National Liquor News February 2018 by The Intermedia Group

AUSTRALIAâ&#x20AC;&#x2122;S LEADING LIQUOR INDUSTRY MAGAZINE

vol. 37 no. 1 - FEBRUARY 2018

THE 2018 ANNUAL INDUSTRY LEADERS FORUM

Australia

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www.liquorawards.com.au Early bird tickets: James Wells - 02 8586 6101 or james@intermedia.com.au Sponsorship opportunities: Shane T Williams - 02 8586 6205 or stwilliams@intermedia.com.au

SAVE THE DATE WEDNESDAY 31 OCTOBER 2018

â&#x20AC;&#x2DC;For 36 years National Liquor News has been the leading trade publication communicating news, trends and in depth features to educate and inform liquor retailers nationally.â&#x20AC;&#x2122;

One Stop Trade Marketing Shop Planning a brand launch? Want to communicate to more than 40,000 + readers in the off-premise? Then book your trade campaign now and speak to the nationâ&#x20AC;&#x2122;s liquor retailers.

Contact Shane T Williams on 0431 857 765 or 02 8586 6205 or stwilliams@intermedia.com.au

EDITOR’S NOTE

PUBLISHED BY:

Food and Beverage Media Pty Ltd 41 Bridge Road GLEBE NSW Australia 2037 Tel: 02 9660 2113 Fax: 02 9660 4419

PUBLISHER: James Wells

james@intermedia.com.au

EDITOR: Deborah Jackson

djackson@intermedia.com.au

ASSISTANT EDITOR: Tam Allenby tallenby@intermedia.com.au

Editor’s Note

Shane T Williams and Deb Jackson.

elcome to the first issue of National Liquor News for 2018. The Annual Industry Leaders Forum is always an interesting one to work on because we speak to suppliers, retailers and associations from all around Australia and are able to get a true national perspective on the state of our industry. I hope that the busy Christmas trading period was prosperous for all. I know that in some states it may have been more challenging than usual, particularly with the implementation of the Container Deposit Scheme (CDS) in NSW, but it’s great to hear that so many NSW-based retailers were able to return a profit over this period. In this issue you will read a lot about the NSW CDS. Retailers across the state are dealing with the fallout of the state government’s CDS, which kicked off on 1 December, although invoicing started on 1 November. The scheme started with far fewer than the promised 800 collection points and this was reflected in the return rates, which were much lower than anticipated. Although this has seen Exchange for Change send out refunds to suppliers, which should mean some welcome price relief for retailers, it is too late for those small businesses that have laid off staff or had to close as a result of the scheme. It’s also tough times for many border retailers who will be struggling to compete in a tough market and with increasingly diminishing margins against the nonCDS prices of their close competitors who happen to be based in another state. The CDS will launch in Queensland and the ACT this year and the industry is hopeful that government will take note of the shortcomings of the NSW launch and be better prepared in those states. As we begin a new year we are also relaunching the way we present our monthly IRI data. In 2018

the data we present to you will be more detailed and user friendly. Gone are the tables and graphs of 2017, this year we’ve worked alongside IRI to pull together information that will be truly useful to you in your stores. This will include things like top five growth brands in each category, top performing NPD and much more. You can turn to page 30 to check it out and I’d love to hear your thoughts on this one, so please do get in touch with me if you like the new format or if you have any suggestions on how we could present the information better. The 2018 Annual Industry Leaders Forum is our biggest yet with more interviews than ever before. Overall there still seems to be a huge trend towards craft/independent beer but we’re seeing consumers gaining a preference towards drinking local. We’re also noticing a trend towards entertaining and recreating cocktails at home, and the trend towards health and wellbeing that we noticed in 2017 is really gaining momentum. As always, in this issue of National Liquor News we’ve got market insights from Euromonitor International, Roy Morgan and GfK that we think will be invaluable when planning for the year ahead, these kick off on page 26. I hope you all enjoy reading the 2018 National Liquor News Annual Industry Leaders Forum as much as I enjoyed putting it together, and I hope there is some valuable information in there that will help you in 2018. As always, keep your feedback flowing (djackson@ intermedia.com.au). This is your industry magazine, so make sure that it works for you! Happy reading! Deb

NATIONAL LIQUOR NEWS IS THE OFFICIAL TRADE PUBLICATION OF THE AUSTRALIAN LIQUOR STORES ASSOCIATION (ALSA).

8 | FEBRUARY 2018 NATIONAL LIQUOR NEWS

GENERAL MANAGER SALES – LIQUOR & HOSPITALITY GROUP: Shane T. Williams stwilliams@intermedia.com.au

GROUP ART DIRECTOR – LIQUOR AND HOSPITALITY: Kea Thorburn kthorburn@intermedia.com.au

HEAD OF CIRCULATION: Chris Blacklock cblacklock@intermedia.com.au

PRODUCTION MANAGER: Jacqui Cooper

jacqui@intermedia.com.au

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CONTENTS

12 26

108

Contents February YEAR IN REVIEW 12 We recap the key events that shaped the Australian liquor industry in 2017

RESEARCH & INSIGHTS 26 Euromonitor International 28 GfK 30 IRI 36 Roy Morgan

ASSOCIATIONS 40 ABA 41 ABAC 46 ALSA 48 ALSA Retail Insights 50 ALSA SEA 68 DrinkWise 69 DSICA 72 IBA 82 LSA NSW 84 LSA NT 85 LSA WA

104

Wine Australia

RETAIL & WHOLESALE 44 ALDI 45 Australian Liquor Marketers 64 Coles Liquor 70 Endeavour Drinks Group 73 Independent Liquor Group 76 Liquor Barons 78 Liquor Legends 80 Liquor Marketing Group 88 Retailer Profile: P&V Wine & Liquor 90 Porter’s Liquor 92 Retailer Profile: Porter’s Midway Cellars 93 Red Bottle 96 Thirsty Camel

SUPPLIERS 42 Accolade Wines 52 Archie Rose 54 Asahi 55 Australian Brewery

10 | FEBRUARY 2018 NATIONAL LIQUOR NEWS

Australian Vintage Limited

Bacardi-Martini Australia

Brown Brothers

60 Brown-Forman 62 Campari 66 Coopers 67 Diageo 71

Giesen Group

Kollaras & Co

75 Lion 86

McWilliam’s Wines

Pernod Ricard

Samuel Smith & Son

Treasury Wine Estates

100

Westons World Brands

102

William Grant & Sons

106

Wingara Wine Group

107 Wingman 108

Yealands Wine Group

MADE BY LEADING BARTENDERS, PERFECT FOR MIXING. Untold Spiced Rum was borne from a passionate collaboration between bartenders, artists and spirit experts. Bartenders Dave Kerr (The Beaufort), Nathan Beasley (Black Pearl), Oscar Eastman (ex-Eau de Vie) and Andres Walters (The Lobo Plantation) developed the spiced rum by selecting a blend of 2-3 year aged rum from Trinidad. They then infused it with subtle natural spices that produced a flavour which is sweet on the nose but has a smooth, dry taste, letting the rum base shine through. For cocktail recipes visit: UntoldRum

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To order contact Asahi Premium Beverages on: 1800 090 378

YEAR IN REVIEW

LOOKING BACK AT THE HIGHLIGHTS FROM 2017 WE’VE COMPILED A SNAPSHOT OF THE DEFINING MOMENTS WHICH SHAPED THE LIQUOR INDUSTRY IN 2017.

ALCOHOL IS AUSTRALIA’S THIRD BIGGEST ONLINE PURCHASE A report by KPMG revealed the online spending habits of nearly 20,000 consumers from 50 countries, including Australia. The KPMG 2017 Global Online Consumer Report showed the top five categories for online purchases in Australia were women’s apparel, books and music, men’s apparel, electronics and wine. However, this changed slightly when all alcohol categories were put together. “When you include different types, alcohol is third behind women’s apparel and books/music,” said KPMG’s Trent Duvall. “This shows the success of the likes of Vinomofo, Langton’s, Dan Murphy’s online as well as winemakers selling online themselves and shows a route for other traditional retailers looking to reinvent their route to market.” While the report showed that more and more Australians were heading online to do their shopping, it was apparent that consumers here still had more trust in websites linked to bricks and mortar retailers, rather than online only stores.

DIAGEO APPOINTS NEW COMMERCIAL DIRECTOR Diageo Australia appointed a new Commercial Director with Andrew Clarke replacing Simon Tamke. Clarke came with more than 25 years’ experience of working in FMCG companies and Diageo Australia’s Managing Director, David Smith said at the time that he believed Clarke would be a strong fit for the company. “Andrew is a big hitting Commercial Director who delivers results,” Smith said. “He loves brands, people and customers and he’s going to be a great fit for the Diageo Australia business.” Clarke’s career has seen him hold senior management positions with Arnott’s Biscuits, Mars and Ingham Enterprises.

TWE WINS PENFOLDS TRADEMARK CASE IN CHINA Treasury Wine Estates (TWE) won a landmark legal dispute in the Beijing High People’s Court, regarding the use of its Penfolds trademark in China. The dispute centred on an individual in China who had registered the Ben Fu trademark in 2009; Ben Fu is the Chinese transliteration of Penfolds. The final judgment handed down by the court ruled that the individual had failed to demonstrate any genuine use of the trademark for wine or related business activities. As a result the trademark was cancelled, allowing TWE to claim the ownership of the Ben Fu trademark registration and to use it across China.

12 | FEBRUARY 2018 NATIONAL LIQUOR NEWS

BROOKLYN EYEING NEW BEERS FOR AUSTRALIA As Brooklyn Lager enjoyed record sales in Australia CEO Eric Ottaway told National Liquor News that it would likely make some adjustments to its portfolio of beers in this country. “We are taking a look at our portfolio and probably making some adjustments as we move forward. I think the craft beer market is moving towards more sessionable beers, and that’s a function of a number of factors: whether that’s just more consciousness about the amount of alcohol people are consuming or the age of the consumer, I think people are starting to appreciate flavour, but also flavour without as much alcohol,” Ottaway said. He added: “Things are going great for Brooklyn in Australia. We made the switch over to Coopers in September of 2015, so 2016 was our first full year and our sales are almost double what we were doing previously.”

YEAR IN REVIEW

THE EDRINGTON GROUP SIGNS ON WITH SPIRITS PLATFORM The Edrington Group, which has a portfolio of whiskies including The Macallan, Highland Park, Cutty Sark and The Famous Grouse, agreed to a deal with the rapidly expanding marketing and distribution company, Spirits Platform. William Chan, Managing Director of Edrington Hong Kong Limited, said: “We can expect big things from Spirits Platform in 2017, with more exciting news around the corner.” Spirits Platform CEO, Ian Atherton, said: “We are thrilled at the opportunity to represent such an iconic portfolio of Scotch whiskies with an extensive history and a commitment to quality.”

NSW CONTAINER DEPOSIT SCHEME DEADLINE PUSHED BACK The New South Wales Government announced in February that it had extended the implementation date for the state’s Container Deposit Scheme (CDS) by five months. The CDS had been scheduled to start on 1 July 2017 but the government said it was pushing the date back to 1 December “in order to ensure maximum possible state-wide coverage from day one”. NSW Environment Minister Gabrielle Upton said at the time: “Clean Up Australia and the Boomerang Alliance, along with industry stakeholders, have asked for an extension of time to make sure the CDS is a world leading program, from day one. This will be the biggest initiative to tackle litter in the state’s history – stakeholder feedback is vital to get the scheme right.”

RECEIVERS APPOINTED FOR NANT DISTILLING PTY LTD The takeover of Nant Distilling Pty Ltd by Australian Whisky Holdings (AWH) would prove to be a long-running, bitter and unpleasant story for Australia’s spirits industry. With reports of investor barrels being left unfilled and arguments raging over who had access to the Nant Distillery and its naming rights, Nant owner Keith Batt told National Liquor News that he had moved to put the company into receivership in order to gain access to the distilling equipment on the Nant Estate. This complex situation saw claim and counter-claim made over the next few months before AWH finally completed the acquisition of the Nant Distillery assets, including the Nant intellectual property, from the receivers in August 2017.

THE WORLD’S MOST VALUABLE BEER BRANDS REVEALED Leading independent branded business valuation and strategy consultancy, Brand Finance, released its 2017 report into the Alcoholic Beverages industry, which detailed the world’s 25 most valuable beer brands. In the report Brand Finance said: “A handful of major brand portfolio owners dominate the industry with AB InBev, Heineken NV, Molson Coors and Asahi Group taking the largest share. AB InBev is first among them controlling 11 of the world’s 25 most valuable beer brands. Following its high profile merger with SABMiller, for over US$100bn, AB InBev commands a 46 per cent market share.” The top three most valuable brands for 2017, were the same as 2016 with Bud Light, Budweiser and Heineken taking out first, second and third respectively.

NATIONAL LIQUOR NEWS FEBRUARY 2018 | 13

YEAR IN REVIEW

BOB HAWKE LAUNCHES NEW BREWERY AND BEER Former Australian Prime Minister Bob Hawke helped to launch Hawke’s Brewing Co and its first product, Hawke’s Lager. “There’s never been a more exciting time for the beer industry in Australia, with so many local breweries offering beer drinkers a higher level of quality and choice. I’m excited to be a part of the Hawke’s Brewing Co. journey, as we work together to bring even more choice to the market, especially as we expand the range beyond the lager,” said Hawke brewer Justin Fox. With Hawke donating all his proceeds from the beer to Landcare Australia, the former PM said: “You can have a feeling of wellbeing as you sip your Hawke’s Lager, knowing that you will be making a contribution to the environment and to your country. You can see why I’m happy, helping your country and having a beer at the same time.”

LMG CEO SAYS INDEPENDENTS CAN COMPETE After a report from Roy Morgan claimed that the independents’ share of the market in Australia was in decline, Gavin Saunders, the CEO of Liquor Marketing Group (LMG), said he believed that independent retailers who adapted to meet the needs of consumers, would be successful. “With supermarket groups like Dan Murphy’s and First Choice Liquor focused on price and range, independent retailers need to be competitive in these areas, however there is an opportunity for independents to provide better access, service and experience to the customers. Independent retailers are uniquely positioned to be able to provide greater service, easy access and experience to their customers through their ownership and control of the outlets.”

MICHAEL EAST ANNOUNCES RETIREMENT

ABA DISMISSES CALLS FOR PLAIN PACKAGING Alcohol Beverages Australia (ABA) dismissed calls for plain packaging for alcohol, which came in response to a study on the effectiveness of graphic anti-alcohol advertisements. ABA said that the calls were off the mark and that the advertising content used as the basis for such calls amounted to scaremongering. “These ads will just be dismissed as scaremongering by the vast majority of Australians who drink responsibly and are well aware that alcohol should be consumed in moderation. To be in the risk category claimed in these ads, you have to drink at levels that are extremely high, which is simply not relevant to most people. The alcohol beverages industry urges policy makers to carefully consider the established evidence before making any decisions on the subject.”

14 | FEBRUARY 2018 NATIONAL LIQUOR NEWS

Accolade Wines’ CEO Michael East announced his plans to take early retirement in April. East informed the Accolade board of his plans to retire after the company decided to withdraw from its IPO process. “I had always intended to retire at the beginning of 2019 and I believe it is the right thing to do so now in view of the longer time scale for an eventual IPO,” East said. Chairman Jim Anderson said: “I want to thank Michael for taking on the CEO role at short notice last year and recognise his distinguished professionalism at Accolade. Michael has made a major contribution to Accolade through his leadership of the Australia and New Zealand business over the last five years. The Board wishes him well in his future retirement.”

WORLDâ&#x20AC;&#x2122;S B E S T- S E L L I N G PREMIUM S C O T C H*

*IWSR 2017

YEAR IN REVIEW

HOUSE OF FINE WINE LAUNCHES

MAY 2017

Société Jacques Bollinger (SJB), Henschke and Villa Maria joined forces to create House of Fine Wine, a new Australian distribution company offering nationwide supply of premium wines from a single, focused portfolio. The company was established following the sale of Fine Wine Partners to Accolade. The three wineries, which all had seats on the advisory board of Fine Wine Partners, share multi-generational, family-owned values and a long-term vision for the future, contributing complementary strengths for a rich portfolio of fine wines. David Bird, the General Manager of House of Fine Wine, said: “We’ll provide a tightly focused premium portfolio and highly engaged sales and support team who have a deep understanding of each family winery and their remarkable wines.”

A NEW PRICE-LED BANNER BRAND LAUNCHES Independent Liquor Retailers (ILR) launched Liquor Boss, a new sub-banner set to lead with an aggressive pricing strategy. ILR General Manager Corey Leeson said the launch of the new brand was part of a reinvigorated channel strategy. “It’s sort of setting that ultimate group up for the future and acting a bit like a chain,” he told National Liquor News. “We want to ensure we have a retail offer for all types of independent liquor businesses. Our strategic planning identified a gap in the market for an aggressive price strategy underpinned with strong range, service and everyday value attributes.” Leeson added that ILR would look to cap the number of Liquor Boss stores at around 10 to 12 and they would look to reach that number over the following 18 months to two years.

ALDI REVEALS DETAILS OF NATIONWIDE STORE JUN EXPANSION 2017 Aldi Australia revealed plans to expand its store network across Australia. The German retailer told National Liquor News that it was planning to expand its network of 473 stores across the country and that it was eager to bring the Aldi difference to more Australians. “In addition to Aldi stores already opened this year, we can confirm plans to open across the Eastern seaboard, South Australia and Western Australia,” a spokesperson told National Liquor News. The spokesperson also said the new stores would be built to the new format the retailer was using in Australia, which aimed at creating a better shopping experience.

16 | FEBRUARY 2018 NATIONAL LIQUOR NEWS

MAY 2017

AUSTRALIAN DRINKING HABITS REVEALED In May, a report titled ‘Alcohol Consumption in Australia 2017’ detailed the drinking habits of Australian consumers in 2017, with some surprising findings. One interesting finding was that baby boomers were the country’s heaviest drinkers; one quarter of people aged in their 60s say they drink most days, compared with less than 10 per cent of people in their 20s. It also revealed that most drinkers say they drink at home a few times a week, and nearly one-in-five said they drink at home most days. In terms of what is drunk, red and white wine were the most popular types of alcohol, and only a quarter of the population were regular beer drinkers.

IBA TALKS STRATEGY FOR THE YEAR AHEAD

JUN 2017

After acquiring the Porter’s Liquor Group in 2016, Rod Pritchard, the General Manager, Merchandise for Australian Liquor Marketers (ALM) spoke to National Liquor News about plans for the coming year. “We definitely have ambitious plans for this brand over the next year or two and look forward to offering a niche wine offer to shoppers across the country,” he said. Pritchard added: “IBA will continue to work with both retailers and suppliers to help grow the independent market and support local communities with a liquor offer that is unmatched. We firmly believe that not one size fits all, and with the plans to further localise brands and range, we are confident that we will continue attract and convert shopper loyalty within each market.”

YEAR IN REVIEW

PROXIMO SPIRITS BUYS ISLAND2ISLAND

JUN 2017

THE WORLD’S BIGGEST-SELLING SPIRITS BRANDS In June the International Wine and Spirits Research (IWSR) published its annual list of the world’s top 100 spirits brands by volume. The largest spirit brand by volume was once again the South Korean soju brand Jinro, which sold well over 65m nine-litre cases in 2016. Jinro had been the top selling spirit for a number of years and sold more nine-litre cases than the second and third placed spirits combined. The second place went to Indian whisky brand ABD’s Officer’s Choice whisky, which sold 32.3m cases, while third placed Thai Beverages’ Ruang Kao, a Thai rum, sold 31.2m cases. They were closely followed by more internationally recognised brands; Johnnie Walker ranked 11th, Bacardi rum was 13th and Jack Daniel’s ranked as the 16th largest spirit by volume.

Proximo Spirits, the owner of Jose J U L 2017 Cuervo Tequila, Bushmills Irish Whiskey and The Kraken Spiced Rum, agreed to purchase island2island in July. The deal came into effect from 1 July 2017 and although it saw Managing Director Les Page prepare for his retirement, he stressed that nothing would change at the company. “I have been impressed with Proximo Spirits and their commitment to Australia; they have a long-term vision for the future of island2island, developing and building the business that the team here have helped to grow,” Page said. “I would like to thank everybody for their friendship and support over my years in the industry. There will be no changes to the operations of the company.”

JUL 2017

INTERNATIONAL SPIRITS CHALLENGE TROPHY WINNERS REVEALED The trophy winners for the 2017 International Spirits Challenge (ISC) were revealed in July, with an Australian spirit claiming one of the top honours. This was the 22nd year for the ISC, widely regarded as one of the most influential, respected and authoritative spirits competitions in the world. In the rum tasting category Bundaberg Rum: Master Distillers’ Collection – Blenders Edition won an ISC trophy and Bundaberg Distilling Co Marketing Manager Hayden Abercrombie was understandably delighted. “Bundaberg is an Australian icon with an incredible story to tell,” Abercrombie said. “Consumers are rediscovering the versatility and complexity of rum and they’re seeking out our premium styles. It’s fantastic to see our Master Distillers’ Collection Blenders Edition be recognised at the prestigious ISC awards and awarded a trophy.”

JUL 2017

INDUSTRY WELCOMED ABAC CODE CHANGES In a move that was widely welcomed by the industry the responsible placement of alcohol marketing would be included in the ABAC Responsible Marketing Code (ABAC), to regulate where alcohol marketing can appear. Alcohol Beverages Australia (ABA) welcomed the ABAC Code changes with Executive Director Fergus Taylor, describing it as a “sensible move that is welcomed by the industry. The changes complement the existing robust ABAC restrictions which are in place to make sure alcohol advertising does not appeal to or target minors,” Taylor said. “These additional regulations mean that the community can be confident that alcohol advertising and marketing in Australia will continue to be vigorously and successfully regulated by the strict, independent ABAC system.”

18 | FEBRUARY 2018 NATIONAL LIQUOR NEWS

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YEAR IN REVIEW

AUG 2017

EXCHANGE FOR CHANGE AWARDED NSW CDS CONTRACT Exchange for Change (EFC), a company formed through a consortium of leading beverage suppliers, was awarded the NSW Government tender to coordinate the state’s new Container Deposit Scheme (CDS). EFC Project Director, Jeff Maguire, said the beverages industry would be able to mobilise quickly in order to implement the scheme. “This is a great opportunity for us to work with the community to help achieve the Government’s goal of reducing litter and increasing recycling,” Maguire said. “We look forward to supporting a well-run, effective CDS for NSW. As Scheme Coordinator we will work closely with Government to get the scheme up and running, and give the public an even greater incentive to recycle bottles and cans.”

LION ANNOUNCED ITS BIGGEST LAUNCH OF 2017

AUG 2017

Lion confirmed its biggest investment in new product development for 2017 with the launch of Iron Jack mid-strength Australian lager. “There is a market for contemporary and sessionable mid-strength beer, with really low bitterness and a bit of hop aroma to start with, but finishes really clean,” Lion Brand Director, Jack Mesley told National Liquor News. “We know our drinkers are looking for new beers they can relate to and we’ve had some fantastic feedback about Iron Jack. We will be making every effort to ensure this beer available in every store and bottle shop right across the country. We have identified that wellbeing and moderation are going to be the drivers of the category going forward. So for us, this beer is going to be all about targeting the classic beer drinker who is thinking more about moderation than he has before and also to help him to continue to engage with the beer category.”

ASAHI BUYS SELECTED ASM LIQUOR BRANDS

AUG 2017

Asahi Premium Beverages (APB) continued its acquisition strategy with the purchase of several selected spirit brands from ASM Liquor. The acquisition strategy by APB saw Mountain Goat, Peroni, Grolsch and UK craft brewer Meantime, join the company’s portfolio in addition to the ASM brands. The deal included Vodka O, Tequila Blu, Spicebox Whisky and VDKA 6100. Scott Hadley, APB’s Chief Commercial Officer, said: “These brands will give APB an important position within the full strength spirits category. This will mean we can offer our customers an even broader range of alcohol beverages.”

20 | FEBRUARY 2018 NATIONAL LIQUOR NEWS

AB INBEV ACQUIRES 100 PER CENT OF 4 PINES Sydney-based 4 Pines became the next craft brewery to be bought by the big guys, after announcing that it had been acquired by the world’s leading brewer AB InBev, for an ‘undisclosed sum’. Jaron Mitchell, 4 Pines’ Cofounder told National Liquor News that the discussions of the sale had been going on for the last 12 months, and while he was sceptical at first he soon realised the opportunities a partnership would mean for 4 Pines. “This is a seriously exciting global business with great prospects and doing a lot of good things in environment and social with their people, and innovation and of course beer and it just matches with what we’re doing perfectly,” he said. According to both parties, the deal enabled 4 Pines to expand its operations and retain and grow its people, culture and identity.

SEP 2017

YEAR IN REVIEW

BWS CONFIRMS NATIONAL ONE-HOUR DELIVERY ROLLOUT

SEP 2017

GREAT NORTHERN ORIGINAL TO GOES NATIONAL Carlton and United Breweries (CUB) made its popular Queensland beer, Great Northern Original, available nationwide in September. CUB’s Vice-President Marketing Australia, Richard Oppy, told National Liquor News that as a result of the huge popularity of Great Northern Super Crisp and an increase in consumer demand for Great Northern Original outside of Queensland, the decision was made to go national. “When we launched Original in 2010, the plan was to play into the local provenance and so we brewed a refreshing, easy drinking beer that was perfect for that hot climate in Queensland and it was inspired by the original Great Northern Brewery in Cairns,” Oppy said. “Consumers have just loved the positioning of the beer, with the great outdoors and going boating, camping and fishing – it’s so aspirational. But what we’ve found is that’s not just for Queensland, that positioning is powerful for everyone in Australia.”

PERNOD RICARD TALKS OPPORTUNITIES IN LIQUOR RETAIL

SEP 2017

Endeavour Drinks Group (EDG) confirmed its intention to expand the rollout of its delivery service with drinks delivered within an hour from selected BWS stores. According to a statement released by the company, the BWS delivery service allows residents to order their drinks online with arrival confirmed within the hour using ‘dynamic real-time updates’. BWS claimed that it is the first time a major liquor retailer has delivered to consumers in the evenings and also on weekends. “Our intention is to rollout the initiative to other capital cities over the next few months. Timing for the rollout will be linked to the success of the trial in Sydney and the scalability of this across our national network,” EDG said.

OCT 2017

Speaking at the ILG study tour of the United States, representatives of Pernod Ricard said that an increasingly multicultural and ageing population are opportunities rather than hindrances for growth in liquor retail. Luke Van Staveren told ILG members that changes to the percentage of Australians with parents born overseas will see changes to consumption that retailers should be ready to make the most of. “The untouched opportunity is to reach those non-liquor drinkers, especially migrants, who want to feel that sense of belonging on certain occasions – rather than drinking the normal, boring non-alcoholic options, they want to feel as though they’re part of the group,” Van Staveren said. “So the two parts of your business to look at are: for the current Australian drinkers, make sure you grow their average weight of purchase and increase their basket size, but [you also need] to recruit those migrants new to Australia by looking at some of their consumer or cultural consumption occasions, i.e. Chinese New Year, or Diwali.”

OCT 2017

LSA LAUNCHES CDS COMMUNICATION MATERIALS FOR LIQUOR RETAILERS The Liquor Stores Association NSW & ACT (LSA) provided its members with key communication materials, ahead of the NSW Government’s Container Deposit Scheme launch on 1 December. The materials helped retailers communicate to consumers the cost of the scheme and the subsequent price increases. LSA Executive Director Michael Waters said: “For retailers to recover the full cost impact of the scheme, the price of drinks sold in bottles, cans and PET will increase by at least $3.50 per carton (24) initially from 1 November 2017, as announced by the Scheme Coordinator on 18 August 2017, in order to build a float for redemptions to commence from 1 December 2017. The fact of the matter is, this scheme has been rushed through – we’ve been urging the NSW Government to get a public education campaign up and running, but they clearly don’t want the community to know what the real cost impact on the average consumers’ hip pocket will be.”

NATIONAL LIQUOR NEWS FEBRUARY 2018 | 21

YEAR IN REVIEW

THE 2017 ALIA WINNERS REVEALED

OCT 2017

DRINKWISE AUSTRALIA CEO JOHN SCOTT RESIGNS DrinkWise Australia CEO, John Scott announced he plans to leave the organisation in early 2018. ”After over 10 years with the organisation as Chief Executive, a non-executive Director and as an external supplier, I believe I have made an enduring contribution to the excellent position DrinkWise finds itself in today,” Scott told National Liquor News. “I’m extremely proud of the innovative work that’s been achieved in recent years and it’s testament to both industry leadership and commitment, the Board and DrinkWise team that we can proudly point to a significant body of work that has received national and international recognition.”

The 2017 Australian Liquor Industry Awards (ALIA) took place at Randwick Racecourse with around 600 members of the industry gathered to celebrate another successful year. The night saw 54 awards presented to the industry’s best people, products, venues and brands across the on- and off-premise, including 12 major awards. The Liquor Store of the Year went to The Oak Barrel for the second year in a row, an acknowledgment that Ian Chainey described as “humbling”. He added: “Ten years ago independents were down and out and the corporations were taking over but through small production and customer enthusiasm for that small production we are making a comeback – enjoy the evening.” The final award of the night saw two winners, with Pernod Ricard and Asahi Premium Beverages both named as the Off-Premise Suppliers of the Year.

LSA NSW/ACT CELEBRATES EXCELLENCE IN LIQUOR RETAIL The Liquor Stores Association of NSW & ACT (LSA) held its 21st annual Retail Liquor Industry Awards for Excellence in November. Liquor retailers, suppliers, representatives and key industry stakeholders from across NSW and the ACT gathered to celebrate the industry. Woodville Road Cellars became the Liquor Store of the Year, while BWS Spring Farm won New Liquor Store of the Year, and Dan Murphy’s won Online Liquor Store of the Year. The Excellence in Innovation Award went to The Drink Hive, and the Excellence in Customer Service Award was awarded to Red Bottle Central. Brady Blakey from Liquor Legends Charnwood was named the Liquor Store Manager of the Year, Liquor Store Owner of the Year was awarded to Dan Mackie from The Bottle-O Hazelbrook and Cellarbrations at Lawson, and Steven Dinnell from Porter’s Liquor Ryde / Midway Cellars was awarded the inaugural Young Liquor Retailer of the Year.

NOV 2017

22 | FEBRUARY 2018 NATIONAL LIQUOR NEWS

YEAR IN REVIEW

CALLS TO BACK AUSTRALIAN PROSECCO

NOV 2017

ILR TO GROW BRANDS IN KEY MARKETS November saw Independent Liquor Retailers (ILR) launch a new marketing strategy targeting further growth for its brands in key markets. The new marketing push was for ILR’s flagship Local Liquor brand and the group said the objective was to consolidate the banner’s position “as the leading convenience liquor retailing brand in NSW”. ILR General Manager Corey Leeson said the new marketing strategy capitalises on the strong connection that exists between Local Liquor store owners and their communities. “All 170 Local Liquor stores are owned and managed by committed local people who genuinely tailor their offering to suit the needs of their communities” he said. “The new campaign leverages this insight and features store owners from across NSW and the ACT.”

METCASH LIQUOR ENJOYS STRONG FIRST HALF

The Winemakers’ Federation of Australia called on Australian consumers to responsibly enjoy Australian Prosecco with family and friends over the festive season. The push to enjoy the increasingly popular variety gained momentum, and importance, after it was revealed that Australian Prosecco was on the European Union’s hit list in the next round of Free Trade Agreement (FTA) negotiations. WFA Chief Executive Tony Battaglene explained: “Prosecco Road producers in Victoria and others around the country are rallying together again to support the WFA campaign. We have been working with the Australian Government and highlighting how dangerous such a move by the Europeans would be in terms of impinging on our rights, the cost to the Australian economy and livelihoods of our producers. WFA fiercely defends the rights of Australian producers to use Prosecco and we are getting ready for the fight of our lives. We want Australian consumers to get behind us too and that’s why enjoying an Aussie Prosecco during the holidays would be a great show of support.”

DEC 2017

Metcash Limited released its financial results for the first half of its 2018 financial year, with group sales revenue up 7.6 per cent on the prior corresponding period to $7.06bn. Metcash’s liquor sales increased by 5.1 per cent to $1.64bn, which the group says reflects “continued growth in the IBA bannered network”. Wholesale sales through the IBA bannered network increased 8.7 per cent, driven by a number of contract customers converting to the IBA network. The group also reported that retail sales through the IBA network increased 1.6 per cent on a like-for-like basis. Liquor EBIT increased $0.5m to $27.6m, which reflects “stronger sales to both the IBA bannered network and contract customers, partly offset by an increase in the bad debts provision in Western Australia and costs associated with the implementation of the NSW Container Deposit Scheme.

