
F&B IP Overview 7
Summary & conclusions 9
Sector overview 17
Wine 43
Appendices 62
BEVERAGES – WINE – SITUATION
The wine industry has shown rapid growth driven by Marlborough Sauvignon Blanc; further diversification into
new varieties and new regions should occur going forward
New Zealand wine (exports US$774m) top three wineries foreign owned; New World wines are an
important part of a global portfolio.
- Wine production is a fast growing industry for New Zealand with
a number of large players
- Many wineries are now foreign owned (Montana, Nobilo); Competitors
ongoing acquisitions are occurring
- New Zealand wine competes directly with other premium
- Large group of small‐to‐medium sized New Zealand owned temperate climate countries
wineries who are capital constrained
- France, Germany, USA, South Africa, Chile
- The New Zealand wine industry has achieved spectacular growth
over the last 40 years
- From NZ£51 in exports in 1960 to NZ$1b in 2009 Consumers/Markets
- Achieved premium price position in–market on par with - Global Financial Crisis (GFC) depressed global demand, pushing
France (which has been producing wine for ~2,000 years) down prices; this in turn triggered a decrease in global production
- Competes successfully with major old world wine - These falling prices have impacted New Zealand wines
producers (e.g. France, Germany) - Wine consumption is declining in many EU markets (France, Italy,
- Success to date almost exclusively Marlborough Sauvignon Blanc Spain) due to economic conditions; however, New Zealand’s key
markets (AU, UK, USA) have been stable to increasing
- A “must‐have” wine for major wine players
- Wine sales success to date in wine has been primarily in Anglo‐
- Good Marlborough wine area is now almost all used Saxon 4 (USA, Canada, UK & AU);
- Emergent secondary regions are 20 years behind Marlborough in - China is an emerging growth market; now New Zealand’s #5
terms of development export destination
- Hawkes Bay, Waipara and Central Otago stand out as the - Available market data suggests that the growth of New Zealand
next best prospects wine is at the expense of French wines (i.e. that the two are close
substitutes to consumers)
- Other than Gimblett Gravels Syrah, most still to find “their”
wine
- Foreign ownership plays a big part in the wine industry, with the
PAGE 10 GFC = Global Financial Crisis; Source: Interviews; Coriolis
BEVERAGES – OTHER BEVERAGES – SITUATION
Outside wine, the New Zealand beverage sector is primarily focused on production for domestic consumption;
however, exports are growing
Beer (exports US$26m) Coca‐Cola
- Beer brewing is a low growth duopoly controlled by two - Frucor, former Apple & Pear Marketing Board Juice
international companies brewing for domestic consumption Business, now a division of Suntory (Japan); maker of V
energy drink and Pepsi licensee in New Zealand
- Lion, founded in New Zealand, owned by Kirin (Japan)
- Smaller innovators emerging outside soft‐drinks/water (e.g.
- Dominion Breweries, founded in New Zealand, now owned Charlie’s/Phoenix recently acquired by Asahi)
by Asia‐Pacific Breweries (Heineken/F&N)
Juice (exports US$38m)
- There are a wide range of smaller/micro breweries
- New Zealand exports apple and kiwifruit juice, primarily as a
- New Zealand is a minor beer exporter1, and imports +50% more secondary product of the fresh fruit industry; New Zealand
beer than it exports2, driven in part by the foreign ownership of imports +20% more juice than it exports2
its two key breweries; however beer export surged in the last
year (driven by smaller microbreweries) Water (exports US$8m)
Spirits (exports US$58m) - New Zealand has excellent theoretical potential to produce and
export premium bottled water; however to date it has realised
- Independent Liquor, recently purchased by Asahi, is the largest very little of this potential despite 30 years of trying
player in spirits; Independent initially developed its business
around flavoured RTD3 drinks, however it is diversifying into other
alcoholic beverages
- There are a range of smaller firms in spirits achieving strong
growth and the sector is well positioned for further growth
Soft‐drinks (exports US$67m)
- Non‐alcoholic beverages are a duopoly controlled by two
international companies that primarily manufacturing for
domestic consumption
- Coca‐Cola Amatil, Australian‐listed Asia‐Pacific licensee of
PAGE 11 1. Mexico, for example, exports 87x as much beer as New Zealand; NZ currently exports about as much beer as the Dominican Republic; 2. in value terms; 3. RTD = ready‐to‐drink
BEVERAGES – QUANTITATIVE SCORECARD
Most of the beverages produced in New Zealand are consumed in New Zealand; the wine industry is the key
export success story to date
Key metrics # CAGR CAGR ABS Key markets % US$m CAGR CAGR ABS
(2010) (00‐10) (09‐10) (09‐10) (2010) (2010) (00‐10) (09‐10) (09‐10)
Wine $774 24% 21% $137 Lion 1,400 $605m France ‐ Loire Valley (Sancerre,
Spirits $58 9% 46% $18 Pernod Ricard 750 $337m Pouilly Furme)
Beer $26 12% 64% $10 Delegats Group 50 $220m ‐ Bordeaux Regions (Entre‐
Soft drinks $67 7% 23% $13 Constellation Brands 270 $215m Deux‐Mers, Pessac‐
Juice $38 7% 5% $2 Villa Maria 250 $141m Leognan)
Water $8 18% 51% $3 DB Breweries 500 $461m Germany ‐ Alsace, Mosel
Independent Liquor 300 $414m USA ‐ Washington State, Oregon
Total $971 18% 23% $182 Coca Cola Amatil 1,100 $493m Chile ‐ Valparaiso, Casablanca
Frucor 900 $380m Valley
PAGE 12 1. Manufacturing only; Source: various company annual reports; various company websites; Kompass; Coriolis analysis
BEVERAGES – WINE – SWOT ANALYSIS
The New Zealand wine industry is well positioned for further growth, but pressures will continue
Strengths Weaknesses
‐ Islands in the middle of the South Pacific the size of Italy but with only the population ‐ Large number of small wineries with low/no economies of scale
of Singapore; therefore relatively unspoilt
‐ High debt levels of many small and medium sized wineries
‐ Strong and growing success in premium/super‐premium
‐ Highly dependant on four countries (AU, UK, USA and Canada)
‐ Achieves a strong price premium in key markets (similar to France)
‐ Increasing exports of bulk wine
‐ New Zealand Sauvignon Blanc now a “must have” for global wine companies
‐ Lack strong super‐premium heritage brands as demanded by brand and status
‐ Growth in market share in key markets (e.g. USA) conscious Asian consumers
‐ Innovative and quality‐focused winemakers
