the beverage group

The alcoholic drinks market in Sweden

 

Systembolaget’s sales in 2014 totalled 470 million litres with a total retail value of SEK 32.8 billion. These figures correspond to a year on year increase of 0.5 per cent in terms of volume, but of 2.8 per cent in value. The tax on alcohol was raised during the year and this is the principal explanation for the difference between the increases in volume and value. Customers did not generally shift to more expensive products but instead stuck to the products that they usually buy, even after the price rise. Beer and alcohol-free were the only product groups to show growth during the year. Cider and mixed drinks and spirits declined, while sales of wine remained largely unchanged from 2013 in terms of volume. The long-term trend appears to be stable, but there are clear differences within the category groups, with individual categories deviating strongly from the overall trend. Sales patterns seldom change rapidly, but 2014 saw an increase in customers’ preferences for organic products.

 

Wine

 

Wine sales remained almost unchanged in 2014 at 197.8 million litres, corresponding to 42 per cent of Systembolaget’s total sales by volume. The retail value increased during the same period by 3.2 per cent to SEK 17.4 billion, which comprises 53 per cent of sales. It has been clear for some years that wine sales have levelled off and that there is a mature market for wine in Sweden. There will probably be no increase in volumes over the next few years but instead redistribution between types, countries of origin, and brands. Wine accounts for over half the net sales in Systembolaget stores. Wine is driven by new products and the number of launches in 2015 will be greatest in the wine category group, even if the number of new launches has declined slightly.

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Organic wine

 

Sales of organic wine fell at the beginning of 2013 but then picked up in 2014 by close to 100 percent to 21.3 million litres. The Monopoly set up a target in 2013 to reach 10 percent share of organic share of alcoholic drinks at the latest 2020.

To accelerate the growth Systembolaget increased the share of organic wines asked for in tenders and added prioritized positions for new and existing organic wines which resulted in a specified level of guaranteed distribution. In parallel the way in which customers view organic products have changed. The volume increase in 2014 led to organic wines accounted for 10.8 per cent of total wine sales and thereby passing the goal of ten percent but organic beer still lags behind. The focus going ahead will be to focus on breadth instead of volume. More than half of the segments currently lack an organic alternative.

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Ethically certified wine

 

Sales of ethically certified wine increased by 54 per cent in 2014, reaching 7.6 million litres, which corresponds to 4.4 per cent of all wine sales and 15 per cent of all wine from the countries of origin where ethical labelling is a possibility. The increase is largely a knock-on effect of the act that organic items from these countries are also often ethically certified.

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Boxed wine

 

Boxed wines continue to dominate wine sales in Sweden, although sales did fall by 0.8 per cent in 2014 in what was a break in the trend in recent years and one that suggests that the breakdown between packaging types may now have stabilised after 18 years of market availability for boxed wines. Sales of boxed wines by volume totalled 103.6 million litres, corresponding to 52.4 per cent of the total volume of wine sold. The retail value was SEK 6.8 billion, or 39.1 per cent of the total retail value of wines. There is a clear flow of volumes to the higher price bands. Sales by volume of boxes costing less than SEK 200 are decreasing, while sales of those costing over SEK 200 are increasing. Bottled wines have also seen a substantial decline in volumes in the lowest price bands, but this drop is recovered in the price bands just under SEK 100, which is where the growth is occurring. The increase in alcohol tax is, of course, a partial explanation, but in addition price points that were previously clear thresholds no longer seem to act as a barrier to customers who want to increase their wine experience. The new product placement in countries instead of price segments in stores has probably contributed to the premiumisation effect, but the continued strong interest in wine among customers will also have played a part.

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Red wine

 

Red wine accounts, with 103.6 million litres sold in 2014, for 52 percent of total wine sales. Volumes decreased by 2.2 percent, a reduction that seems largely to have entailed a shift to the rosé and sparkling wine categories. Red wine’s market share in recent years has achieved historically high levels and the category therefore is expected to show a slight decline in future in line with the other Nordic markets. The retail value of red wine sales totalled just over SEK 9 billion, corresponding to an increase of 0.3 per cent from the previous year, and red wine accordingly accounts for 28 per cent of the value of Systembolaget’s sales and 22 per cent of its sales by volume.

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Boxed and tetra packaging both lost market shares in favour of bottles during the year, and bottled wines now account for 38 per cent of red wine sales. The percentage drop in sales in the under SEK 70 price band reached double figures, while sales in the SEK 80-99 price band increased. Sales in the latter segment totalled S7.6 million litres, making it by far the largest segment in this category.