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PRESSURE MOUNTS ON MINISTER OVER ‘ABYSMAL’ CDS ROLLOUT

DEC 2017

When the NSW Container Deposit Scheme (CDS) kicked off on 1 December, the number of Reverse Vending Machines and collection points across the state were far fewer than the Government had promised, heaping pressure on to NSW Environment Minister Gabrielle Upton. While members of the opposition and numerous associations, were unhappy with the rollout of the scheme, Minister Upton was also criticised by members of her own Government. Deputy Premier John Barilaro, said: “I’m honest enough to say that [the scheme] has not rolled out the way we wanted it. I made it clear that I think the rollout has been abysmal. The reality is we have got to accept that logistically we have stuffed it up.” The NSW Opposition Leader, Luke Foley, was more damning in his assessment and called on the Government to delay starting the scheme. “The Environment Minister needs to be sacked,” Foley said. “More importantly the introduction of this scheme should be deferred.”

Research & Insights

NATIONAL LIQUOR NEWS FEBRUARY 2018 | 25

RESEARCH & INSIGHTS

AUSTRALIA’S EVOLVING DRINKING HABITS: THREE TRENDS TO FOLLOW SARA AGOSTINO A RESEARCH ANALYST AT EUROMONITOR INTERNATIONAL DISCUSSES THE THREE TRENDS THAT LIQUOR RETAILERS SHOULD BE AWARE OF IN 2018.

he amount of money Australians are spending on alcoholic drinks continues to increase every year. In 2016, per capita spend by Australians of legal drinking age stood at AU$1986. Most notably, Australia’s ingrained beer drinking culture saw consumers spend most on beer products, accounting for nearly half of an Australian’s yearly alcoholic drinks spend in 2016.

PREMIUMISATION AND CRAFT TRENDS BECOME ENTRENCHED The premiumisation trend reflects how Australians are continuing to drink less, but better quality, alcohol. One example of this is the shift towards premium beer brands, particularly dark beer, such as ale, as well as lager. This has led to strong increases in beer unit prices. Due to premiumisation, imported premium lagers are doing particularly well and, although many global beer brands, such as Stella Artois, Heineken and Beck’s, are manufactured under licence in Australia, local consumers continue to favour imported variants as they are perceived to be of better quality. The premiumisation trend also goes hand-in-hand with the craft

26 | FEBRUARY 2018 NATIONAL LIQUOR NEWS

trend. Craft beer production and sales are thriving in Australia as local consumers become more informed about the origin and production of beer. In addition, the beer palates of Australians are also changing as international beer brands become more ubiquitous and they are exposed to more of these brands when travelling. Craft beer consumers are typically younger and view the drink as more of an experience, particularly when they support a locally produced beer or visit a microbrewery. Similarly, consumers of cider/perry are showing a growing preference for craft products. This is encouraged by manufacturers who emphasise that their products are authentically produced and made from good quality ingredients without the addition of sugar or preservatives. The popularity of cider has also been enhanced by consumers wanting to support local producers. The number and availability of locally produced ciders, such as Willie Smith’s cider from the Huon Valley in Tasmania, and Flying Brick Cider, produced using traditional methods and Victorian fruit, continues to increase. As a result, cider has recorded the strongest value growth in alcoholic drinks in Australia over the last few years. Within spirits, premium craft spirits remain an important growth area.

AUSTRALIA’S INGRAINED BEER DRINKING CULTURE SAW CONSUMERS SPEND MOST ON BEER PRODUCTS, ACCOUNTING FOR NEARLY HALF OF AN AUSTRALIAN’S YEARLY ALCOHOLIC DRINKS SPEND IN 2016. With health consciousness on the rise, no/low alcoholic drink options continue to see growth. In late 2017, Seedlip, the world’s first distilled non-alcoholic spirits, arrived in Australia. It is available in two variants, Garden 108, which has an herbal profile and Spice 94, which has an aromatic profile. With 20 per cent of Australians abstaining from alcohol in 2017, up from 11 per cent in 2011, according to DrinkWise’s 2017 report on Australian drinking habits, this is a trend that is anticipated to gain even more traction. Further, one low alcoholic drink option that continues to grow in popularity is mid-strength beer. The growing demand for this type of beer is driven by health-conscious consumers who are looking for a premium beer which is lower in alcohol and low-carb. When Coopers Brewery launched Carlsberg Mid in February 2016, Australia was one of the first global markets to be introduced to Carlsberg Mid 3.5%. This product marked one of the first times Carlsberg has manufactured a mid-strength version of their Carlsberg beer.

GENDER AND ALCOHOL CONSUMPTION

The gin renaissance is an important example of this, with a focus on the creation of distinctively Australian spirits. The growth of local brands is supported by a surge in the number of local distilleries as well as local consumers’ penchant for premium and super premium gin brands. The use of unique Australian ingredients is creating an interesting twist on traditional gin. The collaboration between Something Wild and Adelaide Hills Distillery with their Australian Green Ant Gin, a handcrafted product which uses green ants, traditional bush tucker for indigenous Australians, is an example of this.

HEALTH, WELLNESS AND GREATER MODERATION In line with the premiumisation and craft trends, Australians are making a conscious choice to drink less but better quality alcohol. This is because local consumers are becoming more conscious of and knowledgeable about what they are putting in their bodies. As a result, health and wellness concerns are continuing to impact alcoholic drinks, with the Australian drinking culture moving towards greater moderation and lower levels of high alcohol consumption. Industry sources judge this as one of the biggest macro trends currently impacting the alcoholic drinks industry. Drinking among young people is also in sharp decline, with data from the Australian Bureau of Statistics’ National Health Survey 20142015 showing that two-thirds of 15 to 17 year-olds had never consumed alcohol, a number that has been increasing.

Gendered drinking habits in Australia continue to evolve. Notably, the level of alcohol consumed by females continues to rise. Data from the Australian Bureau of Statistics published in the ‘Medical Journal of Australia’ shows that between 2001 and 2012, drinking among men increased six per cent, from 4.7 to five standard drinks a day. In this same period, drinking among women increased 21 per cent, from 2.8 to 3.4 standard drinks a day. The alcoholic drinks industry has facilitated this change by marketing new products to both men and women. For example, in beer, Heineken launched a mid-strength, low calorie beer, Heineken 3, in August 2016. This product sought to appeal to both male and female consumers and was supported by an 18 month gender neutral advertising campaign. More recently, Lion launched Roam, a flavoured beer which incorporates a spirit and fruit flavouring in May 2017. The two variants, Tequila and Lime and Vodka and Watermelon, sought to appeal to both male and female younger drinkers (of legal drinking age). The growing popularity of rosé and the cocktail Frosé among both men and women has been another example of a drink trend transcending gendered lines, with the term Brosé used to define males who drink the wine. Jill Star, author of the book ‘High Sobriety’ which detailed her year of abstaining from alcohol, looked at the rise of ‘ladette culture’. This culture sees females trying to keep pace with male drinking. She attributes the growth in females drinking to greater levels of employment and disposable income as well as a progressively more social culture. This has led to the expansion of wine as well as sweet drinks which are particularly attractive to younger females, such as RTDs. Drinking among females has also diversified, with industry sources indicating that there has been an uptake in females drinking whisky as well as gin.

For more global insights on the alcoholic drinks market, visit https://blog.euromonitor.com/category/alcoholic-drinks

NATIONAL LIQUOR NEWS FEBRUARY 2018 | 27

RESEARCH & INSIGHTS

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RESEARCH & INSIGHTS

SEAMLESS RETAIL:

AN EXPECTED NECESSITY, NOT A DIFFERENTIATOR, IN 2018 OMNICHANNEL, SEAMLESS, INTEGRATED – WHATEVER YOU CHOOSE TO CALL IT, SHOPPERS EXPECT IT OF YOU, DISCUSSES NORRELLE GOLDRING FROM GFK.

mnichannel is out and seamless is in, cry the pundits. To the extent there is now a Seamless Retail Conference and Expo for Australasia (happening in March 2018 in Sydney, in case you’re interested in attending). Omnichannel, seamless, integrated – they’re actually all really talking about the same thing. According to Frost & Sullivan research, the definition of omnichannel is ‘seamless and effortless, high quality customer experiences that occur within and between contact channels. Requires integration’. Seamless retailing is not just about multichannel transaction availability. It’s understanding all the touchpoints a shopper has with you, across the purchase and repurchase cycle (need, plan, search and compare, decide, buy, take delivery, use, tell). Shoppers move across channels and touchpoints at each stage of the purchase cycle, and within stages. For instance, a shopper may research online, compare instore, do price comparisons online while they are in the store, buy in-store to have it home delivered, and then post a review of the product online. And potentially call a customer care centre (‘chatbot’ or real person, online or by phone) if they have queries about the product. Or they may research online, buy online, and pick it up from a store. You get the idea.

INSTANT EVERYWHERE This type of shopping behaviour is the norm rather than the exception. ‘Instant everywhere’ is the order of the day… as a shopper I want to be able to look for, buy, and collect it whenever I choose, wherever I am. Channels are expanding too, with the rise of the Internet of Things, voice commerce and speech search devices such as Amazon Echo and Google Home, the latter of which

“INSTANT EVERYWHERE MEANS SHOPPERS INCREASINGLY WANT FLEXIBLE WAYS OF COLLECTING THE PRODUCT OR HAVING IT DELIVERED TO THEM, AND SPEED OF DELIVERY IS BECOMING INCREASINGLY IMPORTANT.” has a tie-up in the USA with Walmart, for instance. How this works is you say something like ‘Hey Google, order my Budweiser’ and Google Home places the order with Walmart for home delivery. Another example is visual commerce. Basically, as a shopper, the world is your store. Take a photo on your smartphone of something you like the look of or enjoyed – someone’s funky bag on a train, or a bottle of wine in a restaurant, say – and an app such as Pinterest Lens takes you to that item (or the closest match to it) on a retailer’s website where you can buy it immediately by tapping the ‘buy now’ button. Clothing retailer ASOS, 70 per cent of whose UK sales come from mobile devices, launched its visual commerce app and has seen an uptick in sales of styles worn by celebrities that shoppers have taken photos of when seen online or in a magazine. And then there is the increase in manufacturers selling direct. Instant everywhere means shoppers increasingly want flexible ways of collecting the product or having it delivered to them, and speed of delivery is becoming increasingly important. BWS’ recent ‘one hour delivery’ trial and rollout talks to this, as does Amazon Now in London, who use supermarket chain Morrisons for fulfilment. In the USA, Amazon is also working with shoppable recipe websites, and here in Australia Coles has been trialling 30 minute grocery deliveries via Deliveroo. You can provide flexible delivery options without

necessarily having to do the delivery yourself – there are numerous examples of similar partnerships and use of third party providers. Instacart in the USA works with such well known retailers as Kroger, Wegmans, Publix and even Aldi. Then there are flexible collection points – collect in-store (‘traditional’ click-andcollect), or collect from another party such as Woolworths are doing with their 500-site parcel locker partnership with Australia Post.

ADVANCES IN PAYMENT METHODS Seamlessness also extends to payment methods – not just tap-and-go, or even mobile device payments (still in their infancy in Australia, despite Apple Pay now having been available for more than 18 months) – but ability to pay with palm (as in South Korea, where Lotte Card’s Hand Pay 360 degree scanner system is in trial at 7-Eleven) and with your face (as in China, where technology from Face++ is used in several popular apps and it’s possible to transfer money through Alipay using only your face as credentials). So as the number of retail channels and touchpoints broadens you are less able to rely on traffic coming to your door. You need to understand shoppers’ shopping process and touchpoints, and how they prefer to do what sort of shopping tasks, and adjust your marketing and supply chains accordingly. Not easy obviously, but in 2018 this is now a necessity, not a nice to have.

ABOUT NORRELLE GOLDRING & GFK Norrelle Goldring is Shopper Lead APAC at global consumer and retail research house GfK. She has 20 years’ experience in shopper and retail research and marketing across manufacturer, retailer and agency roles with companies ranging from Diageo to Coca-Cola to Vodafone Stores. Norrelle helps improve shopping experiences by understanding how and why people buy things. Call Norrelle on 0437 335 686 or email norrelle.goldring@gfk.com.

NATIONAL LIQUOR NEWS FEBRUARY 2018 | 29

RESEARCH & INSIGHTS

LIQUOR MARKET OVERVIEW

IRI PROVIDES AN EXCLUSIVE LOOK AT ITS INSIGHTS ON THE LIQUOR INDUSTRY TO JANUARY 2018.

RI has been providing data to National Liquor News for a number of years. In 2018 it will have a fresh new look using IRI’s comprehensive market data, which covers major retailer sales, warehouse sales, and directto-store sales. The new format IRI Market Overview pages in National Liquor News will include new data, trends and insights that are relevant to your business including key market performance indicators each month.

TOTAL OFF-PREMISE PERFORMANCE The total off-premise liquor market in Australia generated sales of $17.5bn in 2017, which showed a value growth of 3.4 per cent and volume growth of 1.1 per cent. The overall growth saw $570m added to the off-premise liquor market. • Beer remains the largest category within the overall off-premise market and was the largest growth contributor last year. The beer category over-indexed in terms of its growth to market share. • Wine, while up in value underindexes its market share with 26 per cent share of trade versus

18 per cent share of growth. Although the value of the wine category increased, its volume did slip slightly. •B randed sales still account for a huge aspect of the overall market with 94 per cent of total liquor. However, private label is only just behind branded in terms of dollar growth, with private label’s growth being 3.3 per cent versus 3.4 per cent for branded. • CUB is the largest manufacturer within the off-premise and over-indexed its market share to growth, with 19 per cent share of trade but 37 per cent share of growth, which has been significantly driven by the performance of Great Northern, which accounts for four of the top five growth SKUs. • While craft is still a very small portion of the overall market the influence of small manufacturers is growing across beer, wine and spirits. Currently small manufacturers have just four per cent share but contributed $94m to the total liquor market last year, a trend that is expected to keep increasing.

MARKET VALUE

$17.5bn up 3.4 per cent

TOP

MARKET VOLUME

208m* up 1.1 per cent MANUFACTURERS

TOP 5 GROWTH BRANDS**

1. CUB 2. Lion 3. Diageo

1. Great Northern Super Crisp (+98%) 2. Great Northern Original (+59%) 3. Iron Jack (NEW)

4. Private Label 5. Beam Suntory

4. Furphy (+289%) 5. Canadian Club (+9%)

CATEGORY BREAKDOWN BEER (37%)

WINE (26%)

SPIRITS (21%)

RTD (14%)

CIDER (3%)

*9 Litre Equiv (000) ** Sorted by actual growth, presented by year on year growth

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BEER CATEGORY OVERVIEW

he total category growth in the last year was $257m, up four per cent on the previous year and this was massively driven by the mid-strength and Australian craft segments, which accounted for 61 per cent and 24 per cent of the total growth respectively. • Mid-strength added $157m worth of growth to the overall beer category, while Australian craft added $62m worth of the overall growth. •P remium International was another key driver of the overall category growth, with value growth of $44m, which was 17 per cent of the overall category growth. •W hile mid-strength is booming, low alcohol beer saw negative growth in the year, with a $38m decline, although it still commands five per cent of the total beer category. •A lthough mid-strength and Australian craft are the biggest growth areas, they are still only the fourth and fifth biggest beer segments overall, with 15 per cent and eight per cent of the category. The biggest segment with 28 per cent of the category is full strength; Premium International with 20 per cent is second and low carb with 16 per cent is third. •O verall there was a 13 per cent increase in range, which predominantly came from Australian craft products, with a 35 per cent increase. Other growth areas included ginger beer with a 17 per cent increase in range and mid-strength with a 13 per cent increase. •N ew Product Development is an increasingly important part of the overall beer category, in 2017 there were over 500 new SKUs in the category, adding $92m worth of growth. •T he Australian craft beer segment was worth $552m, adding $62m worth of growth to the category; the segment saw 10 per cent volume growth.

CATEGORY VALUE

$6.5bn, up 4.1 per cent

TOP

CATEGORY VOLUME

128m*, up 1.4 per cent

NPD

1. Iron Jack (330ml stubbie & 375 ml can)

TOP 5 GROWTH BRANDS**

2. Furphy (375ml can) 3. Corona Extra (355ml can)

1. Great Northern Super Crisp (+98%) 2. Great Northern Original (+59%) 3. Iron Jack (NEW) 4. Furphy Refreshing Ale (+289%) 5. Corona Extra (+5%)

4. Great Northern Super Crisp (700ml long neck) 5. Great Northern Original (700ml long neck)

FIVE MOST POPULAR INDEPENDENT BREWER NPD The IBA defines ‘Independent’ as a brewery that is no more than 20 per cent owned by another party.

1. Southern Mills Gold (330ml stubbie) 2. Yeastie Boys Big Mouth Session IPA (330ml can) 3. Gage Roads Mixed Stubbie (8x330ml stubbie) 4. Balter Pilsner (375ml can) 5. Gage Roads Alby Draught (330ml stubbie)

NATIONAL LIQUOR NEWS FEBRUARY 2018 | 31

RESEARCH & INSIGHTS

WINE CATEGORY OVERVIEW

he total wine category growth last year was $104m, an increase of two per cent. It was driven by branded wine, which accounted for 86 per cent of total category growth. The overall category growth was largely driven by the bottled red and bottle rosé segments, which accounted for 76 per cent of the overall category growth. •B ottled red added $41m worth of growth to the wine category, while bottled rosé added $38m to the overall growth of the wine category. •T he wine category has the lowest percentage of branded sales accounting for total sales at 86 per cent and private label saw three per cent dollar growth. • S maller manufacturers, those with less than five per cent share of the category have seen some wins over the year, now making up 11 per cent of the category and adding $49m worth of growth in the last year. The next largest growth contributing manufacturers were private label, followed by Pernod Ricard which saw four per cent growth driven largely by its Jacob’s Creek Le Petit Rosé and Stoneleigh brands.

• Bottled red and bottled white are, unsurprisingly, still the first and second largest segments respectively. Sparkling comes next followed by Champagne. White cask, fortified and red cask are the next largest segments, but each of those three are in decline and while rosé is behind those, if it continues on its current growth path it will soon pass red cask and fortified. • Overall there was a slight decrease in range of two per cent, which came mainly from a two per cent decrease in bottled red range and a three per cent decrease in bottled white range. • Three of the top five dollar growth contributing NPD came from Treasury Wine Estates, collectively adding $12m worth of growth. These bottles ranged in value from $50 to $1100. • Bottled red is still the driving segment within the overall category, contributing three of the top five dollar growth SKUs to the overall category. The growing rose trend also added to the category’s overall growth and Sauvignon Blanc would appear to still be extremely popular.

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CATEGORY VALUE

$4.5bn, up 2.4 per cent CATEGORY VOLUME

41m*, down 0.4 per cent

TOP

TOP 5 GROWTH SKUS** 1. Penfolds Bin 389 Cabernet Shiraz (+224%)

NPD

2. Penfolds Bin 407 Cabernet Sauvignon (+1233%) 3. Jacob’s Creek Le Petit Rosé (+284%) 4. Stoneleigh Core Marlborough Sauvignon Blanc (+19%)

1. Colonel and the Merchant Shiraz

5. Colonel and the Merchant Shiraz (NEW)

2. Penfolds Grange 2013

TOP 5 GROWTH SEGMENTS**

3. Penfolds Bin 28 Kalm Shiraz

1. Bottled red (+23%) 2. Bottled rosé (+62%) 3. Sparkling (+3%)

4. Mildara Limestone Coast Cabernet Sauvignon 5. Penfolds St Henri Shiraz

4. Champagne (+5%) 5. Bottled white (+1%)

TOP 5 GROWTH BRANDS** 1. Wolf Blass Red Label (+24%) 2. Squealing Pig (+53%) 3. Kim Crawford Regional Reserve (+102%) 4. Jacobs Creek Le Petit (+301%) 5. Stoneleigh Core (+19%)

SPIRITS CATEGORY OVERVIEW

pirits was another category showing solid growth over the year with 3.4 per cent value growth and 1.7 per cent volume growth. In total this meant an additional $119m worth of market growth came into the category as a whole. •C lear spirits are driving the category’s growth with vodka and gin being the two biggest growth drivers adding $56m worth of growth in the last year. With the consumer trend towards health and wellbeing championing low sugar alternatives clear spirits have enjoyed a resurgence. •W hile clear spirits are enjoying strong growth the category’s two strongest segments remain Scotch and Bourbon accounting for 45 per cent of the overall category at $1.7bn. Other world whisky (outside Scotch and Bourbon) was the third biggest growth segment. •B randed sales are strong in spirits accounting for 95 per cent of total glass spirit sales, but both branded and private label saw growth in the year up 3.5 per cent and 1.2 per cent respectively. •T here was a slight increase in range of two per cent, which was mainly in the gin segment and there were more than 250 new spirit SKUs in the year, adding $34m worth of growth. •T he notion of on-premise trends driving off-premise habits was shown with Campari realising the largest actual dollar growth last year. This was mainly driven by the Aperol Spritz cocktail resurgence in the ontrade leading consumers to replicate this at home. •T he most successful NPD launch of the year was Jim Beam Devils Cut Bourbon 40%, which while accounting for just 0.2 per cent share of trade had a 4.8 per cent share of the overall growth. •W hile the growth of clear spirits is demonstrated with three of the five top growth brands being either a vodka or a gin, the power of whisky is also on show with Irish and Scotch brands taking spots one and two respectively in the growth brands rating in actual dollar terms.

CATEGORY VALUE

$3.7bn, up 3.4 per cent CATEGORY VOLUME

7m*, up 1.7 per cent

TOP 5 GROWTH BRANDS** 1. Jameson (+18%) 2. Haig Dimple (+32%) 3. Russian Standard Original (+52%) 4. Bombay Sapphire (+22%) 5. Tanqueray (+22%)

TOP 5 GROWTH SKUS**

TOP NPD 1. Jim Beam Devils Cut Bourbon 40% 2. Cointreau Sparkle 3. Absolut Vodka Uncover Original 4. Ballantine’s Scotch Whisky 500ml 5. Grey Goose Riviera Limited Edition

1. Bundaberg UP (+18%) 2. Haig Dimple (+43%) 3. Russian Standard Original (+58%) 4. Bombay Sapphie (+223%) 5. Jameson Irish Whiskey (+16%)

TOP 5 CATEGORY SEGMENTS** 1. Scotch Whisky (23%) 2. Bourbon (22%) 3. Vodka (17%) 4. Dark Rum (11%) 5. Liqueurs (9%)

NATIONAL LIQUOR NEWS FEBRUARY 2018 | 33

RESEARCH & INSIGHTS

CATEGORY VALUE

CIDER CATEGORY OVERVIEW

verall it was a challenging year for cider, with a slight drop of 0.8 per cent in value although there was a 0.4 per cent increase in volume. This can be explained by a decrease in prices of one per cent, which led to the slight category devaluation. • The category is split into five segments with apple cider being by far the biggest accounting for 69 per cent overall, making it worth $340m. The apple cider segment did see three per cent growth, which was worth $9m. • With five segments, three in growth and two in decline, the $13m decline of pear and fruit flavoured offsets the $9m of growth in the apple category and the small growth of mead and mixed cider. • There was also growth for two of the category’s other segments, with mead seeing 7.1 per cent growth and mixed cider seeing 13.4 per cent, although both of these are coming off a very small base. • The overall category decline can be attributed to the negative growth of the category’s second and third biggest segments of pear/ perry and fruit flavoured respectively. The pear segment declined by 10 per cent, losing $9m while the fruit flavoured declined by five per cent for a $4m loss. • Despite the challenges for cider the category has seen a six per cent increase in its range, not surprisingly driven by the apple cider segment. • Overall the cider category saw 95 new SKUs last year, which helped to add $19m worth of growth to the category. • While overall category growth has been driven by Pure Blonde Cider, Orchard Thieves has seen the most successful NPD growth and has further supported the growth seen in the apple cider segment.

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$0.5bn, down 0.8 per cent CATEGORY VOLUME

8m*, up 0.4 per cent

TOP

SEGMENT SHARE** 1. Apple cider (69%) 2. Pear/Perry (16%)

NPD

3. Fruit Flavoured (15%) 4. Mead (<1%)

1. Orchard Thieves (330ml bottle)

5. Mixed Cider (<1%)

SEGMENT VOLUME*

2. Pure Blonde Cider (375ml can 10-pack) 3. Somersby Apple Cider (440ml can 10-pack)

1. Apple cider (5,969.97, up 223.91) 2. Pear/Perry (1,338.77, down 130.53) 3. Fruit Flavoured (773.24, down 60.90) 4. Mead (6.37, up 0.77) 5. Mixed cider (2.30, up 0.27)

OVERALL 5 BIGGEST GROWTH BRANDS** 1. Pure Blonde (+210%) 2. Mercury Hard (+50%) 3. Orchard Thieves (+1044%) 4. Little Green (+223%) 5. Strongbow Low Carb (+11%)

4. Little Fat Lamb Strawberry & Lime (1.25lt PET) 5. 5 Seeds Lower Sugar Cider (345ml bottle 6-pack)

RESEARCH & INSIGHTS

RTD CATEGORY OVERVIEW

he ready-to-drink (RTD) category enjoyed somewhat of a revival last year with both volume growth of 4.1 per cent and value growth of 2.2 per cent. Overall the category experienced $94m worth of growth. •T he category’s two biggest segments, dark spirits and light spirits, both enjoyed growth last year with $74m and $22m respectively. This was balanced by a $0.06m drop in the value of the shots and minis segment and a $2m drop in the light spirits RTS segment. •A lthough dark spirits is the largest segment within the category, accounting for 81 per cent overall, light spirits is over-indexing its market share with 19 per cent share of trade vs 24 per cent share of growth. •T he year saw a slight increase in range of one per cent, which came mainly from the dark spirits segment. Overall there were almost 150 new SKUs in RTD over the year, adding $41m worth of growth. •B randed sales in RTD are among the strongest for any overall category, accounting for 99 per cent of total RTD, but private label did see dollar growth of 21 per cent last year. •T hroughout the year prices within the RTD category proved stable, with a slight inflation of two per cent. Overall 15 per cent of RTD sales came from promotions which is at the same level as the previous year. •B eam Suntory and Diageo realised the biggest dollar gains in the RTD category with a total increase of $48m, this was driven by Canadian Club as well as Smirnoff Pure and Bundaberg Lazy Bear. •F ive brands accounted for two-thirds of RTD growth, with the biggest growth-driving brand being Canadian Club, which added $21m worth of growth.

$2.4bn, up 4.1 per cent CATEGORY VOLUME

TOP

24m*, up 2.2 per cent

TOP 5 GROWTH MANUFACTURERS**

NPD

1. B eam Suntory (+4%) 2. Diageo (+4%)

1. Jim Beam Black & Cola (375ml 24-pack)

3. Brown-Forman (+5%) 4. Asahi PB (+6%)

2. Jim Beam Double Serve & Cola (375ml 24-pack)

5. Private Label (+21%)

TOP 5 GROWTH BRANDS** 1. Canadian Club (+12%) 2. Smirnoff Pure (+198%) 3. Cruiser (+10%) 4. J ack Daniel’s American Serve (+154%) 5. Bundaberg Lazy Bear (+89%)

3. Bundaberg Lazy Bear Dry & Lime (300ml 10-pack) 4. Jim Beam Double Serve & Cola (375ml 4-pack) 5. Wild Turkey 1-1 6.5% & Cola (375ml 12-pack)

TOP 5 GROWTH SKUS** 1. Bundaberg Up & Cola (+214%) 2. Nelson Country Bourbon & Cola (+96%) 3. Canadian Club & Dry (+26%) 4. Bundaberg Lazy Bear Dry & Lime (+76%) 5. Jack Daniel’s Double Jack & Cola(+42%)

ABOUT THE AUTHOR Mairead McElvanna is the Channel Insights Analyst for IRI, working across the Liquor, Grocery, Convenience, and Pharmacy channels. Mairead has almost six years of experience in the UK and Australian markets, and has partnered with a variety of global suppliers and retailers to help turn insights into action.

ABOUT IRI IRI is a leader in delivering market, consumer and shopper information, predictive analytics and the foresight that leads to action. IRI goes beyond the data to enable informed decisions and create growth for clients in the FMCG, retail, liquor and pharmaceutical industries by pinpointing what matters to respective owners, illuminating how it can impact their businesses.

NATIONAL LIQUOR NEWS FEBRUARY 2018 | 35

RESEARCH & INSIGHTS

CATEGORY VALUE

RESEARCH & INSIGHTS

THE DRINKING YEAR IN REVIEW: 2017 SET ALIGHT BY CIDER, LIQUEURS & WHITE SPIRITS ROY MORGAN REVEALS THAT CIDER, LIQUEURS AND WHITE SPIRITS ARE WHAT AUSTRALIAN DRINKERS (18+) WERE TURNING TO IN 2017.

he percentage of Australian drinkers (18+) has failed to build on last year’s rise, with a gentle decline over the past 12 months led by the leading categories of wine and beer drinkers. But Roy Morgan research shows that Australians are increasingly turning to cider, liqueur and white spirits to sate their thirst. A year ago we celebrated a surprising upturn in alcohol consumption by Australian adults, however the results for 2017 show that last year was something of a standout in recent years. Twelve months down the track, Roy Morgan can reveal that in the year to September 2017 the proportion of Australian drinkers has moderated, with 67.6 per cent of Australians 18+ (or 12.75 million people) drinking at least one alcoholic beverage in an average four weeks, compared with 69.5 per cent (12.9 million) in 2016. A decrease in Australians drinking wine and beer was responsible for the overall fall,

however Australians are increasingly turning to cider, liqueurs, RTDs and a range of spirits including whisky, gin and vodka for their alcohol consumption. Over the past year consumption of spirits increased by 109,000 drinkers per four week period to five million Australian adults (26.4 per cent) with white spirits leading the way with 224,000 more drinkers per four week period. Wine is again the clear leader as Australia’s favourite alcoholic beverage beating all comers with 44.4 per cent (cf. 45.0 per cent in 2016) of Australians drinking wine in an average four weeks; however this is down 80,000 drinkers on a year ago. The move from beer to cider which we’ve seen over the last few years (with the notable exception of a spike in beer drinkers in 2016) has continued with a decline of 68,000 Australians drinking beer in an average four weeks meaning 37.5 per cent of Australians now drink beer compared to 38.5 per cent a year ago.

36 | FEBRUARY 2018 NATIONAL LIQUOR NEWS

The contrast with cider is apparent when one considers just fewer than 2.4 million Australians (12.7 per cent) now drink cider in an average four weeks, up 44,000 Australians on a year ago, and up an impressive 545,000 Australians compared to four years ago in 2013. White spirits experienced strong growth in penetration in 2017 on the back of strong rises for both vodka and gin with 13.2 per cent of Australians now drinking a white spirit in an average four weeks, up one percentage point and equal to 224,000 extra drinkers from 2016. However, this strong performance wasn’t matched by dark spirits, which although still preferred overall slipped slightly with 18.3 per cent of Australians drinking something from the category in an average four weeks compared with a high of 18.9 per cent penetration a year ago (a loss of 50,000 drinkers year-over-year). Meanwhile, the liqueurs category (including cocktails) has continued its strong growth

CHART ONE: YEAR-ON-YEAR CHANGE IN LAST FOUR WEEK DRINKERS (‘000S)

Source: Roy Morgan Single Source (Australia), October 2016-September 2017 (n=15,049). Base: Australians 18+ from a year ago with an additional 135,000 Australians now partaking in a liqueur (or cocktail) in an average four weeks an increase of 328,000 drinkers over the past two years and with market penetration now equal to 9.1 per cent of the adult population up from 8.5 per cent a year ago.

METHODOLOGY This information about the Australian alcohol market is based on Roy Morgan Single Source data. Roy Morgan Single Source comprises approximately 50,000 interviews each year with Australians aged 14+, both city and country, supplemented with self-completion questionnaires to provide a comprehensive, integrated understanding of consumers – what they are like, what they consume, what they buy, what they think, what they want, and what media they choose to watch, read and listen to. Data in this article only includes respondents aged 18+. In the alcohol category, Roy Morgan Single Source measures who has alcohol category (and brand) consumption, brand awareness, preferences and rejection, attitudes to alcohol and drinking, and a large range of questions on liquor outlets.

