High-end spirits, wine and beer survive in a stale alcohol industry
Trading up to higher-quality spirits, wine and beer continued to fuel beverage alcohol industry growth in 2007, but the rates of growth slowed compared to previous boom years. Wine consumption increased 4 percent while spirits grew 3.2 percent, and beer rose just 1.2 percent, according to the 2008 Handbook Advance published by 
The Beverage Information Group, Norwalk, Conn.
The weakening U.S. economy was a major contributor to the slowdown, especially at restaurants and bars, which are key to the decade-long expansion of spirits and wine. Still, the distilled spirits business was up (reaching 182.4 million nine-liter cases) for the tenth consecutive year, wine sales grew for the 14th consecutive year (hitting 294.4 million cases) and beer recovered for the second year in a row from a drop in 2005 (marking 2.93 billion cases).
Wine continued to find favor with new legal-age drinkers, American craft beers continued a run of double-digit growth and imported spirits showed great strength last year. High-end products across all categories continued to outperform the business as a whole.
Vodka, the single largest spirit category, grew 6.7 percent in 2007. The category now accounts for 28.9 percent of the spirits business. Rum, the second-largest spirit category, also showed power, growing 5.1 percent. Tequila and Irish whiskey, both substantially smaller in volume than vodka and rum, posted impressive gains of 9.4 percent and 17.5 percent, respectively. Losing ground were blended whiskey (down 1.9 percent), Canadian whiskey (down 0.6 percent) and prepared cocktails (down 5 percent).
Among table wines, which account for more than 91 percent of U.S. wine consumption, almost every country exporting to the U.S. showed growth last year, with Italy (up 8.8 percent) and France (up 6.6 percent) leading the way. Australia stayed flat last year, perhaps partly due to the slower growth of Yellow Tail, the leading imported wine in the U.S. Imported table wines grew faster last year (+7.6 percent) versus domestics (+3.1 percent), though domestic wines still dominate the business, with 66.9 percent coming from the U.S.
Craft and light beers were the main bright spots among beers; though imports advanced, it was at a much slower pace than previous years. Among premium, popular, malt liquor, ice and flavored malt beverages, only ice beer grew in 2007. Total beer consumption rose 1.2 percent or 35.7 million cases to 2.93 billion 2.25 gallon cases. Light beers grew 2.5 percent and now represent 51.1 percent of the whole beer market.
Dollar sales outpaced volume sales across all segments in 2007, with on-premise sales up 8.3 percent, and off-premise sales up 5.0 percent. Total sales for 2007 reached $188.7 billion. For more information visit www.bevinfogroup.com.
Pundits’ politics polarize their likeability
Rush Limbaugh is one of the least-favorite news and current-affairs personalities, according to a Harris Interactive poll. Forty-two percent of respondents cited the conservative talk show host as someone they are not particularly fond of, while 23 percent say fellow right-wing bloviator Bill O’Reilly earns the same dubious honor. Results also find CNN’s Larry King in the bottom three with 19 percent.
Research company Harris Interactive, Rochester, N.Y., conducted a nationwide Harris Poll between January 15 and 22, 2008, surveying online 2,302 U.S. adults aged 18 and over to learn which news and current-affairs personalities top lists of favorite and least-favorite.
Leading the list of favorites, just under one-quarter (23 percent) of Americans cite Fox News Channel’s Bill O’Reilly as one of their three favorite news and current-affairs personalities, followed by host of ABC’s World News Tonight Charles Gibson and CNN’s Anderson Cooper (17 percent each).
Rounding out the top five favorite news and current affairs personalities is NBC Nightly News anchor Brian Williams (16 percent), and then with 13 percent each is Meet the Press host Tim Russert, CBS Evening News anchor Katie Couric and former 60 Minutes correspondent Mike Wallace. On the other side, 17 percent say that Nancy Grace of CNN Headline News is one of their least favorites and 16 percent cite Katie Couric. In looking at the two lists, there are a number of the same people who are in the top 10 on both. Bill O’Reilly, Katie Couric, Barbara Walters, Rush Limbaugh and Sean Hannity of Fox News all are in the top half of the favorites and the least favorites list.
