Galatea Presentation May 2015 Swedish Alcohol Market. Goverment - - PowerPoint PPT Presentation

Galatea Presentation May 2015

Swedish Alcohol Market.

• Goverment controlled through state owned Sytembolaget, similiar to LCBO.
• Alcoholic products above 3,5% can only be sold to consumers in the some 420 stores.
• Stores are divided into Standard stores and Premium stores due to consumer pattern in

each store.

• Systembolaget is the world’s second largest distributor of alcoholic beverages, distributing

470 miljon liters annually.

• Some 50% of the volume is beer and 42% wine, beer is the only category growing 2014 vs

2013.

• Products are listed though a tender process.
• Products are evaluated every three months through a ranking system and given the

distribution it’s sales have qualified it for.

• Systembolaget has an idividual agreement for all it’s 4 000 products, this agreement is for

the product itself, NOT for the distributor of the product.

• The On-trade market in Sweden consists of 9 000 outlets with a permit to sell alcoholic

beverages.

Wine 2014 vs 2013

• Wine growth as such was stabile in

volume, but grew 3,2% in value. – Market more mature.

• Etically certified wines grew by 54%.

– Mainly due to new launches – SA, Chile and Arg rose from 4,8 to 9,6%

• Organic wines had a stable growth with a

slight decrease in 2013. – Actions are being taken in hindsight

• f political desicion of 10% Organic

by 2020. – 2014 the Organic volumes grew to 10,8% of the volumes.

• Lesson:

– Organic and ”all sorts or certifications”

Wine 2014 vs 2013, cont.

• For the first year since its entrance,

boxed wines decreased, in total by 0,8% – This was only in the low-priced segments – Red BIB up to SEK 199 saw the biggest decrease with 12,9%

• Per format:

– Boxed wine stands for 52,4% in volume – Or 56,5%, not including sparkling.

Sparkling/ Champagne 2014 vs 2013

• Sparkling wine grew by 11%
• Champagne saw a growth in the lowest price

segment.

• Champagne segment 0-249 grew by 7,7%
• Champagne segment 250-399 grew by 5,9%
• Champagne segment +400 decreased by 1,9%
• Sparkling wine saw the biggest growth in the

segment 80-119, 21%

• The segment 0-79 grew by 12%
• Italy, France and Spain are the three dominant

countries.

Wine 2014 vs 2013, cont.

• White wine makes up 31% of all wines

– Slight increase in volume – Increase in value, 4,5% – Only 30% is bottled wine – Biggest growth from 90-199 – There is a clear trend for Premium wines among the white wines. – South Africa stands for 23% in volume. – And 19% in value. – France has almost the same value, but – 12,5% of the volume

Wine 2014 vs 2013, cont.

• Red wine makes up 52,4% of the total wine

sales.

• Red wine decreased by 2,2% in volume, but

grew slightly in volume. – The move appears to have been towards Rosé-wines – Volume growth is mainly between SEK 80- 99. – All cheap bottles are losing volume.

• Red wine per country:

– Italy has 40% of the volumes – South Africa, Spain and Australia follows, but all are losing volume. – Chile, Argentina, Portugal and New Zeeland are increasing in volume – South Africa, Spain and Chile have the lowest price per liter.

• Red wine by grape:

– Swedes like their sugar and Zinfandel is now the biggest varietal.

Systembolaget’s Product range model.

Ranking/Evaluation and launches:

• Ranking (evaluation)is made four times per year.
• Launches of new products are made four times per year.
• All launches have the chance to qualify for extended listing.
• Products will only have a guaranteed distributíon for six months.
• Products will be evaluated already after one month, not six as previously.
• The current January-March period decides distribution as of June 1st.
• Consumer prices can only be changed twice a year, March 1st and September

1st, with a three month lead time.