SPIRITS OUTPERFORM AGAIN IN 2017 As mentioned earlier, consumption of spirits is the standout alcohol category over the past 12 months and is up strongly for the second straight year. Drilling into the data reveals that whisky/ Scotch whisky is again the leading category of spirit consumed by 37.7 per cent of spirits drinkers in an average four weeks and up 98,000 drinkers on a year ago while nearest competing spirits category Bourbon/American whiskey lost ground after outperforming in 2016 down to 27.7 per cent of spirit drinkers with 86,000 fewer drinkers. However, the biggest winner in spirits in 2017 was old favourite gin which increased its breadth of drinkers for the third straight year, up 148,000 drinkers in a year and up over 360,000 in three years, and now over 1.2 million Australians drink gin in an average four week period, equivalent to 24.2 per cent of the spirits drinking population compared to 20 per cent two years ago. There were mixed results for other spirits with vodka now consumed by 23.4 per cent of spirits drinkers (up 0.9 per cent) once again overtaking rum (22.1 per cent) and set for a potential spike in 2018 with the Socceroos heading to the World Cup in Russia with tens of thousands of supporters in tow while brandy was up slightly year-on-year and tequila slipped slightly. When considering how many glasses of spirits

Australians are drinking once again it is rum that performs impressively with the rum drinkers now consuming an average of just under 8.5 glasses in an average four weeks, a significant increase from just over seven glasses a year ago. Rum’s performance contrasts to drinkers of other well-known spirits with drinkers of Bourbon/ American whiskey now consuming just over 8.5 glasses in an average four weeks compared to over nine glasses a year ago and Whisky/Scotch whisky drinkers now drinking under 8.5 glasses compared to almost nine a year ago.

WHO SHOULD AUSTRALIA’S BREWERS TARGET? The small decrease over the past year of Australians drinking beer should be a concern for Australia’s breweries heading into 2018 and the detailed consumer profiling segmentation tool Roy Morgan Helix Personas is able to pinpoint exactly which types of Australians are responsible for the overall drop in beer drinkers in Australia in 2017. Australia’s leading beer drinking communities include the 4.5 million strong ‘Leading Lifestyles’ – 41 per cent of whom drank beer in the last four weeks ahead of the 3.3 million ‘Battlers’ Community – with a penetration rate of 35.7 per cent, the 2.1 million ‘Metrotech’ Community – which has the highest penetration rate of any community at 41.1 per cent and the 2.3 million community known as ‘Today’s Families’ which includes high earning outer suburban families with an impressive beer drinking penetration rate of 39.3 per cent. The numbers that standout when analysing these communities is the drop off in Metrotechs’ consumption of beer with a drop of 138,000 Metrotechs in 2017 drinking beer in an average

NATIONAL LIQUOR NEWS FEBRUARY 2018 | 37

RESEARCH & INSIGHTS

four weeks compared to a year ago. This drop is particularly concentrated in full strength beer (down 145,000), but fairly evenly split between premium/imported beer (down 76,000) and not premium/imported beer (down 81,000). As highlighted a year ago, the lucrative Metrotechs; young, cashed-up inner city professionals, are increasingly shifting to drinking alternatives including spirits, especially white spirits (up 46,000 drinkers in the last two years) and also cider (up 17,000 drinkers in 2017). In fact cider performed well among many communities in 2017 with an increase in cider drinkers among Leading Lifestyles, Today’s Families, the older Golden Years and Battlers. With more than 650,000 drinking cider in an average four week period the Leading Lifestyles Community drank more cider in 2017 than any other community and were a massive 92 per cent more likely to drink cider in an average four week period than the average Australian. With each community comprised of several smaller, distinct segments known as ‘Personas’, it is possible to gain even more detailed insights regarding who is most (and least) likely to drink different types of beer, cider, and other alcoholic beverages, making Helix Personas an invaluable resource for brands wishing to succeed in the increasingly competitive and crowded market.

LIQUOR RETAILERS FACE INCREASING COMPETITION IN 2018 Australia’s retail market is facing increasing competition on many fronts with the recent entry of American giant Amazon, and Australia’s liquor market is no exception with the entry, and success, of German discount supermarket giant Aldi over the past 15 years now attracting German rival Kaufland, which has already begun buying up lucrative retail sites in preparation for a launch in the near future, and continuing speculation about fellow German discount retail giant Lidl. In the year to September 2017, over five million Australians bought alcohol in an average seven day period, spending over $324 million between them, or an average of over $64 per person per week. Despite the number of Australians buying alcohol being virtually unchanged from a year ago, spending year-on-year overall is up around $15 million and about $4 per person. Dan Murphy’s has again strengthened its advantage over all-comers in the industry with share of wallet rising to 30.4 per cent (up 1.5 percentage points from a year ago) and average spend increasing substantially for the market leader to $77 (up from $69 a year ago). Wesfarmers leading liquor outlet Liquorland solidified its hold on third position in the market increasing share of wallet to 10.6 per cent (up an impressive 2.6 percentage points) and marginally increasing average spend to $41 (up from $40). Assessing the performance of Australia’s 10 major alcohol retailers over the last year shows half of the retailers increasing their share of ‘Liquor Outlet’ spend and half experiencing a decrease. Among those who saw declines in retail spend were First Choice for the second straight year to 4.6 per cent (down 0.6 percentage points), IGA Liquor (2.9 per cent, down 0.1 percentage points) and notably Woolworths Liquor (1.9 per cent, down one percentage point). It is worth noting that the strong performance of market leader Dan Murphy’s over the past year has been reflected in the monthly Roy Morgan Customer Satisfaction Awards with Dan Murphy’s triumphant in consecutive months late in 2017, although other brands including First Choice Liquor, Aldi Liquor and IGA Liquor have also performed strongly throughout 2017 with each of these brands managing multiple victories in the award. So what will 2018 mean for the Australian liquor market? Roy Morgan will be watching trends in the industry closely and monitoring the alcohol consumption and retailing trends as they develop throughout the year.

38 | FEBRUARY 2018 NATIONAL LIQUOR NEWS

CHART TWO: SHARE OF TOTAL SPIRITS CATEGORY VOLUME BY TYPE

Source: Roy Morgan Single Source (Australia), October 2015– September 2016 (n=3,429) and October 2016 – September 2017 (n=3,569). Base: People aged 18+ who drank spirits in the last 4 weeks.

Despite the number of Australians buying alcohol being virtually unchanged from a year ago, spending year-on-year overall is up around $15 million and about $4 per person. CHART THREE: TOP 10 SHARE OF WALLET LIQUOR RETAIL CATEGORY

Source: Roy Morgan Single Source (Australia), October 2016-September 2017 (n=3,585). Base: Australians 18+ who bought liquor at a retailer in an average 7 days.

Australiaâ&#x20AC;&#x2122;s leading liquor associations, suppliers, retailers and wholesalers share their views on the state of the industry.

NATIONAL LIQUOR NEWS FEBRUARY 2018 | 39

ASSOCIATION

FERGUS TAYLOR, EXECUTIVE DIRECTOR ALCOHOL BEVERAGES AUSTRALIA WHAT WERE THE MAIN HIGHLIGHTS/ACHIEVEMENTS FOR ABA IN 2017?

ASSOCIATION

The alcohol beverages industry in Australia has celebrated a year of unprecedented cooperation among members as it dealt with a multitude of challenging issues. This co-operation not only provided for much needed balance into the mainstream public debate around alcohol consumption and regulation, it also helped to solidify trust and alignment among our growing group of key industry stakeholders, which is critical to enabling the benefits of effective and united representation for the industry into the future. The highlight was the Alcohol Beverages Australia (ABA), Celebration of Industry dinner in Canberra in August, when 200 plus ABA member association and corporate, and non-member association and corporate representatives, came together to meet and inform more than 80 federal politicians from all corners of the political spectrum in The Great Hall in Parliament House Canberra.

WHAT WERE SOME OF THE MAJOR ISSUES THAT ABA FACED IN 2017? Well-funded organisations that promote an anti-alcohol agenda remain a constant hurdle. The operations of the anti-alcohol activists directed against our industry are becoming better resourced, more aggressive and more prepared to appeal to emotion than rely on evidence. Their tactics change and we will need to ensure credible evidence is available and accessible to the public and to politicians, as opinions are formed and decisions are made. Research has shown that population wide policies neglect contextual and cultural determinants when it comes to alcohol related harms. ABA is countering widespread advocacy by anti-alcohol activists for minimum unit pricing, sweeping advertising bans and mandatory labelling which do not provide the targeted tools needed to appropriately address alcohol related harms. The conversation has also been hijacked by biased individuals who do not view the alcohol industry as a legitimate stakeholder and who directly damage any confidence in the impartiality of reforms and guidelines.

However, despite the seemingly never ending defence of the industry against the misinformation and scaremongering of the anti-alcohol activists – we are always stronger together and the results we’re achieving are both a testimony and an encouragement to this.

WHAT DO YOU ANTICIPATE AS THE MAIN CHALLENGES AND OPPORTUNITIES FOR THE LIQUOR INDUSTRY OVER THE NEXT 12 MONTHS? As we move into 2018 it’s never been more important that we continue to build cooperation and focus on the issues that unite us instead of those we see differently. Despite an avalanche of credible, recent, comprehensive and conclusive evidence to support the safe and sensible production, marketing, advertising, promotion, availability and consumption of our products, despite the continuation of hugely positive trends in declining underage consumption and binge drinking that have been borne out of the major government and industry research pieces of 2017, and despite the declines in violence and anti-social behaviour and improvements in community attitudes towards alcohol that people are increasingly experiencing, there remain vocal and noisy calls for yet further restrictions to alcohol advertising and availability across Australia. Our capacity to protect our industry from populist misinformation, public misconception and over regulation relies on an ongoing determination to work as one, with a united message to ensure the public and administrative debates around alcohol are only ever conducted against a backdrop of credible and independently scrutinised evidence.

WHAT WILL BE THE IMMEDIATE FOCUS FOR ABA IN 2018? ABA and its members have been following the development of the National Alcohol Strategy (NAS) for several years and actively participated in detailed consultation along the way. Unfortunately, the newly released Draft NAS reflects little of this work and has been received with great surprise and disappointment by ABA members.

40 | FEBRUARY 2018 NATIONAL LIQUOR NEWS

The draft has included several population wide measures when the bulk of international, peerreviewed evidence has repeatedly shown that lowering population wide alcohol consumption does not equate to a reduction in harmful alcohol consumption. The blunt strategies of reducing overall consumption and banning promotion will additionally cause significant and unnecessary upward pressure on alcohol prices and inconvenience for up to 14 million Australians. ABA will also be focussing on presenting more of the positive aspects of our industry.

WHAT KEY POINTS SHOULD THE INDUSTRY BE DISCUSSING IN 2018? Industry wide reputational issues that target overall consumption without driving down misuse, like advertising bans and minimum pricing, will continue to attract our attention, so it’s important for the industry to invest in the effectiveness of targeted measures to demonstrate their suitability and worth, and the industry’s commitment to be part of the solution where alcohol is misused. But we’re also keen to better promote the positive side of the industry, like the fondness our customers have for our wonderful products and the enormous contribution we make to the economic and social fabric of Australian life, to remind the public and politicians that moderate drinking is a fun and enjoyable part of a healthy lifestyle.

WHAT IS ONE ISSUE THAT YOU WOULD LIKE TO SEE URGENTLY ADDRESSED BY THE INDUSTRY? ABA looks forward to engaging with key stakeholders to ensure the final NAS is developed against a backdrop of the most recent, credible and peer reviewed evidence available and guided by a determination to target alcohol misuse where it occurs without unfairly impinging on the freedoms and lives of those who are doing the right thing. The vast majority of Australians have a positive relationship with alcohol, so any reform should correctly focus on targeted policies, rather than unfairly penalising the majority of responsible drinkers with big price rises and further restrictions.

ASSOCIATION

ALAN FERGUSON, CHAIR ABAC

A challenge for ABAC in 2017 was educating both policy makers and the regulated community about the scheme. With frequent changes in portfolios and departmental staff in both Federal and State jurisdictions we identified that more regular face-to-face communication about ABAC was required to ensure that policy makers understand the scheme. In addition, ABAC began regulating placement of alcohol marketing for the first time and as with any significant change it was important to adequately inform alcohol marketers of the changes and their implications.

WHAT WERE SOME OF THE POSITIVES TO COME OUT OF 2017? The introduction of new standards for the responsible placement of alcohol marketing in November, 2017 was a positive change that was welcomed by both industry and policy makers. The new placement standards support and bolster existing placement regulation in media specific codes, such as the Outdoor Media Association and Commercial Television Industry codes, but they go further by aiming to keep pace with new and emerging technology. The new standards include additional safeguards for minors, namely a requirement to use available age restriction controls in digital media to exclude minors from an audience, to only use media platforms with a more than 75 per cent adult audience, verification of ages as 18+ for electronic direct mail and no placement with content or programs primarily aimed at minors. Most alcohol marketers were already very conscious of these issues and include such restrictions within their internal policies, but the inclusion of these standards in the ABAC Code means that alcohol marketers will be accountable to the community via ABAC Complaints Panel decisions. It is important that ABAC periodically reviews its Code and procedures to ensure it remains at the cutting-edge of developing new approaches to ensure a robust and effective Code for alcohol marketing in Australia.

Another positive was community standards research undertaken by Colmar Brunton that demonstrated that the ABAC standards align with community concerns and ABAC Panel decisions are generally more conservative than the community.

WHAT OPPORTUNITIES AND CHALLENGES ARE FACING THE INDUSTRY AT THE MOMENT? An opportunity and challenge for the liquor industry is to demonstrate to policy makers how seriously they take responsible marketing of alcohol products. They can achieve this by becoming a signatory and strictly adhering to the ABAC Code and Digital Marketing Best Practice Guide. Also by taking advantage of the ABAC pre-vetting service to have their marketing independently checked by our experienced pre-vetters.

WHAT ARE THE CHALLENGES AROUND ALCOHOL ADVERTISING ON SOCIAL MEDIA? Social media is a dynamic and changing environment. Alcohol marketers should use responsible platforms that have the technologies available to ensure their marketing is being directed to adults. User generated content is also a challenge for alcohol marketers and frequent moderation is required to ensure ABAC standards are being met. The ABAC Digital Best Practice includes a set of guidelines that assist industry in meeting the ABAC standards and responsibly managing their marketing in digital media.

HOW MANY COMPLAINTS DID ABAC RECEIVE, UPHOLD AND DISMISS IN 2017? In 2017 ABAC has: • Received 130 complaints (compared with 139 in 2016). • Made seven determinations upheld the complaint(s) (compared to 10 in 2016). • Thirty-five determinations dismissed the complaint(s) (compared to 24 in 2016). • One determination is pending. All seven complaints that were upheld related to marketing that had not been pre-vetted (six digital and one radio). This signifies the value of the pre-vetting service. In 2017, the ABAC Panel made it’s first decisions where an alcohol product placement fell within the scope of the ABAC Code. It is important for marketers to take care when engaging in product placement to ensure the Code standards will be maintained. The Panel also made its first decisions on the placement of alcohol advertising in relation to a variety of media including outdoor, digital, cinema and radio.

WHAT IS YOUR KEY MESSAGE TO THE INDUSTRY? I would encourage the industry to work with media partners to keep improving the targeting of their marketing to ensure it is directed to an adult audience. Also to ensure staff and agencies all have a good understanding of the ABAC Code standards and use the pre-vetting service to check marketing before is placed in the market.

NATIONAL LIQUOR NEWS FEBRUARY 2018 | 41

ASSOCIATION

WHAT WERE THE MAJOR ISSUES THAT ABAC FACED IN 2017?

SUPPLIER

KEITH TODD, CHIEF OPERATING OFFICER ACCOLADE WINES

SUPPLIER

HOW DO THINGS LOOK FOR THE YEAR AHEAD AT THE BERRI FACILITY? Construction on the new facility is due to commence in 2018. This new bottling plant and integrated warehouse will be a national distribution centre on the Berri site. The construction time is estimated to take approximately 12 months and during this period between 150 and 200 people will be employed. Once operational there will be around 40 new roles at the plant which will have capacity to produce in excess of eight million bottles annually. With preferences continuing to move towards bottled and premium we are investing and making changes to move with the market.

WHAT WERE SOME OTHER MAJOR HIGHLIGHTS FOR ACCOLADE IN 2017? 2017 was a defining year for Accolade Wines. The smooth integration of Fine Wine Partners (FWP) really solidifies our premium offering. We are now in the position of having one of the leading premium wine portfolios in the country. We also had an exceptional year with industry recognition of our offering and widespread awards across our labels both domestically and internationally. Arras clearly had many moments in the sun but Houghton also had an incredible year, there isn’t a more awarded brand in the market.

HOUSE OF ARRAS HAD A GREAT YEAR ON THE COMPETITION CIRCUIT – WHAT DOES THIS MEAN FOR ACCOLADE WINES? Such endorsement across a broad range of judges is an absolute statement of quality and the entire viticulture and winemaking team is extremely proud of this achievement. House of Arras also won best Australian producer in the prestigious International Wine and Spirit Competition, which is the first time the top Australian producer category has been awarded to a sparkling wine. Fruit for House of Arras is sourced across Tasmania’s premium cool climate regions, ideal

“Understanding our customers’ strategies and aligning our approach will be a key focus for 2018. Also creating offerings that are relevant to shoppers and that genuinely meet unmet category needs.” for long, slow and consistent fruit development. The entire portfolio of Arras sparkling wines is held back between three to 10 years to give them the distinction, quality and maturity they require to be world-class. What sets House of Arras apart from other Australian sparkling wines on the market is the age of its wine. There are plenty of cold climate sparkling Chardonnays, Pinot Noirs and Pinot Meuniers, but to take it to world parity, it had to be the same age as benchmark wines and we are achieving that age with House of Arras.

WHAT HAVE BEEN THE MAJOR CHALLENGES THAT ACCOLADE FACED IN 2017? Following completion of the acquisition of the FWP business and brands in January of last year we had to integrate people, brands, wineries as well as IT and financial systems while ensuring no interruption to vintage and the trading business. It was a period of change for many at Accolade Wines and FWP and was handled admirably. They say most challenges present opportunities and I am immensely proud of what we achieved and how well the process went. Many of our people went above and beyond to make this work and the result was a smooth transition internally and for our customers.

IN WHICH AREAS DID YOU SEE THE MOST GROWTH IN 2017? The $15 plus category saw significant growth particularly in the lighter styles. The Australian palate is diversifying away from traditional rich reds like Shiraz. Pinot Noir and rosé are increasingly the drink of choice. As a result, Stonier, Grant Burge and St Hallett all experienced growth off the back of this.

42 | FEBRUARY 2018 NATIONAL LIQUOR NEWS

And Hardys of course went from strength to strength outperforming the Australian retail sales market.

WHAT DO YOU SEE AS THE BIG WINE TRENDS? The move towards lighter styles will continue through 2018. Rosé in particular is expected to become increasingly popular. Accolade will be launching new products in this space and will continue to leverage our existing portfolio which has a strong offering in this segment. Another interesting segment for big players is looking at tapping into the craft and boutique markets. We’ll have some innovative offerings in this area hitting the market in 2018.

HOW WILL YOU ENGAGE THE TRADE IN 2018? Understanding our customers’ strategies and aligning our approach will be a key focus for 2018. Also creating offerings that are relevant to shoppers and that genuinely meet unmet category needs. We’re not interested in simply launching yet another $15 Shiraz.

WHAT KEY FACTORS DO YOU THINK THE INDUSTRY SHOULD BE DISCUSSING? The number one focus for industry must be ensuring any debate and decision making is fact based. It will not serve the industry or deliver the best outcomes for the community if, as an industry, we are fragmented in our approach. We need to work together to ensure solutions are targeted and tackling the root cause of issues in the community. Another complicated challenge for the industry is the environment and sustainability. An uncertain climatic future is going to increasingly become an issue.

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RETAIL & WHOLESALE

PAUL HANDLEY, BUYING DIRECTOR – BEER, CIDER, SPIRITS & RTDS ALDI WHAT WERE THE HIGHLIGHTS FOR ALDI IN 2017?

RETAIL & WHOLESALE

2017 was another fantastic year for expansion at ALDI, opening just under one new store a week. Our regions in South Australia and Western Australia are now more than a year old and are doing very well. ALDI initially opened in Australia in 2001, and by the end of 2017 had over 500 stores (more than 300 with liquor), which I think is an amazing effort by all the ALDI team. During 2017 we also have been busy with our store refurbishment program, rolling that out to many more stores. We’ve improved the range, adding a number of new products, invested in around 500 retail reductions across the grocery range, without pressuring our suppliers, and continued to improve the quality of our products. This has all helped to continue our double digit sales growth and resulted in ALDI having our biggest year in Australia yet with total sales of over $8bn per annum. Within the liquor offering, ALDI had a very successful 2017. We have worked very hard to deliver a compelling range of excellent quality exclusive brand products. During 2017 some highlights were achieving Double Gold for our Highland Black 8 Year Old Scotch at the Melbourne International Spirits Competition, as well as a Trophy for Best Australian Style Lager for our Storm Super Dry at the Australian International Beer Awards.

WHAT DO YOU SEE AS THE MAIN CHALLENGES AND OPPORTUNITIES IN WA IN 2018? We almost doubled our store network in Western Australia in 2017. We also opened our first liquor stores at the end of August, and finished the year with nine liquor stores in WA. Support from the WA public continues to be excellent and we’ve had great feedback from customers on the quality of our products including our liquor range. One of the main challenges in rolling out our liquor offer to WA is the tyranny of distance and the cost that comes with that. Outside of that however, I see plenty of opportunity in WA. Since we first offered liquor as part of our range in our Victorian stores in 2003,

customers have become used to liquor being a convenient part of a household shop. Our goal was to bring this same convenience, efficiency and quality liquor range to shoppers in WA and I think we have been successful with this to date. I am confident we will continue to trade very well with our great quality, great value liquor range.

IS EXPANSION STILL A BIG PRIORITY FOR ALDI? AND WITH THAT EXPANSION, IS ENSURING NEW STORES HAVE LIQUOR LICENSES ALSO A PRIORITY?

“We’ve worked very hard to break the stigma around ‘private label’ and we are proud of the unique quality perception we have developed in Australia.” value for money for our customers. At the same time we’ll give our customers greater choice via an expanded range and a better experience via investment in our store network.

We’ve always indicated we see potential for 600 stores in Australia, and we’re only at 500. So yes, expansion will continue for the next few years. New stores will be built in the new ‘Project Fresh’ format and wherever possible retailers would like to include a liquor offering as part of those store rollouts.

WHAT DIFFICULTIES ARE FACING ALDI LIQUOR?

TALKING AUSTRALIA-WIDE, WHAT DO YOU SEE AS THE MAIN CHALLENGES AND OPPORTUNITIES FOR ALDI IN 2018?

In NSW the new Container Deposit Scheme (CDS) will clearly have an impact on retails via additional cost of goods, not to mention the additional cost and complexity of administration brought about by the scheme.

As with any business that has been expanding rapidly, the challenge is always to ensure that we can deliver on availability, execution and service. We continue to be actively engaged with over 1000 suppliers, many of them Australian and many of them having supplied us for many years. We’ll continue to work closely with them to ensure we can get the right products to the right place at the right time. A major challenge is to increase the basket size at a time when discretionary spend is under pressure. During 2017, we commissioned research with Deloitte Access Economics that showed 37 per cent of Aussie households are concerned about their ability to pay for expenses like bills and household costs. This is up by six per cent from only two years ago and is expected to continue to increase. It also highlighted that over the last 12 months, one in four Australians (25 per cent) has switched the grocery store at which they shop most frequently, with value for money being the primary driver. So the opportunity for us lies in keeping a laser like focus on providing great

44 | FEBRUARY 2018 NATIONAL LIQUOR NEWS

WHAT WILL BE THE IMMEDIATE FOCUS FOR ALDI’S LIQUOR BUSINESS IN 2018? As with our grocery offer, in liquor we will continue to offer a small and focused core range of great value products in each major market segment. We will also continue to supplement this with a Special Buys program which we use to cover other market segments and innovations throughout the year. Our biggest opportunity remains in convincing our large number of main grocery shoppers to try the ALDI liquor offer and ideally convert them to regular ALDI liquor shoppers. Our continued focus on an everyday low prices strategy means we will always offer value to the customer over a period of time. We’ll continue to have a balance of market leading brands as well as our own exclusive brands within the range. We’ve worked very hard to break the stigma around ‘private label’ and we are proud of the unique quality perception we have developed in Australia.

RETAIL & WHOLESALE

SCOTT MARSHALL, CEO ALM

Last year was very exciting with independent retailers growing sales against the previous year. We are still in a very competitive market and face constant challenges around industry legislation and changing market dynamics. The introduction of the CDS in NSW was a very poorly managed process from the start and we will see a big impact on consumption trends going forward. I believe that over time this will benefit smaller format local stores.

WHAT CHALLENGES AND OPPORTUNITIES DOES BEING BOTH THE WHOLESALER AND RETAILER PRESENT? ALM’s purpose is ‘Successful Independents’, with wholesale and retail being very separate and distinct. As a wholesaler, we continue to improve service levels and delivery to retail stores and on-premise customers supporting suppliers with the most efficient route to market. On the retail side, we work very closely with our customers to ensure the best localised offer by brand and we have seen this accelerate growth in the many areas across the country. We also partner to offer suppliers a true alternative and help them grow sustainably for the long term.

WHAT IS DRIVING THE GROWTH OF CELLARBRATIONS AND WHAT IS FORECAST FOR THE YEAR AHEAD? The IBA team has worked closely with suppliers and retailers to keep ahead of the shopper trends and ensure that the store standards and offer is best in class. I believe this has driven shopper loyalty to each local store along with outstanding local service from our retail network. The team has done a fantastic job in localising ranges and ensuring good category management in the stores. This has proven to grow retail sales. We have had a lot of success with premium ranges and have retailers selling products that they never thought they could (eg. wines and spirits over $100 a bottle). We will take learnings from this and constantly evolve ranges to meet each market.

HOW SUCCESSFUL HAS THE PORTER’S STRATEGY BEEN AND WHAT CAN WE EXPECT IN 2018?

and suppliers and take these learnings to other states as it is potentially rolled out. I would like to see the other states pause on CDS and actually measure the overall impact of the scheme and also consider negative impact on the consumer price rise along with the onerous cost of doing business to all retailers and manufacturers versus any actual upside in litter reduction.

The Porter’s brand has gone through a refresh and we are rolling this out in the first quarter. We are very keen to roll this out in the right areas to meet shopper expectations and also give the retailers incremental sales and margin. The in-store offer and shopper profile matches all of the future growth trends and we are very confident rolling this out nationally.

WHAT WILL BE THE IMMEDIATE FOCUS FOR IBA IN 2018? IBA will continue to roll out the best store in every town and ensure the Australian shopper has choice. Our retailers add value in all of the communities they operate and we will continue to grow and support each and every one of them. We are focused on a very healthy independent network of retailers for the long term. We will also up the focus on training and education for our retailers and their teams. This is critical in us delivering the best local service and is something that the chains would love to compete with us on, but they will never be able to match the passion and dedication of our retailers in servicing their customers.

WHAT CAN WE EXPECT TO SEE FROM THIRSTY CAMEL IN 2018? As part of the IBA strategy in helping retailers have the best local offer to maximise their location, Thirsty Camel is very important and offers another unique brand and shopper experience. We work very closely with the other state Thirsty Camel members (under the Liquor Alliance) to continue to grow the brand to shoppers. The trend to smaller local shopping missions definitely helps the better drive-through retail offers in the market.

WHAT DO YOU SEE AS THE KEY RETAIL TRENDS FOR 2018? The retail trends are fast tracking all the time, shoppers want the new and exciting and are willing to step up in value in all categories. As I have said, the CDS will impact some categories and we expect volume decreases (e.g. mainstream beer) and as an industry we need to react to the shift in shopper behaviour.

WHAT WILL BE THE IMMEDIATE FOCUS FOR ALM IN 2018? We are continually trying to improve our offer and service to the independent market in both retail and on-premise. We are seeing innovation and expanded ranges with all suppliers and we need to manage these carefully to ensure suppliers have a fast and direct route to consumers while our retailers get the innovation that has the best chance of growing their business without being left with obsolete stock over time. Partnering with suppliers and retailers is a key element to the success of us all matching with shopper trends. In the short term we need to understand the impact of CDS on our retailers

“I WOULD LIKE TO SEE THE OTHER STATES PAUSE ON CDS AND ACTUALLY MEASURE THE OVERALL IMPACT OF THE SCHEME AND ALSO CONSIDER NEGATIVE IMPACT ON THE CONSUMER PRICE RISE ALONG WITH THE ONEROUS COST OF DOING BUSINESS TO ALL RETAILERS AND MANUFACTURERS.”

NATIONAL LIQUOR NEWS FEBRUARY 2018 | 45

RETAIL & WHOLESALE

WHAT WERE THE HIGHLIGHTS FOR ALM/IBA IN 2017?

ASSOCIATION

TERRY MOTT, CEO ALSA WHAT WERE THE MAJOR CHALLENGES FACING THE RETAIL LIQUOR INDUSTRY IN 2017? Creeping regulation. Just like the frog in the pot – you don’t even know that it’s happening until it’s too late. A few more fees and charges, a container deposit administration fee, a small tax increment or yet another piece of red tape and administrative cost that you reckon won’t impact on your business right now.

ALSA was also instrumental in developing the concept for and then managing on behalf of ABA, the successful Celebration of Industry Dinner in the Great Hall of the Australian Parliament House in August. Sharni Fenton from Vantage Group, 9/11 Bottleshops in Tasmania won the ALSA Young Liquor Retailer of the Year Award 2017 including a place on the ALSA International Study Tour to New York in February.

WHAT WILL BE THE IMMEDIATE FOCUS FOR ALSA IN 2018? ASSOCIATION Source: Evil Speculator Government can often react to the industry’s detractors and little regulatory adjustments keep mounting until they become a significant impact on business and alas, mostly don’t have any real impact on the supposed ‘problem’ they were designed to fix.

WHAT WERE THE HIGHLIGHTS FOR ALSA IN 2017? ALSA’s major achievements in 2017 included the second edition of the ALSA-IRI State of the Industry Report, demonstrating the important impacts on employment, economic and social contribution that the industry overall and retail liquor sector in particular make to the fabric of the Australian way of life. The launch event in Parliament House Canberra in March, attracted Federal politicians and senior industry executives. ALSA continued to strongly support the role it played in the establishment of Alcohol Beverages Australia (ABA) with all major sectors of the industry demonstrating their commitment to collectively promote the benefits and contribution of our industry and to challenge the myths often pedalled around alcohol consumption and push back against the tide of the well-funded temperance advocacy movement.

The third edition of the annual ALSA-IRI State of the Industry Report and the scores of presentations of the data across the country, leading up to the official launch at Parliament House in Canberra on 27 March. ALSA will focus on engagement with all stakeholders while continuing to support ABA, assisting ALSA-SEA to grow and provide specialised retail liquor representation in VIC, TAS and SA.

HOW SUCCESSFUL WAS THE REBRANDED AUSTRALIAN RETAIL DRINKS CONFERENCE AND WHAT CAN WE EXPECT TO SEE IN 2018? The new two-and-a-half day format was a success and has proven to be more accessible for both retailers and corporate delegates alike – allowing a much shorter time commitment to attend, contribute and learn, while networking with key retailers and suppliers from across Australia. The Australian Retail Drinks Conference 2018 will be held for two-and-a-half days from the evening of Tuesday 7 August to Friday 10 August at Peppers Salt Resort in Kingscliff NSW – only 20 minutes from Gold Coast airport.

WHAT DO YOU ANTICIPATE AS THE MAIN CHALLENGES AND OPPORTUNITIES FOR THE RETAIL LIQUOR INDUSTRY IN 2018? The challenge is to continue to move away from the ‘race to the bottom’ on pricing and the opportunity is to leverage the positive changes in the alcohol consumption patterns with Australian consumers, who are drinking less volume of alcohol – but drinking better

46 | FEBRUARY 2018 NATIONAL LIQUOR NEWS

quality, with premiumisation being a key feature in all key market segments.

