| KN15134 |
| KEY NOTE REPORT PLUS Wine : May 2004 |
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This report covers:wine, light, fortified, wines, style of wine, still light wines, Champagne, sparkling wines, buying behaviour, wine production and exporting, France, Italy, Other European Exporters, New World, Australia, California, South Africa, South America,
Companies covered include: Allied Domecq, Bacardi-Martini, Diageo, Ernest & Julio Gallo, Pernod Ricard, Scottish & Newcastle, Southcorp Wines Europe, Western Wines,
| Executive Summary |
| 1. Market Definition |
| Report Coverage |
| Exclusions |
| Wine Terms |
| MARKET SECTORS |
| MARKET TRENDS |
| Brief History |
| Trends in the 1990s |
| Wines in the Early 2000s |
| ECONOMIC TRENDS |
| Population |
| Table 1: UK Resident Population Estimates by Sex (000), Mid-Years 1999-2003 |
| Gross Domestic Product |
| Table 2: UK Gross Domestic Product at Current Prices (£m), 1999-2003p |
| Inflation |
| Table 3: UK Rate of Inflation (%), 1999-2003 |
| Unemployment |
| Table 4: Actual Number of Unemployed Persons (million), 1999-2003 |
| Household Disposable Income |
| Table 5: Household Disposable Income (£ and %), 1998-2002 |
| MARKET POSITION |
| The UK |
| Table 6: The UK Total Alcohol Market by Value at Current Prices (£m at rsp and %), 2003 |
| Overseas |
| 2. Market Size |
| THE TOTAL MARKET |
| Table 7: The Total UK Wine Market by Value and Volume (£m at rsp and million litres), 1999-2003 |
| Table 8: Average Values of Wine Sold in the UK (£ per litre at rsp), 1999-2003 |
| Table 9: Retail Price Indices for Wines and Spirits (index June 1999=100), 1999-2003 |
| BY MARKET SECTOR |
| Light Versus Fortified Wines |
| Light Wines by Type |
| By Style of Wine |
| Table 10: The UK Light Wine Sector by Type by Value (£m at rsp and %), 2003 |
| SLW by Varietal |
| Fortified Wines By Type |
| Table 11: The UK Fortified Wine Sector by Type by Value (£m at rsp and %), 2003 |
| OVERSEAS TRADE |
| Still Light Wines |
| Table 12: UK Still Light Wine Imports by Principal Country of Origin by Volume (%), 1992-2003 |
| Table 13: Top Ten Still Light Wines by Country of Origin in the Off-Trade Market by Volume (%), 2002 |
| Champagne and Sparkling Wines |
| Table 14: UK Champagne and Sparkling Wine Imports by Principal Country of Origins by Volume (%), 1992-2003 |
| Fortified Wines |
| Table 15: UK Fortified Wine Imports by Principal Country of Origin by Volume (million litres), 1999-2003 |
| 3. Industry Background |
| RECENT HISTORY |
| INDUSTRY SYNOPSIS |
| Table 16: Financial Results for UK Manufacturers of Beverages and Soft Drinks by Turnover and Pre-Tax Profit (£000 and %), 2003 |
| Number of Companies |
| Employment |
| REGIONAL VARIATIONS IN THE MARKETPLACE |
| DISTRIBUTION |
| Importing Structure |
| On-Trade and Off-Trade |
| Table 17: The UK Wine Market by Volume and Value by Broad Distribution Channel (million litres, £m at rsp and %), 2003 |
| Off-Trade and Take-Home Outlets |
| Table 18: Off-Trade Shares for Wine by Type of Outlet by Value (£m at rsp and %), 2003 |
| Table 19: Leading Multiple Retailers of Wine by Number of Outlets, 2004 |
| On-Trade Outlets |
| Table 20: On-Trade Shares for Wine by Type of Outlet by Value (£m at rsp and %), 2003 |
| HOW ROBUST IS THE MARKET? |
| LEGISLATION |
| KEY TRADE ASSOCIATIONS |
| The Wine and Spirit Association |
| 4. Competitor Analysis |
| THE MARKETPLACE |
| MARKET LEADERS |
| Table 21: Major Wine Shippers, Agents, Distributors or Wholesalers, 2003 |
