Multinationals shake off 2009 Hangover

By Andrew Starke

2009 was a bad year for large multinational liquor companies with a new report showing that many lost ground to domestic brands as the global financial crisis undermined consumer confidence.

The 2010 Millionaires Club, a report produced annually by Euromonitor International, found that the recession had caused consumers’ to trade down and resulted in a big decline in on-trade consumption.

“2009 was not a good year for multinational companies,” said Euromonitor International senior alcoholic drinks analyst, Jeremy Cunnington.

“The 2010 Millionaires ranking saw total volumes of international brands on the list fall by 5 percent while domestic/local brands saw growth of 6 percent, selling over 400 million 9-litre cases.”

The Millionaires supplement is a ranking of spirits brands with sales of over one million 9-litre cases across all retail channels.

In the third year of Euromonitor International’s Millionaires research, the 2010 list includes a record breaking 162 brands.

Jinro from South Korea remained atop the list although the soju drink lost ground in volume sales as did Diageo’s Smirnoff vodka, the second biggest brand.

Pernod Ricard remained the company with the most brands on the Millionaires list despite losing two from the 2009 list - Presidente brandy and, more surprisingly, Luksusowa vodka.

Two stand-out brands were Indian whiskies which continued to benefit from a rapidly growing category and a booming Indian economy.

Second-placed United Spirits increased the number of brands on the list up two to 19 with its Bagpiper Indian whisk(e)y becoming the leading whisk(e)y brand in the world.

Diageo sits in an increasingly distant third place with 14 brands (down one) with only two of its rum brands benefiting from strong growth in its core markets (North America for Captain Morgan, Venezuela for Cacique) along with Bells in the UK.

Bacardi continued to suffer from its over-reliance on a limited number of major markets, specifically in the US and Spain, with only two of its brands, Eristoff vodka and William Lawson blended scotch, recording growth.

The 2010 listing boasted 17 new brand entries, including brands from Colombia, Turkey and most notably the soju producers of South Korea.

It also showed the strength and power of spirits consumption in Asia-Pacific as domestic/local brands on the list, which are almost entirely sold in the region, accounted for over 40 percent of total brand volumes.

While the picture painted in volume terms in 2009 was relatively bleak for international brands, 2010 is likely to be far more positive, due to the emerging markets of Latin America, Asia-Pacific and Eastern Europe.

“Signs of economic recovery in the first half of 2010 will undoubtedly help international brands bounce back,” said Cunnington.

“However, many core markets for these brands, especially in Western Europe, could still hold back growth as governments and consumers continue to restrict spending to reduce their high levels of debt.”


 

[Fri 09/07/2010 01:04:01]