WHAT KEY POINTS SHOULD THE INDUSTRY BE DISCUSSING? Leveraging the new found cooperation across the sectors to reinforce and back ABA to both promote and to defend the industry and our employees. The industry overall needs to continue the excellent work to unite together and challenge the spurious myths and claims from those health advocacy groups aligned with the temperance movement along with uninformed negative and sensationalist headlines by some in the media, to change the debate and encourage balanced government policy and informed education of the community.

WHAT ARE THE KEY CONCERNS THAT YOU WOULD LIKE TO SEE ADDRESSED AS THE CDS IS ROLLED OUT IN OTHER STATES? The NSW CDS was a great example of how NOT to develop an overly complex and expensive litter recovery program. Hopefully other states and territories will both consult and listen to advice from industry and the public in NSW who have been severely inconvenienced and are now paying excessively again for a system that duplicates and promises to destroy part of the very successful and well established kerbside recyclables recovery system.

“The challenge is to continue to move away from the ‘race to the bottom’ on pricing and the opportunity is to leverage the positive changes in the alcohol consumption patterns.”

introducing

somersby cloudy apple

*Less sweet than Somersby Apple Cider

ASSOCIATION

MAL HIGGS, PROJECT MANAGER ALSA RETAIL INSIGHTS

T ASSOCIATION

he past 12 months have proven inspiring for the retail trade. We are seeing quite a significant shift in consumers’ preferences occurring – across all categories. We have seen the interest in craft beer growing strongly for a number of years now and that interest is showing no signs of abating as consumers gain confidence in the different styles and varieties of beer on offer. The spirits category has seen somewhat of a resurgence, with interest in craft or artisan distillers at an all-time high. It seems that our customers continue to be intrigued by the latest whisky expression or artisan distillers gin and they recognise that these come at a higher price point. In the wine category, it seems that where we once feared the ‘commoditisation’ of the category – consumers are telling us that price is not everything and that many are prepared to try new and emerging varieties and are interested in styles and varieties that suit their lifestyles – look at rosé and Prosecco. Of course, the challenge for the retail trade is keeping up with these trends and adapting our businesses to accommodate them. These exciting trends are giving many retailers a new reason to examine their particular retail offer to ensure that it is relevant to these trends. Naturally, to do this, we need to be informed about how best to respond to them. ALSA, with the support of a number of its key supplier partners, has developed a range of professional development ‘tools’ to assist the retailer in this endeavour. From overseas study tours, to online training, relevant industry information in the form of the ALSA-IRI State of the Industry Report, the annual ALSA Australian

“Exciting trends are giving many retailers a new reason to examine their particular retail offer to ensure that it is relevant.”

The 2017 ALSA Study Tour.

Retail Drinks Conference, there are a range of initiatives designed to assist our liquor store members in developing their businesses. The project which is well used by our members has been the ALSA Retail Insights program. This program has now attracted more than 30,000 visits to its website (www.alsaretailinsights.com. au) and comments received from retailers have continued to be very positive. ALSA Retail Insights is the first professional development resource available to Australian liquor retailers which covers a broad range of subjects, from Shopper Insights to Category Management.

HERE IS A SUMMARY OF THE MOST POPULAR MODULES: Pricing strategies – Every retail liquor business needs a profit margin in order to be successful. Many retailers use a ‘reactive’ pricing strategy rather than a ‘tactical’ pricing strategy in their business. This module will cover some of the areas to increase profit margins while maintaining the competitive image required in today’s market place. Getting the most from your POS system – Most retailers now have a computerised POS system, however many only use a small component of its capability. This module shows examples of some of the reports that can be used to understand more about a retail business

48 | FEBRUARY 2018 NATIONAL LIQUOR NEWS

and help gain more margin and efficiencies. Store design and layout – One of the popular modules on the site in which the principles of design and layout are presented. These are invaluable tools for a retailer who is considering what to do in changing the design or layout of their store and are not sure where to start. Category management – the larger retailers use it extensively but is it appropriate in the independent environment? The eight steps to category management can literally change the way your business operates, resulting in increased sales and profit – it’s that simple. The information available on the site and in the various modules is sufficiently current and relevant that retailers use it to assist them on making their business decisions. The various module topics have been selected to address almost any area of business that may require a ‘skilled’ approach. It is our belief that combined with the business ‘skills’ a liquor retailer needs to run a successful business, the information available from ALSA Retail Insights will create the opportunity to enhance the professionalism of the entire retail liquor sector. If you have any comments or questions of the ALSA Retail Insights program, please feel free to contact Mal Higgs at mal@ alsaretailinsights.com.au or from the website itself, feedback@alsaretailinsights.com.au.

CONTACT YOUR OATLEY FINE WINE MERCHANTS REPRESENTATIVE OR PHONE 1800 628 539

ASSOCIATION

AUSTRALIAN LIQUOR STORES ASSOCIATION SEA

SAM CUFONE, PRESIDENT ALSA-SEA WHAT’S YOUR VIEW ON SA’S LIQUOR LICENSING REFORMS AND WHAT DO THEY MEAN FOR THE YEAR AHEAD?

ASSOCIATION

Like all reviews, the South Australian Government has delivered mixed blessings with their review – some positive news and some not so good news for retail packaged liquor sales licensees. ALSA-SEA members in SA will be meeting soon to discuss the implications and how these will impact on the way they do business. They include restrictions on trading hours, the accompaniment of minors in-store, and deliveries including online will have a higher burden of proof of age. The good news is that several other more interventionist proposals were dropped including sensibly the proposed drug and alcohol testing of staff or licensees; also, compliance history risk related liquor licence loadings for serving minors or intoxicated; importantly the proposal for minimum pricing was abandoned; and the proposal to collect wholesale sales data was dropped.

WHAT WERE SOME OF THE HIGHLIGHTS FOR ALSA-SEA IN 2017? ALSA-SEA has developed a firm footing in Victoria. On-ground resources are building the

brand in that state, along with memberships, built on the offer of our membership benefits and services, and embracing new licensees to the sector. ALSA-SEA made submissions to the Review of Liquor Acts in both Victoria and SA and are continuing discussions with governments in both jurisdictions on the Liquor Acts and other matters, including retail theft and aggravated violence in robberies.

WHAT WILL BE YOUR MAJOR FOCUS FOR THE YEAR AHEAD? To continue to build membership in Victoria and provide more membership benefits and services with more resources for membership support for those members in SA and Tasmania.

WHAT DO YOU SEE AS THE MAJOR OPPORTUNITIES FOR LIQUOR RETAILERS IN 2018? For all independent retailers to establish their point of difference. To leverage the changing consumption patterns and trends to cater for increasing premiumisation across all categories, to both satisfy shopper demand and build businesses with more profitable offerings.

WHAT ARE SOME OF THE KEY CHALLENGES FACING ALSA-SEA? Of course, the traditional volume lines appear

to continue to decline. Retailers will need to be on their game to adjust to these changing needs and not get caught out by ignoring the changing consumer demand. While it is also a key opportunity, the need to adapt to changing consumer demand is a challenge for many retailers and competitive pricing remains an issue. On the regulatory front, governments are constantly adjusting their regulatory environments with more interventionist proposals, to suppress demand and marketing activity. These often come along with more red tape and higher costs of doing business, often in response to pressure groups. So AUSTRALIAN LIQUOR STORES ASSOCIATION SEA industry must unite to balance the debate and ensure policy is made in a properly informed environment – not simply as a knee jerk response to calls for more restrictions on consumers and more regulation on the industry.

WHAT IS YOUR MESSAGE TO RETAILERS CONSIDERING BECOMING AN ALSA-SEA MEMBER? ALSA-SEA was established to utilise the strength of ALSA and their national representation of our sector and promotion of the benefits and contribution of our industry sector to the social and economic welfare of our communities. This organisation provides specialist packaged liquor representation in SA, Tasmania and Victoria along with tailored membership benefits and services, which are designed to assist our members and save them money on their day-to-day business operating costs and this model is proving to deliver those advantages for members.

WHAT IS ONE ISSUE YOU’D LIKE TO SEE URGENTLY ADDRESSED BY THE INDUSTRY? Industry needs to continue to work together to build both our reputation and our professionalism, as the Achilles heel of those who do not do the right thing will bring all of us into disrepute and leave the door ajar for regulators to step in with knee jerk responses.

50 | FEBRUARY 2018 NATIONAL LIQUOR NEWS

A POSTCARD FROM LYNCHBURG, TENNESSEE. FUNNY HOW WE NEVER GET ANY ‘RETURN TO SENDER’. EVERY DROP FROM A SINGLE SOURCE – LYNCHBURG, TENNESSEE.

P L E A S E D R I N K R E S P O N S I B LY

JACK DANIEL’S AND OLD NO.7 ARE REGISTERED TRADEMARKS. ©2018 JACK DANIEL’S. TENNESSEE WHISKEY ALCOHOL 40% BY VOLUME (80 PROOF). DISTILLED AND BOTTLED BY JACK DANIEL DISTILLERY, LYNCHBURG, TENNESSEE. JACKDANIELS.COM

SUPPLIER

WILL EDWARDS, FOUNDER ARCHIE ROSE

SUPPLIER

WHAT WERE THE HIGHLIGHTS FOR ARCHIE ROSE IN 2017?

WHAT DO YOU SEE AS THE COMING TRENDS FOR 2018?

2017 was a huge year. We collaborated with Japanese tattoo artist, Kian Forreal (Horisumi), to create four limited edition gins based on each of the Japanese seasons. This was a really interesting collaboration in which Horisumi’s label artwork dictated the spirit and its distillates, literally flipping the production process on its head. Each of the gins – Horisumi Autumn, Horisumi Winter, Horisumi Spring and Horisumi Summer sold out, the latter within hours of launching. Last year we were really proud to partner with some of Sydney’s most iconic events and institutions including the St George Open Air Cinema, Australian Museum and Sydney Writer’s Festival. You’ll see a lot more of these in 2018 as we partner with similar cultural organisations in every city around Australia. We were fortunate to receive several awards in 2017, including Best Australian Gin (Platinum Medal) – Signature Dry Gin SIP Awards (USA); Double Gold Medal – Distiller’s Strength Gin (New York World Wine & Spirits Competition); World’s Best International Contemporary Gin – Signature Dry Gin (American Distilling Institute Craft Spirit Awards); and World’s Best Unaged Rye Whiskey – White Rye (American Whiskey Masters USA). We were also grateful for very strong on- and off-premise growth nationwide. We’ve added a number of key team members and can’t wait to make 2018 even bigger and better.

Creating incredible products will always be the starting point to business success, backed by exceptional design and packaging. Authentic customer experience continues to be a driver for ours and other businesses. We’ll be increasing our capacity around our education and experiences including distillery tours, gin blending and other masterclasses. The movement is definitely one of sustainability. Bars are not the greenest things around, and we’ve been trying to decrease our footprint since we opened. Both in the bar and in the distillery we strive to reduce energy usage and waste. Straws are the easiest thing to stop using, as part of the ‘big four’ plastic pollutants (bags, plastic bottles and coffee cups being the other three) educating the public is the last hurdle in removing this unnecessary pollutant from our drinks, we now offer them only upon request. We also try to reduce waste from our perishable consumption, for example our citrus offcuts go into an Oleo Saccharum – a citrus sugar syrup with the citrus notes extracted from the oils of the skin of the fruit. Pineapple skins usually discarded when juicing pineapples contain so much pineapple goodness – simmered with sugar and spices for a short time produce a wonderful spiced syrup that costs next to nothing. Frugality and flavour. We’re also working with our dear friends over at Cornersmith who make use of some of our spent botanicals from the distillation process. We love those guys. And in turn we use some of their shrubs and pickles in our drinks across the bar. Besides sustainable, closed-loop bartending as a trend, drinks wise we’re still seeing funk reign supreme – we’re loving the acid hit of shrubs in drinks, spritzes using Pétillantnaturels. And of course at this time of year, when fruit is at its best, we’re preserving away like smart little ants, not silly grasshoppers, and ready to get through winter. Kombucha seems to be sticking around, as does alternative milks. I’m seeing almond milk, coconut milk and oat milk drinks popping up at the vanguard. Basically hipsters still reign supreme, even if some of them are shaving off their beards.

WHAT WILL BE THE MAIN CHALLENGES AND OPPORTUNITIES FOR ARCHIE ROSE IN 2018? We have a fantastic roster of new products that we can’t wait to rollout from April onwards. This year a big goal is to broaden our reach and to significantly expand our event presence around the country, we expect to do more than 500 events in 2018 so we can share our products with spirit lovers in all states and territories. And whisky. 2018 is the year to spread the word about Archie Rose whisky ahead of a full launch next year.

52 | FEBRUARY 2018 NATIONAL LIQUOR NEWS

And frankly thankfully for us, the market is fully behind Australian-produced spirits. Other than for our own range of booze we get requests across the bar for lots of great Australian whiskies, gins and vodkas. Long may that trend last. The drink of 2018 is the Gin Spritz. Gin with a touch of one of your favourite liqueurs i.e. a Crème de Pêche, cassis or Campari for those with a drier palate plus a splash of soda.

WHAT PLANS DO YOU HAVE TO ENGAGE THE OFF-PREMISE TRADE IN THE YEAR AHEAD? Our main focus will remain on our educational experiences increasing the number of tasting events, gin blending and other masterclasses outside the distillery, which we know drives more customers to look for our brand in their local retailers. We also want to work closely with retailers giving them the opportunity to offer our experiences to their customers. We will continue to invest heavily in creating engaging online spirits and drinks features, which is where our target audience spend a lot of their time viewing and sharing content.

“A BIG GOAL IS TO BROADEN OUR REACH AND TO SIGNIFICANTLY EXPAND OUR EVENT PRESENCE AROUND THE COUNTRY, WE EXPECT TO DO MORE THAN 500 EVENTS IN 2018 SO WE CAN SHARE OUR PRODUCTS WITH SPIRIT LOVERS IN ALL STATES AND TERRITORIES. ”

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SUPPLIER

SCOTT HADLEY, CHIEF COMMERCIAL OFFICER ASAHI PREMIUM BEVERAGES

SUPPLIER

WHAT WERE THE HIGHLIGHTS FOR ASAHI PREMIUM BEVERAGES (APB) IN 2017? We had an extremely busy year with a number of highlights that filled the 2017 calendar. Vodka Cruiser continues to go from strength to strength and we launched a number of variants under the Vodka Cruiser originals campaign which gained enormous traction on social media. We also welcomed Vodka O, VDKA 6100, Tequila Blu and Spice Box to our portfolio when we purchased the Artisan Spirit Merchants (ASM) brands. This has been a great inclusion into our portfolio with Vodka O giving us a platform to build a strong spirits portfolio. We then followed up in October with the inclusion of Peroni and Grolsch which continues to build on our premium international beer portfolio. Peroni is a fantastic brand that will assist our growth in the on-premise channel. In October we were also announced joint winners at the 2017 ALIAs as Off-Premise Supplier of the Year. As you can see, it has been a big year at Asahi.

WHAT ARE THE MAJOR OPPORTUNITES FOR APB’S BEER PORTFOLIO IN 2018? We want to keep the growth momentum going in both premium international beer and craft beer – so our approach is very much about improving category performance so that we all benefit. In craft beer, we believe that there is a tremendous opportunity for us all to improve category performance. The choice offered by the expansion of craft beer is mind-boggling. While some consumers revel in this choice, others are quite confused by the plethora of offerings. The opportunity for suppliers and retailers is to help consumers navigate the category and choose something that meets their needs. We believe that the opportunity for retailers in 2018 will be to consolidate their craft beer offerings, making sure they have a full range of the leading products and top selling craft beer brands – including APB brands of Cricketers Arms and Mountain Goat of course. Some retailers are already

successfully doing this and seeing healthy stock turns and return on investment. And it doesn’t need to be boring – there is always a role for seasonal or local rotations to keep the offering looking fresh for regular customers. In premium international beer we all see a lot of focus on price as a way for retailers to attract customers. APB now has five brands that can command a premium in the market with Peroni, Asahi Super Dry, Pilsner Urquell, Grolsh and Estrella Damm as our super-premium offerings. In 2018 we will be working with retailers and on-premise operators to ensure we increase category value for all. Initiatives include investing in unique packs and promotions and ensuring marketing improves consumer demand without the need for significant price levers. There is no one quick fix to realising healthy market prices, but focus needs to be on creating overall value for consumers, so prices are a secondary consideration.

IN WHICH AREAS DID YOU SEE THE MOST GROWTH? The consumer trend of seeking better quality beer continues to drive our premium international beer brand’s performance. The Asahi brand continues its strong growth momentum, up 32 per cent MAT (IRI September 2017) and craft beer continues to perform as the ‘new premium’ category with Mountain Goat up 36 per cent and Cricketers Arms up 20 per cent. We are also pleased to see continued strong growth of both Woodstock (plus five per cent MAT) and Vodka Cruiser brands (plus six per cent), driven by our continued brand renovation and NPD. In particular, we are excited about the growth potential of Woodstock Easy Roller, our new refreshing twist on Bourbon, pairing Woodstock Bourbon with a delicious ginger beer mixer.

WHAT CHALLENGES DID APB FACE IN 2017? We have grown our portfolio substantially during the 2017 period with the inclusion of Peroni, Grolsch, Pilsner Urquell, our new spirit brands and some NPD, and such rapid growth

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“We want to keep the growth momentum going in both premium international beer and craft beer.” presents challenges with portfolio management and ensuring that we have established the appropriate communication and training programs to assist our staff with selling a larger portfolio. We will always face regulatory challenges, and the burden that imposes on our operations. The forthcoming introduction of the Container Deposit Scheme (CDS) in NSW is an example of where we had to deploy a number of internal resources away from our core business as well as employ external expertise to assist us with the new legislation.

WHAT DO YOU SEE AS THE BIG TRENDS FOR CRAFT BEER IN 2018? The trend towards easier drinking craft beers, while well established, will continue to drive growth for retailers in 2018. Beers like Mountain Goat Steam Ale, Mountain Goat Summer Ale and Cricketers Arms Scorcher Summer Ale all play to this trend. Ensuring these offerings are readily available both on- and off-premise will enable retailers and on-premise operators to trade up as many customers as possible to these higher dollar margin offerings. Another trend worth noting is the rise of mid-strength craft beer. We have been pleased by the popularity of our recently released Cricketers Arms Session Ale. It is a triple hopped full flavoured refreshing ale with ABV of 3.5 per cent available in a 375ml can. There have been a number of similar beers in this space, which again provides retailers with the opportunity to trade consumers up from other lower value options.

SUPPLIER

MARCELLO COLOSIMO, CEO AUSTRALIAN BREWERY

It would be hard to go past the quality of our beer in 2017. This was backed up by the best year we have ever had in national beer awards. Nine gold medals across the three biggest beer competitions in the country is a real feather in the cap of our brewing team with Dan Shaw at the helm for his first full year. Another highlight would be our increased national distribution with a new national on-premise account, more SKUs in the major retailers and a distributor that is strong in South Australia and Western Australia, areas we have traditionally been weaker. We also had a fantastic year with our collaborations - If you like Pina Colada with Bucket Boys really captured the zeitgeist in the craft beer community and this is something we would really like to expand upon in 2018. Our reputation for producing quality consistent beer is second to none and we want to share ideas with our on- and offpremise partners. Finally securing a fantastic distribution partner in South Africa, which is very exciting.

WHAT DO YOU SEE AS THE MAIN CHALLENGES AND OPPORTUNITIES FOR AUSTRALIAN BREWERY?8? I think our challenges this year are the same for all craft brewers; increased competition, less free taps for independent producers and brewers selling beer too cheap. For pub operators the bottom line is of course very important and with rumours of people selling kegs for $150 it will be hard for them to say no despite the quality of the beer. The race to the bottom has been talked about a lot this year because it should be a concern for all brewers. We recently expanded the brewery’s capacity by one-third and we have a far more efficient canning line on the water. This will give us more time and space to ramp up production of our seasonal beers, something that had gotten a little away from us towards the end of 2017 with the demand for our core range. We will also will seek to build on what we have done with our work in China in 2017.

SUPPLIER

WHAT WERE THE HIGHLIGHTS FOR AUSTRALIAN BREWERY IN 2017?

“I BELIEVE THINGS WILL CONTINUE TO LOCALISE IN CRAFT BEER AND I ALSO FEEL THAT BRAND HERITAGE AND OWNERSHIP WILL BECOME MORE IMPORTANT WITH CONSUMERS. THIS WILL COME OFF THE BACK OF SEVERAL MAJOR CRAFT BREWER ACQUISITIONS IN 2017.” HAS THE NSW CDS HAD ANY IMPACT ON YOUR BUSINESS? We support any initiatives that will help the environment. That is a big part of the reason we were the first craft producer in Australia to put our whole range exclusively in cans back in 2012. However, we feel the program was badly communicated to us, retailers and most importantly the public. With price rises a necessity to cover the cost for all producers, I don’t think it is clear yet exactly what the cost will be once the program gets up and fully running. For us with national distribution as long as it is launched correctly we do not mind as more states launch a recycling rebate. This can help us have a consistent price around the country.

WHAT DO YOU THINK WILL BE THE BIG BEER TRENDS FOR 2018? HOW WILL AUSTRALIAN BREWERY ADDRESS THEM? I believe things will continue to localise in craft beer and I also feel that brand heritage and ownership will become more important with consumers. This will come off the back of several major craft brewer acquisitions in 2017. A more educated consumer will also

expect better beer from brewers as standards are raised. I don’t think a rising tide will lift all boats in 2018 with more mergers and brewers closing their doors. In regards to beer styles I think we will continue to see the growth and emergence of styles and brewing methods like sour beers, New England IPAs and flavour infusions. We will also see an increased importance on freshness and how to maintain it both in distribution and on the shelf. We have several plans in the works for this, including seasonal beers that are pre-sold only and shipped next day or only sold at the brewery.

HOW WILL YOU ENGAGE THE OFFPREMISE TRADE TO DRIVE SALES IN 2018? We have usually relied on tastings but this year we are going to put more focus on compelling POS and promotions. With so much good craft beer in the market now it is easy to get lost on the shelf. We are also developing innovative gift with purchase options. Unfortunately, the only negative we have found so far in producing only in cans is that we do not have something as easy as the old faithful branded bottle opener to use.

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SUPPLIER

CAMERON FERGUSON, GENERAL MANAGER AUSTRALASIA & NORTH AMERICA AUSTRALIAN VINTAGE LIMITED WHAT WERE THE HIGHLIGHTS FOR AVL IN 2017? SUPPLIER

A key highlight was our wine show performance throughout the year, where the quality of our wines continued to be recognised on the national and international stage. A standout was the recent Winestate Wine of the Year Awards, where McGuigan The Shortlist Adelaide Hills Chardonnay 2016 was announced Winestate ‘Wine of the Year’, and Nepenthe Winemaker’s Selection Adelaide Hills Grüner Veltliner 2016 was judged Alternate White Wine of the Year. Quite some achievement, and one of which we are incredibly proud. Furthermore, Nepenthe was awarded the Trophy for Best Sauvignon Blanc of Show at the Hong Kong International Wine and Spirits Competition for the Nepenthe Pinnacle Petraea Sauvignon Blanc 2016, triumphing over well-regarded Sauvignon Blanc from all over the world. It’s a particularly pleasing result, and a great boost for premium Australian and Adelaide Hills Sauvignon Blanc which continues to out-perform New Zealand Sauvignon Blanc at premium price points. Driving brand awareness has been a real focus, and remains a ‘game changer’ for the brand and our business. When we embarked on the ‘Bring a McGuigan’ campaign we did so with the aim to shake up the way in which wine is advertised, driving humour and irreverence into what has been a traditional medium to date. The result was a fantastic vindication of what we set out to do.

HOW HAS AVL BOUNCED BACK FROM THE IMPACT OF UNFAVOURABLE EXCHANGE RATES EARLY IN 2017? Undoubtedly exchange rates into the United Kingdom have been a challenge for some time, and like any business exporting to the UK, it does impact your overall business. That said, we are staying very much focused on what we can control, and are extremely committed to our business in the UK. We continue to grow our footprint in channels such as convenience, where we have been under trading to date. The Australian category is flat, however our

core brand McGuigan continues to grow share and has plenty of headroom for continued long-term growth. It’s fair to say our business in the UK has never been in better shape and once the currency moves favourably we are in a terrific position to get maximum benefit.

WHY DID YOU DECIDE TO INVEST IN THE CHINESE MARKET? While we have established a footprint for McGuigan in China through our strategic partnership with COFCO, the agreement with Vintage China Fund will see our remaining core brands – including Tempus Two and Nepenthe – secure national distribution across China. This is an important step in the evolution of our business in China, and we now have a national presence for our core portfolio of brands in what is one of our key focus markets. In addition, the investment has given us the opportunity to bring forward some capital projects such as a new bottling line, premium winery program and the next instalment of our solar park, all of which will deliver excellent return-on-investment and benefit our business globally.

WHAT DO YOU SEE AS THE BIG TRENDS FOR 2018? One that has been coming for a while is the United States. A more favourable exchange rate, and a growing interest in Australian wine above US$10, has seen – and will continue to see – a slow but steady turnaround for the Australian category. We’ve re-entered the premium sector of the market with Tempus Two in the past year, and from January will be re-introducing McGuigan into the US at a price point north of US$10. Premiumisation is a growing global trend, we’re seeing this in average price point growth in our brands. We’re really backing emerging varietals to continue to pique interest and drive our brands. Malbec is hot on everyone’s lips, and we’re taking a serious position in driving the variety in Australia. Cross category blur between wine, beer and spirits is one that is garnering attention, tapping into the juggernaut that is the craft movement. We’ve recently dipped our toe in

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“Cross category blur between wine, beer and spirits is one that is garnering attention, tapping into the juggernaut that is the craft movement.” the water with a new brand Off The Grid, craft wine from emerging varieties in 500ml crown sealed beer bottles.

HOW WILL YOU ENGAGE THE TRADE TO DRIVE SALES IN 2018? Moving forward we’re focused on driving sustained branded growth across all our retail partners. A key part of this strategy is one of differentiation, namely in the hypercompetitive $10-$15 price segment. To that end, we’ve worked collaboratively with all channels in the domestic market to develop differentiated branded solutions that enable us to build our brands in concept with delivering upon the strategic imperatives of our customers.

WHAT DO YOU THINK THE INDUSTRY SHOULD BE DISCUSSING IN 2018? One that does warrant debate is understanding our USP. Not as brands, but as brand Australia. I’d like to see Wine Australia driving this even harder. New Zealand have well aligned USPs for example. We need the collective industry to be thinking country first, region second, brand third. What is our single unifying message and how do we collectively find a way to invest more into market development plans for Australian wine? We need to do a better job collectively so Australia does not lose ground to emerging new world wine regions.

A UNIQUE BREW One of the things that gives our ales and stout that unique Coopers flavour and appearance is a process called natural conditioning. To achieve this we add a small amount of live yeast to our beer just before bottling or kegging. This causes secondary fermentation in the bottle or keg which carbonates the beer and eliminates the need for any preservatives or additives.

SUPPLIER

BACARDI-MARTINI AUSTRALIA PTY LTD DENIS BROWN, MANAGING DIRECTOR BACARDI-MARTINI AUSTRALIA

SUPPLIER

WHAT WERE SOME OF THE HIGHLIGHTS FOR BACARDI-MARTINI AUSTRALIA (BMA) IN 2017? Looking at the overall market, a couple of category highlights were the continued growth of cocktail culture, driven by the small bar movement and the growing interest in the gin category. Australian bars and bartenders continue to feature in global awards and Australian consumers are educating themselves to offer some simpler cocktails at their barbeques or to start the evening with a refreshing G&T. For BMA, internally we made more progress on our entrepreneurial culture and collaboration skills, be it with customers or agencies. Externally, we continue to invest in memorable brand events such as Grey Goose Riviera, Bombay Sapphire’s ‘Project Botanicals’ and the Bacardi Legacy cocktail competition. For the industry, I am impressed by how DrinkWise continues to show a positive impact on Australian drinking habits.

WHAT HAVE BEEN THE MAJOR CHALLENGES THAT YOU HAVE FACED IN 2017? Our major challenges can be bucketed under one heading: ‘How to work collaboratively with regulators?’ We face the continued high taxation of spirits, and the licensing restrictions Andy Wren and Joe McCanta.

Bombay Botanicals. particularly in NSW. After marching at the ‘Keep Sydney Open’ campaign, I was delighted to see some changes, such as a bar can now serve a single malt neat, without asking for a mixer after midnight. And of course, most recently the challenges with the NSW implementation of the Container Deposit Scheme (CDS). It has been difficult to engage and work with regulators, not only on policy but also pragmatic implementation. Finally, we will continue to grapple with the changing advertising landscape, for example the role of influencers in social media versus traditional media, the number of likes on Facebook or Instagram versus reach and frequency. How to build distinctive brands in 2018 is changing, and this challenge is fun and exciting.

WILL YOU CONTINUE TO PLACE EMPHASIS ON BRAND ACTIVATIONS SUCH AS PROJECT BOTANICALS IN 2018? We aim to make all our brand activations memorable, as we hope that our brands help consumers make their drinking occasions more memorable. In a busy world for our consumers, cutting through is vital. Being boring is a waste of effort. We also want to work with our customers to help them amplify their offers in social media. The social landscape is changing rapidly, so working with customers to help inform and educate shoppers and drinkers is a natural progression. Learning together seems wise.

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WHAT DO YOU SEE AS THE BIG TRENDS FOR 2018? Consumer desire for convenience and immediacy. Peoples’ smartphones are becoming the remote control to their lives, how can we participate in this? Also, I expect more growth in small bars and the number of experienced bartenders. This is a terrific driver of consumers’ interest in cocktails. In the same way that the growth of cafés and the barista community improves the quality and availability of great coffee, I believe Australia will continue to build its reputation for great bartenders and hence great drinks. Of course, this is (a) tail wind for our portfolio. The growth in lower alcohol cocktails and aperitifs. This trend is coming from Australians’ desire to be healthier, the growth of outdoor cafés and bars, and European influence around aperitifs such as vermouth and Aperol. Educating consumers on how to enjoy vermouth is an opportunity for our Martini and Noilly Pratt vermouths.

HOW WILL YOU ENGAGE THE TRADE IN 2018? We will work with customers who want to grow the cocktail and spirits categories, where we are keen to develop better joint business plans. We will continue to invest in bartender education around spirit categories of rum, vodka, whisky and gin, and hold the Bacardi Legacy cocktail event to inspire bartenders to develop a Legacy cocktail to share with the world.

SUPPLIER

WHAT WERE THE HIGHLIGHTS FOR BROWN BROTHERS IN 2017? 2017 was a big year for our company. One of the major highlights was the integration of the Innocent Bystander brand into our own salesforce. It’s always a challenging process and momentum can be lost and yet it’s such a wonderful consumer brand that with a more concentrated focus will see tremendous upside in the months and years ahead. It was also a big year for Prosecco and we have continued to lead the category by focusing on consumer occasions. Our other big growth driver has been our Tasmanian wine offering predominantly through the Devil’s Corner brand.

WERE THERE ANY UNEXPECTED DELIGHTS OR SURPRISES OVER THE LAST 12 MONTHS? While not necessarily unexpected, our people continue to inspire me. We have experienced a phase of significant growth over the last two years and our peoples’ ability to meet the demands that have driven from a priority, quality and intensity perspective all while maintaining our core company family values has been outstanding.

WHAT WERE THE MAJOR CHALLENGES FACED BY BROWN BROTHERS IN 2017? While growth has been pleasing our ability to meet demand now and into the future is a challenge for us. We, along with our neighbours, are committed to the home of Prosecco in Australia being the King Valley as this is where the Prosecco story started many years ago. The challenge is that demand continues to exceed our ability to supply and being an agricultural business there is no tap to turn on so we must wait circa three years for fruit to come to bear. Tasmanian varieties are similar being exposed to cool climate conditions, particularly Pinot Noir.

WHAT DO YOU SEE AS THE MAJOR OPPORTUNITIES FOR BROWN BROTHERS IN 2018? China is certainly our biggest market

opportunity excluding national as we continue to learn as much as we possibly can about this rapidly evolving market. Innocent Bystander provides a very exciting opportunity for our teams to connect with a broader range of customers and channels. It also potentially opens our wines up to new consumers for us to interact with. We aim to continue leading the market in targeted growth categories – Pinot Noir, Prosecco and Moscato while continuing to push the boundaries as a leader of new and emerging varietals, packages and consumer messaging.