| Table 22: Major Wine Companies in the UK, 2003 |
| Allied Domecq PLC |
| Company Structure |
| Current and Future Developments |
| Financial Results |
| Table 23: Financial Results for Allied Domecq PLC (£m), Years Ending August 2001-2003 |
| Bacardi-Martini Ltd |
| Company Structure |
| Current and Future Developments |
| Financial Results |
| Table 24: Financial Results for Bacardi-Martini Ltd (£m), Years Ending March 2001-2003 |
| Constellation Wines Europe Ltd |
| Company Structure |
| Current and Future Developments |
| Financial Results |
| Diageo PLC |
| Company Structure |
| Current and Future Developments |
| Financial Results |
| Table 25: Financial Results for Diageo PLC (£m), Years Ending December 2001-2003 |
| Ernest & Julio Gallo |
| Company Structure |
| Current and Future Developments |
| Financial Results |
| Pernod Ricard UK Ltd |
| Company Structure |
| Current and Future Developments |
| Financial Results |
| Table 26: Financial Results for Pernod Ricard UK Ltd (£m), Years Ending December 2001-2003 |
| Scottish & Newcastle PLC |
| Company Structure |
| Current and Future Developments |
| Financial Results |
| Southcorp Wines Europe Ltd |
| Company Structure |
| Current and Future Developments |
| Financial Results |
| Western Wines Ltd |
| Company Structure |
| Current and Future Developments |
| Financial Results |
| Other Companies |
| OUTSIDE SUPPLIERS |
| PACKAGING AND LABELLING |
| MARKETING ACTIVITY |
| Advertising in the Media |
| Table 27: Main Media Advertising Expenditure on Wines by Category (£000), 1998-2003 |
| Table 28: Main Media Advertising Expenditure on Light Wines (£000), 2002-2003 |
| Table 29: Main Media Advertising Expenditure on Fortified Wines (£000), 2002 and 2003 |
| Other Marketing |
| 5. Brand Strategy |
| INTRODUCTION |
| RESEARCH FINDINGS |
| Table 30: Penetration of Leading Wine Brands and Types (% of adults), 1997-2004 |
| COMPANIES' BRANDS |
| Light Wines |
| Table 31: Leading Brands of Wine in the UK Off-Trade (£m at rsp), 2002 |
| Fortified Wine Brands |
| 6. Strengths, Weaknesses, Opportunities and Threats |
| STRENGTHS |
| WEAKNESSES |
| OPPORTUNITIES |
| THREATS |
| 7. Buying Behaviour |
| Penetration of LIGHT WINES |
| Table 32: Light Wine Drinkers by Sex, Age, Social Grade, Household Income and Region (% of adults), 2003 |
| Key Note Primary Research |
| Table 33: Leading Branded Wines by Age, Sex, Social Grade and Region (% of adults), 2004 |
| Table 34: Varietal, Vin de Pays and Own-Label Wines by Age, Sex, Social Grade and Region (% of adults), 2004 |
| Table 35: Older Wine Styles by Age, Sex, Social Grade and Region (% of adults), 2004 |
| Fortified Wines |
| Table 36: Drinkers of Fortified Wines (% adults), 1998-2003 |
| Table 37: Fortified Wine Drinkers by Age, Sex, Social Grade and Region (% of adults), 2003 |
| 8. Current Issues |
| SEctor TRENDS |
| DISTRIBUTION ISSUES |
| LINE EXTENSIONS |
| PACKAGING AND PRESENTATION |
| 9. The Global Market |
| WINE PRODUCTION AND EXPORTING |
| France |
| Italy |
| Other European Exporters |
| The New World |
| Australia |
| California |
| South Africa |
| South America |
| Wine Consumption |
| Table 38: Per Capita Consumption of Wine in Selected Markets (litres), 1993 and 2001 |
| 10. Forecasts |
| FORECAST ECONOMIC TRENDS |
| Population |
| Table 39: Forecast UK Resident Population by Sex (000), 2004-2008 |
| Gross Domestic Product |
| Table 40: Forecast UK Growth in Gross Domestic Product in Real Terms (%), 2004-2008 |