For Republicans, the top three favorites are Bill O’Reilly (42 percent), Rush Limbaugh (28 percent) and Sean Hannity (27 percent). Democrats chose Anderson Cooper (22 percent), Brian Williams (20 percent) and Charles Gibson (19 percent) as favorites. One thing to note is that Republicans are more united behind their favorites while the Democrats are a bit more fragmented.
Democrats show stronger support in the list of their least favorites as three in five Democrats (60 percent) say it’s Rush Limbaugh, followed by one-third (34 percent) who say Bill O’Reilly and 17 percent who say Nancy Grace. For Republicans, just over a quarter (26 percent) each says Larry King and Katie Couric are their least favorites. Rush Limbaugh inspires mixed emotions for Republicans as 24 percent say he is one of their least favorites. For more information visit www.harrisinteractive.com.
For many, “green” trumps convenience in packaging
More than half of U.S. consumers would give up all forms of packaging provided for convenience purposes if it would benefit the environment, including packaging designed for easy stacking/storing at home (58 percent); packaging that can be used for cooking or doubling as a re-sealable container (55 percent); and packaging designed for easy transport (53 percent). According to New York researcher The Nielsen Company, U.S. consumers are slightly more likely to give up packaging for convenience purposes than the average global consumer.
At the other end of the scale, Nielsen finds that U.S. consumers are least willing to give up packaging designed to keep products clean and untouched by other shoppers (26 percent); packaging designed to keep products in good condition (31 percent); packaging that preserves products to make them last longer and stay fresher (31 percent); and packaging information, including food labeling, cooking and usage instructions (33 percent). One in 10 U.S. consumers is not prepared to give up any aspect of packaging for the benefit of the environment.
Nielsen’s research uncovers some differences regarding attitudes toward packaging between different regions of the world. Generally, Europeans and North Americans agree on types of packaging they are willing to forego to help the environment, with nearly 60 percent willing to give up packaging designed for stacking and storing at home. By comparison, only 42 percent of Asians would be willing to give up these types of convenience packaging, likely because Asian homes tend to be smaller and have limited storage space, so “stack and store” options are more practical and preferable.
Environmentally-aware New Zealanders top global rankings as the most prepared to give up all packaging aspects for the sake of the environment. This may be due to high levels of eco-consciousness, including in-store reminders and recyclable bag merchandising by supermarkets.
“Factors influencing packaging preferences across cultures include whether consumers drive themselves to stores or if they rely on public transportation; the size of their homes and storage space in their kitchens,” says Shuchi Sethi, vice president, Nielsen customized research. “We see cultural food and shopping habits also influencing packaging choice.”
According to studies conducted using packs@work, Nielsen’s proprietary pack research system, food retailers and manufacturers are continuously striving to meet consumer demand for more eco-friendly packaging solutions that minimize impact on the environment.
“In more eco-aware markets, including the U.S., there is an increasing expectation of packaging with minimal environmental impact, although for most consumers, this doesn’t necessarily translate into a willingness to pay more,” says Sethi. “What most consumers expect is packaging that provides an added ‘feel eco-good factor’ by minimizing environmental impacts.”
In more eco-conscious countries, Nielsen’s packs@work studies show consumer preference for packaging that is recyclable, biodegradable and safe for disposal, using materials such as paper, cardboard and/or glass rather than plastic and polystyrene. Glass packaging, for example, is considered to be hygienic, inert, recyclable, tamper-proof and potentially able to extend product life. Its aesthetic appeal provides positive cues about product authenticity, quality and efficiency. For more information visit www.nielsen.com.
High quality and low cost drive consumers to private-label products
Nearly 75 percent of all U.S. consumers rate private-label offerings as excellent in overall quality, with older and lower-income shoppers leading the way, according to a study from Chicago research firm Information Resources Inc. (IRI). The report also reveals that, despite generally flat sales during the past few years, store brands are gaining favorability in key CPG categories, offering the potential of sizeable market share gains among lower-income shoppers.
