Is there a Ready To Drink Binge Drinking Epidemic in Australia

1
Is there aReady To DrinkBinge Drinking
Epidemicin Australia?

• May 2008

2
Research Objectives

• Is there a Ready To Drink (RTD) led binge
  drinking Epidemic increase in Australia?
• Do RTDs deliver a substantial volume of pure
  alcohol (LALs) within the alcoholic beverage
  consumers intake?
• Has the rate of RTD consumption in Australia
  increased over the past 2 years?
• If there has been an increase, is this being
  driven by younger adults?
• Can it be said that RTDs are the leading cause
  for an increase in Australian young adult Binge
  Drinking habits?

3
Executive Summary

• Market volume trends of the different types of
  alcohol consumed will mislead understanding of
  consumer consumption patterns
• Volume is a function of the number of consumers
  and how much they consume
• Analysis of underlying consumer trends reveal
  completely different trends within each alcoholic
  beverage type to what topline market trends could
  suggest
• At a macro level, beer appears to be the biggest
  contributor to unhealthy rates of alcohol
  consumption
• Within each of the other different alcoholic
  beverage types (RTD, Full Strength Spirits and
  Wine), there are segments that should also be of
  concern
• Improving consumer consumption behaviours will
  need to be addressed industry wide not within
  one type of alcoholic beverage

4
Executive Summary Market volume trends
misleading

• In volume growth, RTDs appear to be the long term
  growth area followed by wine. Beer and Full
  Strength Spirit volumes in decline.
• In LALs however, Wine is growing at similar
  levels to RTDs
• Within these two categories though, all segments
  have growth rates declining
• Beer LAL volume growth is declining.
• Within Beer, Imported Beer is in strong growth
  and the growth rate is now the fastest of any
  segment.
• The Imported Beer growth rate is accelerating and
  in the most recent available data is over 6 times
  greater than next fastest growing alcoholic
  beverage segment within the other categories, 53
  versus Full Strength Light Spirits 12 and
  Sparkling Wine 8
• Imported Beer is larger in size than Light Spirit
  RTDs

5
Executive Summary Consumer behaviours driving
market volumes

• Beer
• A reduction in the number of consumers mask a
  significant increase in consumption rates. Males
  18-24 consumption rate increased from 68 drinks
  to 76 drinks over the last 2 years when looking
  at 4 week consumption
• RTD
• Volume growth is being derived from increases in
  numbers of consumers, predominantly older
  consumers (men and women 40). The percentage of
  drinkers aged 40 has increased from 40 to 43
  of Total RTD drinkers. Consumption rates by
  drinkers is falling. Consumption by Male 18-24
  has decrease from 32 drinks to 19 drinks over the
  last 2 years when looking at 4 week consumption
• Full Strength Spirits
• Volume is gently declining primarily due to
  decreasing consumption rates. Males 18-24 were
  consuming 17 drinks last year and 15 drinks this
  year in their last 4 weeks surveyed
• Wine
• Volume growth is being derived due to increases
  in both number of drinkers and consumption rates.
  The consumption rate increase is approximately 2
  drinks within the last 4 weeks across both males
  and females but still one of the lowest across
  the different alcohol types

6
Executive Summary Concerns for unhealthy
drinking behaviours

• When assessing consumption across different
  beverage types, especially in 18-24 year olds
• Beer
• The consumption rate is significantly higher than
  any other beverage types (Men and Women) Beer 76
  Drinks, RTD 19 drinks, Spirits 15 drinks and Wine
  12 Drinks. The consumption rate is also
  increasing significantly in Men.
• RTDs
• Within Light Spirit RTDs (approx 21 of Total
  RTD), female consumption rates are the second
  highest but decreasing, Beer is only slightly
  higher
• Full Strength Spirits
• For women, consumption rates while lower than
  Beer and RTDs is increasing
• Wine
• While consumption rates are generally lower,
  these rates are increasing in both sexes

7
Executive Summary Perception or Reality

• For Light Spirit RTDs (Alco-pops, Colours and
  Flavours)
• Comprise 21 of Total RTDs
• Main brands commented on as culprits Bacardi
  Breezers, Vodka Cruisers etc are in continued
  significant decline, some with volumes so low as
  to question capability to be a cause. Nearly all
  brands in the segment demonstrate short lived
  appeal (less than 3 years)
• Customised consumer research has identified that
  the majority of consumption occasions consist of
  more that 1 alcohol type. Products consumed later
  in the occasion, independent of the volume
  consumed, will more likely be identified as
  suspect. (Recency versus primacy)
• Spirit based drink consumption (Full Strength
  Sprits and Premixed Spirits) more often occurs
  later in the consumption occasion. Beer, and to
  lesser extent wine feature more prominently
  earlier in the average consumption occasion
• Even with only 1 RTD drink at the end of the
  consumption occasion, RTD could easily be
  perceived as a leading cause of excess consumption