Ranking

Evaluation

• What is evaluated and how?
• First of all it’s not about sales, it’s about margin for Systembolaget.
• A product with a higher price will get higher points.
• So, 1 Margin
• 2, Market factor, as compared to other products in same segment, for each shop.
• 3, Volume correction
• These three will give a product its future distribution and the process is done seperately for

Standard stores and Premium stores.

Evaluation, cont.

• This example is for Premium Category white wine 3 Liter BIB.
• Factor is how the wines are performing in comparison with competing wines.

Category Name Points Mark points Factor Vol. corrected points Volymkorrigering Final points

• Fut. SMIX4 Fut. SMIX5 Fut. SMIX6 Curr. stores in cat. No Sold Tot Sold

Premium Foot of Africa Chenin Bl Box 3L 233 926 233 926 1,00 77 975 3 77 975 ABCD ABCDE B 92 16 959 62 091 Premium Robertson Chardonnay box 3 L 140 986 140 986 1,00 46 995 3 46 995 ABCD ABCDE B 92 8 611 30 435 Premium Leva Chard Dimiat & Muscat box 3 l 139 356 140 119 1,01 46 706 3 46 706 ABCD ABCDE B 90 10 077 46 185 Premium Il Nostro Catarratto Grecani box 3L 132 103 134 789 1,02 44 930 3 44 930 ABCD ABCDE B 76 10 058 33 163 Premium Inycon Chard Pinot Grigio Box 3L 117 558 119 084 1,01 39 695 3 39 695 ABCD ABCDE B 32 7 791 20 932 Premium Casas Patronales Char Sauv Bl 3L 118 753 118 753 1,00 39 584 3 39 584 BCD ABCDE 92 7 505 26 382 Premium Chapel Hill Riesling Sauv Bl box 3l 110 744 110 744 1,00 36 915 3 36 915 BCD ABCDE 85 7 308 34 469 Premium Chill Out Fresh&Fruity Chard box 3L 108 554 108 554 1,00 36 185 3 36 185 BCD ACDE 92 6 649 28 041 Premium Drostdy-Hof Steen box 3 l 103 946 108 342 1,04 36 114 3 36 114 CD CDE 32 7 137 21 916 Premium Ecologica Torrontés Chardonnay 3L 99 101 99 356 1,00 33 119 3 33 119 BCD BCDE 91 5 641 17 903 Premium Mandala SB CB Chard box 3 L 80 475 83 289 1,03 27 763 3 27 763 D DE 71 4 974 14 898 Premium Opal Springs Chard Viogn 14 3 L 53 539 60 127 1,12 20 042 3 20 042 D DE 71 3 571 15 431 Premium Oude Kaap Chardonnay box 3l 34 987 51 115 1,46 17 038 3 17 038 8 2 006 6 826 Premium Black Tower Rivaner box 3 L 34 284 50 393 1,47 16 798 3 16 798 32 1 731 12 022 Premium White Roses Chard Viogn Box 3 L 16 299 31 454 1,93 10 485 3 10 485 994 5 165 Premium Wildboar's Rock Riesling box 13 3L 13 675 26 694 1,95 8 898 3 8 898 776 1 375 Premium KWV Chenin Blanc Muscat box 3 l 7 449 21 845 2,93 7 282 3 7 282 452 11 547 Premium Moselland Riesling Kab box 3 l 6 698 21 269 3,18 7 090 3 7 090 329 3 425 Premium Californ White box 3 l 7 417 18 734 2,53 6 245 3 6 245 533 6 351 Premium Königsmosel Riesl box 3 l 5 114 17 414 3,40 5 805 3 5 805 246 1 020 Premium Florentina Torrontes S Bl box 3L 2 690 9 277 3,45 3 092 3 3 092 177 3 248

Galatea

• Situated in Stockholm, Sweden.
• 2014 turnover € 92 million.
• 5th largest supplier to State monopoly for alcoholic beverages.
• 4th largest supplier to the On-trade
• Own it’s warehouse and distribution chain, through daughter company KGA
• 100 employees (including KGA staff)
• Sales volumes 2014, 29 million liters.
• Since October 2014 100% owned by Martin&Servera

Sales team

• Our sales team consists of:

– 9 sales reps, covering the whole of Sweden – 3 full time tele sales – 1 coach – controller for installation maintenance – 1 Sales director – 1 Sales manager On-Trade – 1 Wholesaler KAM – 1 KAM Systembolaget, -former buyer at Systembolaget

• We deliver weekly to 1 000 premies, 100% access to all outlets through our

distribution set-up and collaboration with the major breweries.