| Inflation |
| Table 41: Forecast UK Rate of Inflation (%), 2004-2008 |
| Unemployment |
| Table 42: Forecast Actual Number of Unemployed Persons (million), 2004-2008 |
| FORECASTS 2004 to 2008 |
| Table 43: The UK Forecast Wine Market by Value at Current Prices (£m at rsp), 2004-2008 |
| MARKET GROWTH |
| Figure 1: The UK Wine Market by Value at Current Prices (£m at rsp), 1999-2008 |
| FUTURE TRENDS |
| 11. Company Profiles |
| Allied Domecq Plc |
| Bacardi-martini LTd |
| Diageo Plc |
| Pernod Ricard Uk Ltd |
| Scottish & Newcastle Plc |
| 12. Company Financials |
| 13. Further Sources |
| Associations |
| Publications |
| General Sources |
| Government Publications |
| Other Sources |
| Bonnier Information Sources |
| Fast FoodB |
| Executive Summary |
| The UK fast food and takeaway market generated estimated sales of £8.1bn in 2003 at retail selling prices, increasing sales by 3% since the previous year. Its share of the total UK catering market has been increasing year-on-year over the past 5 years. |
| Consumer demand for convenience, and the widespread development of fast food and takeaway outlets on various sites, has encouraged sales. Although dominated by a few large global brands, the market is still highly fragmented with most operators classed as small businesses. |
| The largest market sector is sandwiches, contributing over 36% of all sales in this market in 2003. Sandwich sales have benefited from the trend towards shorter lunch breaks and the corresponding demand for light lunches and snacks, and the spread of more branded sandwich outlets across the UK. As well as traditional sandwich bars and cafés, sandwiches are now also available from other outlets such as petrol station forecourts, supermarkets, other retail outlets, and numerous office delivery services. |
| The second-largest category is burgers, representing 22.4% of all sales in this market. After a poor performance in 2002, the market for burgers improved its sales performance in 2003 through menu diversification and more emphasis on brand building. Burgers are taking a smaller share of sales at traditional burger outlets year-on-year. Both the pizza sector and chicken restaurant market have benefited from consumers moving away from burgers. Chicken outlets continue to expand and emphasize their family dining options, while home delivery pizza sales have driven growth in the pizza sector. Sales growth in the fish and chips sector remains limited. |
| The `other fast food and takeaway' sector includes a variety of outlets such as coffee shops, Indian and Chinese outlets, sushi and noodle bars, soup bars, salad bars, organic food outlets, doughnut, muffin and other pastry shops. Traditional takeaway foods such as Chinese and Indian are saturated and are experiencing little growth. |
| Obesity issues and health concerns, especially among children, are forcing changes in the market. More brand owners are developing lighter options, vegetarian offerings, and introducing more fresh fruit and salads. In traditional sectors, such as burgers, the pace of outlet expansion is slowing down as leading suppliers concentrate on building sales at existing outlets. In the other areas, notably pizza home delivery, chicken, and sandwiches, there is still considerable growth in new store openings. |