8
Executive Summary Consumers with potentially
unhealthy levels of consumption

• Working from the premise that Binge Drinkers are
  high volume alcohol consumers, analysis of
  consumers with 100 drink consumption in a 4 week
  period reveal
• There are approximately 1.8 million people with
  little change over time and almost 50 of these
  are Men 40
• Across all 100 drinkers, Beer is the dominant
  alcoholic beverage accounting for literally 3 in
  4 drinks (74)
• Over time, Beer is increasing its share of
  volume within the 100 drinkers 72 in 2004 to
  74 in 2007
• Within the 18-24 year old sub group the number of
  drinkers has increased slightly but driven
  entirely by men, the number of women are in
  significant decline.
• For Men 18-24, Beer is even more dominant in
  total alcohol consumption 76 and increasing. RTD
  and Spirits share of volume consumed is actually
  in decline with both accounting for 1 in 10
  drinks
• For Women 18-24, there is a different trend. Beer
  is still a main beverage type 27, but has
  declined significantly over time. RTDs have
  increased and is the leading alcoholic beverage
  type, 33. Wine and Spirits share of consumption
  is also on the increase.

9
Executive Summary Conclusion

• Is there a Ready To Drink (RTD) led binge
  drinking Epidemic increase in Australia?
• No, the available data does not support this
• To improve alcohol consumption habits in
  Australia, all alcohol types would need to be
  included in a solution

10
About the key data sources

• IWSR
•  The IWSR (International Wine and Spirit Record)
  was started in 1971 as a UK subsidiary of the
  market research company, System Three
  Communications, specialising extensively on the
  global alcoholic beverage market
• The IWSR supplies volume data on wine and spirit
  consumption for
• brands and categories across more than 120
  domestic markets (incl Australia)
• categories across a further 100 countries and
  territories
• brands and categories across global duty free and
  travel retail
• and in-depth market commentaries
• Annual volume measurement released May in
  following year, 2006 is most current Data
• Roy Morgan Single Source
• A continuous survey of more than 50,000
  Australians aged 14 each year, of which roughly
  half complete a detailed Product Poll containing
  alcohol consumption by category and brand
  (alcohol questions are only asked of people 18).
• The sample is nation-wide and representative of
  all regions, age breaks and gender.
• Roy Morgan Single Source is used widely by all
  major industries including alcohol, retail,
  automotive, finance, utilities, media, tourism,
  health and government to understand trends in
  behaviour both here in Australia and compared to
  other countries.
• The alcohol data covers consumption within time
  periods, brands selected, volume consumed,
  location consumed and more. The trend has had no
  major continuity breaks since 2002.

11
The Market

• Key volume trends

12
In actual litres, Beer remains the dominant
alcoholic beverage type with Premixed Spirits
appearing to be the long term growth product
Beer is the largest category in the Australian
Liquor Market
RTDs in growth, but still not up to the total
volume of wine
13
In litres of pure alcohol there is a different
trend, both Wine and Premixed Spirits are in
similar growth, with Beer and Spirits in decline
When looking at litres of pure alcohol (LALs)
Beer is over 4 times the size of RTD
Both Wine and RTDs have a similar absolute LAL
volume growth over time
14
At Segment Level, Imported Beer growth rate is
almost 5 times higher than any other segment
within the Australian liquor market
Within the Beer category, Imported beer is
growing at an increasing rate. Imported Beer is
now larger than Light Spirit RTDs.
Source IWSR 2007
15
Dark spirit premixed drinks account for around
75 of the RTD market. Light spirit premixed
drinks (alco-pops?) are around 20
16
Many of the major brands within Dark Spirit
Premixes maintain a longer term growth profile
17
Almost all major brands within Light Spirit
Premixes enter sales volume decline after 2 to 3
years in market
Smirnoff Black Ice (7) is the only mainstream
Light Spirit RTD showing volume growth after 3
years of being in market. UDL is the other brand
with continued growth as is a value brand
18
Consumer

• What is happening at a consumer level?