WHAT DO YOU SEE AS THE EXCITING TRENDS FOR THE WINE INDUSTRY IN 2018? There is no doubt the trending towards lighter styles in wine. By no coincidence Ross Brown and our leadership team have set Brown Brothers on a path over many years to capitalise on this trend through wines like Moscato and Dolcetto, by collaborations with CSIRO on Cienna and Tarrango, our move to Tasmania for Pinot Noir and finally the global phenomenon that is Prosecco. Anything pink is appealing and rosé is really developing unisex appeal albeit still off a relatively low base that we can only see growing further in 2018.

WHAT SHOULD THE INDUSTRY BE TALKING ABOUT IN 2018? From a retail and manufacturer perspective the latest recommendations from FARE to the government are very disturbing. Most alarming is the apparent position of excluding the alcohol industry from the conversation. Impacting the majority of responsible alcohol consumers by increasing taxes, and introducing minimum pricing without directly focusing on the minority who we all acknowledge create issues, is an underwhelming policy. Flow on effects for our industry are many and fundamentally it is highly unlikely that problem drinkers will reduce their consumption in the same way that policies developed in conjunction with the industry over recent years have.

The wine industry employs thousands of people predominantly in struggling rural areas and the government has worked extremely inclusively on the WET rebate evolution, export grants and tourism so to preclude the industry on this topic is confusing.

WHAT IS YOUR KEY MESSAGE TO THE TRADE FOR THE YEAR AHEAD? I’m always reluctant to speak at the trade as they know their own challenges better than I, and yet if I was to focus on one message it would be that the trade and suppliers should be combining resources to work together to better understand the consumer and engage the shopper. Importantly that is not about who has the most data or power points to share, it’s about who can extract meaningful insights that localised can help individual retailers improve their offer to shoppers. From a pure Brown Brothers company offering perspective I hope you can see that our portfolio displays a diverse range of exciting consumer appealing brands delivered to you with the family values we have treasured over many decades. We are here to help.

“IF I WAS TO FOCUS ON ONE MESSAGE IT WOULD BE THAT THE TRADE AND SUPPLIERS SHOULD BE COMBINING RESOURCES TO WORK TOGETHER TO BETTER UNDERSTAND THE CONSUMER AND ENGAGE THE SHOPPER.”

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SUPPLIER

DEAN CARROLL, CEO BROWN BROTHERS

SUPPLIER

MARK SATTERTHWAITE, MANAGING DIRECTOR BROWN-FORMAN WHAT WERE THE HIGHLIGHTS FOR BROWN-FORMAN IN 2017? SUPPLIER

2017 was an important year for the company as we were able to increase our existing brands’ footprints while broadening the portfolio with new whisky additions such as Glendronach, BenRiach, and Glenglassaugh single malt scotches, Slane Irish Whiskey, and Collingwood Canadian. Our Bourbons, Woodford Reserve and Old Forester, also grew with double digit gains fuelled by the on- and off-premise segments. Jack Daniel’s and our messaging via the ‘Postcards’ advertising campaign helped to reinforce the specialness of the brand while conveying the message that every drop continues to be made in Lynchburg, Tennessee. We also drove greater visibility within the music and event space. In the highly competitive RTD category, Jack Daniel’s American Serve lapped the previous year’s launch with YOY gains. Double Jack also posted another year of sales increases as consumers gravitated to higher proof RTDs.

HOW HAS SLANE IRISH WHISKEY PERFORMED SINCE LAUNCH? Glass Irish Whiskey is four per cent of Total Glass Whisk(e)y sales, having the highest growth rate which has accelerated for three years and at this point we see no slowing down for the category. Brown-Forman is well placed on Slane according to the strategy that was outlined for the brand. We’re very pleased and encouraged by our performance to date. During the seeding stage, it has been adopted extremely well by trade and consumers. We continue to receive positive feedback on the disruptive nature of the packaging as well as complexity and more robust flavour of the whiskey itself, owing to our triple cask maturation.

WHAT HAVE BEEN SOME OF THE CHALLENGES YOU FACED IN 2017? In addition to the key challenge of an increasing number of brands and innovations competing in the Australian market for the same shelf space and back bar visibility, some

of the specific challenges that the we faced in 2017 were: i) an overall decline in alcohol consumption, ii) declining trends for the mid-strength segment of RTDs (4.5 to five per cent ABV) and, iii) competitive pricing within RTD’s and full strength products.

WHAT ARE THE THE MAJOR OPPORTUNITIES FOR BROWN-FORMAN OVER THE NEXT 12 MONTHS? I believe that we need to continue to improve our abilities in informing the trade and our consumers of how and why our brands are different. The worldwide increased interest in premium spirits plays well into our strong suit and I would expect us to be able to capitalise upon this for quite some time into the future. Jack Daniel was a real man who created a Tennessee Whiskey that has been made in the same town using the same charcoal mellowing process for more than 150 years. This is fascinating – and is simply not known by as many we would like within our target audience. We also think that the Australian market has a long runway and is still largely discovering some categories and brands. And with each discovery, comes another opportunity for industry. Innovation has been extremely important within RTDs and I would expect that we will need to continue to find ways to reach consumers’ changing tastes and occasions.

WHAT DO YOU SEE AS THE BIG SPIRITS TRENDS FOR 2018? There is a continued emergence and fragmentation of the total whisk(e)y market, as consumers look to discover new tastes and brands as well as trade up to more premium and different expressions within a reasonably mature category. Within the RTD segment, there seems to be some degree of polarisation where growth is delivered by either low-proof easy drinking ‘refreshing’ options or higher ABV variants. Finally, innovation in new flavours and formats continue to see positive trends. Brown-Forman has been consistent in utilising consumer-centric innovations to address trends – whether it is in product or activation without compromising the values of the respective brands in its portfolio.

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“THE WORLDWIDE INCREASED INTEREST IN PREMIUM SPIRITS PLAYS WELL INTO OUR STRONG SUIT AND I WOULD EXPECT US TO BE ABLE TO CAPITALISE UPON THIS FOR QUITE SOME TIME INTO THE FUTURE.” HOW WILL YOU ENGAGE THE TRADE TO DRIVE SALES IN 2018? Brown-Forman has and will continue to evolve in how we engage our customers to deliver mutually beneficial growth. We will continue to invest in the capability and channel understanding of our expanded on-premise team and are increasing our resources behind brand advocacy. We have also expanded our key account team and will put more resources and energy into category development this year.

WHAT KEY FACTORS DO YOU THINK THE INDUSTRY SHOULD BE DISCUSSING IN 2018? As always, the industry as a whole must continue to have a proactive conversation with all stakeholders to ensure that people are serving and consuming our products in a responsible way. In addition, the industry must also be open to communicating positive stories of consumer education, improved training and career opportunities for bartenders and our contribution to night time and tourism economies. This will help improve our collective reputation among regulators and other stakeholders.

Thousands of people work in the wine industry but few end up on the bottle. At Yalumba, we’ve been making wine since 1849. One thing we’ve learnt over the years is that you can’t do much with a bunch of good grapes unless you have already picked a bunch of great people. With this in mind, in 1962, we decided to honour the great people who have made an outstanding contribution to life and tradition at Yalumba by crafting ‘The Signature’. Each release of this iconic Cabernet Sauvignon and Shiraz blend bears the signature of the person honoured. With the 55th Signature, we salute Andrew Murphy. Murph started his working life in the cellar where he quickly rose to Cellar Manager, qualified as a Winemaker, was promoted to Operations Manager and is today our Director of Wine. So he doesn’t need anybody to tell him that the wine which now bears his name is one of the finest Signatures we have crafted yet. In fact, he’d probably say the wine he’s ended up on is the one he’d most like to upend.

One family. Many stories.

Judy Argent 2008

Clive Weston 2009

Jane Ferrari 2010

Robert Hill-Smith 2012

Andrew Murphy 2013

SUPPLIER

FRANCO PERONI, MANAGING DIRECTOR CAMPARI

SUPPLIER

WHAT WERE SOME OF THE HIGHLIGHTS FOR CAMPARI IN 2017? Campari enjoyed a number of highlights over the course of 2017, in particular: • Aperol’s successful first year of sponsorship of the Australian Open tennis, following which both Tennis Australia and Aperol were delighted to announce a further three-year sponsorship partnership. • The growth of the aperitivo category pioneered by Campari with its market leading brands Aperol and Campari. This category has seen a number of new entrants, which highlights the continued popularity of the aperitivo occasion and Campari is well placed to continue to expand the category given our Italian roots, intimate knowledge of the drinks and rituals that go with the aperitivo occasion, together with our learnings in other markets, particularly Europe. • Campari’s growing presence in the onpremise channel. We have a number of new, key partnerships and through targeted, joint strategies with our customers we are bringing richer drinking experiences to consumers. • Our people continue to thrive through tailored capability building initiatives with the Campari Australia team being recognised internally through international promotions and awards. • Campari continues to be acknowledged by its customers in the 2017 Advantage Survey for its dedication to customer support related initiatives and was further recognised as 2017 supplier of the year at the IBA National Retail Conference, which was an absolute highlight for the Campari team. • While we are doing well in the aperitivo category, we are also focused on other category opportunities longer term, with a focus on authentic brands with rich stories and experiences such as Baron Samedi and Wild Turkey.

WHAT CHALLENGES DID YOU HAVE FACED IN 2017? Overall Campari enjoyed a positive 2017, however some of the challenges we experienced during 2017 was preparing for, and implementing the NSW Container Deposit Scheme (CDS)

during the month of December, re-positioning our Wild Turkey RTD products to better meet consumer needs and rationalising our investment in digital sales and marketing platforms.

WHAT DO YOU SEE AS MAJOR OPPORTUNITIES FOR CAMPARI OVER THE NEXT 12 MONTHS? During 2018 we anticipate a broadening demand in the in the apertivo category, with more consumers wanting to explore Campari and Campari based cocktails in particular. We also expect to see an increased appreciation of craft Bourbon with brands such as Wild Turkey and Russell’s Reserve being well positioned to meet this growing consumer demand. Aperol will continue its strong momentum and Campari will remain focussed on fostering win-win strategies with both our on- and off-premise customers.

WHAT DO YOU SEE AS THE BIG TRENDS FOR 2018? Drinking less but drinking better is evident as the spirits category continues to premiumise. Campari is well placed to offer a portfolio of brands with genuine heritage and authenticity to match today’s expression of premium. In addition, experimentation and evolving repertoires will underpin the trend of classic cocktails in the on-premise and we will start to see how this will translate into the offpremise. Craft spirits will certainly continue to get bigger and exploring some new craft

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expressions in categories like American whiskey will be one to watch in 2018. Digital as a communication channel for consumers, influencers and retailers will be an area of interest and Campari will continue to be innovative in this space.

WHAT KEY FACTORS DO YOU THINK THE INDUSTRY SHOULD BE DISCUSSING IN 2018? In 2018, industry will continue to focus on ensuring that alcohol products are marketed and promoted in a responsible manner and are enjoyed by consumers in safe environments. The alcohol tax agenda is also likely to remain an area of debate for the industry in the coming year ahead. Lastly, the industry will remain focused on the challenges and opportunities for alcohol, but look out to other industries for inspiration and learnings that are transferable to our sector.

HOW WILL YOU ENGAGE THE TRADE TO DRIVE SALES IN 2018? Our team will continue to build on the close partnerships we have forged with our customers to remain connected at all levels. We will use our agility to pioneer category leading executions and respond quickly to customer strategies. Additionally, Campari will continue to engage with customers on our brand priorities and longer term strategic plans, with a focus on connecting ‘experts to experts’ rather than just a sales outlook.

100% WILD FERMENTED www.stoneleigh.com/au/

RETAIL & WHOLESALE

GREG DAVIS, LIQUOR DIRECTOR COLES LIQUOR WHAT WERE THE HIGHLIGHTS FOR COLES LIQUOR IN 2017? More customers are shopping with us more often, which has always been our strategic intent and mantra. Thanks to our loyal customers, we managed to achieve another year of like for like sales growth illustrating the consistent delivery of the overall Coles Liquor Group strategy. We ask millions of customers each year for their feedback through our Tell Coles Liquor program and last year, we had 1.5 million more extremely satisfied customers across our brands. We’re also actively contributing to the communities we serve and are particularly proud of the completion of our first full year partnering with SecondBite. Our customers and stores raised $1 million over this time including almost $500,000 over our annual Christmas appeal.

RETAIL & WHOLESALE

HOW IS YOUR TURNAROUND STRATEGY PROGRESSING? WHAT CAN WE EXPECT TO SEE OVER THE LAST TWO YEARS?

WHAT DO YOU THINK THE CHALLENGES ARE FOR THE INDUSTRY OVER THE NEXT 12 MONTHS?

At the beginning of the turnaround, we worked really hard on building a plan we thought would allow our brands to succeed in the market place. We’re pleased to say we remain on track in delivering on that plan. We started by building a solid foundation and driving customer centricity. This included investing in value, in our stores, in our service culture and in systems and processes to simplify the way we work. Although we’ve delivered a great deal of change in these areas, they remain critical and we will continue to focus on them. We’re proud to be delivering a much more consistent experience for our customers and team members, particularly in store. These are all the result of tireless efforts from our team to improve and grow the business.

The industry will continue to face challenges from the external environment as it always does. There will always be changing legislation, as we saw with the NSW Container Deposit Scheme being introduced in December as well as changing lockout laws for pubs. The important thing for state and local government is to consult widely with the industry before making changes. Because like us, the industry works hard to adapt to changing community perspectives and attitudes. At Coles Liquor, we are often making these changes ahead of the curve like the phasing out of single use plastic bags nationally this year. Fortunately the work we’ve done to simplify our business over the past three years has positioned us well to respond in an agile fashion to the challenges that arise.

HOW IS THE LIQUOR MARKET TRIAL PROGRESSING? ARE THERE ANY PLANS TO EXPAND THAT BRAND?

WHAT ARE THE CHALLENGES AND OPPORTUNITIES FOR COLES LIQUOR BRANDS OVER THE NEXT 12 MONTHS?

We remain pleased with the customer response to and the results achieved within the Liquor Market trial. We frequently run trials across all our brands and are always rolling out the learnings from those trials to the fleet.

Customers lift their expectations of us every year, which creates both opportunities and risks. Each of our brands work hard to excel at meeting and exceeding customers’ expectations by having a clear customer focus

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when it comes to decision making. We stay close to our customers’ needs by investing in detailed customer insights and engaging directly with our customer base. For example all our leaders across each of our banners complete customer immersion sessions where they walk in the shoes of a customer, before receiving their feedback. This allows us to stay close to trends and test our offer out with the people that matter most.

WHAT DO YOU THINK WILL BE THE BIGGEST TRENDS IN 2018? We are fortunate to be part of the Flybuys customer loyalty program which gives us great insights into changing customer behaviour and trends as they happen. We’ve noticed customers are increasingly looking to try new things and expand their repertoire. How they decide what to try is influenced by the story behind the brand and what makes it special. They’re also interested in the combination of food and drinks and “what goes well with that”. So whilst the role of the liquor retailer will always be to get the basics right, like having great value, availability and service, customers increasingly expect us to know the brands and their stories. It’s an exciting opportunity for us and our supply base and we’re looking forward to working closely together to make the most of it.

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Live Passionately. Drink Responsibly. BACARDÃ AND THE BAT DEVICE ARE TRADEMARKS OF BACARDI & COMPANY LIMITED, BACARDI U.S.A., INC., CORAL GABLES, FL. RUM - 40% ALC. BY VOL.

SUPPLIER

CAM PEARCE, NATIONAL SALES AND MARKETING DIRECTOR COOPERS WHAT WERE THE HIGHLIGHTS FOR COOPERS IN 2017? SUPPLIER

Coopers’ first involvement in the Australian Open in January and the opening of a $65 million Malting Plant in late November bookended a strong year for Coopers in 2017. The Australian Open is the largest sponsorship with which Coopers is involved and an enormous amount of work was undertaken to ensure the arrangement with Tennis Australia ran smoothly. Coopers’ sponsorship includes lead-in tournaments at Brisbane, Sydney, Perth and Hobart and has up to four years left to run. Coopers’ new maltings at its Regency Park site opened in November after a construction period of almost two years. The 16,000sqm malt house is considered the most technically advanced in the world and can produce up to 54,000 tonnes of malt a year. Coopers will use approximately 17,000 tonnes a year for its own requirements with the rest available to national and overseas customers. Beer sales continued to improve in 2016-17 with Coopers recording its 24th consecutive year of growth to 83.8 million litres, giving us around five per cent of the total Australian market. New South Wales is now Coopers’ strongest market with 27 per cent of total sales, compared with 22.9 per cent in South Australia and 18.7 per cent for Victoria. Late in the year Coopers introduced Session Ale, a refreshing summer style beer with tropical fruit notes and an aromatic hop character from the Galaxy and Melba hop varieties. Session Ale has a 4.2 per cent alcohol level and is available on tap.

CRAFT BEER IS STILL ON THE UP – HOW WILL COOPERS LEVERAGE THIS TREND IN 2018? Coopers will continue to promote its own craft brewing credentials. We are a familyowned company and hold a unique position in Australia. Our founder, Thomas Cooper, is widely regarded as being one of Australia’s first craft brewers. We have been brewing our unique range of secondary-fermented ales for 155 years and still set the standard for today’s craft brewers. In late 2017, we released Session

Ale, a refreshing summer style beer, to the onpremise trade. It has received a very positive response and has become a permanent addition to our range of ales. While it was initially planned as a limited edition, its rapid take-up meant the decision was made to make it a permanent addition to the Coopers range. Session Ale is a refreshing summer style beer with tropical fruit notes and an aromatic hop character derived from Galaxy and Melba hops. It was developed to meet the growing demand for fruity, easy-drinking summer style beers. The hops are added late in the brewing process for bitterness and then dry hopped to extract flavour and aroma. This gives a moderate level of after-palate dryhopped bitterness to balance the estery flavours produced by the famous Coopers Ale yeast. Like other Coopers ales, it undergoes secondary fermentation, eliminating the need for additives or preservatives. This secondary fermentation also means the beer has a slightly cloudy appearance, which is a hallmark of Coopers ales. Session Ale has been released under its own distinctive rondel (ale label) making it an obvious and distinct member of the family, alongside Sparkling Ale, Pale Ale, Stout, Dark Ale and Mild Ale. The opening of our new maltings last November gives Coopers further control over its raw materials and the ability to develop malt types which will encourage product development, a hallmark of the craft sector, into the future. Coopers is headed by Dr Tim Cooper, our

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Chief Brewer and Managing Director, who is a great, great grandson of Thomas Cooper, underlying our family ownership and heritage.

WHAT DO YOU SEE AS THE BIG BEER TRENDS FOR 2018? Fruity summer style beers such as Coopers Session Ale are proving very popular in the market and demand for this style is expected to grow in 2018. Across the market generally, new flavours and styles are evolving while innovation in packaging, container sizes and alcohol content is creating additional interest in the market. Coopers has produced small batch releases in the past and will give ongoing consideration to similar releases to highlight Coopers’ craft brewing credentials in the future. The mid-strength market is expected to continue growing in popularity with Coopers Mild Ale 3.5% being one of the brewery’s strong performers. The low carb sector also remains strong, while low and ultra-low alcohol beers are developing a good niche in the market and are expected to grow further in 2018.

WHAT SHOULD THE TRADE BE DISCUSSING IN 2018? Total beer consumption in Australia has continued its decline and achieving profitable growth in a challenging market is proving difficult. Reversing this trend will be one of the major topics the industry will be debating in 2018. The impact of the introduction of the Container Deposit Scheme (CDS) in NSW is still working its way through the market and there will be strong interest in how this plays out.

SUPPLIER

WHAT WERE THE HIGHLIGHTS FOR DIAGEO AUSTRALIA IN 2017? Bundaberg Rum is back in growth and winning global awards like Best Dark Rum in the World at the World Drinks Awards for the second year running. The premix category is back in growth, driven by strong innovation such as Bundaberg Lazy Bear, Smirnoff Pure and Pimm’s Sparkling Cup. We continued our partnership with Masterchef and Matt Preston that taps into the resurgent and vibrant spirits culture in Australia. The partnership leverages the consumer trend of people drinking more premium products in lower tempo occasions and the growing trend of entertaining in the home. Our Reserve portfolio is performing well and our industry leading World Class bartending competition again demonstrated the outstanding talent of Australian bartenders with Australian winner Andrea Gualdi making it to the top four in the global finals in Mexico.

YOU HAD A BIG PUSH ON BUNDABERG IN 2017. HAS THIS HELPED TO REVIVE THE BRAND? Bundaberg Rum is our biggest brand and I’m proud of the work the team has put in to reinvigorating this iconic brand, leveraging its incredible heritage and the quality of the liquid. In 2017 we launched a major creative campaign for the brand, the first in a decade. The feedback from the industry and Bundy fans has been overwhelmingly positive and we’ve got new creative launching in early 2018. Bundaberg Lazy Bear continued to drive premix category growth and we were delighted to win New Product of the Year at the ALIAs. Bundaberg Rum Solera again won the Best Dark Rum in the World at the World Drinks Awards for the second year running. Our team in Bundy is extremely proud of this global recognition and understandably so. It’s great recognition of their commitment to producing Australia’s best rum. Bundy will continue to have a huge year in 2018 celebrating its 130th birthday, continuing its NRL partnership and welcoming more than

“DIAGEO RECENTLY LAUNCHED ONE OF ITS BIGGEST RESPONSIBLE CONSUMPTION INITIATIVES EVER WITH DRINK POSITIVE, A GLOBAL CAMPAIGN THAT PROMOTES MODERATION AND A POSITIVE DRINKING CULTURE.” 75,000 visitors to its distillery, an awardwinning tourism experience that’s become a must-do for anyone visiting the region.

WILL THERE BE MORE INNOVATION FROM DIAGEO IN 2018? Absolutely. The premix category is back in growth and Diageo has been instrumental in driving this growth. Innovation is a key driver of growing the at home occasion and we’ve had wonderful support from our retail partners. Looking at the success of Bundaberg Rum Lazy Bear and Smirnoff Pure, consumers are telling us we are on the right track and we believe this is a crucial segment that will unlock future growth in the spirits category. In the lead-up to summer we started rolling out Pimm’s on Tap in the on-premise and we’ve had fantastic feedback already from customers. Pimm’s on Tap is a great example of excellent innovation driven by strong consumer insights. We’ve just launched Tanqueray and Tonic, a premix innovation I’m really excited about. The liquid is sensational, the packaging is fantastic and it’s a product that is going to help premiumise the premix category.

WHAT DO YOU SEE AS THE COMING TRENDS FOR 2018? Australian consumer tastes are changing and this has driven demand for drinks that are

lower in sugar or lower in alcohol. Some of this demand is driven by macro trends around holistic living and wellbeing with consumers looking to drink better, rather than more. They’re seeking lighter and more refreshing tasting drinks that are perfect for daytime casual get together occasions. While low- to mid-strength premix accounts for a relatively small proportion of Diageo’s total premix portfolio, it’s the fastest growing segment within the category. We expect the importance of this emerging segment will continue to grow in line with demand for these types of drinks in other categories. Resurgent interest in cocktail culture will continue to underpin the future growth of spirits. We’ll unlock opportunities for spirits in the at home occasion by de-mystifying and simplifying simple mixed drinks. An example of that is the Matt Preston partnership, a key influencer who is demonstrating just how simple it is to serve up simple mixed drinks to your friends and how to match them with the food you serve. This will be amplified and supported through our media and retail partnerships.

WHAT ARE THE KEY ISSUES YOU THINK THE INDUSTRY SHOULD BE DISCUSSING IN 2018? Responsible marketing of our brands and promoting responsible consumption are two of the most important issues we face as an industry. We’ve been seeing cultural change in the way Australians consume alcohol for some time now, with overall consumption trending downwards and a 47 per cent decrease in the number of Australians drinking regularly. As alcohol producers we all have an obligation to do everything we can to continue these positive downward trends, and tackle alcohol harm and misuse in our community. Continuing our partnership with DrinkWise is also important to maintaining this trend. Diageo recently launched one of its biggest responsible consumption initiatives ever with Drink Positive, a global campaign that promotes moderation and a positive drinking culture.

NATIONAL LIQUOR NEWS FEBRUARY 2018 | 67

SUPPLIER

DAVID SMITH, MANAGING DIRECTOR DIAGEO AUSTRALIA

ASSOCIATION

SIMON STRAHAN, CEO DRINKWISE WHAT WERE THE HIGHLIGHTS FOR DRINKWISE IN 2017?

ASSOCIATION

Since 2007, DrinkWise has been creating targeted social marketing campaigns to evoke positive behavioural and cultural change around Australians’ consumption of alcohol. To coincide with the 10th anniversary of DrinkWise’s campaigns, we commissioned an independent research report, Australian Drinking Habits: 2007 vs 2017, to assess the impact of our programs and the changes Australians have made to their consumption habits over the past decade. The results were very encouraging and show that, for the most part, Australians have a positive relationship with alcohol. The majority of us drink moderately, enjoying a drink to relax or over a meal with family and friends. Our research also shows that more Australians are drinking within health guidelines and the rate of underage drinking is decreasing. These trends mirror recent government statistics, and suggest that our nation’s relationship with alcohol is fundamentally changing to one that is more mature and responsible. Clearly, these trends do not hold true for everyone and we will continue to focus on the misuse of alcohol that causes harm at the individual, family and community level.

WHAT HAVE BEEN SOME OF THE MOST SUCCESSFUL CAMPAIGNS/ PARTNERSHIPS OVER THE PAST 12 MONTHS? The success of DrinkWise programs over the past year was underpinned by a sustained focus on evidence-based campaign development and the understanding that coordination and collaboration with suppliers, stakeholders, industry and government can deliver exceptional results. By establishing new partnerships and enhancing existing relationships with industry, sporting codes, music festivals and related industry suppliers, DrinkWise were able to reach and engage audiences in new and innovative ways, including: • The AFL score review – by owning a poignant moment within the game on sport

stadium big screens and Channel Seven’s game broadcasts, we ensured audience attention was focused on the DrinkWise brand and message. • Melbourne Cup Carnival – the Victorian Racing Club (VRC) demonstrated its commitment to the DrinkWise partnership and moderation messaging by allocating naming rights for an Oaks Day race, oncourse signage and media opportunities. • Cricket Australia – this partnership has evolved over the past year to include more on-ground opportunities, including water distribution during the recent test series and Big Bash League. • Splendour in the Grass music festival – this partnership provided DrinkWise with moderation messaging on entry wristbands, stage signage, bar branding and branded volunteer gear, all serving as a constant reminder to moderate throughout the multiday festival. • Ghost with Uber – this activation stemmed from the strategic insight that people often leave a party or venue unannounced to avoid the pressure to keep drinking. By ordering an Uber Ghost car, riders could exit knowing that safe and reliable transport would be waiting, and let their friends know, via the app, that they were on their way home.

WHAT SHOULD WE EXPECT TO SEE FROM DRINKWISE IN 2018? Nurturing and growing the strong partnerships that DrinkWise has established over recent years is a priority. Having had responsibility for establishing these partnerships, I’m keenly aware of how important they are to extend the DrinkWise message to new and existing audiences. The chance to embed the messaging into the various sporting codes and events will provide longevity and set expectations for crowd behaviour. These partnerships will allow the current How to Drink Properly and Parents campaigns, and the You Won’t Miss a Moment if you DrinkWise and labelling initiatives to extend reach, frequency and influence. Utilising industry channels, such as retail outlets and hotels will also be part of the

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planning to enable point-of-purchase messaging to be delivered to consumers.

WHAT DO YOU HOPE TO BRING TO THE ROLE? I will be looking to accelerate the level of innovation used to communicate our messages. Many of DrinkWise’s programs are considered world leading in both marketing channel innovation and ability to resonate with target audiences. It is also important to continually look to programs similar organisations are implementing in other countries and consider whether success and learnings achieved in those jurisdictions might be transferable to Australia. Another of my immediate priorities will be implementing a comprehensive engagement program with government, stakeholders and industry, essential to ensuring that benefits of DrinkWise programs are widely known and understood. This will pave the way for stakeholders to proactively identify opportunities for moderation message integration.

WHAT KEY POINTS SHOULD THE INDUSTRY BE DISCUSSING OVER THE NEXT 12 MONTHS? DrinkWise is funded by a committed group of producers and retailers who’ve taken a strong leadership position to ensure Australians are educated about healthy and safe alcohol consumption. There is, however, opportunity for other producers to significantly influence where and how often moderation messages are seen. DrinkWise has developed material and messages ready for integration by industry for sponsored events, because we know industry message adoption accelerates awareness and uptake, fast-tracking behaviour change. Active support by all producers, large or small, is key to ensuring that the work of DrinkWise is amplified beyond what we could achieve on our own. Including the DrinkWise logo on advertising materials, and the adoption of Get the Facts and pregnancy warning labels on bottles, cans and packaging are very simple ways to demonstrate support.

ASSOCIATION

HOW HAS YOUR FIRST YEAR AS CEO OF DSICA BEEN? Great actually. It’s a great job and a great industry overall and specifically with the spirits industry, it’s genuinely a great time to be getting on board. The interest in spirits and cocktails is at a really high level and from talking to my members it’s probably at an all-time high. There’s a number of reasons for that, the investment that everybody has been making into new venues and developing people, the continued emergence of some great Australian distillers, all of that is coming together at a really good time. But from an industry association point of view, there’s an unrealised challenge because a lot of our stakeholders don’t understand those trends, but the good news is that consumers do. I think the trade, and particularly the on-premise is attuned to it and in fact for that matter as you wander around off-premise you can see some of the retail execution that some of our members and the retailers do, which is fantastic now. You can go to some of the bigger outlets and see the cocktail aisle and the different sections, it’s really beginning, but it’s still early days.

we all have to deal with and I think the ABA is really well placed to start working on that and I’m looking forward to working with them to help with those big picture issues, things like the National Alcohol Strategy and really putting that to sleep, but based again on those misconceptions and people trying to create a crisis when there isn’t one.

WHAT DO YOU ANTICIPATE AS THE MAIN CHALLENGES AND OPPORTUNITIES FOR THE SPIRITS INDUSTRY OVER THE NEXT 12 MONTHS? I am very much focused on opportunities and that is telling our stories. The challenge is that the spirits industry in Australia has to work incredibly hard just to stand still. It’s got a lot of things up against it, such as the prohibitive tax system and you can see the impact that is having on the emerging local distillers, but it’s also about a future investment in Australia by international players, if we don’t get some change in the next little while the future industry doesn’t look anywhere near as bright as it should do, and the challenge for me is trying to get people to realise that it’s not a ‘nice to do’ it’s a ‘must do’.

WHAT WILL BE YOUR MAIN INITIATIVES OVER THE NEXT 12 MONTHS?

WHAT KEY POINTS SHOULD THE INDUSTRY BE DISCUSSING IN 2018?

The big one is to actually raise the profile of the category among some of our key stakeholders and correct a lot of misconceptions, and probably be more proactive in really telling our category story to key stakeholders, because it’s a terrific one. I don’t want to give too much away about that yet but we’ve got some good ideas that are going to be actioned throughout the year. It’s a very positive story and the bigger picture, the alcohol industry has got a great, positive story to tell. With all of the innovation across the sector and consumer behaviours, responsible drinking, Australia has got a lot to be proud of in terms of our maturing approach to alcohol and its contribution to the economy and society. And despite that we’ve still got all of the noise that

Broadly the alcohol industry is in a good place, the ABA is up and running and due credit to the foundation executives for getting that set up and we are now moving to the next phase with that. That’s really important that we make sure that we stay focused on promoting the industry generally and they have committed to doing that. Within that there are going to be some differences from time to time but part of my challenge is telling a better story, just better educating people about what is happening and what the potential for spirits and cocktails in Australia is, it’s huge and it’s going to contribute to that responsible drinking culture. One of the challenges is the fragmentation of effort between State and Federal Government. I think some of the State Governments, some are fantastic where you’ve got Victoria going

“As you wander around offpremise you can see some of the retail execution that some of our members and the retailers do, which is fantastic now.” gangbusters with sensible licenxing laws and staying right away from CDS and then you’ve got NSW going, yep, maybe we overreacted but maybe we can pull back things a bit, and then Queensland halfway in between I suppose. So one of the challenges for the industry is to try and communicate effectively at every level of government, and we’ll be looking to do more activity out in the states to talk to our stakeholders out there. And just reminding people about how our marketplace is maturing in terms of responsible drinking and not being distracted by the sensational, anti-alcohol stories from time to time that aren’t fact based.