Opportunities Issues/Threats/Risk
‐ Continued income growth in Asian markets ‐ Growing consolidation of the wine industry
‐ Continued growth of New Zealand wine consumption in China ‐ Difficult finding good distributors to gain access into key markets
‐ Low share in Europe (two thirds of global wine consumption) outside British Isles ‐ Continued growth of bulk wine trade reducing the value of wine
‐ Joint in‐market activity spreading cost of marketing ‐ Continued impact of GFC, reducing wine spend
‐ Automated vineyard pruning technology reducing requirements for labour ‐ Oversupply of wine globally increasing pressure on price
‐ Strong and growing demand in Asia for premium fortified wines/wine based spirits ‐ Continued growth of retail brands/store brands in wine
(e.g. cognac)
PAGE 13 Source: Interviews; Coriolis
BEVERAGES – NON‐WINE – SWOT ANALYSIS
New Zealand is currently less well positioned outside wine; however the country is well positioned for further
growth
Strengths Weaknesses
‐ Islands in the middle of the South Pacific the size of Italy but with only the population ‐ No deep cultural unique “spirits” associated with New Zealand
of Singapore; therefore relatively unspoilt
‐ Long shipping distance to traditional western markets
‐ Closer shipping distances to Asia compared to European competitors
‐ No large New Zealand owned champion growing and driving New Zealand brand
‐ Demonstrated capabilities in beverage production position in beverages
‐ On‐going growth and success of Frucor/V, and Charlies/Phoenix in non‐alcoholic ‐ Limited culture or mentality of super‐premium branding or positioning (e.g. relative
drinks category to France)
‐ Emergent success in spirits (e.g VoC and 42Below) ‐ Low levels of skills outside wine relative to peer group
‐ Not a producer of many base ingredients of typical beverages
Opportunities Issues/Threats/Risk
‐ Leverage success of New Zealand wine industry; build on awareness of New Zealand ‐ Limited opportunity shipping “water” around the world if it isn’t a premium product
in wider premium beverages segments
‐ Changing consumer sentiment (e.g. bottled water backlash)
‐ Wide range of New Zealand unique plants available as flavouring (e.g. 42 Below
‐ Failure to achieve large scale export traction outside wine
Manuka honey)
‐ Hollowing out of management skills in New Zealand industry due to foreign
‐ Rapidly growing demand for premium alcoholic beverages in Asia
ownership
PAGE 14 Source: Interviews; Coriolis
BEVERAGES – POTENTIAL STRATEGIC DIRECTIONS
Five potential high potential strategic directions are identified for the beverages industry
PAGE 15 1. For example a retail bay with the word “New Zealand” on the sign overhead
BEVERAGES – POTENTIAL AREAS FOR INVESTMENT
Alcoholic beverages is a major opportunity for investors; wine has shown rapid growth; opportunities exist in
second tier wine regions and developing a premium spirits category
Wine - Peer group countries suggest strong future growth possible
- New Zealand Sauvignon Blanc a “must‐have” component of - Limited entry vehicles; greenfields by global player with
portfolio for major global wine companies skill sets recommended
- Three of the top five US wine companies in NZ
- Three of the largest EU alcoholic beverage companies in NZ Beer
- Three of the top five Australian wine companies in NZ - No revealed demand for New Zealand beer in world markets
- Lion owned by Kirin
- Some opportunity in Marlborough - DB owned by Asia Pacific Breweries
- Due to lower price of wine (due to GFC) - Independent Liquor owned by Asahi
- Future area growth of Marlborough limited due to - Microbreweries small and growing but primarily domestic
geological constraints focussed
- Large firms either foreign owned by majors or committed NZ Soft drinks
family owners - In Soft drinks, Frucor/V and Charlie’s/Phoenix are attractive but
- Delegats and Villa Maria both committed owners both recently changed hands for top dollars; both now Japanese
owned
- Opportunities for investment in next tier down layer of firms
(e.g. Giesen, Lawsons Dry Hills, Chard Farm, Allan Scott, Coopers Water
Creek, Kumeu River etc.) - Limited opportunities in export bottled water
- Best fit would be for investor with transferrable capability
- Investors looking to unlock value in other regions; investigate
emergent secondary regions (i.e. the next “Marlborough”)
Premium alcoholic spirits
- Clear potential in premium alcoholic beverages
- Building on New Zealand positioning in premium wine
Section Page
Contents 4
Glossary of terms 5
Methodology & data sources 6
F&B IP Overview 7
Summary & conclusions 9
Sector overview 17
Wine 43
Appendices 62
BEVERAGES – SUPPLY CHAIN
Beverages have a relatively simple supply chain
Simplified model of New Zealand beverage supply chain
(model; ANZSIC codes as available))
Domestic
Imported Grocery Supermarkets
market
beverages wholesale & other retail
(F360‐100)
Other Beer
ingredients/ manufacturing
imports (C121‐200)
PAGE 18 1. Tobacco inseparable at source; 2. There may be one or more layers of wholesaling, depending on product or market; some wholesale functions may be captive inside retailers or
foodservice operators; Source: Coriolis
BEVERAGES – # OF ENTERPRISES
The number of enterprises involved in beverage manufacturing in New Zealand is growing strongly, driven by
wine
Number of enterprise units in beverage manufacturing in New Zealand1 Comments
(enterprises; 2000‐2010) ‐ Question: What does the experience of other
CAGR countries tell us about the long term industry
(00‐10) (09‐10) structure for wine? If we double production again,
will we have ~700 wine manufacturers?
519 6% 10%
470
436 441
406
369
354
331 Wine 8% 12%
358
308
297 319
287 281 290
258
210 225
201
180
165 180
Notes/Definitions
2000 2001 2002 2003 2004 2005 2006 2007 2008 2009 2010
PAGE 19 1. Uses persons employed by enterprise unit; 2. Such as port, brandy, etc.; Source: SNZ business demographics (detailed industry for enterprise units) and (detailed industry for
geographic units); Coriolis analysis
BEVERAGES – # OF ENTERPRISES BY EMPLOYMENT SIZE
Looking at the same group split by employee size, we find growth is coming from an explosion of smaller
beverage manufacturers
Number of enterprise units in beverage manufacturing in New Zealand by employment size1 Comments
(enterprises; 2000‐2010) ‐ Question: Are the firms with no employees small
CAGR family enterprises or something else?