| Sales growth from 2004 to 2008 is forecast to be less than the previous 5 years, partly due to a lower level of new openings, increased competition, and mature markets in some market areas. Between 2004 and 2008, the total market is forecast to increase by 11.2% at current prices, compared to a growth of 15.5% at current prices between 1999 and 2003. |
| Executive Summary |
| 1. Market Definition |
| REPORT COVERAGE |
| MARKET SECTORS |
| Sandwiches |
| Burgers |
| Pizza |
| Chicken |
| Fish and Chips |
| Other Fast Food/Takeaways and Home Delivery Outlets |
| MARKET TRENDS |
| More Eating Out and Eating on the Move |
| Changing Working Patterns |
| Obesity |
| Outlet Expansion |
| Menu Diversification |
| Young Adults and Children |
| ECONOMIC TRENDS |
| Population |
| Table 1: UK Resident Population Estimates by Sex (000), Mid Years 1999-2003 |
| Inflation |
| Table 2: UK Rate of Inflation (%), 1999-2003 |
| Unemployment |
| Table 3: Actual Number of Unemployed Persons in the UK (million), 1999-2003 |
| Household Disposable Income |
| Table 4: Household Disposable Income (£), 1998-2002 |
| MARKET POSITION |
| The UK |
| Table 5: The UK Catering and Fast Food/Takeaway and Home Delivery Outlets Markets by Value at Current Prices (£m), 1999-2003 |
| overseas |
| 2. Market Size |
| THE TOTAL MARKET |
| Table 6: The Total UK Fast Food/Takeaway and Home Delivery Outlets Market by Value at Current Prices (£m at rsp), 1999-2003 |
| Table 7: Restaurant Meals, Takeaways and Snacks at Retail Price Index and General Retail Price Index by Month (January 1987=100), 2003 |
| by MARKET SECTOR |
| Table 8: The UK Fast Food/Takeaway and Home Delivery Outlets Market by Sector by Value at Current Prices (£m at rsp and %), 2003 |
| Sandwiches |
| Table 9: The UK Sandwiches Sector by Value at Current Prices (£m at rsp), 1999-2003 |
| Burgers |
| Table 10: The UK Burger Sector by Value at Current Prices (£m at rsp), 1999-2003 |
| Pizzas |
| Table 11: The UK Pizza Sector by Value at Current Prices (£m at rsp), 1999-2003 |
| Chicken |
| Table 12: The UK Chicken Sector by Value at Current Prices (£m at rsp), 1999-2003 |
| Fish and Chips |
| Table 13: The UK Fish and Chips Sector by Value at Current Prices (£m at rsp), 1999-2003 |
| Other Fast Food/Takeaway and Home Delivery Outlets |
| Table 14: The UK Other Fast Food/Takeaway and Home Delivery Outlets Sector by Value at Current Prices (£m at rsp), 1999-2003 |
| 3. Industry Background |
| RECENT HISTORY |
| INDUSTRY SYNOPSIS |
| Takeaways |
| Table 15: Average Financial Results for Leading Companies in the Fast Food/Takeaways and Home Delivery Outlets Market by Turnover and Pre-Tax Profit (£000, % and £), Latest Year End |
| Restaurants |
| Table 16: Average Financial Results for Leading Companies in the Restaurants Sector by Turnover and Pre-Tax Profit (£000, % and £), Latest Year End |
| NUMBER OF COMPANIES |
| Table 17: Number of UK VAT-Based Restaurant and Takeaway Enterprises by Turnover Sizeband (£000 and %), Years Ending 2002 and 2003 |
| EMPLOYMENT |
| REGIONAL VARIATIONS |
| HOW ROBUST IS THE MARKET? |
| LEGISLATION |
| KEY TRADE ASSOCIATIONS |
| British Franchising Association |
| British Hospitality Association |
| British Sandwich Association |
| National Federation of Fish Friers |
| Pizza, Pasta, & Italian Food Association |
| 4. Competitor Analysis |
| THE MARKETPLACE |
| MARKET LEADERS |
| Table 18: Leading Hot Fast Food/Takeaway Chains† by Type of Outlet (number), 2004 |
| Benjy's Group Holdings Ltd |
| Company Structure |
| Current and Future Developments |
| Financial Results |
| Burger King Ltd |
| Company Structure |