WHAT IS ONE ISSUE THAT YOU WOULD LIKE TO SEE URGENTLY ADDRESSED BY THE INDUSTRY? The job for all of us is to really work on having fact-based discussions. I am on the record as saying if we identify particular areas, and there still are some, that need addressing then I think industry is more than willing to work with government to fix it, and I think that cooperative approach has produced great results. So if we can keep stressing to government at all levels that industry is committed to doing the right thing and you’ll get better results cheaper and quicker if you work with the industry.

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ASSOCIATION

ALEC WAGSTAFF, CEO DSICA

RETAIL & WHOLESALE

MARTIN SMITH, MANAGING DIRECTOR ENDEAVOUR DRINKS GROUP WHAT WERE THE HIGHLIGHTS FOR EDG IN 2017? Innovation in better meeting our customers’ shopping needs was probably the best way to summarise 2017. BWS continued its goal of providing an authentic customer experience brought to life during the present 100 Days of Summer campaign with store teams engaging and having fun with customers over the Christmas and New Year periods. Dan Murphy’s Mosman opened blending its traditional destination store format with design and experiential elements learnt from the Prahan Cellar. Langton’s Fine Wines set a world record for a full Grange set and Cellarmasters launched their touring cellar door affectionately called ‘Vinny’ which has just completed its tour around Australia delighting customers with some of Australia’s best wines right on their front door.

RETAIL & WHOLESALE

WHAT WILL BE THE MAIN FOCUS FOR BWS IN 2018? Moving into the new year, BWS will continue to focus on providing an ultra-convenient shopping experience for their customers providing them with authentic service with a range tailored for their local needs and expectations.

DARWIN HAS PROVED TO BE A CHALLENGING MARKET TO CRACK INTO, WHAT CAN WE EXPECT TO SEE FROM EDG IN THE NT IN 2018? In a welcome move, the NT Government has established a process for our licence application to be considered by a new Liquor Commission. Without pre-empting the outcome, if successful we are hopeful of having a showcase store open by the end of 2018 that will reflect the NT Government’s desire for Darwin to become the capital of Northern Australia.

DELIVERY WAS A FOCUS FOR EDG IN 2017. HOW SUCCESSFUL HAVE THE NEW DELIVERY MODELS BEEN? Customers now expect retailers to provide a

seamless and cost appropriate delivery service which makes it an increasingly important part of the shopping experience, both online and in-store. Very few retailers are in control of this experience, so continued investment in our own logistics capability will be a crucial point of differentiation as we seek to improve the ‘last-mile’ experience for our customers.

WHAT WILL BE THE MAIN FOCUS FOR DAN MURPHY’S IN 2018? Dan Murphy’s is all about customers having the ultimate drinks experience whenever they step into our doors. In 2018, Dan Murphy’s will continue to take learnings from our newest concept stores and to further meet customer expectations with an innovative range at a great price.

WHAT HAVE YOU LEARNT FROM THE DAN MURPHY’S MOSMAN STORE MODEL? Customer feedback has been really positive on our new Mosman store with even its most ardent local critics now regular shoppers. Key elements that contribute to a great customer experience such as improved store and product lighting and our new tasting area are being rolled out in new stores and those undergoing refurbishment.

WHAT ARE THE BIGGEST DIFFICULTIES FACING EDG IN THE CURRENT MARKET? Through our industry’s investments in DrinkWise, ID25, Don’t Buy For Them, and other industry-led initiatives, the latest statistics that show continued improvements in Australia’s drinking culture are something our collective industry should take pride in. With Australians drinking less, it also challenges us to find new ways to delight our customers with drinks and experiences that suit this lifestyle while continuing to drive value growth throughout the supply chain.

WHAT DO YOU THINK WILL BE THE BIGGEST TRENDS IN 2018? Rosé continues to dominate in category growth with more and more customers

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switching from the more traditional Sauvignon Blanc and sparkling varieties. With the introduction of Iron Jack and the continued success of Great Northern we continue to witness strong customer demand for a lighter refreshing beer. It would be remiss not to mention the explosion of Australian artisan distillers whose global award winning efforts are drawing international acclaim and help sell a positive message about Australia to the world.

WHAT SHOULD THE INDUSTRY BE DISCUSSING IN 2018? In addition to reviewing the Australian drinking guidelines, the Australian, state and territory governments are currently developing a long-term National Alcohol Strategy. For our industry to continue to support jobs and deliver world-class drinks offerings, it is imperative that these major reviews are balanced, sensible and deliverable. This can only be achieved if the alcohol beverage sector works collectively and presents a strong unified voice that fully represents the 14 million Australians who choose to enjoy an alcoholic beverage. The important decision to create Alcohol Beverages Australia (ABA) and the continued success of DrinkWise cannot be understated in how they will effectively represent our collective interests during the development of these two important pieces of work.

“MOVING INTO THE NEW YEAR, BWS WILL CONTINUE TO FOCUS ON PROVIDING AN ULTRA-CONVENIENT SHOPPING EXPERIENCE FOR THEIR CUSTOMERS.”

SUPPLIER

WHAT WERE THE MAIN HIGHLIGHTS FOR GIESEN IN 2017? After the June 2016 acquisition of the brand assets of Winegrowers of Ara, 2017 was a year of consolidation and we concluded the year with Ara well established within the Giesen Group. It was the same for our partnership with Oatley Fine Wine Merchants (OFWM) who in April 2016 were appointed distributors of the Giesen portfolio in Australia’s independent retail and on-premise accounts. This partnership grew and in 2017 has helped Giesen Wines continue to perform strongly across all segments of the Australian market, within all ranges of the Group portfolio. A year into the partnership we are achieving the objective to show Australians the diversity and depth of our portfolio. Another highlight in 2017 saw Giesen Wines being invited to pour at the prestigious Wine Spectator New York Wine Experience in October. The event includes dinners and cocktail parties, with the highlight being two New York Wine Experience Critics’ Choice Grand Tastings on Thursday 19 and Friday 20 October. Wineries are invited to pour at the tasting by Wine Spectator’s board of senior editors, and only wineries that have received the highest tasting scores of 90+ point ratings from the magazine’s tasting panel are considered. I attended the event to introduce wine lovers to Giesen and it was an outstanding honour to share our Marlborough wines with many discerning wine drinkers. In late 2017 after months of work our marketing team launched a new website. This is now a great repository for wine lovers in Australia and throughout the world to learn the stories behind our brand.

IN WHICH AREAS DID YOU SEE THE MOST AMOUNT OF GROWTH IN 2017? Giesen and Ara sales are increasing in Australia and we look forward to this continuing. Our partnership with Oatley helps us call on many more customers across Australia. Because of this relationship in 2017 we saw compelling growth within the on-premise and independent

“Despite some claims to the contrary people are continuing their affair with Marlborough Sauvignon Blanc.” retail segments. Australia has always been a very supportive market for Giesen and we look forward to this continuing in 2018 with the ability for us to supply more outlets.

WHAT DO YOU SEE AS THE BIG TRENDS FOR 2018? Trends come and go. But there are constants in the wine market and we deliver to these. They are quality and value for money from recognised regions such as Marlborough. That said, we are seeing increased demand for organic wines. We have noticed every year that consumers and trade are taking more interest in organic wines and we will continue to develop more styles and wines as we gain a better understanding of the wines and their flavour profiles. We have been growing, making and selling organic wines since 2009. Now 20 per cent of Giesen vineyards are certified organic or in transition. These vineyards allow us to create a selection of flavour-filled award-winning, organic wines. In 2015 after a long-term lease, we purchased the prized organic Clayvin, Marlborough’s first significant hillside vineyard. This significant addition to our vineyard holdings complements our winemaking innovation and premium wine portfolio. We also see some sophistication from drinkers around their understanding of rosé, like what we experienced in the US market a year or two ago. We introduced Giesen Rosé in Australia in late 2016 and we are seeing sales growth. Wine drinkers are increasingly looking for a fresh, crisp style of rosé, which is the how the Giesen Rosé is made. Consumers are increasingly looking for

lighter in alcohol options and we are pleased to have responded to this demand. We have for a few years offered a Marlborough Sauvignon Blanc that is 25 per cent lighter in alcohol than our standard Giesen Estate Sauvignon Blanc. We are seeing growth here with consumers recognising the power of Marlborough and that our lighter in alcohol wine retains the delicious concentration of flavour they expect from the region and Sauvignon Blanc. We expect this category to continue to grow.

HOW WILL YOU ENGAGE THE TRADE TO DRIVE SALES IN 2018? Working with Oatley Fine Wine Merchants we will continue to increase our distribution by calling on more independent retail and on-premise outlets. We have a variety of point of sale and will continue to develop this following an increased investment in sales and marketing for the company. Our relationship with Oatley Fine Wine Merchants provides insights to help us develop unique and engaging consumer promotions and we will continue to innovate so our customers have points of difference within our brands. In Australia we are also the wine supplier for American Express Openair Cinema. This allows consumers to taste and trial our Giesen wines. This program began in October and runs until April so gives us a strong consumer experience for six months.

WHAT IS YOUR KEY MESSAGE TO THE TRADE? Despite some claims to the contrary people are continuing their affair with Marlborough Sauvignon Blanc. The Giesen range features an extensive range of Sauvignon Blanc from light alcohol to organic and ultra-premium single vineyard styles such as Matthews Lane Sauvignon Blanc. We want to continue illustrating that Sauvignon Blanc has many faces and styles and invite consumers to find a style that meets their taste. In 2018 we will continue to focus on the most important person in the drinks business – the consumer. We’ll keep listening to them, identifying what they want and then delivering upon this. We think that’s what everyone in the industry should be doing.

NATIONAL LIQUOR NEWS FEBRUARY 2018 | 71

SUPPLIER

THEO GIESEN, CO-OWNER GIESEN GROUP

ASSOCIATION

CHRIS MCNAMARA, EXECUTIVE OFFICER INDEPENDENT BREWERS ASSOCIATION HOW HAVE THE CHANGES TO THE IBA BEEN RECEIVED?

ASSOCIATION

Overwhelmingly positively. It had been a subject that had been much debated since the inception of the Craft Beer Industry Association (CBIA) in 2012 and its time had finally come. More and more of our independent brewing members were questioning how their interests aligned with those of our corporate brewing members especially in the marketplace. There were some concerns that we would suddenly lose access to the knowledge base within the large brewers but I don’t think that has been the case. We had a number of judges at the Craft Beer Awards and attendees at the conference come from the larger brewers. We will continue to foster relationships with individuals within those companies.

HAVE YOU NOTICED ANY POSITIVE CHANGES TO YOUR MEMBERSHIP SINCE REBRANDING? Most definitely. There had always been a number of breweries who had said that they would only become members if we made the changes we did. I’m happy to say that those breweries kept their word and signed up. I believe the process that we went through has also increased our engagement with members. We went to great lengths to be consultative through the process and that is paying dividends now.

WHAT IS THE MOST EXCITING ASPECT OF AUSTRALIA’S BEER SCENE? I think it would be impossible to dispute the idea that this is the most exciting time to be an Australian beer drinker. Trying to identify a single aspect is nigh on impossible so here are two. There are more breweries in Australia than at any point in time in our nation’s history. And those breweries are producing such a vast range of beer styles that if brewers and venues/ retailers work together a beer style can be found for every consumer’s palate. The second point follows on from that, venues are embracing the range of choice. Smart operators have recognised that consumers are looking for more choice in their

beer offering. Yes, the traditional lagers are still going to be popular but they no longer have to be the only offering. And that offering doesn’t have to only be in the bar. More and more venues are celebrating good beer as an accompaniment in the dining room. I think the biggest thing we will see in the next few years is a growing emphasis on being local. As access to the wholesale market gets more competitive brewers will need to reassess the dream of selling their beers across the country and instead look at how they can survive in their own backyard. That may mean that they look at restricting their distribution footprint to a certain city or region or it may mean they go hyperlocal and establish a brewpub that will only sell its beers across its own bar. The brewpub model is extremely popular in the USA but is only now really starting to get traction in Australia.

2017 WAS A YEAR FULL OF ACQUISITIONS, WHAT IMPACT HAS THIS HAD ON THE INDUSTRY? The sales have definitely had an impact on the industry. In the short term they have created a lot of discussion, and not just in craft beer circles. There has been a significant amount of coverage in the mainstream media. What it will mean in the longer term is a bit harder to tell but it will open up more opportunities for independent breweries to take advantage of consumers’ growing desire to support small and independent businesses. From an IBA perspective we lose three larger members in the form of 4 Pines, Feral and Pirate Life and that is disappointing but we have 200 other members to represent so there is plenty to keep us busy.

DO YOU THINK THERE WILL BE FURTHER CONSOLIDATION/ BUYOUTS IN 2018? Most likely, yes. We have already seen four industry participants (Lion, CUB, Asahi and Coca-Cola Amatil) make significant purchases. We may see more purchases from them or there may be other international breweries that may wish to get involved in the Australian market. Heineken and Carlsberg are the second and

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third largest brewers in the world but have no physical presence here and both of them have invested in small, independent breweries in other markets. In Heineken’s case that has been as close as New Zealand where they own Tuatara as part of their DB operations. The purchasers may also come from nonbeverage companies. We had an example of that when Dixon Hospitality purchased Hawthorn Brewing Co.

WHAT WILL BE YOUR MAIN INITIATIVES IN 2018? The major project we are working on at the moment is an independence seal. This will be similar to those released by the Brewers Association in the US and the Society of Independent Brewers in the UK. The seal will only be available to IBA members and will be an easy way for consumers to identify beers produced by independent brewers. We are also working on a nationwide celebration of the independent brewing industry to be held in the second half of 2018. In 2018 our conference and awards, both with new names coming soon, will be held in Sydney at the end of June. And of course we will continue on with our advocacy program, being the voice of Australian independent brewing.

HOW CAN RETAILERS BETTER SUPPORT INDIE BREWERS? Firstly, indie brewers can help retailers provide choice for their customers. Increasingly Australian drinkers are looking outside of what they had traditionally drunk for something different. Independent beer provides those options with fresh, local brews. Secondly, indie beer helps the profitability of the businesses by providing a margin product. The margin provided by a six-pack sale of indie beer is significantly better than what is achievable from a carton of mainstream beer. Thirdly, indie beer has a story to tell. Customers want to hear the stories behind the breweries. They want to be able to identify with the brands. Indie brewers can help retailers establish that connection with customers.

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Australia

PAUL ESPOSITO, CEO INDEPENDENT LIQUOR GROUP WHAT DOES IT MEAN TO BE A PART OF A ‘CO-OPERATIVE’ AND HOW DOES IT BENEFIT YOUR MEMBERS?

My first year as CEO has been exciting and what we have planned for the time ahead will be an inspiring journey for ILG. The implementation of the Supercellars rebranding has been well received by our members, suppliers included. We have moved back into press in both NSW and Queensland and will continue in this direction to promote brand awareness and expose our independent members to their respective local community. We’re in the process of implementing a new category management and supply chain team, based in the Sydney office. A review of the cooperatives’ internal policies have been carried out to ensure the integrity and reliability of the co-operative’s operational processes. Changes have been introduced in keeping with current commercial conditions as well as adhering with statutory obligations. The members’ participation in both our international study tour and the four in one event on the Gold Coast for our AGM, brands conference, trade expo and annual members’ dinner was a significant record attendance.

There is a real focus this year in bringing back the ‘family’ aspect of the co-operative. ILG is a collective of independent, for the most part, owner operated, small to medium sized businesses doing something together that they could not do alone, allowing them to compete in an aggressive market. It’s a collaboration among like-minded entrepreneurs whose shared commercial experiences and encounters help them face the challenges that come their way. As a shareholder member of the co-operative, they have a voice and the ability to exercise their rights as embodied in the co-operative rules. It is a democratic approach that keeps the individuality of our members, recognising their independent disposition in the Industry. Our purpose is to build wealth, security and longevity for these members.

WHAT ARE THE KEY STRENGTHS OF ILG? Our people, our culture, our structure and our history make up ILG’s strength and point of difference. Our longstanding shareholder members combined with long serving staff members from as lengthy as over 30 years with a majority in the 10 to 15 year bracket, make up the ILG family. A family of independent businesses working together for their future and supported by a workforce whose commitment and exceptional service, the members have been accustomed to. ILG’s co-operative structure, Australia’s largest (and only) liquor co-operative, is unique. A culture fundamentally reinforced by the co-operative principle of equal opportunities to all. Simply put, it’s owned by its members and surplus revenue is returned to the members. Lastly, with over 40 years of history in the liquor industry, ILG is synonymous to integrity in brand and service.

WHAT IMPACT HAS THE IMPLEMENTATION OF THE CDS IN NSW HAD ON THE ILG BUSINESS?

WHAT WILL THE FOCUS FOR ILG BE OVER THE NEXT 12 MONTHS? Our focus will be to better our member service, continue to increase our membership base and aim on improving our internal systems. This year the co-operative will make a significant investment in a new ERP system, which we are hoping to rollout in the next 12-18 months. This will improve ‘touch points’ and communication for our members and will give us a world class logistics, distribution and finance system. We need to develop integrated solutions that will add value, as well as, create a more user friendly environment to ease the pressure for our members. We will continue to improve our merchandise strategy to enhance our consumer experience at store level and get a better understanding of what our members need. We have great banner brands needing further awareness, which we intend to address in various platforms; with greater focus on digital revolution with the view to continually improve our online and website services.

It’s had a huge impact on our total business, due to the poor communication from the government and the Scheme, members and consumers were left in the dark. Consumers today still don’t understand why their pricing has gone up. There’s a view in the marketplace that the government should have ‘gone back to the future’ and let local communities and charities run the collection points. This issue will continue with the impending implementation in ACT and Queensland, I’m therefore hoping the communication to consumers and members will be better than what it was in NSW.

WHAT ARE THE BIGGEST CHALLENGES ILG IS FACING IN THE CURRENT MARKET? The biggest issue independent wholesalers are facing is the continuing dominance of the supermarkets and their push to sub-wholesale, impacting the market as a whole. The effect of oversupply and heavy discounting is having on prices and a forecast decline in discretionary income will impact growth. Additionally, Australians’ changing drinking habits, with consumers drinking less and focusing on more premium products. These are all major challenges, not to mention regulatory measures introduced from time to time.

WHAT ARE THE KEY FACTORS THE INDUSTRY SHOULD BE DISCUSSING IN 2018? There needs to be continued focus on responsible liquor consumption and refining the behavioural attitudes towards liquor. At the moment, the industry is experiencing minimal growth in certain sectors however we’re seeing some real growth in value terms. What we need to focus on is a good base line growth in volume and value. We need to ensure that the industry focuses not only on profitability, but people and the environment as a measure of success. There needs to be a unified, common sense approach to successfully address the issues we are facing in the liquor industry.

NATIONAL LIQUOR NEWS FEBRUARY 2018 | 73

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HOW HAS YOUR FIRST YEAR IN THE ROLE OF CEO BEEN? WHAT HAVE BEEN YOUR MAJOR SUCCESSES?

SUPPLIER

JOHN KOLLARAS, MANAGING DIRECTOR KOLLARAS & CO WHAT WERE THE HIGHLIGHTS FOR KOLLARS & CO IN 2017? SUPPLIER

2017 was an excellent year for Kollaras & Co on many fronts. We are particularly excited that our brands have really started to gain well deserved attention in industry and non-industry media recording great results in blind tasting and recommendation panels. The past 12 months also saw us really focus on clarifying what Kollaras is about, culminating in the launch of our new website to make our business model much more accessible to our customers and consumers.

WHAT WERE THE MAJOR CHALLENGES YOU FACED IN 2017? We have really had to think about how we go to market and how we best communicate our value proposition as an organisation, and how we ensure our brands deliver a point of difference to our customers in a market that is so busy. Our business has evolved from a focus in the domestic market largely driven by a wholesale offer to a brand solution led offer, keeping an eye on how effective we are in this space is an important challenge for us to remain aware of. As an exporter and national operator, we have also found the NSW CDS to be very challenging. As I write this, we are still concerned with the significant impact this will cause our export (cruise and international) business on the basis that the regulatory framework that supports the CDS lacks a great deal of foresight and detail.

WHAT SEPARATES KOLLARAS & CO FROM ITS COMPETITORS IN THE RETAIL LIQUOR INDUSTRY? Our business model is unique in many ways; we are unique because at our core we start by working backwards from a customer need – we overuse the term ‘solutions specialist’ in our business, but really, that is what we are. We are unique in the sense that we create an offer, be it a product portfolio or a service model, completely based on what our customer needs. We are passionate about bringing the right brands, products and producers together to service our clients, and the ever-evolving

demands of consumers. We understand the importance of providing our customers with a point of difference, so that shoppers are motivated to visit stores and spend – not just once, but continuously. Our brands are an important piece of what sets us apart. We help deliver success and prosperity to retailers, whose own success we depend on.

WHAT DO YOU SEE AS THE BIG TRENDS FOR 2018, AND HOW WILL KOLLARAS & CO ADDRESS THOSE? We certainly agree with the general view that premiumisation is a real trend but we aren’t seeing it just in price. We see it happening across all price points and are responding with a focus on encouraging our customers to experiment with products that are meeting the needs of a more open-minded consumer.

WHAT DO YOU SEE AS THE MAJOR OPPORTUNITES FOR KOLLARAS & CO OVER THE NEXT 12 MONTHS? The broader Kollaras Group includes business units which we see as very complementary to our beverage business. A pocket of growth in our liquor business over the last 12 months has been our tobacco offer, our owned tobacco brands through sister company TIC have delivered excellent results on the P&C

74 | FEBRUARY 2018 NATIONAL LIQUOR NEWS

and grocery channels and this success is being recognised by many of our liquor customers. Watch this space as we really focus on bringing this offer to more customers over the next 12 months. Perhaps most excitingly is our focus on independent exclusive beer brands. We talk about being solution led in our business, and the launch of Indie has already been a real success.

HOW WOULD YOU SAY THE RETAIL LIQUOR LANDSCAPE HAS EVOLVED IN RECENT TIMES? We notice that our customers are asking for more category lead and consumer insight driven solutions which we are very focused on. In the independent trade particularly, our customers are also asking us to spend more time to talk through our findings and recommendations with them. In our industry, it seems most are spending less time in venues due to the expense in doing so. Our business has been very focused on countering this trend by investing significantly in customer contact over recent years, to really improve our ability to respond to our customers’ needs. We are also using this to help drive better outcomes on our portfolios that are exclusive to the independent channel which significantly improves margins for our customers.

SUPPLIER

WHAT WERE SOME OF THE HIGHLIGHTS FOR LION IN 2017? Last year we saw some great success stories across our business. Our sponsorship partners grew in 2017. XXXX became the official beer partner for Cricket Australia, The Rugby League World Cup and the 2018 Gold Coast Commonwealth Games. We also returned to the sponsorship of the NSW Blues for Tooheys New, which was met with a great response from our drinkers. This is on top of signing again with the QLD Maroons for XXXX – this makes our relationship with QRL one of the longest in league and any sport in Australia. From our brands, we saw the successful launch of Iron Jack. This new crisp Australian Lager has had enormous support from our customers, thank you to everyone for helping make this the most successful beer brand launch of the year. We also were proud of the release of classic cans for our heritage brands like James Boag’s Draught and XXX Ale, Emu Export and Tooheys Draught. Last year also saw us announce some exiting new technology partnerships that allow us to invest in future avenues of growth. These include BarCats, a new Uber-like service that matches bar staff with venues looking for people to join their teams.

LION’S BIG RELEASE FOR 2017 WAS IRON JACK – WILL THIS BRAND CONTINUE TO BE A FOCUS IN 2018? Iron Jack was the biggest brand release for Lion in 2017. While many only see the brand come to life in their local pub or bottle shop, there has been a lot of hard work, planning and executing in 2017 to make this happen and that same effort will roll into 2018 for the next stage of the brand. We are delighted with the way both our customers and consumers have embraced Iron Jack. We have been in market for just under three months now and sales have broken all expectations. We have an exciting TV campaign launching early next year that will boost the brand even further. XXXX Gold remains our number one priority and we have a

lot of great things happening with the brand in 2018, including the sponsorships I mentioned previously, which we are really excited about.

CRAFT BEER CONTINUES TO GROW IN AUSTRALIA – HOW WILL LION TAP INTO THAT IN 2018? We have been pioneering Australia’s craft scene for a long time with Chuck Hahn, the father of craft beer in Australia. A standout performer of last year was Furphy. We have seen the brand grow at nearly 300 per cent in 2017 and we expect the demand for this brand to continue into 2018. In October we announced a new partnership with the Imperial Hotel in Eumundi to bring back the much missed local beer brand, Eumundi Lager, which is being brewed on site at its spiritual home, the Imperial Hotel in the heart of Eumundi. The Byron Bay Brewery also launched a new beer, The Hazy One. All of these brands will continue to grow in 2018 and I am sure our innovative brewers across our sites will have one or two more surprises up their sleeves for the year ahead.

WHAT WERE SOME OF THE MAJOR CHALLENGES IN 2017? The entire drinks and hospitality industry was adjusting in 2017 to the introduction of the Container Deposit Scheme (CDS) in NSW. The Government’s litter reduction scheme presents a key change for manufacturers and for retailers. In NSW, Lion is part of a joint venture that is playing the role of scheme coordinator. Container deposit schemes are Government policy in Queensland and Western Australia, which will mean suppliers and stockists in those states will also need to start thinking about managing the change.

WHAT DO YOU SEE AS THE MAJOR OPPORTUNITIES FOR LION OVER THE NEXT 12 MONTHS? As we have seen over the last few years, while the segment itself is relatively small, craft continues to grow. With brands such as Byron Bay, Eumundi, Furphy and household

favourites like James Squire, Little Creatures and Kosciuszko, we feel we have the right mix in our portfolio to play an important role in this space in 2018. Mid-strength, or the less than full strength category, will continue to grow as people become more and more mindful of what they consume and how they consume it. People are looking for more moderate options to suit specific occasions in their lives and they also want to know what is in the product. We have led this category for a number of years and XXXX Gold and Iron Jack will lead the way for us in 2018 and give people more options in this space.

WHAT DO YOU THINK THE INDUSTRY SHOULD BE DISCUSSING IN 2018? As always, the industry should continue to invest in evolving Australia’s drinking culture, and continue to discuss new ideas to promote moderate consumption and reduce harmful drinking. Lion is proud to be one of the largest funders of DrinkWise Australia over the past decade, with the work of DrinkWise held up globally as some of the most effective education programs in changing people’s attitudes to drinking. You need only look at the long term consumption stats, which all show underage drinking is reducing as is risky consumption across a number of key demographics.

“Mid-strength, or the less than full strength category will continue to grow as people become more and more mindful of what they consume and how they consume it.”

NATIONAL LIQUOR NEWS FEBRUARY 2018 | 75

SUPPLIER

JAMES BRINDLEY, MANAGING DIRECTOR LION BEER AUSTRALIA

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CHRIS O’BRIEN, GENERAL MANAGER LIQUOR BARONS

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iquor Barons heads into 2018 with a mix of momentum, recognition and clear focus, while being fully aware that many of the challenges the liquor retailing industry has faced in the past year are still evident. The group is in a healthy position with a clear model and strategy for growth that has it well placed to meet those challenges and continue to meet its profitability targets in the future. Underpinning our strategy has been a strong focus discipline to control our costs while pursuing profitability and continuing to invest in our brand. This has been especially important in the current economic environment allowing us to be well-positioned to take advantage of the upswing in the economy. There are certainly many healthy signs for the West Australian economy with significant growth in the mining sector, traditionally the bellwether for overall economic growth in WA. I am confident that this will reward our stores who have all been through difficult times during the past couple of years.

CHALLENGES IN 2017 The tough economic conditions during 2017 continued to bite and we saw the popularity of the $10 and $12.99 price points grow. It is evident that customers were looking for value, and more particularly value at these lower price points. It means that some very good wines were re-positioned into these price points to meet that growing demand. Whether the signs of economic recovery starting to flow through drive these popular price points up remains to be seen. It may be customers are now more aware of the quality of wines they can purchase and will be reluctant to move back up in price. Perhaps that will be our challenge in the future. Another major challenge has been trying to get the best bang for our advertising spend. There is no question that the advertising landscape has changed rapidly in the past few years with less reliance on traditional advertising spend in newspapers. Media advertising has become more fragmented with a noticeable take-up in digital and in the future that challenge will continue

to be balancing this spend to maximise effectiveness. Understanding our target demographic and how best to reach them will be essential if we are to remain at the top of our game in this increasingly complex zone.

HIGHLIGHTS FOR 2017 For 2017 a major highlight for the Liquor Barons Group was winning the Retail Banner Group of the Year at the Australian Liquor Industry Awards (ALIA) for the fourth time in six years. We beat the biggest names in Australian liquor retailing, and for everyone in the group from the head office through to the stores who have committed so much to the brand, this was a terrific endorsement and reward for all that hard work. It was also pleasing that we are starting to see results from our investment in our ‘Far from Ordinary’ campaign. This is a significant investment for the group but one which I believe will continue to build and deliver sustainable longer-term results. The overall success of the group and its strong brand have contributed to the continued growth of our co-operative member numbers. When I started in this role eight years ago there were 20 stores – we now have more than 70 and the number continues to grow.

OPPORTUNITIES FOR LIQUOR BARONS During the next 12 months, we will continue to focus on expanding our member numbers. We aim to attract well managed stores which will add value to our group, both financially and reputationally, and for whom we can help grow through our combined strength and expertise. We will also continue to seek national alliances with other like-minded groups. A considerable focus during the next year will be continuing to refine and drive our push into digital marketing, not to be confused with e-commerce. And we will continue to expand the use of our market leading data capability, particularly through the Barons Advantage Club loyalty program, for which I see tremendous possibilities in enabling us to both attract and retain customers to our targeted offerings.

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I expect Prosecco to continue to grow on the back of spritzer-style drinks but it could be that we have seen the peak of the Aperol style with other refreshing alternatives starting to make an impact. There has been a significant return to quality modern Chardonnays and this will continue in 2018. Winemakers recognised this some time ago and consumers are really starting to support them. We are also seeing increasing interest in Australian and New Zealand Pinot Noir. In the spirits category, there has been a move away from blended Scotch to single malts especially in the entry level price points. And as a general trend it seems that WA consumers are seeking and supporting locally produced products and regional brands.

HOT TOPICS IN 2018 The hot topic in WA during the next year will be the Container Deposit Scheme (CDS) which is scheduled to come in on 1 January 2019. Experience from attempts to adopt this scheme in some other states has highlighted many challenges which will need to be addressed if we are to have a smooth transition. The act of managing the scheme will lead to some price increases. As well as the logistics of managing and implementing the scheme there will be a significant communications issue to help consumers to understand the impact of the scheme. The anti-alcohol lobby is likely to increase its efforts and it is essential that the liquor industry continue to use a fact-based approach in addressing issues around problem drinkers. In short, we need to be part of the solution and at the forefront in working towards the best outcome. To continue to exceed our customers’ expectations, we are going to need a fundamental change towards more flexible trading terms that recognise that one size doesn’t necessarily fit all. Differentiated retailing is the way of the future and we need to change how we all approach our commercial discussions. In many ways 2018 promises to be one of the most interesting and dynamic years in the history of liquor retailing in Australia.

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JOHN CARMODY, MANAGING DIRECTOR LIQUOR LEGENDS WHAT WERE THE HIGHLIGHTS FOR LIQUOR LEGENDS IN 2017?

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The continued growth for the group and achievement of our largest volumes in 26 years was quite significant, plus five per cent like for like growth was a really good outcome. Our expansion into the Northern Territory in November was welcomed, we’ve got the Hidden Valley Hotel now as a member, we’ve just got the one member there at the moment but we’re looking to expand that with hopefully another five stores over the next 12 months. We have also seen excellent growth in South Australia. We’ve seen like for like growth in SA for the outlets that joined us of some 20 per cent. We’re up to 38 outlets in that state. We’re in six states and territories now with around 280 members nationally, that is up 27 per cent on 12 months ago. Growth is really important and growth in areas where we don’t have an outlet is our priority. There’s a lot of territory in NSW, SA, QLD and VIC where we can recruit a lot more outlets as well.

WHAT WILL BE THE MAIN FOCUS FOR LIQUOR LEGENDS IN 2018? It’s maintaining the momentum that we’ve seen in 2017 and delivering our consistently high level of service to our members through our Business Development Managers.