(00‐10) (09‐10)
519 6% 10%
Notes/Definitions
470
As sub‐aggregate level data not available this
436 441 aggregates:
406 ‐ Soft Drink, Cordial and Syrup Mnfg. (C121‐100)
‐ Beer Manufacturing (C121‐200
250 No employees 9% 17%
369 ‐ Spirit Manufacturing (C121‐300)
354 213 ‐ Wine and Other2 Alcoholic Bev. Mnfg. (C121‐
331 186 400)
194
308
297 177
287
148
139
115
99 112
101
105 1 to 5 9% 1%
109 104
97
93
88 89 97
89 76
80 48 6 to 9 8% 30%
32 37
38
32 29 39
33 36
23 23 41 44 49 10 to 19 4% 11%
41
41 33 39 38
32 37 37
35 39 47 46 41 20‐49 2% ‐11%
33 29 32 38 37 34
9 11 9 8 10 11 12 14 13 14 14 50‐99 5% 0%
9 9 9 9 10 11 12 13 13 12 12 100+ 3% 0%
2000 2001 2002 2003 2004 2005 2006 2007 2008 2009 2010
PAGE 20 1. Uses persons employed by enterprise unit; Source: SNZ business demographics (detailed industry for enterprise units) and (detailed industry for geographic units); Coriolis analysis
BEVERAGES – EMPLOYMENT
The number of people employed in beverage manufacturing grew at 3%/per annum over the past decade;
however sector employment rate was ‐4% in 2010
Number of persons employed in beverage manufacturing in New Zealand1 Comments
(people; 2000‐2010) ‐ Employment not growing as fast as enterprise
CAGR numbers; are we increasing efficiency or
(00‐10) (09‐10) fragmenting?
9,310
9,090 ‐ Almost all employment loss in 2010 in wine
8,900 3% ‐4%
8,770
8,500
8,190
8,030 Notes/Definitions
7,680
‐ Soft Drink, Cordial and Syrup Mnfg. (C121‐100)
7,270 7,290
‐ Beer Manufacturing (C121‐200
‐ Spirit Manufacturing (C121‐300)
6,470 5,230 ‐ Wine and Other2 Alcoholic Bev. Mnfg. (C121‐
5,080 4,790 Wine 5% ‐8%
4,770 400)
4,580
4,150 4,230
4,110
3,710 3,750
3,030
Soft drinks,
2,010 2,030 2,070 2,060 other non‐ 2% ‐0.5%
1,680 1,890 1,850 1,720 1,720 1,900 1,850 alcoholic
2000 2001 2002 2003 2004 2005 2006 2007 2008 2009 2010
PAGE 21 1. Uses persons employed by enterprise unit; Source: SNZ business demographics (detailed industry for enterprise units) and (detailed industry for geographic units); Coriolis analysis
BEVERAGES – EMPLOYMENT BY ENTERPRISE SIZE
Looking at employment by employee size highlights (1) the importance of large firms and (2) that the larger firms
have been more impacted in the last year
Number of persons employed in beverage manufacturing in New Zealand by employment size1 Comments
(people; 2000‐2010) ‐ Larger firms more impacted than small
CAGR
9,310 (00‐10) (09‐10)
9,090 3% ‐4% Notes/Definitions
8,770
280 8,900
300 280 ‐ Soft Drink, Cordial and Syrup Mnfg. (C121‐100)
8,500 280 1 to 5 2% 0%
250 240
8,190 250 570 340 6 to 9 7% 21% ‐ Beer Manufacturing (C121‐200
8,030 270 540
260 290 ‐ Spirit Manufacturing (C121‐300)
7,680 240 550 640 10 to 19 4% 12%
220 540 ‐ Wine and Other2 Alcoholic Bev. Mnfg. (C121‐
260
7,270 7,290 240 400)
230 460
530 1,500
250 220 1,510
160 240 1,270 1,310 20‐49 2% ‐13%
570 1,090
6,470 1,080
530 530
230
1,160
170
1,160 860 990
440 910 830 920 940 50‐99 4% ‐5%
990 810
720
1,080 530
750 610
620
2000 2001 2002 2003 2004 2005 2006 2007 2008 2009 2010
PAGE 22 1. Uses persons employed by enterprise unit; Source: SNZ business demographics (detailed industry for enterprise units) and (detailed industry for geographic units); Coriolis analysis
BEVERAGE – EMPLOYMENT BY REGION
Industry employment is concentrated in Auckland and the key wine producing regions
Number of persons employed in the beverage industry in New Zealand by region Comments
(people; 2010)
‐ Soft drinks and beer more location neutral;
wine more place specific
Otago/Southland
356 4%
Notes/Definitions
For example as Nelson/Tas/WC 260
“grape growing” ‐ Statistics New Zealand calculates its statistics
Canterbury 3% based on the predominant business activity of
600 7% the enterprise
‐ A firm that is defined as “beverage
manufacturing” at the enterprise level may
Classified elsewhere have a subsidiary at the geographic level that is
2,450 28% classified as “grape growing”
Marlborough 1,110 Wellington
12% ‐ Data here is “geographic” units not
90 1% “enterprise” units (pages prior)
Man/Wan/T ‐ “Classified elsewhere” is the difference
Northland 40 0% between geographic unit employees and
Hawke's Bay ar 85 1%
enterprise unit employees; it represents firm
600 7% subsidiaries not involved in “beverage
manufacturing,” for example those classified as
Auckland 2,930 “grape growing” or “beverage wholesaling”
33% Gisborne 110 1%
‐ Man/Wan/T = Manawatu, Wanganui, Taranaki
Bay of Plenty 160
2% ‐ Wellington includes Martinborough and other
Waikato 110 1% Wairarapa wineries
Total = 8,900
PAGE 23 Note: Uses persons employed by geographic unit; Source: SNZ business demographics ; Coriolis analysis
BEVERAGE – EMPLOYMENT BY REGION
Auckland and major wine growing regions only areas creating large scale employment growth
Number of persons employed in the beverage industry in New Zealand Comments
(people; 2000‐2010) 10 year
Absolute ‐ Auckland and major wine growing regions only
Change areas creating large scale
(00‐10)
9,310
9,090 +2,830
8,900
8,770
8,500 Notes/Definitions
8,190
8,030 ‐ Statistics New Zealand calculates its statistics
2,550
7,680 2,540 Classified elsewhere based on predominant business activity; firms
2,350 2,450 +910
7,270 7,290 1,970 (e.g. grape growing) are classified by their predominant activity.