| Current and Future Developments |
| Financial Results |
| Compass Group PLC |
| Company Structure |
| Current and Future Developments |
| Financial Results |
| Domino's Pizza UK & IRL PLC |
| Company Structure |
| Current and Future Developments |
| Financial Results |
| Greggs PLC |
| Company Structure |
| Current and Future Developments |
| Financial Results |
| Kentucky Fried Chicken (Great Britain) Ltd |
| Company Structure |
| Current and Future Developments |
| Financial Results |
| McDonald's Restaurants Ltd |
| Company Structure |
| Current and Future Developments |
| Financial Results |
| O'Briens Irish Sandwich Bars (UK) Ltd |
| Company Structure |
| Current and Future Developments |
| Financial Results |
| Perfect Pizza Ltd |
| Company Structure |
| Current and Future Developments |
| Financial Results |
| Pizza Hut (UK) Ltd |
| Company Structure |
| Current and Future Developments |
| Financial Results |
| Prêt A Manger (Europe) Ltd |
| Company Structure |
| Current and Future Developments |
| Financial Results |
| Subway |
| Company Structure |
| Current and Future Developments |
| Financial Results |
| Wimpy Restaurants Group Ltd |
| Company Structure |
| Current and Future Developments |
| Financial Results |
| Other Companies |
| Coffee Shops |
| Caffè Nero Group PLC |
| Coffee Republic PLC |
| Costa Ltd |
| Favorite Fried Chicken Ltd |
| Fast Food Systems Ltd |
| Starbucks Coffee Company (UK) Ltd |
| Spud U Like |
| OUTSIDE SUPPLIERS |
| marketing activity |
| 5. Brand Strategy |
| INTRODUCTION |
| BRANDS |
| RESEARCH FINDINGS |
| Consumer Penetration of Fast Food/Takeaway and Home Delivery Outlets |
| By Sex |
| Table 19: Consumer Penetration of Fast Food and Takeaway Outlets Eaten in During the Past 6 Months by Sex (% of adults), 2004 |
| By Age |
| Table 20: Consumer Penetration of Fast Food and Takeaway Outlets Eaten in During the Past 6 Months by Age (% of adults), 2004 |
| By Social Grade |
| Table 21: Consumer Penetration of Fast Food and Takeaway Outlets Eaten in During the Past 6 Months by Social Grade (% of adults), 2004 |
| By Region |
| Table 22: Consumer Penetration of Fast Food and Takeaway Outlets Eaten in During the Past 6 Months in the South of England and Wales (% of adults), February 2004 |
| Table 23: Consumer Penetration of Fast Food and Takeaway Outlets Eaten in During the Past 6 Months in the Midlands and the North (% of adults), February 2004 |
| ADVERTISING AND PROMOTION |
| Table 24: Main Media Advertising Expenditure by Selected Fast Food Brands (£000), Years Ending December 2002 and 2003 |
| BRAND DEVELOPMENTS |
| McDonald's |
| Burger King |
| KFC |
| Domino's Pizza |
| Pizza Hut |
| O'Briens |
| Benjy's |
| Subway |
| 6. Strengths, Weaknesses, Opportunities and Threats |
| SANDWICHES |
| Strengths |
| Weaknesses |
| Opportunities |
| Threats |
| BURGERS |
| Strengths |
| Weaknesses |
| Opportunities |
| Threats |
| PIZZA |
| Strengths |
| Weaknesses |
| Opportunities |
| Threats |
| FISH AND CHIPS |
| Strengths |
| Weaknesses |
| Opportunities |
| Threats |
| CHICKEN |
| Strengths |
| Weaknesses |
| Opportunities |
| Threats |
| OTHER FAST FOOD/TAKEAWAY and home delivery outlets |
| Strengths |
| Weaknesses |
| Opportunities |
| Threats |
| 7. Buying Behaviour |
| VISITS TO FAST FOOD AND TAKEAWAY OUTLETS |
| Table 25: Visitors to Takeaways and Fast Food Outlets (% of adults), 2003 |
| Table 26: Frequency of Visits to Takeaway and Fast Food Restaurants (% of adults), 2003 |