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Italy dominates in terms of country of origin, with just under 40 per cent of the market share by volume and a similar share by value. Sales of Italian wines increased by 10 per cent on the previous year and are strongly dominant in most segments. Amarone continues to enjoy a very high share of sales in the over SEK 120 price band, but its market share has now fallen for two years in succession. Sales of Italian table wine have, by contrast, increased markedly, from 1 million litres in 2010 to 10 million litres in 2014. South Africa, Spain and Australia are the highest ranking countries of origin, after Italy, but all of these countries lost market shares in 2014. Chile, Argentina, Portugal and New Zealand, by contrast, all showed growth. Many of these shifts can be explained by access to organic wine. New Zealand, France and the USA are the three countries of origin with the highest average price per litre, while South Africa, Chile and Spain are ranked lowest on the top 10 countries of origin in terms of price per litre.

 

Grape variety is important to many customers and a new leader has emerged amongst the single varietal wines in the range during the year, Zinfandel, which has gone from a 3 percent market share to a 14 percent one in just five years and is now slightly ahead of Cabernet Sauvignon and Syrah on the favourite varietal list. Residual sugar content has increased slightly, year on year. There is clearly a customer group that prefers slightly sweeter wines. Sales of organic wine totalled 13.1 million litres during the year, corresponding to 12.7 per cent of total red wine sales – figures that should be seen in the light of the 6.2 per cent of total red wine sales achieved by organic wines in 2013. The range of organic wines varies strongly from one country to another. Wine with an alcohol content of less than 10 per cent has found it difficult to establish itself in the red wine range and only 58,000 litres of this type of wine was sold in 2014, corresponding to 0.06 per cent of total red wine sales.

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

White wine

 

White wine sales totalled 61.4 million litres in 2014, accounting for 31 per cent of total wine sales. The change from last year was an increase of 0.2 per cent, with little flow between other categories. The market share largely corresponds to the average in western Europe, according to Euromonitor, and has remained constant, despite the strong growth by rosé wines.

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Sales of white wine are spread relatively evenly over the year and the category is distinguished by the fact that bottles only account for 30 per cent of sales. There is a clear premiumisation trend in white wine, with the retail value of sales rising by 4.5 per cent to a total of SEK 4.7 billion. All bottle segments in the SEK 90 or above price band reported positive growth, as did the boxed wines in the SEK 200 and above price band.

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

South Africa continues to be the biggest country of origin for white wine, with a 22 percent market share by volume. Sales are, however, concentrated on the lower price bands and if we look at share of value instead, France is almost on a par with South Africa, despite a more modest share of sales by volume at 12 percent. France enjoys a high market share in the most expensive price bands – as high as 75 percent in the over SEK 150 bottled white wines segment. The market share for organic white wine was 12 percent, corresponding to a clear upturn from last year when the share was 5 percent. A number of new launches have helped bring about this increase in volume, but it has largely occurred organically within existing listings or through the conversion of existing listings. A total of 7.5 million litres of organic white wine were sold in 2014.

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Rosé wine

 

Rosé wines accounted for 8 percent, or 15.4 million litres, of total wine sales in 2014, corresponding to a year on year increase of 9 percent. This is a lower growth figure than in the previous year, but it is still in line with the average for the two preceding years. Rosé wines now account for just over 10 per cent of total sales in Western Europe so it is conceivable that room for growth still exists. Although the historic two-digit growth figures may become rarer in the future. The category is still immature, with relatively large changes in sales patterns from one season to another, and the difference in share from peak season to low season has, unlike in other European markets, actually strengthened in recent years. The market share in July was 19 percent, while in December, it was 22 percent.

 

The high sales figures led to a resegmentation of the category in 2015, which now includes segments for both more expensive bottled wines and more expensive boxed wines. There are two dominant and, to some extent, opposing flavour trends, namely rosé wines with a clear sweetness such as White Zinfandel, and very dry, Provençale-style rosé wines. Organic wines account for 6 percent of the category, corresponding to an increase of 2 percent during last year.

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Sparkling wine

 

Sales of sparkling wines increased by 10.9 per cent to 11 million litres, corresponding to 5.6 per cent of total wine sales by volume and 9.4 percent of the retail value. A degree of premiumisation was apparent for sparkling wine, but for champagne it was the lowest price band that reported the greatest growth while the highest price band noted a slight fall in sales. Sparkling rosé wines showed greater growth than last year, but did not manage to achieve quite the same growth levels as the category as a whole.

Italy is the biggest country of origin by volume due to Prosecco, while France dominates in terms of retail value, with a share of the retail value that is almost twice that of Italy. Three countries of origin dominate overall, namely Italy, France and Spain, although a few strong brands from other countries of origin have established a strong presence within the range. There is a growing interest in exclusive sparkling wines that are not champagne, from countries such as Spain, Italy and the UK. Sales are modest to date, but this may signal the start of a new trend. The category has recently been re-segmented in order to provide scope for items in all price bands. Organic wines accounted for 12 percent of sales and the market leader is an organic wine and accounts for over half of the organic contribution to sales.