1,740
1,640
‐ Data here is “geographic” units not
1,700 40
6,470 “enterprise” units (pages prior)
1,640 1,530 55 50 50 40
55 70 Northland +22
‐ “Classified elsewhere” is difference between
35
1,540 20 geographic unit employees and enterprise unit
18
employees; it represents firm subsidiaries not
3,000 involved in “beverage manufacturing,” for
2,830 2,950 Auckland +440
18 2,900 2,920 2,960 2,930 example those classified as “grape growing” or
3,050 “beverage wholesaling”
2,960 3,030
‐ So a firm that is defined as “beverage
2,490 120 110 manufacturing” at the enterprise level may
110 110 170 110 Waikato +35
100 230 100 200 160 Bay of Plenty ‐20 have a subsidiary at the geographic level that is
220 250 260 160
250 150 110 Gisborne ‐10
270 280 120 580 classified as “grape growing”
90 440 500 600 Hawkes Bay +310
90 85 160 500 75
150 95 470 480 61 90 95 Mana/Wanga/Tara +36
75 170 90 130 100 100 85 ‐ Wellington includes Martinborough and other
180 200 430 61 62 120 90 Wellington ‐60
400 150 140
120 360 56
130
Wairarapa wineries
290 44
110 1,210
49 52
130 1,320 1,170 1,110 Marlborough +460
150 1,060 1,040
960
1,210 ‐ Mana/Wanga/Tara = Manawatu, Wanganui,
830
650 740 225 Taranaki
141 139 210 245 260 Nel/Tas/Marl/WC +65
195 190 188 195 134
550 600 620 660 600 Canterbury +30 ‐ Nel/Tas/Marl/WC = Nelson, Tasman,
600 520
570 570 560 510
Marlborough, West Coast
240 260 350 300 403 366 373 433 356 Otago/Southland +196
160 160
2000 2001 2002 2003 2004 2005 2006 2007 2008 2009 2010
PAGE 24 Source: SNZ business demographics detailed industry for geographic & enterprise units; Coriolis analysis
BEVERAGE – INDUSTRY AGGREGATE TURNOVER
The New Zealand beverage industry has a wide range of firms
Aggregate beverage (and tobacco) industry turnover/total income Comments
(NZ$; FY10 or as available) Likely mostly wine; may ‐ Lion split into Lion Nathan Wine & Spirits and NZ
currently includes Breweries and Maltexo
tobacco
Vavasour 1% ‐ Data includes tobacco, inseparable at source
Mount Riley 1%
Cloudy Bay 1%
Sacred Hill Non‐alcoholic ‐ Suggest Statistics New Zealand remove tobacco
1% ~20% from data as this does not help industry
Mud House 1%
Other 490 firms 9%
St Clair 1% Coca‐Cola Amatil 12%
Giesen 1%
Yealands 1%
Wither Hills 1% Notes/Definitions
Frucor 9%
Treasury Wine 2% ‐ Wine growing aggregated into fruit/horticulture
EnzaFoods 1%
‐ Table reference MFG001AA
Charlie's 1%
Villa Maria 3%
Just Water 0%
Constellation 5%
dbbreweries 11%
Lion 5%
Delegat's 5% Independent Liquor 10%
Wine
~50% Non‐wine alcohol
Pernod Ricard 8%
~30%
Lion 9%
Bacardi/42 Below 0%
Harringtons 0%
TOTAL = $4,240m
PAGE 25 Source: SNZ (Manufacturing survey); Coriolis analysis
BEVERAGE – TURNOVER OF KEY FIRMS
While non‐alcoholic and beer/spirits are relatively consolidated, the wine sector is more fragmented
Turnover of select large beverage industry firms Comments
(NZ$m; FY10 or as available) ‐ Lion is aggregated business revenue , which
includes significant wine and spirits
Coca‐Cola Amatil $493 ‐ Includes significant estimates
Frucor $380
EnzaFoods Non‐
$52
alcoholic
Charlie's $32
Just Water $17 Notes/Definitions
Lion $605 ‐ Excludes importer wholesalers (e.g. firms the
dbbreweries $461 wholesale imported spirits)
Independent Liquor $414 Non‐wine ‐ Consolidated group revenue for all companies
Harringtons alcohol
$20
Bacardi/42 Below $11
Pernod Ricard $337
Delegat's $220
Constellation $215
Villa Maria $141
Treasury Wine $106
Wither Hills $53
Yealands $50
Giesen $45 Wine
St Clair $40
Mud House $39
Cloudy Bay $37
Sacred Hill $36
Mount Riley $25
Vavasour $22
Aggregate beverage industry turnover/total income Comments
(NZ$m; nominal, non‐inflation adjusted; 2000‐2010) CAGR ‐ Data includes tobacco, inseparable at source
(00‐10) (09‐10)
$4,500 ‐ Suggest Statistics New Zealand remove tobacco
Beverage & from data as this does not help industry
tobacco product 5% 7%
mnfg.
$4,000
Notes/Definitions
‐ Wine growing aggregated into fruit/horticulture
$3,500
‐ Table reference MFG001AA
$3,000
$2,500
$2,000
$1,500
$1,000
$500
$‐
2000 2001 2002 2003 2004 2005 2006 2007 2008 2009 2010
PAGE 27 Source: SNZ (Manufacturing survey); Coriolis analysis
BEVERAGE – TURNOVER OF KEY FIRMS
Companies are driving growth through both acquisition and organic growth
‐ Lions figures supplied by Lion (not taken from
$700 yearly annual reports as per the other companies)
Notes/Definitions
‐4.3% ‐ Consolidated group revenue for all companies
$600
‐ CCA & Frucor CAGR = (04‐09)
2.4%
$500
5.4%
$400
‐4.7%
$300
‐0.4%
(cross) 12.3%
$200 (triangle) 30.5%
$100 6.2%
$0
2005 2006 2007 2008 2009 2010
Key firms in the New Zealand beverage sector
(2010 or as available)
Year
Turnover % Export Employees Ownership founded Notes
PAGE 29 Source: various company annual reports (AR); various company websites (WS) ; Kompass (K); Kompass estimate (Ke); interviews (Ci); Coriolis analysis and estimates (Ce)
BEER/OTHER ALCOHOL – KEY FIRMS
There are three large firms manufacturing beer and spirits in New Zealand
Key firms in the New Zealand other alcohol sector
(2010 or as available)
Year
Turnover % Export Employees Ownership founded Notes
Key firms in the New Zealand wine sector
(2010 or as available)
Year