Key of Galatea:

• Route to market:
• Though our set-up with:

– 5 Brand Managers, all specialized in their field – Own sales force – Martin&Servera partnership – Logistical set-up – Giving us Contol of the entire logistical flow, from order to final delivery at end consumer. – Making life easier, more secure AND more cost efficient We have an unrivalled Route To Market

Galatea Logistics

• Galatea owns it’s own distribution, something that very few importers apart from the major

breweries do

• KGA, is the largest distributor of alcoholic beverages in Sweden.
• KGA offers a lot of advantages to Galatea, especially through pricing, Galatea pays ONLY

when a case leaves the warehouse – No off-loading cost – No registration cost – No rent

• These savings are generally invested back into either,

– Marketing – Consumer pricing – Better margin for the producers

• Plus we have excellent service when it comes to trouble shooting.

– And extra services, such as re-branding and re-packing

• http://www.galatea.se/eng/about-us/videos/the-kga-video/

Outside the box campaigns

• Galatea was in 2011 the first company to do marketing in Cell-phones.
• Cell phone campaigns have the benifit of being:

– Gender specific – Age specific – Area specific – Time specific – Measurable through CTR:s

• People us the cell phones when they have the time and often actually are looking for

something.

• Here is a campaign summary from

the summer of 2014:

– 670 000 unique viewers – 32 887 has swiped – 17 000 used the map (CTR 0,85%) – 50 used the store locator

Outside the box campaigns

Galatea

• Since October 2014 Galatea is owned by Martin & Servera
• The Martin & Servera Group was formed in January 2012 as a result of the merger

between Martin Olsson and Servera R&S.

• Martin & Servera is jointly owned by Axel Johnson AB and the Oldmark family.
• Axel Johnson AB is Sweden’s 21st largest company.
• Martin & Servera is Sweden’s 88th largest company.
• Main reason for purchase, Galatea’s superiority in Sweden regarding Route to market

for Systembolaget and knowledge of imported beer.

Martin & Servera, cont.

• 14 sales offices
• 17 sommeliers
• Some 450 sales persons
• 5 warehouses
• 4 cash & carry
• 2700 employees
• Turnover SEK 12 billion
• 7 000 customers (of 9 000)

Sigtuna Brew house

• Situated just by Arlanda is the Sigtuna Brew house

– Importance to wines:

• Full equipped laboratory giving us the possibility to check

– ABV% – Sugar content – Acidity – And all other needs.

Conclusion

• Galatea can since the merger with Martin&Servera now offer:

– A total of 26 sales people solely dedicated to wine, beer and spirits. – 450 Martin&Servera ”ordinary” sales people – Two individual tele sales set-ups – Fully controlled and transparent logistical set-up – A team of Brand managers, and the possibillity of Brand Ambassadors – An unrivalled Route to market – Transparent monthly reports.

• On top of this

– Galatea is main partner of the White Guide, Swedish equivalent of Guide Rouge. – Martin&Servera is main sponsor of the Swedish Sommelier’s Association – Martin&Servera is main sponsor of the Swedish Culinary Team – Martin&Servera has an acredited Sommelier’s education in-house – Galatea’s aim is not to be an importer,

• It’s to be a Partner!

Thank you!

Should there be any questions regarding this presentation please do not hesitate to contact: Dan Samson Senior Brand Manager dan@galatea.se +46 734 44 91 82