19
Across the alcohol beverage categories, RTDs are
consumed by the least amount of people
71.6 of people aged 18 in Australia consumed
wine within the last 4 weeks of being surveyed
20
RTDs and Full Strength Spirits are have the
lowest drinks per consumer rate (and down on last
year). The Beer consumption rate is over 3.5
times more then RTD
The average Beer drinker consumed 52.4 glasses of
beer within the last 4 weeks of being surveyed
21
With less drinkers and lower consumption rates,
RTDs have the lowest volume share of glasses
measure 8.6, Beer has more than 6 times more
volume
Beer has 57 of the alcoholic beverage market
measured in glasses within the last 4 weeks of
being surveyed
22
All alcohol beverage types have the majority of
volume consumed by men, In RTDs, Men account for
57.6 of the volume
57.6
87.4
51.3
62.9
Of the total RTD volume measured in drinks, 15.1
was consumed by males 18-24
23
Overall RTD consumption is higher in rural areas
but Light Spirit based RTDs have a slight skew to
metropolitan areas
57.7 of the population aged 18 live in
metropolitan areas and account for 58.1 of Light
Spirit based RTD volume
24
RTDs are increasing being consumed by older (40)
consumers. The proportion of drinkers aged 18-24
has fallen over the last 2 years
Last year, 40.1 of RTD volume was consumed by
people 40, this year it has risen to 42.6
25
Variation exists in demography across the types
of RTD. Dark spirit premix has a notable older
and more male consumer than light spirit premix
22.4 of dark spirit premix volume is consumed
by men aged 40
26
The proportion of total RTD volume consumed by
older (40) males and females is increasing over
time and decreasing with 18-24 year olds.
20.5 of RTD volume was consumed by Males 40,
up from 18.5 the previous year
27
When looking at the total alcoholic beverage
consumption of males 18-24, Beer makes up 70 of
total volume and is increasing
Last year, 63.8 of total alcoholic beverages
consumed by males 18-24 was beer
28
Beers increase as a proportion of total alcohol
consumption with males 18-24 due to an increase
in volume consumed. RTDs actually decreased
This year, 18-24 male Beer drinkers consumed 75.7
beer drinks on average in a 4 week period, up
from 68.0
This year, 18-24 male RTD drinkers consumed 19.4
RTD drinks on average in a 4 week period, down
from 32.2.
29
Within total alcoholic beverage consumption by
females 18-24, RTD share of volume consumed is
decreasing and makes up 33 of total volume, the
proportion of consumption for Wine and Full
Strength Spirits is increasing
Last year, 24.8 of total alcoholic beverages
consumed by females 18-24 was beer
30
Wine and Full Strength Spirits increase as a
proportion of total alcohol consumption with
females 18-24 due to increase volume consumed.
RTDs consumption rates decreased and Beer
consumption rates are the highest
This year, 18-24 female RTD drinkers consumed
17.0 RTD drinks on average in a 4 week period,
down from 18.9
31
The majority of consumption occasions contain a
mix of different alcohol types. Beer tends to be
consumed earlier in the occasion and Dark Spirits
later in the occasion
Source Customised Research 2004, Bluemoon
32
What are the areas of those at highest risk of
binge drinking?

• What alcohol is consumed by people who drink more
  than 100 drinks in a 4 week period

33
A projected 1.8 million Australians consume over
100 drinks in a 4 week period which is relatively
unchanged over the last 4 years
34
Men aged 40 account for literally half of the
100 drinkers, and Men aged 30 are the next
largest group. Men 18-24 are increasing over
time, with women 18-24 decreasing by an almost
similar amount
35
For the consumers of 100 drinks in a 4 week
period, more than 7 in 10 of those drinks will be
beer, RTDs account for less than 1 in 10
36
Beers presence in the 100 drinkers repertoire
in increasing over time, Spirits, RTDs and Wines
presence are all decreasing
37
For 18-24 year old 100 drinkers, Beer now
accounts for almost 3 in 4 drinks and increasing.
Both RTDs and Spirits have notable declines
38
Males 18-24 who consume 100 drinks, reflect a
similar trend to Total 18-24 year olds with Beer
the dominant alcohol type, almost 4 in 5 drinks.
This is due to men 18-24 accounting for almost 5
times the number of consumers of women 18-24 when
looking at total 18-24 year olds
39
Women 18-24 who consume 100 drinks do show a
different behaviour to men. Beer is still a
leading alcoholic beverage consumed although RTDs
have an increased level of consumption. Beer has
decreased dramatically over time with RTDs
growing at a strong but slower rate