Turnover % Export Employees Ownership founded Notes
PAGE 31 Source: various company annual reports (AR); various company websites (WS) ; Kompass (K); Kompass estimate (Ke); interviews (Ci); Coriolis analysis and estimates (Ce)
WINE – KEY FIRMS
There is also a strong group of mid‐to‐large size wineries
Key firms in the New Zealand wine sector
(2010 or as available)
Year
Turnover % Export Employees Ownership founded Notes
PAGE 32 Source: various company annual reports (AR); various company websites (WS) ; Kompass (K); Kompass estimate (Ke); interviews (Ci); Coriolis analysis and estimates (Ce)
WINE – KEY FIRMS
… continued
Key firms in the New Zealand wine sector
(2010 or as available)
Year
Turnover % Export Employees Ownership founded Notes
PAGE 33 Source: various company annual reports (AR); various company websites (WS) ; Kompass (K); Kompass estimate (Ke); interviews (Ci); Coriolis analysis and estimates (Ce)
BEVERAGE – KEY FIRMS ‐ WHOLESALERS
There are a range of larger importer/wholesalers in beverages
Key firms in the New Zealand wholesale sector
(2010 or as available)
Year
Turnover % Export Employees Ownership founded Notes
PAGE 34 Source: various company annual reports (AR); various company websites (WS) ; Kompass (K); Kompass estimate (Ke); interviews (Ci); Coriolis analysis and estimates (Ce)
BEVERAGES – WINE TRANSACTIONS
There has been a constant stream of transactions in the New Zealand wine industry, particular foreign
investment in NZ wines…
Recent major wine industry transactions
(2005‐2011)
Date Acquirer Target Price Details
2011 Foster’s (Australia) and Rapaura Vintners N/A Based in Marlborough – make wines for Babich and Matua and contract winemaking
Babich Wines Was 1/3 owned by Goldwater Estate, Foster’s and Babich, now 50:50 Foster’s and Babich
PAGE 35 Source: various companies annual financial statements (as filed with NZ Companies Office or available company website); various press releases and news articles; Coriolis analysis
BEVERAGES – WINE TRANSACTIONS
…continued
Recent major wine industry transactions
(1998‐2003)
Date Acquirer Target Price Details
2004 Pernod Ricard (France) Framingham Wines NZ$6.67m Established 1991; 10.7ha freehold land; 5.94ha leasehold land; includes Tylers Stream brand
270,000l; 30,000 cases
2003 Constellation Brands BRL Hardy (Australia) Au$1.9b Part of a series of acquisitions worldwide
(USA)
2003 Vincor (Canada) Kim Crawford NZ$14.8 Part of a series of acquisitions worldwide; Vincor encountered financial troubles and was bought by
Constellation Brands (USA) for US$1.09 billion in 2006
PAGE 36 Source: various companies annual financial statements (as filed with NZ Companies Office or available company website); various press releases and news articles; Coriolis analysis
BEVERAGES – NON‐WINE ALCOHOL TRANSACTIONS
There have been limited transactions recently in beer and spirits
Recent major non‐wine alcohol industry transactions
(1993‐2011)
Date Acquirer Target Price Details
PAGE 37 Source: various companies annual financial statements (as filed with NZ Companies Office or available company website); various press releases and news articles; Coriolis analysis
BEVERAGES – NON‐ALCOHOLIC TRANSACTIONS
There has been a range of transactions in the non‐alcoholic sector
Recent major non‐alcoholic beverage industry transactions
(2002‐2011)
Date Acquirer Target Price Details
PAGE 38 Source: various companies annual financial statements (as filed with NZ Companies Office or available company website); various press releases and news articles; Coriolis analysis
BEVERAGES – ACTIVITY
Other alcoholic industries have had limited activity in NZ
Recent major beverage industry activity
(2006‐2010)
Date Company Activity Cost Details
Non‐alcoholic
2011 Coca Cola New bottling plant in Christchurch $15m Coca‐Cola Amatil is to build a NZ$15m bottle manufacturing and filling facility at its Woolston site in
Amatil Christchurch, New Zealand
Beer/spirits
2011 Monteith’s Brewery makeoever $4m $4m redevelopment of Greymouth facility to increase tourism to area
Wine
2006 Giesen Winery upgrade, new bottling plant $3.5m Established new bottling and packaging plant in Chch, expanded capacity in Marlborough vineyard
Wines
PAGE 39 Source: various companies annual financial statements (as filed with NZ Companies Office or available company website); various press releases and news articles; Coriolis analysis
BEVERAGES – THEMES (NON‐WINE)
There has been a recent growth in microbreweries and craft beer and growing foreign investment in the non‐
wine beverages sector
Identified firm level activity or investment themes
(2010)
Growth
Foreign Investment
Supply chain
PAGE 40 Source: various companies annual financial statements (as filed with NZ Companies Office or available company website); various press releases and news articles; Coriolis analysis
BEVERAGES – EXPORTS BY TYPE
New Zealand beverage exports have shown strong growth driven by wine
Can spirits and soft drinks show the same
growth over the next 10 years, replicating
wines growth in the past 10 years?
$816
$789
$722
$454 $644
$637
$560
$378
$396
$258 $332
$245
$208
$178 $184
$158 $58 Spirits 9% +33m 46% +$18m
$127 $40 $38