The study, The 2008 Private-label Report: Understanding Emerging Trends and Key Success Factors in Private-label, provides information for retailers and manufacturers through additional research components.
It’s an emerging fact of life for retailers: the quality gap is closing and new consumer attitudes are changing the center-store landscape. Price alone is no longer the make-or-break proposition for customer selection of private-label items that it once was. Quality, variety, packaging and the store’s reputation itself are now important contributing factors that determine the selection of a private-label product.
IRI findings show that several categories of CPG private-label products are ripe for market share gains. Commodity-driven categories that are not dominated by a national brand and possess little need for innovation are showing increased favorability. These include staples, such as butter, pasta, milk and creamers and paperware products. Joining these are a variety of new private-label entries demonstrating the consumer’s willingness to choose items that maintain or exceed quality expectations, regardless of the label. Among these developing growth categories are refrigerated entrees, skin care products, baby formula, tissue items and laundry detergent.
With price still a dominating factor, the target audience for private-label CPG products remains lower-income shoppers. Compared with other consumers, lower-income shoppers rely considerably more on private-label items across all 295 analyzed food, beverage and non-food categories. In 2007, lower-income shoppers spent 17 percent of their overall CPG dollars on private-label products, as compared to 15.7 percent and 13.7 percent for middle-income and higher-income, respectively. Yet, IRI analysis shows that despite the larger stake that lower-income shoppers have in store brand items, retailers are missing opportunities to tap into the growth potential of this market.
“There’s a huge opportunity for retailers who understand the power of private-label offerings,” says Thom Blischok, president of IRI consulting and innovation. “Our analysis of lower-income shoppers shows plenty of room for product expansion and a greater chance to gain market share across many key categories. By responding to consumer needs, especially young families who are looking for both quality and value, smart retailers can develop a whole new segment of brand-loyal consumers who look for the private-label first.” For more information visit www.infores.com.
Roadside billboards merge successfully into the digital age
Viewers feel that digital billboards provide helpful information about their community and drive traffic to local businesses, and more than 80 percent of viewers recalled at least one ad, according to New York research company Arbitron Inc.’s study Arbitron Digital Billboard Report: Cleveland Case Study. Digital billboards are increasingly being used to deliver news and advertising, as well as public notices such as AMBER Alerts.
Nine out of 10 motorists notice digital billboard advertising messages at least some of the time. More than four out of five surveyed said digital billboards display timely news, traffic, weather and emergency information important to the public.
Of the nine advertisements that ran on the digital billboards, 83 percent of commuters were able to recall at least one ad, and 65 percent could recall at least two.
After seeing a business’ ad on the digital displays, nearly one in five viewers were motivated to visit the featured store, and 15 percent later visited a featured restaurant. Thirty-nine percent of travelers who noticed the billboards learned about an event that they were interested in attending.
Local media gained the most recognition from brand-aided recall with local radio stations reaching 50 percent of travelers. The local Fox TV affiliate ads reached 41 percent of commuters. In addition to recall, digital ads help to generate audiences for other media. Thirty-five percent noted a radio station to listen to, and 28 percent noted a television program to watch. For more information visit www.arbitron.com.
Banking and buying on-the-go seen as a safe bet
A study from Rochester, N.Y., research company Harris Interactive finds 16 percent of mobile phone subscribers already use mobile banking services, with 60 percent of these people using the services at least once a week. Many others presently not banking and buying on-the-go expressed interest in mobile banking, with 35 percent open to checking bank account balances and transferring funds via their mobile devices. A third of those surveyed (33 percent) also said they would like to receive text message alerts from their financial institutions.