WHAT WOULD YOU SAY ARE THE KEY STRENGTHS OF THE GROUP? Our liquid stock control services set us up for a lot of success and we’ve seen massive growth for outlets across their businesses through gaming, food, bar and retail on the back of those services. Then from there, the loyalty and rewards program is driving real growth for those businesses. It’s about providing a complete solution for venues and being able to manage it from end to end. It’s something that we’ve been working on for the last 26 years and it’s now escalating. It’s growing rapidly and there’s been more than 30 per cent growth in that side of the business over the last 12 months. And it’s delivering great cost savings and operational outcomes for the outlets, which is even better.

Our loyalty program is integrated across the whole of the business and members are able to send personalised messages to those customers. The personalised messages mean that we use all of the data that we have coming through from the stock system to send customers 100 per cent personalised messages each week, so if you like premium wine and craft beer then you’re going to have those products and even broken down within each segment, every message we send to almost 150,000 rewards customers each week is completely personalised to that shopper.

WHAT DO YOU SEE AS THE MAIN CHALLENGES FOR INDEPENDENT RETAILERS? HOW WILL YOU ADDRESS THOSE? The main focus is remaining competitive in an ever-challenging market, particularly the massive bureaucracies and inefficiencies that we’ve seen with the NSW Container Deposit Scheme (CDS) is a really good example of how poorly a good program can be executed. The CDS has been really poorly executed from a customer point of view. The right information has been kept from them, there’s been a lack of hard resources put behind the program, so there’s only about one-third of the recycling stations promised and we’re in February. And I know from what I’ve seen published so far, that the redemptions are only 10 per cent of what they’ve collected in funds, so where are the funds going, why have all of the retailers and consumers been overcharged so much when there’s been a successful template in SA and the NT. Why have we embarked on a really inefficient program in NSW?

IS THERE ANYTHING YOU’RE DOING TO PREPARE YOUR MEMBERS IN QUEENSLAND FOR THE JULY LAUNCH? All of the communication is based on what we’ve already experienced and talking to everyone in government to try and get them to improve on what has been a really difficult period. We’ve seen almost a four per cent decrease in classic beer sales for instance, with the impact

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of 15 cents a stubby or $4 a case, that’s not sustainable. And it’s hitting those people that can least afford to be affected. And trying to establish collection points or have real outcomes in those areas is proving to be really difficult, particularly for hoteliers and I don’t really understand why that would be the case, so it’s been a major frustration, let alone for bottle shop owners as well. There has certainly been a lot of deals done with the top end of town and not enough that would address the whole of market.

IS THERE ANYTHING ELSE HAPPENING WITH LIQUOR LEGENDS? To be ranked number four in Australia in the Advantage Survey this year and as the number one independent banner group in that survey is something that we’re really proud of. The Endeavour Drinks Group and their banners that they spread out this year, were the only ones to beat us. It was a really good outcome. I think from an independent and retail banner point of view, but also from a stock control and hospitality perspective, we have a lot to offer our customer and our focus is on delivering that.

“TO BE RANKED NUMBER FOUR IN AUSTRALIA IN THE ADVANTAGE SURVEY THIS YEAR AND AS THE NUMBER ONE INDEPENDENT BANNER GROUP IN THAT SURVEY IS SOMETHING THAT WE’RE REALLY PROUD OF.”

2018

TROPHY

2016

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BEST STILL ROSÉ

BEST MEDIUM BODIED DRY RED

2018

TROPHY

BEST SAUVIGNON BLANC

TROPHY

MOST SUCCESSFUL WINERY

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MOST SUCCESSFUL WINERY

Awarded ‘Most Successful Winery of the Show’ at Sydney International Wine Competition 2018 & 2016

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TOP100 PETER YEALANDS SAUVIGNON BLANC 2017 YEALANDS ESTATE SINGLE VINEYARD SAUVIGNON BLANC 2017 YEALANDS ESTATE LAND MADE SAUVIGNON BLANC 2017 PETER YEALANDS PINOT NOIR 2016

BLUE GOLD PETER YEALANDS PINOT GRIS 2017 YEALANDS ESTATE SINGLE VINEYARD PINOT NOIR 2016 YEALANDS ESTATE WINEMAKERS RESERVE CENTRAL OTAGO PINOT NOIR 2016 YEALANDS ESTATE SINGLE VINEYARD SAUVIGNON BLANC 2016

GOLD CROSSROADS WINEMAKERS COLLECTION CHARDONNAY 2015 PETER YEALANDS RESERVE PINOT NOIR 2016

PLEASE CONTACT YOUR LOCAL YEALANDS BUSINESS DEVELOPMENT MANAGER; WA, SA, NT & National Enquiries – Andrew Thiele: 0418 743 018, VIC – Jarrod Grant: 0428 195 869 NSW & QLD – Roger Banham: 0424 715 339 or NSW & ACT Randy Yue: 0404 149 811

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GAVIN SAUNDERS, CEO LIQUOR MARKETING GROUP WHAT WERE THE HIGHLIGHTS FOR THE LIQUOR MARKETING GROUP (LMG) IN 2017?

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LMG had an extraordinary year which provided great results and momentum. Our brand repositioning, which is focused on our shopper and convenience was rolled out in early 2017 with significantly up weighted activity which delivered above market results and therefore more profitable members. LMG advanced its member support through rolling out our scan insights portal, electronic invoicing and increasing retail investment support. LMG provided these services, including the scan insights portal and electronic invoicing downloads, at no cost to members in order to reduce their cost of doing business and provide greater time to focus on their retail operation. Other highlights for the year were member conferences undertaken in each state, where there was great engagement from each of the groups of members and an opportunity to showcase our suppliers and LMG support programs.

WHAT WERE THE MAJOR CHALLENGES LMG FACED IN 2017? The NSW Container Deposit Scheme (CDS) has been a major challenge for LMG and the industry. LMG provided regular updates and information sessions for its members, however the biggest challenge has been the lack of engagement and information which has been able to be derived from the NSW Government and their appointed operators.

WHAT ARE THE KEY STRENGTHS OF LMG? LMG’s strengths are the full service model which we provide our members and our sole focus on supporting members’ retail businesses. LMG’s full service model includes comprehensive marketing support, including more than 22 million catalogues distributed to consumers’ homes each year, the leading liquor retailer on social media in terms of consumer engagement and organically grown followers, and leading convenience

liquor retailer for consumer price perception (as assessed by Shopper Tracker). Along with marketing support, our retailers are supported by data and insights through LMG’s scan collection and member insight portal, electronic invoicing, store design, retail investment support and a dedicated team of BDMs who are passionate about assisting members to advance their businesses. LMG has the benefit of being a not-forprofit member owned group which solely focuses on our members’ retail business and how we support them to grow their sales and profitability. LMG has achieved above market growth for 2017 while maintaining sustainable margins for our members. The ability to grow sales while maintaining value and margin demonstrates the strength of the LMG marketing and support programs.

WHY DID YOU DECIDE TO LAUNCH THE CRAFT BEER PROGRAM? The Craft Beer Program has been launched to complement our current successful premium programs for wine and spirits. Craft beer is a growing segment which offers retailers the opportunity for higher value sales at healthy margins. There has been significant growth in craft and we expect that this trend will be maintained for the near future. The LMG craft beer program provides LMG members guidance on what is a complex segment, along with enhanced buying opportunities and in-store point-of-sale materials to engage and educate shoppers. We have seen positive growth for the outlets which have adopted the program and expect that this will be enhanced with greater promotional focus on this segment which the Craft Beer Program enables.

WHAT INNOVATIONS CAN WE EXPECT FROM LMG IN 2018? LMG will continue to lead the way with programs and systems which support our members. Premium wine and spirits programs have been running for many years and they continue to deliver results and premiumisation

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of sales for our retailers. These will be further refreshed and enhanced in 2018. Consumer insights and direct marketing will be an exciting opportunity for LMG and our members during 2018 along with the rollout of the Bottlemart e-commerce platform. Bottlemart e-commerce is being trialed in Brisbane metro and we expect that the trial will provide great insights and results on how this can be scaled nationally.

WHAT WILL LMG’S FOCUS BE IN 2018? LMG’s focus in 2018 will remain the same. Our sole focus is how we support our members and make them more profitable retailers. The significant momentum of 2017 will be carried through into 2018, however this will be enhanced by a 24 per cent increase in our go to market plans incorporating all facets of marketing. Our member support will continue to be enhanced with the benefit of systems and insights which were rolled out in 2017. Based off the plans and platform developed, 2018 will be a strong year for LMG and all of our members who operate under the Bottlemart, Sip n Save and Harry Brown brands.

“CONSUMER INSIGHTS AND DIRECT MARKETING WILL BE AN EXCITING OPPORTUNITY FOR LMG AND OUR MEMBERS DURING 2018 ALONG WITH THE ROLLOUT OF THE BOTTLEMART E-COMMERCE PLATFORM.”

WORLD CLASS SPARKLING WINE “The complexity, texture and structure of the wines are akin to that of Bollinger RD and Krug.” JAMES HALLIDAY AUSTRALIAN WINE COMPANION 2018

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Enjoy House of Arras responsibly

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ASSOCIATION

PAUL HEILMAN, PRESIDENT LSA NSW WHAT WILL BE THE FOCUS FOR THE YEAR AHEAD?

ASSOCIATION

With 2018 being a pre-election year in NSW, a major focus for the LSA will be advocacy and engagement with all political parties to clarify their policy positions, and to address a broad range of issues and challenges negatively impacting on the retail liquor sector. Integral to the Association’s policy and advocacy role, is the constructive advice, guidance and direction we provide to Government on behalf of our members and the retail liquor industry. The overly complex, badly crafted, rushed and poorly communicated NSW CDS has been a bitter pill for the NSW liquor industry to swallow, and its arrival has been anything but smooth. The CDS will remain high on the agenda this year, and LSA will continue to work closely and proactively with stakeholders, in particular the NSW Deputy Premier and Minister for Small Business, and the NSW Small Business and Cross-Border Commissioners, with the ACT CDS soon to commence and the QLD CDS scheduled to kick-off later this year. Other focus areas for the LSA this year will be the NSW Government’s review of Community Impact Statement requirement for liquor licence applications, Liquor & Gaming NSW’s Tiered Industry Training Framework, which will see the introduction of new Licensee Training and Advanced Licensee Training courses, and working closely with the ACT Government on their pre-election commitment to undertake a joint public education campaign to promote the responsible consumption of alcohol.

WHAT OPPORTUNITIES DO YOU FOR LIQUOR RETAILERS IN 2018? There are many opportunities for liquor retailers to prosper and grow to satisfy the needs of the changing consumer and marketplace. The continuing shift in Australia’s relationship with alcohol beverages, with consumers drinking less but better quality and with the transition to more premium products, is a key trend across all product segments, particularly craft beer, artisan spirits and not only more premium wine but the emergence of new and interesting wine styles and grape varieties.

Australia’s changing population is creating further influences on overall consumption patterns and beverage choice, creating new opportunities for beverage producers and liquor retailers. Lastly, with online shopping continuing to become more commonplace, liquor retailers and marketers have opportunities to connect with today’s instant information age and technology savvy consumers.

WHAT ARE SOME CHALLENGES FACING LSA NSW & ACT? The number of packaged liquor licences in NSW has increased by over 50 per cent in the past 10 years; Australians are drinking less alcohol now than in the past 50 years; the cost of doing business has never been greater – one example being wage rates, nearly 30 per cent higher than they were just eight years ago; and our industry is well over-regulated – all of these factors pose serious threats to our industry, and it’s no surprise that many small businesses are struggling. The LSA is under constant pressure to ensure that we deliver value, and demonstrate relevance and currency to members, and are challenged to be more effective in advocating for the interests of members and the industry.

WHAT IS ONE ISSUE YOU’D LIKE TO SEE URGENTLY ADDRESSED? An ongoing challenge for not only LSA, but the entire industry, is the escalating social policy debate on the role alcohol plays in society, often misrepresented, dominated and misinformed by public health lobby groups clearly aligned to the temperance movement, who continually try to demonise responsible and sensible adults and divert policy attention and resources away from fixing the underlying societal issues caused by alcohol misuse. This overshadows our vibrant, diverse and dynamic retail liquor industry, and the vast majority of operators and consumers who do act responsibly, for the safe and social enjoyment of alcohol beverages. The opportunity has never been greater for the overall industry to unite to promote the positive contribution that responsible and moderate alcohol beverage consumption

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contributes to the economy, with jobs and investment in retailing and marketing, plus production, agriculture and service industries, along with the relaxation and enjoyment which add to the social fabric of the Australian way of life.

WHAT ARE YOUR HOPES FOR THE CDS IN THE YEAR AHEAD? The CDS has had and continues to have a significant impact, and a much greater and differing impact for those businesses situated on or near the QLD, ACT and VIC borders. We are still concerned about the welfare of a number of small retail businesses in these regional communities. Many small beverage manufacturers have been put under undue financial pressure, and retailers at the coal face are copping the backlash from frustrated customers, upset and confused as to why the price of their favourite drinks have increased and then the most recent one, wondering just how and where do they get their money back – there are still nowhere near enough collection points, and many have already pulled the pin as they have quickly realised it’s not worth the hassle. The NSW Government has done everything in its power to avoid letting the community know what the real impact to consumers’ hip pockets will be. Like many members, my staff and I have been on the receiving end of the backlash from angry customers, having to explain why the price of certain products has increased by more than 10 cents – it’s not ‘price gouging’, nor is it ‘opportunistic’, it’s called cost recovery by manufacturers. It is a necessary part of the cost model but that part of the CDS in particular was very poorly communicated to the general public by the government, as well as Minister Upton’s comments in several interviews. We continue to monitor the situation closely, seeking feedback from members and stakeholders, and eagerly await the NSW Small Business Commissioner’s planned roundtable in early March. We hope that we will be able to take a strong body of evidence to this forum, to seek fundamental changes to the CDS where necessary.

ASSOCIATION

FAYE HARTLEY, PRESIDENT LSA NT WHAT WERE THE HIGHLIGHTS FOR LSA NT IN 2017?

ASSOCIATION

The main highlights were the reintroduction of the Banned Drinkers Register (BDR) and the Alcohol Policy and Legislation Review, which is commonly called the Riley Review. It had hearings throughout the second half of 2017 with the report being finished and the government making comment on the recommendations at the end of November. Of the 220 recommendations the government said that one would not be looked at but the other 219 would be. The one that they weren’t going to look at was the banning of Sunday trading across the board for pubs, clubs and drive-throughs. Liquor stores already don’t have Sunday trading. The Riley Report actually gave three recommendations, the first which they most supported was to stop Sunday trading altogether, the second was to give everybody Sunday trading which would mean that liquor stores would get that option, and the third was to leave the status quo. In 2018 they will be looking at rewriting the legislation so that is our opportunity to put forward what we would hope to get out of it, which is an equal playing field, and hopefully they approve it. Out of the Riley Report they have said they will establish an Alcohol Review Implementation Team (ARIT) and the unit will sit under the department of the chief minister and would be there to drive the reforms and coordinate the engagement with stakeholders on new legislation. Also in January 2018, it was passed in Parliament that they would re-establish the Liquor Commission whereby all applications would go to a liquor commission instead of it being held in the hands of the Director General of the department. The Liquor Commission will be either a five or seven seat held up with two legal, one health and people from the business community. It is a better process than what we’ve had with a government representative having the final say and being influenced by politicians. The Liquor Commission won’t be able to be influenced. The other thing that came out of the Riley Review was to stop anymore take-away licences being granted.

The government is also setting up an Independent Commissioner Against Corruption (ICAC). That bill was introduced in October and it’s expected to pass through Parliament in February and that will ensure that law enforcement has the powers to prosecute any corruption uncovered by the new ICAC, and it is retrospective.

WHAT WILL BE YOUR MAJOR FOCUS FOR THE YEAR AHEAD? We’ll be working with the ARIT, we’ve already had three meetings with them and they’ve come to our board meeting and explained what they intend to do and how they will work with LSA NT in going through the Riley Report and focusing on what are the good and bad aspects of the report and how we can work with the department to get a positive result for liquor stores going forward. We’re also having a think tank on 22 February with the President of ALSA and the Executive Officer of ABA, who are coming to the NT to work on what we can put up to the department on at least five to six key issues that are going to have an effect if the Riley Report goes through the way it is written now. It will totally affect mum and dad liquor store owners, so that’s why we need to have this think tank to work towards some good, positive evidencebased approaches that we can present to the government to move forward. In one of the recommendations he said that liquor stores that are attached to a grocery store should be phased out over seven years and that they should either be standalone liquor stores or closed. That leads into the problem that we have that the big two, Woolworths and Coles have always had a slightly separate liquor store attached to their supermarket, so for them it’s an easy issue, they just pull down their blind or their roller door and they comply, whereas the mum and dad shops that are attached to grocery stores can’t do that in a lot of instances. And the way the report is written is basically saying that liquor stores cause all of the issues and pubs and drive-through bottle shops don’t cause anything. But, the government know that isn’t right.

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“To be a member of LSA NT in one aspect gives us a united voice with the government and therefore it means we are representing everybody across the board.” The government has also said that we now have to pay an annual fee for store licences, which we have never done before, so we will be working with the government to work out a schedule of fees based on the size of the store.

WHAT IS YOUR MESSAGE TO RETAILERS CONSIDERING BECOMING AN LSA NT MEMBER? To work hand in hand with the LSA NT and government to get a good outcome for everybody across the board in this Liquor Review, I believe it will bring us all together. To be a member of LSA NT in one aspect gives us a united voice with the government and therefore it means we are representing everybody across the board. It also gives them an avenue to talk to department and the minister and everybody in between those if they have any issues. Minister Natasha Fyfe has an open door policy for our members whereby if they have any issues and aren’t getting the assistance they need, then our members can go to her and she’ll take on board what we tell her and where she can she will make things happen.

WHAT IS ONE ISSUE YOU’D LIKE TO SEE URGENTLY ADDRESSED BY THE INDUSTRY? It has to be the Liquor Review because it’s going to have the most impact on every store in the Northern Territory and we need to get this right because it’s the only opportunity that we’re going to have. They are going to totally rewrite the Liquor Act, so it is our opportunity to put our voice forward for everything that we see as the inequities of the past.

ASSOCIATION

LOU SPAGNOLO, PRESIDENT LSA WA

In recent months, there have been positive signs that the Western Australian economy is moving in the right direction. However, it will take some time for consumers to become confident that history will not repeat itself. When a community goes through a downturn like WA has, people become concerned for their ability to sustain their lifestyle over the long term and often restrict their spending on perceived luxury items. The new State Government is currently implementing a number of changes it has labelled as ‘budget repair’ which involves unpopular and confidence-damaging moves such as utility price increases and job cuts across the public sector. This constant negative economic news about the state’s finances puts downward pressure on the confidence of all Western Australians. In relation to consumer spending levels increasing, until the community can see some light at the end of the tunnel and not just a dull glow it will be a slow and steady path to recovery and consumer confidence.

WHAT WERE SOME OF THE HIGHLIGHTS FOR LSA WA IN 2017? There were a few highlights for this year. This past year has seen our association build strong relationships with government and other agencies, giving us the opportunity to have some influence on decisions that affect our industry. An example of this was the State Government agreeing to allow regional packaged liquor stores to open on Sunday 10th, 17th, 24th and 31st of December (our current legislation does not allow liquor stores to sell packed liquor on Sundays). After an extended negotiation with the Office of Minister Paul Papalia and the Department, a common sense outcome was achieved without any requirement for an Extended Trading Permit and at no cost. Our industry awards were a great success. A worthy winner of our ‘Quiet Achiever Award’ Anita Grace, who owns the

Cellarbrations liquor store in Newman (in the Pilbara region) has for many years involved herself in all aspects of and continues to be a leader in her community.

WHAT WILL BE YOUR MAJOR FOCUS FOR THE YEAR AHEAD? The Liquor Stores Association of WA is proud to have developed a Takeaway Alcohol Management System (TAMS) that enables the Government’s Banned Drinkers Register to become a useful tool in reducing alcoholrelated harm on an individual level. The system will make individuals who cannot, or will not, responsibly manage their alcohol intake more accountable for their actions, providing an alternative to the sledge hammer approach of restricting sales across a whole community. We hope this will reduce the likelihood of future community-wide restrictions and create development opportunities for many regional operators who currently operate under heavy restrictions. To date, we have met with Senior Ministers, department heads and industry groups and the feedback has been very positive. The implementation of TAMS will be one of our major focuses in the coming year.

WHAT DO YOU SEE AS THE MAJOR OPPORTUNITIES FOR LIQUOR RETAILERS IN 2018? The LSA WA spent a significant amount of time and resources reviewing and restructuring our business last year. That work has provided us with strong platforms to better assist our members to grow and take advantage of opportunities such as marketing and salesbased training and other technology-based business improvements. Many of our internal changes will also allow us to provide more information to members as well as better promote the incredible work that so many family-run businesses in our sector provide to the community.

WHAT ARE SOME OF THE KEY CHALLENGES FACING LSA WA? One of the most significant challenges we face is not limited to Western Australia but appears

to be across all jurisdictions in Australia; the anti-liquor lobby. Many lobby groups seem to be very wellresourced and look to constantly gain ground unless all areas of the liquor industry work together to counter the often irrational and discriminatory messages put forward The LSA WA has actively worked to engage with other associations and will continue to do so where opportunity exists to work together on the common goal of sensible regulation based on evidence and facts.

WHAT IS YOUR MESSAGE TO RETAILERS CONSIDERING BECOMING AN LSA WA MEMBER? There are many good reasons to support your industry association. In the absence of a united, well-resourced voice for a product like packaged liquor, we are all vulnerable. There is nothing more certain than alcohol being on the agenda of many professional nay-sayers in coming years and without a strong voice of reason defending the industry, politicians and bureaucrats will receive only one side of every argument. Furthermore, the work the LSA WA has undertaken in the past year will deliver strong results in the future, better promoting, defending and informing our members than ever before. In such a rapidly moving sector as the liquor industry, the value of this cannot be understated.

WHAT IS ONE ISSUE YOU’D LIKE TO SEE URGENTLY ADDRESSED BY THE INDUSTRY? The issue that is currently putting more of our members at risk than any other has to be the increasing tendency of police and other regulators to impose blanket restrictions on our trade when a much more pinpointed solution is required. The LSA WA understands and supports the need for blunt tools to be used in extreme circumstances, but we have noticed a recent trend to use these heavy-handed restrictions of trade as a first response. The work the LSA WA has undertaken on the banned drinker’s register is urgently required.

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ASSOCIATION

THERE SEEMS TO BE SOME INDICATIONS THE WA ECONOMY IS RECOVERING, ARE YOUR MEMBERS SEEING THIS AS WELL?

SUPPLIER

JEFF MCWILLIAM, CEO MCWILLIAM’S WINES

SUPPLIER

SINCE STEPPING INTO THE ROLE IN MID-2016, DO YOU FEEL YOU’VE SETTLED IN AS CEO? I’ve had a year now to settle in and with the assistance of a great leadership team and talented people across all areas of the business I’ve been able to have a transition that’s not only been fun but a very rewarding experience. We are lucky to work in such a dynamic industry and having people around you like the teams we have at McWilliam’s gives us the ability to react and respond in a way to build and deliver brands that people love.

WHAT WERE SOME OF THE HIGHLIGHTS FOR MCWILLIAM’S IN 2017? One standout for the year would definitely be our relocation from Chullora to our new home in Pyrmont. It’s really revitalised the team to be in such a dynamic precinct like Pyrmont/ Darling Harbour and being so close to new up-and-coming culinary hubs like Barangaroo is invaluable for our on-premise team. It was also where McWilliam’s established its first Sydney operation in the 1940s which is an extra special coup for our family.

WITH INNOVATION AND NPD SO IMPORTANT TO MCWILLIAM’S, WHAT ARE SOME OF THE NEW PRODUCTS LAUNCHED IN 2017? McWilliam’s has always been considered a great innovator in the wine industry and we work hard to find new ways to excite consumers and give a wider offering to our customers. We also work with some fantastic brands overseas that have a similar mindset and for 2017 we’ve been able to introduce two great wines from our distributor partner Henkell. We introduced a fusion of fashion and function in November with Henkell Blanc de Blancs. Offered in a stylishly white painted (not sleeved) bottle, this elegant wine is more than just a pretty face. Henkell Blanc de Blancs is a premium offering created from white grapes sourced from famous European wine growing regions. And through French processes and German engineering, Henkell Blanc de Blancs is a high quality premium sekt that is ideal as

an aperitif or an excellent accompaniment to a light dinner. The other wine that we have introduced is the Henkell De-alcoholised sekt, a wine that has been 20 years in the making for the Henkell Group. It took them many years to finesse the process in which they make a high quality sekt and then remove the alcohol while still retaining the fresh fruit flavours and characters from the winemaking process without the alcohol. We’ve thought this was a great innovation with the shift we’ve seen towards people being more health conscious and with that, considering their alcohol intake. We feel this is a premium offering for those who want to enjoy the pleasure of drinking sparkling wine without alcohol.

WHAT WERE SOME OF THE CHALLENGES THAT YOU HAVE FACED IN 2017? There has been a lot of change for us throughout 2017 but we’ve come through it as a team really well and finished with strong results. I really value how hard the teams across the business have worked to keep the McWilliam’s portfolio top of mind within the market and I’m excited to build on this drive for the year to come.

WHAT DO YOU SEE AS THE MAJOR OPPORTUNITIES FOR MCWILLIAM’S IN 2018? I think there are some big trends globally that we at McWilliam’s are looking to build upon but also local trends that we feel have great potential for growth. Firstly, the rosé trend is alive and well and for those looking for a more luxurious option, Champagne rosé is really taking off. We are putting particular focus on Champagne Taittinger Prestige Rosé which has been made with 15 per cent still Pinot Noir sourced from Grand Cru vineyards lending itself to the elegant forest fruits taste and striking pink hue. This, in conjunction with the Chardonnay-dominant style of the house makes for a refreshing wine that is something quite special. We are also introducing Mionetto Prosecco to Australia in time for summer for on-premise and select independent retailers. We’ve seen

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that the Australian culture of dining has become more and more European in style and in turn the aperitif is becoming more integrated within a meal. Prosecco has been a longestablished aperitif in the Italian market and with Mionetto’s elegant and refreshing flavour profile makes it the perfect way to start a meal or your evening.

WHAT DO YOU SEE AS THE BIG WINE TREND FOR 2018? I think the movement of sparkling wines becoming more than just an occasion-based wine into something that can be enjoyed every day is a great opportunity for some of our distributor brands in 2018 (Champagne Taittinger, Henkell and Mionetto). People are embracing celebrating simple pleasures and everyday moments with great wine instead of hiding them away for just the right occasion, and sparkling wines are the perfect fit for this. They come in so many different styles and price points that make them accessible for everyday and every taste.

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RETAILER PROFILE

P&V WINE AND LIQUOR WE CHAT WITH MIKE BENNIE, WHO CO-FOUNDED A NEW BOTTLE SHOP CONCEPT STORE IN SYDNEY’S NEWTOWN WITH FELLOW WELL-KNOWN INDUSTRY FIGURES LOU DOWLING (MARY’S), JAKE SMYTH AND KENNY GRAHAM (MARY’S, THE LANSDOWNE, THE UNICORN). HOW DID THE IDEA COME ABOUT BETWEEN THE FOUR OF YOU? The four of us are all neighbourhood friends and have worked in and around each other in various capacities, and it became evident that Lou Dowling, who was there at the foundation of Mary’s and has helped both Kenny and Jake open places like The Unicorn and The Lansdowne, was beginning to take on some more responsibility and ownership of these businesses and was also getting a bit of itchy feet around the late nights and the like that go with some of those operations. So he proposed to the three of us that our neighbourhood was perhaps missing an essential ingredient and that was a bottle shop, and particularly a bottle shop that focused on what we like drinking and what it feels like a lot of our community are needing experience in and finding it hard to access. And that was natural wine, artisan spirits and craft beer.

SO IS THERE A CLEAR DEFINITION OF WHAT IS A NATURAL WINE?

RETAIL & WHOLESALE

There is enough groundswell of information about natural wine that being able to give some set parameters to that umbrella term is now more reasonable. There are some people that are a bit flagrant to their approach to that definition but for the most part people feel there is a conscience to their winemaking and to their grape sources, and there are some grey areas with that of course, but having no formal definition, the informal definition of what natural wine is has to stand and we gave ourselves the criteria to present to the licencing board that we felt best universally described that for the most part.

WILL THE STORE BE PREDOMINANTLY WINE? It’s predominantly wine in terms of the product mix, probably twothirds wine and one-third beer and spirits but there is still a very strong connection to craft beer and particularly the brewers in Sydney’s Inner West that Lou Dowling has built a very strong relationship with, so they’re a strong feature within the shop and then there will be products from smaller and finer distillers as well.

Lou Dowling and Mike Bennie.

HOW MUCH OF A FOCUS WILL EDUCATION BE IN THE STORE? Educational programs will be ideally run by me but also by winemakers, distillers and brewers themselves that might be sharing their time with us. We do have an event space which is licenced above the shop so we’ll try and encourage as much of that as possible. Outside of that it’s about having dedicated floor staff who know their stuff along with the training that I’ll be providing the people who work here. And then there is a connection to the wider community of winemakers, distillers and brewers who will help enhance the understanding of their product by being present. There’s a large community aspect to the business in itself in that Mary’s is just up the road. We have a strong connection to some of the local bars that exist and we’ll be augmenting some of the products in shop. We’re going to have batched cocktails in the shop that at times will be produced by places like Earl’s Juke Joint or Bloodwood in Newtown for example. We have a bespoke gin that’s been produced in batches and packaged by Poor Tom’s in Marrickville, so a there will be a range of things that draw on our local community to try and enhance what is going on in the shop itself.

TELL ME A BIT ABOUT THE MIKE BENNIE CENTRE FOR GOOD WINE: I’d like there to be events held at least weekly. For myself, I think I’ll do around three events per month, which will be either one-off events or a series of classes. But the events program I hope will be much easier than that, with the number of winemakers that come through Sydney we’re looking at getting them to do small masterclasses based around their wines, their regions or various comparative products. I’m hoping that two to three times per week there will be some form of formal class or event that takes place in our event spaces.

WILL THESE EVENTS TARGET CONSUMERS OR THE TRADE OR BOTH?

P&V Wine and Liquor, Newtown.

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Both. There’s a cooperative nature to the space where if we don’t use the winemakers for events then it can be a sort of home base to host events for the trade with the idea that if they’re going to be hosting events for their own private consumers that they’ll turn sales through the shop, and if they’re simply hosting trade then that’s OK as well. It’s creating an almost cooperative space that is part our own event space to host events that augment our business, but also a space that can be used for winemakers with a degree of freedom.

SUPPLIER

BRIAN FRY, MANAGING DIRECTOR PERNOD RICARD AUSTRALIA

It has been a big year. We’ve seen strong success across our portfolio, activations and through our partnerships. The year was filled with highlights, too many to name, but some of the most notable include G.H. Mumm’s partnership of the Melbourne Cup Carnival, which featured a 59-foot yacht in the Marquee, becoming the number one rosé in Australia with Jacob’s Creek Le Petit Rosé, and the launch of Jacob’s Creek Prosecco Spritz, which is already showing great promise. We also continued to expand partnerships with retail and trade customers to deliver unique experiences to consumers.

WHAT WERE THE MAJOR CHALLENGES FACED BY PERNOD RICARD IN 2017? Our industry is fast moving and it can be a challenging environment to constantly meet evolving consumer needs and deliver competitive market prices. It’s important for businesses to be agile and move with speed to market when launching new products, innovations and experiences.

WHAT DO YOU SEE AS THE MAJOR OPPORTUNITIES FOR PERNOD RICARD IN 2018? Looking at our positive economy, we’ll focus on increasing premiumisation opportunities, as well as lifting market prices to help absorb the increasing cost base for raw materials and continued excise in tax increases. Other major opportunities include tapping into consumer trends, expanding e-commerce platforms and taking Champagne to more consumers across Australia. We will also drive our NPDs and expand their presence, continue to build strong partnerships with customers and create world leading activations across our brand portfolio.

WHAT DO YOU SEE AS THE BIG TRENDS FOR 2018? Trends for the year ahead are focused on key themes of health and wellbeing, female

consumers and providing products to suit every meal occasion. We’ll be bringing this to life across our wine, spirits and Champagne portfolio, a few examples that already speak to this include Jacob’s Creek Le Petit Rosé and our recent launch of Jacob’s Creek Prosecco Spritz.