$90 $97 $15 $39 $26 Beer 12% +$18m 64% +$10m
$35 $30 $31 $14 $16
$30 $13 $14 $11 $64 $67 Soft drinks 7% +$32m 23% +$13m
$25 $32 $25 $11 $67 $55
$8 $7 $9 $50 $50 $52
$35 $26 $29 $38 $48 $38 Juice 7% +$19m 5% +$2m
$19 $19 $16 $32 $24 $31 $34 $36
$2 $2 $15
$2 $5 $3 $3 $3 $8 $6 $6 $8 Water 18% +$7m 51% +$3m
2000 2001 2002 2003 2004 2005 2006 2007 2008 2009 2010
$337
$524 $311
$269
$20
$9
$5
$454
$23
$9
$4
$378 $187 $241 N. America 22% +$208m 29% +$54m
$21
$8
$4 $155
$176 $188 $187
$258 $137
$16
$6
$208 $2 $147
$178 $184 $15 $121
$5
$2 $93
$16
$4
$16
$5
$2 $92
$3 $74
$67 $274 Europe 18% +$222m 23% +$51m
$71 $58 $229 $227 $222
$43 $156
$33 $36 $141
$116
$58 $69 $83
$52
2000 2001 2002 2003 2004 2005 2006 2007 2008 2009 2010
Section Page
Contents 4
Glossary of terms 5
Methodology & data sources 6
F&B IP Overview 7
Summary & conclusions 9
Sector overview 17
Wine 43
Appendices 62
WINE – METRICS
Grape prices have fallen sharply over the past two years
NZ Average Grape Price
(NZ$/tonne; 1991‐2010)
$2,500
$2,000
Change
(09‐10)
10 year ‐20.6%
$1,500 CAGR
(00‐10)
0.8%
$1,000
$500
$0
1991
1992
1993
1994
1995
1996
1997
1998
1999
2000
2001
2002
2003
2004
2005
2006
2007
2008
2009
2010
PAGE 44 Source: NZ Wine Statistical Annual; Coriolis analysis
WINE – METRICS
After a strong period of rapid growth, New Zealand wine area increases have slowed and production has been
cut (in part to improve quality)
NZ Wine Producing Area Last yr NZ Wine Total Production
Last yr
(ha; 000; 1990‐2010) 4.6% (l; m; 1990‐2010)
‐7.4%
33
205
205
32
190
29
10 yr
CAGR 10 yr
(00‐10) CAGR
25
12.6% (00‐10)
148
12.2%
23
133
21
119
18
102
16
89
14
12
10
61
60
60
57
56
55
54
9
53
50
46
8
7
42
41
7
6
6
6
6
33
5
5
1990
1991
1992
1993
1994
1995
1996
1997
1998
1999
2000
2001
2002
2003
2004
2005
2006
2007
2008
2009
2010
1990
1991
1992
1993
1994
1995
1996
1997
1998
1999
2000
2001
2002
2003
2004
2005
2006
2007
2008
2009
2010
PAGE 45 Source: NZ Wine Statistical Annual; Coriolis analysis
WINE – PRODUCTION BY REGION
Close to 70% of grapes crushed are in Marlborough and the region has grown its share over the past decade
New Zealand grape crush by region Share of grapes crushed by region
(t; 1992‐2010) (t; %; 1992‐2010)
10 yr Last
CAGR year
100%
13% ‐7%
Northland/Akld 0% ‐15%
Waikato/BOP ‐16% ‐42% 90%
Gisborne ‐2% ‐21%
250,000
80%
Hawkes Bay 5% 5%
60%
150,000
50%
40%
21% ‐5%
100,000 Marlborough
30%
20%
50,000
10%
Nelson 18% ‐23%
Canterbury 22% 7%
‐ Otago 20% ‐0.4% 0%
1992
1993
1994
1995
1996
1997
1998
1999
2000
2001
2002
2003
2004
2005
2006
2007
2008
2009
2010
1992
1994
1996
1998
2000
2002
2004
2006
2008
2010
PAGE 46 * Wairarapa/ Wellington; Source: New Zealand Wine Growers Survey; Coriolis analysis
WINE – NZ WINE EXPORTS BY VARIETY
Close to 90% of the growth in New Zealand wine exports comes from Sauvignon Blanc
10 Year Last Year
CAGR Absolute CAGR Absolute
NZ Wine exports by grape variety 141 TOTAL 23% +123m 25% +28
(millions of litres; 2000‐2010)
113
88
92
59
51 67
57
43
31
27 36
23
18 20
20 8 Pinot Noir 39% +8m 33% +2m
17 6 6
10 12 6 Chardonnay 5% +2m 9% +0.4m
8 3 4 5 5
2 4 6 Pinot Gris 60% +3m 36% +0.7m
0 1 1 1 5 4 1 1 2 3 Merlot 24% +2m 36% +0.7m
3
0 3 3 3 4 0
1 0
1 2 2 2 3
2 0
1 0
1 0
2 0
2 3 2 2 2 2 2 Sparkling ‐1% ‐0.1m ‐12% ‐0.2m
5 5 4 4 4 4 5 5 5 5 5 Other 1% +0.3m 5% +0.2m
2000 2001 2002 2003 2004 2005 2006 2007 2008 2009 2010
PAGE 47 Source: New Zealand Wine; Coriolis analysis
WINE – NZ WINE EXPORTS BY REGION
New Zealand wine exports have been showing strong value growth across all regions; Australia, the UK and the
USA are our top markets 10 Year Last Year
CAGR Absolute CAGR Absolute
NZ Wine exports by region $774 TOTAL 24% +$684m 23% +$50
(US$m; 2000‐2010)
$29 E Asia 26% +$26m 28% +$6m
$14 SE Asia 28% +$13m 42% +$4m
$8 Other 42% +$7m 46% +$2m
Top 5 countries
(2010)
China $644 $637
$20 $16 $22
Other $10
$6
Canada $10
$5 $240 Australia/ 32% +$225m 15% +$31m
$92
$45 Australia $560 Pacific Islands
$236 $11
$7
$5
$224 $210
USA
$168 $159
$396
UK $8
$214 $5
$3 $213 N.America 27% +$193m 26% +$43m
$332
TOTAL = $774 $7
$4
$2 $102
$151 $163 $170
$76
$245
$6
$3
$1
$54 $122
$103
$158
$127 $4
$2
$1 $69
$29 $271 Europe 18% +$220m 23% +$50m
$97 $3
$1
$0
$90 $24 $226 $224 $221
$3
$1
$0 $45
$3
$1
$0 $14 $32
$15 $140 $154
$20 $23
$112
$66 $77
$51 $56
2000 2001 2002 2003 2004 2005 2006 2007 2008 2009 2010
PAGE 48 Source: UN Comtrade database; Coriolis analysis
WINE – AUSTRALIA IMPORTS BY COUNTRY
The Australian wine market is New Zealand’s biggest success story: Australia is our largest export market, our
largest market share and our strongest growth vs. competitors 10 Year Last Year
CAGR Absolute CAGR Absolute
Australian Wine imports by country $449
(US$m; 2000‐2010) $439 TOTAL 21% +$375m 20% +$74m
$365
$325 $222
$237 NZ 32% +$223m 15% +$32m
$206
$155
$223
$166 $98
$151
$133
$73 $143 France 18% +$115m 40% +$41m
$114 $102
$96 $51
$74 $29 $89
$64
$53 $22 $60
$14 $52 $37
$13 $43 $31 $32 $30 Italy 9% +$17m ‐6% ‐$2m
$28 $29 $7
$21 $21 $5 $8 Spain 12% +$5m 29% +$2m
$13 $16 $20 $6
$13 $12 $12 $2 $3 $3 $21 $31 $21
$2 $1 $2
$9 $2
$9 $11 $10 $11 $19 Other 13% +$15m 7% +$1m
$6 $5
2000 2001 2002 2003 2004 2005 2006 2007 2008 2009 2010
PAGE 49 Source: UN Comtrade database; Coriolis analysis