The survey finds that on-the-go mobile purchases are on the rise. About 25 percent of mobile phone users with mobile access to the Internet now use their devices to buy goods and services online via a credit card. One in five respondents (20 percent) said they would like to someday use their phones like a mobile wallet, where charges would be billed directly to their mobile accounts. In addition, 10 percent of the survey participants said they would consider wire transfers and stock trading via their mobile phones.
Among those surveyed, the biggest barrier affecting consumer acceptance of mobile banking and commerce is security concerns over personal data. Two-thirds (66 percent) of those interviewed express apprehension about using their mobile phone to transmit sensitive financial information. Nearly the same percentage, (63 percent) report fears about this medium exposing them to potential fraud and financial scams. Sixty-one percent also worry about losing a mobile phone containing personal financial information. Other consumer concerns with mobile commerce include questions about usability (43 percent), reliability (37 percent) and the speed of the wireless network (23 percent). For more information visit www.harrisinteractive.com.
Price and convenience draw women and men to their grocers, respectively
A study conducted by Baltimore marketing company Vertis Communications, Vertis Customer Focus 2008: Grocery, revealed that almost half of chief female shoppers said price-related offerings, such as lowest everyday prices, best advertised specials and store coupons, were most important in deciding where to spend their grocery dollars. Forty-eight percent of women age 35-49 who do more than 60 percent of the grocery shopping value these offerings, as do 47 percent of chief female shoppers age 50 and older and 46 percent of chief women shoppers age 18-34.
While the study shows price-related offerings are important to approximately 30 percent of chief male shoppers, 41 percent of male shoppers age 18-34 value convenience, such as proximity to home and work, more than any other supermarket factor.
Other key findings include: 23 percent of men ages 18-34 are most likely to shop at grocery stores close to home, compared to 17 percent of women the same age; best quality food overall was important to only 1 percent of total adults; selection and quality ranked third behind price and convenience for almost all age groups. For more information visit www.vertisinc.com.
Moms worry about marketers targeting kids but take some responsibility
Overwhelmingly, mothers believe that there is too much marketing aimed at children (89 percent), and over half are extremely or very concerned about the situation (57 percent). Mothers fear that marketers will have a negative impact on a range of issues with the biggest being materialism (82 percent), body image (72 percent), childhood obesity (69 percent) and low self-esteem (65 percent), according to a research session conducted by Waltham, Mass., research company Invoke Solutions. The research session produced quantitative and qualitative data on how mothers feel about marketing to children, what is appropriate and where the responsibility in protecting their children lies.
Mothers are very aware of marketing that is targeted directly to their children (66 percent very or extremely aware) and are concerned about its impact, especially with unhealthy food items and inappropriate toys and games. Fast food and carbonated beverages were considered the least appropriate product categories to be marketing to children (70 percent of mothers labeled each of them inappropriate). Still, not all marketers were labeled as bad. Some of the brands that came up as most admirable were Toys “R” Us, Kellogg’s and Mattel. Also, brands that were considered to be selling healthy products or encouraging reading were seen in a favorable light.
More and more children have access to their own technology, which allows them to be exposed to marketers without supervision. Still, 83 percent of mothers claim to monitor their activity frequently or all the time.
In terms of television viewing, 40 percent of mothers watch with their children most of the time, with only 17 percent giving their children the ability to watch whatever they want, when they want. Instead, children are given approved shows or time slots for their viewing. Even with television clearly having the largest impact on children of all media, 69 percent of mothers feel that their TV choices are age-appropriate.
Ninety-two percent of mothers state that their children ask for specific products and brands when taken on shopping trips, especially in the toy, food, snack, game and entertainment categories. While the impact of those suggestions varies across categories, most mothers give in at least some of the time, saying they try to balance saying yes and no (66 percent) or say yes as much as they can afford to (17 percent).
Even with all of the negativity felt toward marketers and specifically those targeting children with unhealthy snacks and games, mothers still feel strongly that it is the parents’ job to protect their children (89 percent agree) and that the media should play a more proactive role in limiting marketing to children (83 percent agree), more than they feel that schools and the government need to play a bigger part. For more information visit www.invoke.com.