| Table 27: Use of Coffee/Sandwich Bars (% of adults), 2003 |
| Use of Fast Food Outlets by Region |
| 8. Current Issues |
| CORPORATE NEWS |
| Elior |
| Gowrings |
| McDonald's |
| Rocket |
| FOOD PROMOTION TO CHILDREN |
| OBESITY LAWSUITS |
| CURRY FOOD COLOURINGS |
| 9. The Global Market |
| US |
| Asia Pacific |
| France and Germany |
| 10. Forecasts |
| INTRODUCTION |
| Gross Domestic Product |
| Table 28: The Forecast UK Growth in Gross Domestic Product in Real Terms (%), 2004-2008 |
| FORECASTS 2004 TO 2008 |
| Table 29: The Total Forecast UK Fast Food/Takeaway and Home Delivery Outlets Market by Value at Current Prices (£m at rsp), 2004-2008 |
| MARKET GROWTH |
| Figure 1: The Total UK Fast Food/Takeaway and Home Delivery Outlets Market by Value at Current Prices (£m at rsp), 1999-2008 |
| BY MARKET SECTOR |
| Table 30: The Forecast UK Fast Food/Takeaway and Home Delivery Outlets Market by Value by Sector at Current Prices (£m at rsp), 2004-2008 |
| FUTURE TRENDS |
| 11. Company Profiles |
| Burger king Ltd |
| Domino's Pizza Uk & Irl Plc |
| Greggs Plc |
| Kentucky Fried Chicken (great Britain) Ltd |
| Mcdonald's Restaurants Ltd |
| Perfect Pizza Ltd |
| Pizza Hut (uk) Ltd |
| 12. Company Financials |
| 13. Further Sources |
| Associations |
| Publications |
| General Sources |
| Government Publications |
| Bonnier Information Sources |
In 2003, the UK wine market was worth £9.75bn, accounting for 25% of the total market for alcoholic drinks. This market value has risen from 20% in 1997, indicating the British consumer's growing enjoyment of wine, although the beer market remains larger. The market value of wine comprises fortified wines, such as vermouth, but mainly divides between still light wines (SLW) and sparkling wines, including Champagne. Wine is a highly fragmented market, unlike beer and spirits in which few brands dominate.
Production in the UK is miniscule, but the British consumer can choose from imported wines from many countries: European (France, Germany, Italy, Spain, etc.) and a growing choice of New World wines, led by Australia and the US. This fragmentation of choice is reflected in the industry structure, where the individual vineyard is as important as the wine shipper or wholesaler.
However, the New World 'upstarts' in wine marketing have taught the Old World a lesson in offering clearly branded wines. Brands such as Hardys and Jacob's Creek (both from Australia), and Blossom Hill and Gallo (from California), have gained wide distribution in both the off-trade (or take-home) and the on-trade (public houses and restaurants). There is a fairly even split in wine sales between the off-trade and the on-trade, but the off-trade is increasingly dominated by multiple grocers, which stock their own extensive ranges of own-label wines.
Eating out has driven the growth of on-trade wine, but public houses and bars are increasingly stocking and serving better ranges of wine. The prospects for higher consumption in the UK are still reasonably good, but suppliers need to persuade consumers to spend more per bottle to raise their profit margins. The impetus will come from the larger firms, which are consolidating their positions at a global level, including Constellation Brands and Gallo of the US, and the UK's own Diageo and Allied Domecq.
Text © 2004Key Note
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Last updated by Amanda Porteous June
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