WINE – AUSTRALIA IMPORTS BY COUNTRY
NZ is taking market share from France and Italy in the Australian wine market
10 Year Last Year
CAGR Absolute CAGR Absolute
Australian Wine imports by country
(US$m; 2000‐2010) TOTAL 21% +$375m 20% +$74m
$14
$13
$22 $29
$51
$73 $98
$155 $222
$237 NZ 32% +$223m 15% +$32m
$206
$28 $21
$29
$43
$52
$60
$89 $114 $151
$102 $143 France 18% +$115m 40% +$41m
2000 2001 2002 2003 2004 2005 2006 2007 2008 2009 2010
PAGE 50 Source: UN Comtrade database; Coriolis analysis
WINE – UK IMPORTS BY COUNTRY
The UK is NZ’s second largest market, NZ is the number 6 country, but a fast growing player
10 Year Last Year
CAGR Absolute CAGR Absolute
UK Wine imports by country
$5,141 $5,206
(US$m; 2000‐2010)
$3,012
$1,210 $460 $528
$2,639
$2,545 $416
$455 $648 Italy 9% +$386m 7% +$42m
$995 $402 $606
$972 $836
$888 $319
$913 $874 $561 Australia 3% +$140m ‐5% ‐$31m
$255 $871 $827 $592
$658 $358
$249 $350 $352
$262 Spain 6% +$159m 9% +$29m
$622 $308 $323
$299 $288 $304 $310
$496 $270 $206 $306 Chile 9% +$180m 1% +$2m
$421 $197 $304
$239 $164 $116 $214 $210 $206
$209 $86 $143 $147 $188 $235 NZ 18% +$189m 25% +$47m
$194 $142 $348 $248 $236
$126 $140 $63 $284 $239 $235 $164 $217 USA 3% +$51m 32% +$53m
$46 $52 $227 $223 $242
$166 $203 $232 $255 $231 $193 $227 $211 S Africa 7% +$100m ‐7% ‐$16m
$111 $133 $178
$378 $397 $403 $458 $489 $409 $414 Other 3% +$107m 1% +$5m
$307 $269 $291 $338
2000 2001 2002 2003 2004 2005 2006 2007 2008 2009 2010
PAGE 51 Source: UN Comtrade database; Coriolis analysis
WINE – UK IMPORTS VALUE BY COUNTRY
NZ has the second highest price for its wine in the UK market
10 Year Last Year
CAGR Absolute CAGR Absolute
UK Wine imports by $/l by country
(US$/litre; 2000‐2010) TOTAL 3% +$0.88 ‐3% ‐$0.11
$10.0
$9.0
Growth in “bulk wine” sales to
the UK, reducing dollar per
litre value
$8.0
France 8% +$4.20 ‐15% ‐$1.32
$7.0
$6.0
$5.0
NZ 1% $0.34 ‐2% +$0.09
$4.0
Other 7% +$1.66 3% +$0.10
Spain 4% +$0.99 ‐10% ‐$0.35
Italy 5% +$1.06 ‐9% ‐$0.39
$3.0
Chile ‐1% +$0.13 ‐7% ‐$0.20
Australia ‐3% ‐$0.66 ‐6% ‐$0.14
$2.0 S Africa ‐1% +$0.11 10% +$0.18
USA ‐1% ‐$0.29 15% +$0.24
$1.0
$‐
2000 2001 2002 2003 2004 2005 2006 2007 2008 2009 2010
PAGE 52 Source: UN Comtrade database; Coriolis analysis
WINE – US IMPORTS BY COUNTRY
NZ is a small player in the US wine market, but is the fastest growing over the long and short term
10 Year Last Year
CAGR Absolute CAGR Absolute
US Wine imports by country
(US$m; 2000‐2010)
$4,856 $4,841
$1,000
$2,802 $960
$1,515 $1,494
$1,047 France 1% +$67m 3% +$30m
$2,339 $2,355 $1,377 $1,017
$803
$1,146
$604 $653 $1,087
$1,172
$649 Australia 8% +$355m ‐5% ‐$37m
$844 $745 $686
$971
$815
$979 $861 $814 $300 Chile 7% +$153m 1% +$2m
$775 $243 $298
$226 $290 Argentina 23% +$254m 25% $58m
$663 $197
$184 $143 $232
$490 $181 $101
$365 $75 $286 $296
$282 Spain 10% +$173m 10% +$25m
$294 $165 $257
$151 $52 $223 $251
$150 $149 $42 $194 $152 $152 $206 NZ 27% +$187m 30% +$47m
$147 $37 $166 $101 $110 $159
$36 $39 $139 $65 $128 $152 $155 $147 Germany 12% +$101m 16% +$20m
$109 $116 $33 $48 $86 $106 $127
$19
$46 $22
$46 $53 $75
$105 $103 $126 $132 $153 $182 $187 $201 $198 $177 $218 Other 8% +$113m 23% +$41m
2000 2001 2002 2003 2004 2005 2006 2007 2008 2009 2010
PAGE 53 Source: UN Comtrade database; Coriolis analysis
WINE – SKEWED TO ANGLO‐SAXON
NZ wine exports are currently skewed towards the Anglo‐Saxon countries; the Northern European market stands
out as the next logical market to target as it accounts for 1/3 of global wine import value
Comparison of global wine consumption share vs. global wine import value share with New Zealand wine import value
(%; 2008/2009)
2%
5% 2% 1%
1% 0%
Other 14% 4% 0%1%
4%
4%
Other Asia 1% 0% 1%
4%
Japan 6%
China 6%
Other Europe 7% 3% 31%
France/Italy 32%
32%
/Spain/Portugal
27% 89%
Russia 4%
19%
Northern Europe 15%
UK/Ireland 5%
32%
22%
20%
USA/Canada 13%
Australia 2% 2%
% of global wine % of global wine import % of New Zealand export
consumption value value
PAGE 54 Note: NZ uses receiving country reported value not NZ export value; Source: UN Comtrade; UN DESA; Wine Institute (CA); Coriolis analysis
SUMMARY
While there are a range of opportunities in Northern Europe, research to date suggests an initial focus on the
Netherlands, Denmark & Sweden
Key metrics: Northern European wine markets & New Zealand
(various; 2009)
Pop GDP Grape Wine cons Total import Import value Import $/l New NZ imp NZ imp $ as NZ imp
(m; 09) /capita area /capita value CIF per capita (US$; 09) World % of $ share a % of AU $/cap CIF
(US$; 09) (ha; 09) (l; 09) (US$m; 09) (US$/cap; 09) import (% of $; 09) imp $ (US$; 09)
value (% of $; 09)
(%; 09)
U.K. 62.0 $35,049 700 19.8 $3,776m $61 $3.33 TBD 5.0% 32% $3.03
Ireland 4.5 $50,948 ‐ 14.0 $272m $61 $4.31 46% 4.6% 30% $2.84
Netherlands 16.6 $47,707 50 21.7 $1,114m $67 $4.18 24% 1.0% 17% $0.64
Iceland 0.3 $38,166 ‐ 17.7 $19m $59 $3.30 49% 1.0% 6% $0.60
Sweden 9.4 $43,356 ‐ 20.3 $636m $68 $3.26 32% 0.8% 13% $0.51
Denmark 5.5 $55,881 ‐ 28.1 $638m $115 $3.35 31% 0.8% 12% $0.34
Finland 5.4 $44,276 ‐ 11.7 $222m $41 $3.37 44% 0.6% 7% $0.24
Norway 4.9 $78,029 ‐ 15.3 $333m $68 $4.38 15% 0.2% 4% $0.14
Switzerland 7.8 $64,277 14,820 36.2 $1,016m $131 $5.33 8% 0.1% 6% $0.13
Germany 81.8 $40,934 99,800 24.1 $2,774m $34 $1.96 13% 0.2% 7% $0.06
Austria 8.4 $45,971 45,098 30.3 $221m $26 $3.62 8% 0.1% 3% $0.02
Russia 141.9 $8,672 42,100 7.5 $639m $4 $1.41 15% 0.2% 27% $0.01
Luxembourg1 0.5 $104,437 1,400 52.7 $123m $245 $5.33 0.3%1 0.0% N/A N/A
PAGE 55 1. Inter‐EU data issues; needs more work; Source: UN DESA; UN FAOStat; UN Comtrade; World Bank; CIA World Fact Book; Wine Institute (CA); Coriolis analysis
MARKET ATTRACTIVENESS MATRIX
In terms of market attractiveness, five Northern Europe markets stand out: Switzerland, Denmark, Belgium,
Sweden and the Netherland
Market attractiveness matrix: Northern European wine markets and New Zealand
(2009)
$100
How to read: the Danes
$90 drink a lot of wine and
spend a lot per person on
Do they spend lots $80 imported wine but could
per person on spend more on NZ wine
imported wine? $70
Norway Sweden Netherlands
Wine import value $60 Ireland
Iceland
per capita
(US$; 09) $50
$10 Size of bubble = expenditure on NZ wine per capita (US$; 09)
Poland Russia
$0
0 2 4 6 8 10 12 14 16 18 20 22 24 26 28 30 32 34 36 38
Do they drink lots of wine?
Total wine consumption per capita
(l/capita; 09)
PAGE 56 Source: UN Comtrade; UN DESA; Wine Institute (CA); Coriolis analysis
MARKET POTENTIAL MATRIX
In terms of market potential, three Northern European markets stand out: Netherlands, Sweden and Denmark
Market potential matrix: Northern Europe markets and the opportunity for New Zealand wine
(2009)
$400
U.K.
Germany
$300 High potential markets for further
NZ export growth
Netherlands
How to read: Sweden is a relatively
How big is the big market that likes New World
wines but could spend more on NZ
market for New wine
$200 Sweden
World wines?
New World wine
Denmark
import value
(US$m; 09)
Ireland
$100 Finland
Russia
Belgium
Switzerland
Norway
Size of bubble = expenditure on NZ wine per capita (US$; 09)
Austria
Iceland
$0
0% 5% 10% 15% 20% 25% 30% 35% 40% 45% 50%
Are they favourable to New World style wines?
New World wine as a % of total wine import value
(% of US$; 09)
PAGE 57 Source: UN Comtrade; UN DESA; Coriolis analysis
NZ WINE IMPORT VALUE GROWTH
The markets that stand out for potential – Netherlands, Denmark and Sweden – are also the markets where New
Zealand has achieved growth to date
10 year
New Zealand wine import value (CIF) by select Northern European country 10 year Absolute
(US$m; 1999‐2009) CAGR Growth
(99‐09) (99‐09)
$31.4 14% +$23m
$30 $29.3
$28.0
$19.9
$20 $19.2
$15
$12.3 Sweden 15% +$4m
PAGE 58 Note: data is as reported by receiving country; Source: UN Comtrade; UN DESA; Coriolis analysis
WINE – THEMES
While sales growth is increasing, wineries are suffering from declining value and global oversupply
Declining value
Global Oversupply
PAGE 59 Source: various companies annual financial statements (as filed with NZ Companies Office or available company website); various press releases and news articles; Coriolis analysis
WINE – THEMES
Significant cost savings are being made in the sector with significant overseas investment
Cost savings
Industry Consolidation Fewer larger firms, gaining economies of scale ‐ Pernod Ricard ‐ owns 100% Montana 100 % Brancott Estate, Camshorm, Penfolds Wines NZ, Tylers Stream Wine
Company
‐ Villa Maria Estate: Whale Bay Wine, Half Bay Wine, Aotea Wines, Atlas Wine, Breakaway Bay Wines, Caroline Bay
Wines, Carter Rock Wine, Esk Valley Estate, First Barrel Wine, Glenvale Estate, House of Wine, Kapua Springs,
Moneo Vintners, Riverstone, Silverlake, Southern Cross Wines, Te Whetu, Terra Vitae , Thornbury, Vidal Estate.
‐ The New Zealand Wine Company: Grove Mill Wine Company Limited, Sanctuary Wine Company Limited, Bedford
Road Investments Limited
‐ Delegat’s Marlborough‐Gold Wines, Oyster Bay Wines (USA) Ltd
Foreign Investment
Growth strategies
PAGE 61 Source: various companies annual financial statements (as filed with NZ Companies Office or available company website); various press releases and news articles; Coriolis analysis
TABLE OF CONTENTS
Section Page
Contents 4
Glossary of terms 5
Methodology & data sources 6
F&B IP Overview 7
Summary & conclusions 9
Sector overview 16
Wine 43
Appendices 62
BEVERAGES – INDUSTRY SCIENTIFIC RESEARCH
A number of research institutes are researching in the wine sector
Key scientific research organisations involved in beverage industry research in New Zealand
(2010)
Total Total
Income Staff Focus & activities
PAGE 63 Source: Company websites; annual reports; Coriolis
BEVERAGE – INDUSTRY ORGANISATIONS
There are four key industry organisations representing the New Zealand beverage industry
Key industry organisations involved in beverage industry research in New Zealand
(2010)
# of website
members Details
New Zealand Wine 1,000 growers ‐ Funded through: a levy on the sale of grapes collected by the Grape www.nzwine.com
700 winery Growers Council under the Commodity Levies Act 1991;
‐ a levy on the sale of wine collected by the Wine Institute under the Wine
Act 2003;
‐ user pays activities and sponsorships
12 ‐ Represent views of producers and marketers of premium spirits and www.distillers.co.nz
liqueurs
PAGE 64 Source: Company websites; annual reports; Coriolis