SUPPLIER

WHAT WERE THE HIGHLIGHTS FOR PERNOD RICARD AUSTRALIA IN 2017?

HOW WILL YOU ENGAGE THE TRADE TO DRIVE SALES IN 2018? We will continue to push the boundaries in innovation to add value to our retail partner categories, build unique activations for our brands in trade and enhance consumer shopper experiences. We’ll focus on expanding our channel offerings to raise the bar in how we talk to and engage with shoppers, driving e-commerce platforms and working with our retail partners to develop bespoke content for customers. Collaborating with our trade partners, we’ll also focus on creating complete shopper journeys from start to finish, through innovation, point of purchase and consumer offerings to training and developing our team to be valuable resources and ambassadors.

WHAT IS YOUR KEY MESSAGE TO THE TRADE? Together we need to continue to challenge existing norms, evolve the way we work to maintain relevance with our ever-evolving shopper needs and build greater loyalty through better customer service.

HAS PERNOD BEEN TARGETING PARTICULAR DEMOGRAPHICS WITH NPD IN 2017? Absolutely, we are always looking at consumer demographics and where new opportunities exist across wine, spirits and Champagne. This year we re-invigorated George Wyndham, bringing his legacy back to life with I AM GEORGE targeting culture seekers who have a passion for wine and are driven by discovery. Other NPD examples that speak to different demographics include Jacob’s Creek Le Petit Rosé catering to female consumers, Jacob’s Creek Prosecco Spritz and from a spirits perspective Jameson Caskmates Young Henry’s edition and Absolut Lime.

WHAT WERE SOME OF MOST SUCCESSFUL BRAND ACTIVATIONS FOR PERNOD IN 2017?

CAN YOU TELL ME ABOUT THE GRADUATE AMBASSADOR PROGRAM AND ITS BENEFITS TO PERNOD?

The past 12 months were incredibly positive. We’ve seen strong results supported by key events and experiences, including: • G.H. Mumm’s partnership with the Melbourne Cup Carnival. • Jacob’s Creek Australian Open and our Prosecco Spritz activation at Splendour in the Grass. • Jameson’s sponsorship of St Jerome’s Laneway Festival. • Perrier Jouët’s ‘Garden of Wonder’ event to launch Blanc de Blancs • The Stoneleigh House activation in Melbourne to drive awareness of the ‘Wonder of Nature’ campaign.

The graduate program was established in 2015 and has seen more than 20 graduates from across 14 countries take part, gaining industry recognised qualifications, experiencing global vintages, building marketing, sales and communication knowledge as well being a wine ambassador in market for up to two years. Our world-class program gives wine enthusiasts a unique opportunity to kick start their career in the wine industry, working all over the world. They also get a real taste of our business and what drives our team, our passion for wine, an entrepreneurial spirit and moments of conviviality.

NATIONAL LIQUOR NEWS FEBRUARY 2018 | 89

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GIUSEPPE MINISSALE, GENERAL MANAGER PORTER’S LIQUOR WHAT WERE THE HIGHLIGHTS FOR PORTER’S LIQUOR IN 2017? Certainly the takeover by Metcash and ALM and the new store rollouts and. We’ve got our first concept store being rolled out at Roseville (pictured) at the moment and we’re just finalising that and then there’s five or six new stores rolling on mainly all in Sydney’s north shore and then the full rollout should happen in March. At this stage we are pitching national, but it’s top secret which state we will go to first.

YOU HAVE BEEN MAKING THE PORTER’S MODEL MORE PREMIUM, HOW SUCCESSFUL HAS THAT BEEN? The store fitout is the first stage in making Porter’s more premium and I can say there will be a colour change to Porter’s. The new livery for the externals has just been signed off and and now the internals are just being approved.

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IS THERE ANYTHING YOU’VE BROUGHT BACK FROM THE ALSA STUDY TOURS AND IMPLEMENTED WITHIN PORTER’S? We’re trialling two of the ideas in two of the stores at the moment and it seems to be working successfully. There will be some significant shifts in the movement of Porter’s if what we’re trialling is adopted, but we’re keeping it pretty close to our chests.

WHAT ARE THE BIGGEST DIFFICULTIES AND OPPORTUNITIES FOR PORTER’S IN THE CURRENT MARKET? The biggest risk we’ve got is the rumours of a 300-500sqm Dan Murphy’s coming to market, I think that’s a challenge that we’re going to face over the coming months. We certainly know that convenience is making its way back against big box but I think we need that little bit more time to get the consumers’ confidence to come back. I think that is a challenge for all retailers, but certainly also Porter’s. The other challenge we’re going to face is credit terms from craft breweries. I think we need to find a way that we can solve that issue.

Retailers have to pay in seven to 14 days on beer that doesn’t move as quickly as mainstream beer and I think that is a little bit unrealistic. As for opportunities I am really excited about Metcash and the rollout of Porter’s. This next 12 months is going to be huge for us, we have got some big expectations and targets and I think suppliers are starting to warm to the new ideas that we are creating and have been really forthcoming with some new initiatives, so I think it’s going to be a really exciting 12 months for us.

HAVE THERE BEEN ANY IMPLICATIONS TO YOUR BUSINESS FOLLOWING THE LAUNCH OF THE CDS IN NSW? Certainly our stock holdings have gone up. The Porter’s group went pretty early in their prices and certainly it improved our margins. I think the interesting time is going to be now with the new CPI rises, it sounds like about a $1 increase happening. You certainly hear a lot more complaints from consumers about the cost of a carton of beer and they are certainly a bit more frustrated by it, but it did not seem to significantly impact our carton beer sales in December. Porter’s finished seven to eight per cent ahead of last year in the December quarter, so we had a very good result. I put that down to consistency of message more than anything else. Being a bit more craft focused and more

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premium focused. We’ve got good retailers in our banner group who are consistently good with their customers.

HOW IMPORTANT DO YOU THINK HAVING A DIGITAL PRESENCE IS? I think it’s a part of it but I don’t think it’s a key component. I am more and more convinced that when you look at the likes of Liquor Barons, BWS, Porter’s, Cellarbrations, they are talking to their customers and getting back in touch with them, which is important. The online component is important from a communication tool, certainly not a selling tool. But any way you can communicate with your customer is important. I’m not hell bent on online, I am there as a part of the overall mix, but talking to your customer is the key.

WHAT DO YOU SEE AS THE BIG TRENDS FOR 2018 AND HOW WILL PORTER’S ADDRESS THOSE? Getting the consumer what they want, at the right price, at the right time is absolute. And for Porter’s it will be finding niche wines and niche products, whether they be craft beer or spirits, and making them effectively the right price for consumers. IBA has got a great team under Rod Pritchard, they’ve got the right network to find those niche products. The team in there are always sending me information so it’s great.

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PORTER’S MIDWAY CELLARS WE CATCH UP WITH STEVE DINNELL, THE LSA NSW YOUNG LIQUOR RETAILER OF THE YEAR, AND TALK ABOUT THE CANNING LINE HE HAS HAD INSTALLED IN-STORE. WHEN DID YOU INSTALL THE CANNING MACHINE?

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It was about three months ago. It was originally for the Australian Liquor Stores Association (ALSA) Young Liquor Retailer of the Year competition, to enter you had to come up with an idea to implement within your store, and this was my idea. It’s probably been about a year in gestation, we talked about it for a while, and because no one else does it we couldn’t really go and see how it would work so it made it a bit harder. We had to hunt out the equipment and customise it but it all came together easier than expected. We had to get the cans and send them to America, because the canning machine came from America, so they had to design it to suit the cans and then it all came out and it all works We bought the machine like a manual one so the customer can do it themselves. We waited until after the Christmas season and now we’re allowing them to do it themselves and even bring in their own homebrew and put it in the can formats. Eventually I’d like to do in-store brewing demonstrations as well, but I’m still learning to homebrew so right now we’re focusing just on the packaging side.

IF THIS REALLY TAKES OFF IT SEEMS LIKE SPACE MAY BECOME AN ISSUE, SO HAVE YOU THOUGHT ABOUT HOW TO COMBAT THAT? With the success we’ve seen so far we have spoken about getting a mechanical machine and moving the little standalone one out the front and people could just walk up to it and try it, but we’d have the mechanical one out the back doing them on a larger scale.

ARE YOU ADVERTISING THAT YOU HAVE THE CANNING LINE? This is our soft start. We didn’t think it would be so well received, that’s why we’re thinking of adding another machine before we start pushing it properly. So we’ve done a bit of stuff on Facebook and we’ve actually hired a marketing guy to give us some tips on how to tackle this, so we’re thinking online.

ASIDE FROM THE CANNING LINE WHAT ELSE HAVE YOU IMPLEMENTED IN THIS STORE? Craft beer, frozen vodka – we put all of our vodka in the freezer, training staff. I come up with lots of little ideas, such as Cognac, just concentrating on one market area, focusing on it and growing it. We had very little Cognac before but now we’ve gone from selling maybe five bottles per month to now we’re selling around 23 cases a month. So I am challenged every month to pick a category, so Cognac was easy because we’re near Eastwood and have such a large Asian community. The next one is going to be tequila, so it’s going to be fun, I’m not too sure what I’m going to do yet but it’s in growth so it’s going to be fun.

SO HOW ARE YOU HUNTING DOWN THE HARD TO GET KEGS? Just a lot of research. So talking to manufacturers, calling around to shops, Skyping people in America just to find out who makes it and how we can get it. We’ve had a discussion about getting a distributor licence so that we can bring some of the higher rated beers in the US and UK over. The logistics are a little hard because you want to keep it fresh and not get damaged.

HOW HAS IT BEEN RECEIVED BY YOUR CUSTOMERS? We went through 14 kegs in the first two months. We had to pay CDS for September sales and I got the bill for like 76 cents, so we only sold a couple of dozen cans in September. Now we’ve done probably over 1000. It’s mainly been singles and four-packs and we charge a flat rate of $10 per can and then

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$31.99 on a split of four. So some are more expensive and some are cheaper so it levels out and makes it valuable.

HOW DID YOU GET INTO LIQUOR RETAILING? I actually worked at North Ryde RSL and I was doing a hospitality course, and I worked down in the cellar so I was around all the alcohol and that just built the interest. I started here in 2008 as a casual and was made manager about four years ago.

HOW ABOUT CRAFT BEER, HOW HAVE YOU SEEN THAT GROW? We had a soft start about three years ago and we found out that we didn’t do it quite right. We didn’t have it in the fridge, it was on the shelves because the fridges were full and we didn’t know how much craft beer we would go through. But about a year ago we relaunched it and we went mainly local breweries, so all of the ones around Sydney and we just focused on cans, so we’re not trying to get the biggest price but just fresh stuff that we can sell at a cheap price so it turns over faster. We have levelled it off as the same as a VB mark up, so you’re looking at 35 per cent instead of 50 per cent. We have about 250 SKUs that we change over fortnightly, so if it sells out then we don’t get it back in unless it’s one of the big ones like Pirate Life or something. Akasha is really popular around here because Five Dock is really close.

HOW ARE YOU FINDING THE MARKET? That’s the reason we kind of stepped into the canning line idea, because it gives us an edge. People are travelling to come use it, we had a guy come down from Port Macquarie and he bought two cases cans and then he bought one of everything in the fridge and it was an $800 sale. So we’re heading with the craft to get really hard to get kegs to turn this into a destination store.

ARE YOU CONCERNED ABOUT THE CDS AT ALL? I am but I’m not because we are pretty confident about going ahead with the $2 return idea. And also, everybody is affected, it’s not just us.

HOW DID IT FEEL TO WIN THE LSA NSW YOUNG LIQUOR RETAILER? It was really good, I had attempted a few times and I finally got there.

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SCOTT TOWERS, DIRECTOR RED BOTTLE

Relocating one of our stores would be the biggest highlight of 2017. We relocated our Pitt St Sydney store about 250m north from what was a long, narrow, dark, difficult-toshop store, to a bright, open, well-designed corner location. Although it was only a small move in actual distance, it has opened us up to an entirely new customer base, thanks in part to a great fitout and a larger emphasis on specialist products, which is something that we couldn’t do in our smaller, previous location.

WHAT DO YOU ANTICIPATE AS THE MAIN CHALLENGES AND OPPORTUNITIES FOR RED BOTTLE IN 2018? The challenges are probably the same as in previous years – government regulation, the dominance of the chains and finding quality staff at all levels. The possibility of Amazon entering the online alcohol market is concerning. Every case of wine sold online is one case less sold in a store. We see opportunities in convenience retail. The right store with the right range, in the right place, will always succeed. It’s not always about the lowest price, as survey after survey has confirmed, yet it pre-occupies much of our industry. We are always looking at innovative ways to sell product. Retailers need to be open to try new things, lest they stay still and let the market move on without them.

WHAT ARE THE BIGGEST DIFFICULTIES FACING RED BOTTLE IN THE CURRENT MARKET? Finding quality staff is always a challenge, even casual sales assistants. This year we are investing a lot of time, money and effort into a structured, online training course for all of our staff. More and more companies are asking their sales reps to cover bigger areas and do more, meaning the representation at store level is becoming less frequent. Consequently, there is less product knowledge passed on to store managers making it more difficult to sell

products. Family-owned companies seem to be better at it than bigger corporate companies who see sales reps as a cost, rather than as an investment.

HAVE THERE BEEN ANY IMPLICATIONS TO YOUR BUSINESS FOLLOWING THE LAUNCH OF THE CDS IN NSW? WHAT ARE YOUR MAIN CONCERNS? There has certainly been resistance and confusion from our customers, especially with the 1 November price rise without any consumer information from the government explaining the levy and the reason for the price rise. Our main concerns are for our colleagues on the borders who have customers who can drive across the border and purchase their booze at a much lower price. It really should have been a national scheme. Obviously there are concerns about the number and location of Reverse Vending Machines and the noise and rubbish they seem to be attracting.

YOU ARE A REGULAR ATTENDEE OF THE ALSA STUDY TOURS, SO WHAT FINDINGS HAVE YOU BROUGHT BACK FROM THOSE AND HOW HAVE YOU EXECUTED THEM IN YOUR STORES? It is good to see numerous trends and therefore have a clearer understanding of the future direction of our market here at home. This understanding encourages us to try new things from different bundle buys through to a new tasting room in our latest fitout.

IN 2018, HOW IMPORTANT DO YOU THINK IT IS FOR RETAILERS TO HAVE A STRONG ONLINE PRESENCE? Online is important but is not the be all and end all, bricks and mortar will always have a big place in society. Some people like to shop, some like to go to a store and touch and feel the products, read the back labels, talk to people about it. Shopping centres are becoming more community hubs and a place for people to hang out and have fun,

rather than just a place to buy things. Bricks and mortar retailers can be part of this, an experience that online can’t recreate. Wine tastings don’t work well online. Having said that, we are at the tail end of a project that updates our online presence significantly.

WHAT DO YOU THINK WILL BE THE BIGGEST TRENDS IN 2018? Artisan spirits will continue to grow, especially Australian and especially within the gin category. Premium mixers to go with premium spirits. Prosecco still has a way to go and rosé will continue to grow but we must be close to saturation point, the sheer volume of rosé available in the market now is phenomenal. Most companies seem to be releasing premium priced rosé, which is great, but there is still a huge amount of under $15.00/bottle wine sold in the market, yet a disproportionate amount of new rosés in that price point. And of course craft beer (however that may be defined) will continue to grow, and probably a growing divide between ‘independent breweries’ versus ‘corporate craft’ as the major players continue to purchase small craft breweries to give them growth they can’t get on their own.

“Relocating one of our stores would be the biggest highlight of 2017... it has opened us up to an entirely new customer base, thanks in part to a great fitout and a larger emphasis on specialist products.”

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WHAT WERE THE HIGHLIGHTS FOR RED BOTTLE IN 2017?

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PAUL MIDOLO, DIRECTOR-STRATEGY & TRADING – AUSTRALIA SAMUEL SMITH & SON

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WHAT WERE SOME OF THE HIGHLIGHTS FOR SAMUEL SMITH & SON IN 2017? After a successful 2017 financial year, we held our tri-annual Samuel Smith & Son sales conference in June. All our road warriors descended on our spiritual home, Yalumba to listen, learn and share in how we will go to the trade with new activations, new products and our sales and call cycle alignment program. In 2017 we also held our bi-annual spring release tastings where we had more than 300 wines on show and 90 principal partners from around the globe. This allows our trade customers to taste new products, new releases and talk directly to our principal partners about their respective brands. In June, Yalumba released The Caley Cabernet Shiraz 2012, while Vasse Felix released the Tom Cullity 2013 Cabernet Malbec red blend.

WERE THERE ANY OTHER EXCITING RELEASES ON THE SUPER-PREMIUM END ACROSS THE SS&S PORTFOLIO IN 2017? It was an exciting year for premium wine releases. Last year saw Jim Barry release the 2013 vintage of The Armagh, Brokenwood’s Graveyard Shiraz 2014 was also released in May and their ILR Semillon 2009 was released in October after missing a vintage last year. Pewsey Vale Vineyard released The Contours 2012 which interestingly is biodynamic and a new wine to celebrate the vineyard’s 170 years, Pewsey Vale Vineyard Block 1961 Riesling 2017, made from the original HillSmith family plantings in 1961.

WHAT WERE SOME OF THE CHALLENGES THAT SS&S FACED IN 2017? Supply and demand is always challenging due to shifting consumer trends and whether we can get the right resources to meet these market demands. We continue to strive to be the supplier of choice in a very competitive marketplace via our customer relationship technology and through our company mantra

of knowledge, service and friendship. We are always trying to make sure that both the Samuel Smith & Son and Negociants Australia portfolios are relevant to the ever changing marketplace.

WHAT DO YOU SEE AS MAJOR OPPORTUNITIES FOR SS&S OVER THE NEXT 12 MONTHS? Australian wine consumers are looking for quality over quantity and that statement is true even in the challenging cask category. Across the board, we are seeing a trend towards high quality wine. Varietals that are generating category growth in bottled wine such as Pinot Grigio, Pinot Noir, Grenache and dry rosé, are driving category growth in the two litre cask category. Well established varieties such as Shiraz and Sauvignon Blanc are also in growth across the board suggesting there’s still strong life in the two litre format. It’s a challenging category but we’re excited about the opportunities and growth within the small format category.

WHAT DO YOU SEE AS THE BIG WINE TRENDS FOR 2018? Rosé, Pinot Noir, Shiraz and Prosecco will continue to grow. It’s also great to see Chardonnay having a renaissance. Personally, I’m hoping that good old Riesling makes some inroads as it is such a great drinking varietal. How will SS&S be addressing those trends? We have many great products and varietals in this space already and through our NPD process and market insights, we will be looking at all the opportunities that may exist. We are also lucky to have access to Yalumba Nursery data that gives us a view of future vineyard plantings in Australia.

HOW WILL YOU ENGAGE THE TRADE TO DRIVE SALES IN 2018? We have several touch points into our business. We offer a direct line to our customer service teams via phone and email, a strong and engaged team of area managers and our new CELLAR 1849 trade portal which is open 24/7. At any time, trading

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“AUSTRALIAN WINE CONSUMERS ARE LOOKING FOR QUALITY OVER QUANTITY AND THAT STATEMENT IS TRUE EVEN IN THE CHALLENGING CASK CATEGORY. ACROSS THE BOARD WE ARE SEEING A TREND TOWARDS HIGH QUALITY WINE.” partners can order, view credit and invoice information, pay their accounts and of course browse the total portfolio of Samuel Smith & Son and Negociants Australia. We are also working on our customer and consumer marketing alignment and program to help deliver the key messages to our consumer base through specific trade marketing activations.

WHAT KEY FACTORS DO YOU THINK THE INDUSTRY SHOULD BE DISCUSSING IN 2018? Continue to understand the NSW Container Deposit Scheme (CDS) and how it will affect our consumers and pricing. We need an awareness program from the government detailing the reasons it has been introduced and how it works as there is still a huge amount of confusion around this program. This program will come into play in other states in the near future. We can all learn from the NSW introduction. The new WET rebate rules need to be clarified as there could be major implications for some suppliers and wholesalers when this comes into play in 2018.

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MIA LLOYD, GENERAL MANAGER UNITED INNKEEPER ASSOCIATION LTD MIA, CONGRATULATIONS ON YOUR APPOINTMENT AS GM. WILL YOUR ROLE PURELY OVERSEE THE VICTORIAN BUSINESS?

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My role as General Manager, United Innkeeper Association Ltd (UIAL) oversees the sales, marketing and operations for Thirsty Camel Victoria, along with our other banners Liquorsavers and Drinklink. As well as the Victorian Thirsty Camel operations, UIAL is also responsible for delivering initiatives for our Thirsty Camel partners, including our consumer loyalty program, the Hump Club, for the Eastern seaboard states. My role also includes collaborating with my state Thirsty Camel partners, under the Liquor Alliance banner, to collectively build the national promotional program, ensuring consumers have a cohesive choice of national offers and promotional initiatives under the Thirsty Camel brand. In turn, our supply partners enjoy the ease of doing business with a national banner, while also having the flexibility to offer state-based initiatives where relevant.

WHAT WERE THE HIGHLIGHTS FOR THIRSTY CAMEL IN 2017? 2017 was a year of change for Thirsty Camel, and while the brand continues to perform exceptionally well, delivering strong sales and margin results for our retailers, we took the opportunity to realign the business and set a new strategic vision. Encompassing two key goals, ‘Members Winning in Market’ and ‘Convenience Shoppers Choosing Thirsty Camel Every Time’ backed by key strategic imperatives and enablers, this vision now forms the foundation for our business. Key highlights from this strategy in 2017 included commissioning an extensive shopper segmentation research study, the largest by an independent retailer in Victoria, which allows us to truly understand our core consumers, their motivations and behaviours. We also embarked on a ‘Perfect Store’ project, allowing us to define and enhance the shopper experience in-store, and we are partnering with key suppliers in a number of pilot stores to bring this initiative to life over the next few months.

Operationally, we have increased the line of visibility in our promotional program for our members, launching The Green Guide, a comprehensive communications tool, providing more information across promotions, marketing and buying to deliver a longer planning horizon that ensures they are set up to win.

WHAT HAVE YOU IDENTIFIED AS KEY GROWTH SEGMENTS? Rather than focusing on a product segment or category led growth strategy, as part of our shopper segmentation research we identified a number of specific shopper segments as key growth opportunities for Thirsty Camel. With a much greater understanding of their needs, motivations and buying behaviours, our focus will be on ensuring we have the right range and promotions in place, and the right marketing activity to reach them at the time they are making their purchase decisions to drive growth for the business. A key example of how this has worked for us has been the insight that some of our key shopper segments are purchasing specifically for events or occasions and that they over index in gifting vs. shoppers in other retail banners. Targeting this segment on Father’s Day, we partnered with a key supplier to offer an incremental grab-andgo gifting opportunity, and sold more than two months’ stock in one weekend.

WHAT ARE THE KEY STRENGTHS OF YOUR HUMP CLUB LOYALTY PROGRAM? Australians are highly engaged with loyalty programs, with 71 per cent of the population engaged in at least one loyalty program. As the retail liquor marketplace becomes increasingly competitive, loyalty programs are critical tools, providing retailers with a point of difference, allowing them to reward shoppers, and differentiate from a price only conversation. The Hump Club program successfully drives customer loyalty for Thirsty Camel retailers, with members shopping significantly more often than non-members, and spending 25 per cent more on average in each transaction. The ‘My Offer’ rewards program specifically has generated millions of dollars in sales since launch for our members.

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Up until recently Hump Club operated as a cloud-based discount loyalty platform, however in 2017 we commenced a pilot program integrating with our retailers’ POS systems. This successful integration has allowed for seamless redemption of ‘My Offers’ in-store and will be rolled out across the group in 2018, along with the introduction of Hump Club V2.0. With offering the ‘My Offer’ program that our shoppers love, the new and improved Hump Club will also reward them for every dollar they spend in-store, delivering a true independent retail loyalty solution.

HOW IMPORTANT IS IT TO HAVE A DELIVERY MODEL IN 2018? One of Thirsty Camel’s core values is convenience, which means ease of shop, ease of navigation and ease of doing business with us from both a member, partner or shopper perspective. Delivery is at the very essence of convenience for consumers and we recognise it as an important part of our continued growth strategy. As such, we have trialled a number of delivery models across the Thirsty Camel business nationally throughout 2017, and will continue to invest in scoping the opportunity that it can present in 2018.

WHAT DO YOU THINK WILL BE THE BIGGEST TRENDS IN 2018? The ongoing health and wellness trend will without doubt continue, however will move more towards moderation without compromisation. Essentially, we will see consumers demand more from the brands they choose to spend their money on and we will all have to work hard to ensure we meet those demands through quality of offering, pack formats that meet occasion needs and innovation that capitalises on shopper missions. As consumers lives become increasingly busy, convenience will come to the forefront, whether that’s in the form of service (drivethrough or otherwise), grab-and-go product options, retailers offering a one-stop shop with more than just liquor, or home delivery options. As a convenience retailer Thirsty Camel is well placed to capitalise on this trend.

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ANGUS MCPHERSON, MANAGING DIRECTOR – AUSTRALIA AND NEW ZEALAND TREASURY WINE ESTATES WHAT WERE SOME OF THE HIGHLIGHTS FOR TWE IN 2017? SUPPLIER

In 2017, TWE continued to build momentum with a focus on developing a high performing organisation by strengthening our portfolio of brands, investing in our people, building sustainable customer partnerships and driving category growth. We introduced a number of exciting new brands to our portfolio including Samuel Wynn and Co, the introduction of a new ‘aperitif’ A’tivo and the launch of Sterling Vineyards in Australia. Our priority brands went from strength to strength with outstanding activations for the launch of The Penfolds Collection 2017, Wolf Blass ‘Here’s to the Chase’ campaign, as well as during key trading periods such as Spring Racing and Christmas. We were also pleased to see our recent additions continuing to recruit new consumers to wine, such as 19 Crimes and Gentleman’s Collection.

WHAT WERE THE MOST SUCCESSFUL PRODUCT LAUNCHES OR ACTIVATIONS IN 2017? An exciting launch for TWE in 2017 was the introduction of A’tivo, a refreshing new Australian ‘aperitif’ that is created to be enjoyed over ice. A’tivo is designed to drive category growth, by providing lightly spritzed varietals that are ideal for capturing opportunities when consumers seek refreshment. A’tivo is a wine category disruptor – we are giving wine products a place where beer, cider, aperitifs and cocktails usually feature. We launched A’tivo at the Melbourne Cup Carnival, where the new brand received exposure through PR and social media and we capitalised on sampling opportunities with 40,000 racegoers across the four race days. Following this strong launch activity, A’tivo is now available market wide. Another successful new brand that had a strong presence at Melbourne Cup Carnival was Samuel Wynn & Co. The Samuel Wynn & Co Urban Winery formed part of Samuel Wynn & Co’s Flemington Birdcage marquee and captured the attention of media and racegoers as the first functioning winery at Flemington

Racecourse. Samuel Wynn & Co was launched in June 2017 and is inspired by the adventurous spirit of Australian industry pioneer Samuel Wynn. With bold creative, an angular, whisky-like bottle, strong shelf presence and approachable styles of leading wine varieties, the brand is proving popular with millennial consumers, who are now one of TWE’s most important consumer segments.

WHAT SUPPORT DO YOU GIVE RETAILERS TO ENSURE THAT TWE BRANDS ARE TOP-OF-MIND FOR THEIR CUSTOMERS? We have been very focused on supporting our priority brands holistically, not just in-store, but at every point that consumers come into contact with them. Ultimately, we want our brands to be top-of-mind for consumers before they go into the store, so that they are even more receptive to strong point of sale and stand-out packaging once they are in the retail environment. A great example is Wolf Blass, which continues to go from strength to strength as one of Australia’s much loved wine brands. Our AFL broadcast partnership saw Wolf Blass on TV for 18 consecutive weeks during the AFL season, including footy finals, reaching more than 11 million Australians. This meant that Wolf Blass was front of mind for our target consumers well before they stepped into store. We then coupled this exposure with an in-store, money-can’t-buy promotion, which meant that Wolf Blass was also strongly visible at the point of purchase.

WHAT PLANS DO YOU HAVE TO ENGAGE THE TRADE IN 2018? We will continue to build on the strength of our brand campaigns with activations like Wolf Blass and AFL that will be bigger and better in 2018. Wolf Blass ‘Chase the Finals’ will return in March, giving Wolf Blass fans the chance to win AFL Grand Final tickets until 2030. We have never had richer insights or a stronger portfolio of wines, so 2018 will be about collaborating with our customers to develop campaigns that address their specific

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shoppers’ needs and will grow the category. We are also placing a heavy focus on longterm shopper behaviours so we can anticipate the needs of shoppers ahead of time and take steps now to future proof the category by expanding wine occasions.

WHAT DO YOU SEE AS THE BIG TRENDS FOR 2018? Using technology to enhance the brand experience is a trend that we believe is one to watch out for in 2018. We’ve taken this approach with 19 Crimes by using augmented reality to bring the stories of the 19 Crimes characters to life. The 19 Crimes Augmented Reality app, which is now available in Australia via the Apple App Store or Google Play, animates the 19 Crimes characters on the front of the bottle so they ‘tell their story’ of mischief. The app has proven exceptionally popular with 300,000 downloads and people spending approximately two minutes enjoying it. Because this technology is so engaging, we think it’s going to really take off in Australia, particularly with strong brands like 19 Crimes that have entertaining stories to tell.

WHAT KEY FACTORS DO YOU THINK THE INDUSTRY SHOULD BE DISCUSSING IN 2018? There are three factors I think the industry should be working together and focusing on over the next 12 months. The first is how we can unlock growth in what is currently a flat market for wine, by recruiting new people to the category and expanding wine occasions. The second is how we continue to drive premiumisation in this category. And finally, we need to work collaboratively as an industry to stand up to the anti-alcohol lobby. We need to ensure we are engaging with the industry and government on alcohol issues, including increased regulation, restrictions on trading, pricing constraints and greater scrutiny on advertising and promotion. By working together on these issues we will bring balance to the debate and ensure that our industry’s interests are well represented and considered.

Denise Is SO Impressed By The Size Of Local Surfer’s New Longboard first attempt, “didn’t I see you girlies at the Margaret River pro?” They shoot him an “um are you like our dad’s age” glare and disappear into the night. Denise offers some comfort, “maybe next time darling”. Luke shrugs it off, “trust me, when I have my Malibu on the beach, I’m fending them off with a stick, it’s a seriously big board”. Maybe he’s joking, or maybe an ungracefully aging accountant sitting on a beach with an unused board really does get them wetter than a Guantanamo Bay torture room. We will never know. Elsewhere in the store, a familiar chatter of craft beer snobbery can be heard. Long serving employee Greg is telling a bearded, beret wearing beer-guy about the craft beer he had on his last visit to the states. None of his stories impress the hipster as he starts telling him that he only drinks mangochocolate stout brewed in the foothills of the Barossa Valley as they are the only company making “real beer” anymore. Normally, Greg could chat the pastry off a pie but this current conversation is making him seriously consider the legal ramifications of using Luke’s board leash to silence the man. Not like Luke has any need for it. However, discretion is the better part of valour and he shoots Denise an S.O.S glance.

 Bell Tower Times It’s Friday afternoon and the swell is pumping so inevitably Luke has washed up on the shore of Denise’s bottle shop. The undisputed Kelly Slater of middle aged weekend warriors talking shit about surfing has entered the store and shoots Denise a shaka. “Good afternoon Luke, catch any good waves darling?” Luke shoots her a greasy wink, “you know it baby”, which would be true if

getting dumped at City Beach like an ugly Bachelorette with a rose allergy counted as catching a good wave. Suddenly, a wild gaggle of Northern beach party girls appear dressed tartier than a bakery display case. Luke can feel the barrel of his middle life crisis closing in on him so decides he needs to charge this wave of flirtation. Denise watches on in great amusement as Luke paddles over and wipes out on his

retail banner group of the year

2011 . 2014 . 2015 . 2017

A quick thinking Denise has a great idea, she interrupts Luke’s story about a barrel he caught in Yallingup that she’s heard 8 times and says, “sweetie, looks like we have someone from Trigg in the shop”. Luke charges over, drops in on the exchange and gives the hipster a piece of his mind, “look grommet, around here the locals drink Matilda Bay, got it?” The hipster can tell Luke is at point breaking point and takes his wankery elsewhere. It’s the perfect 50-year storm of pretentiousness: a poser, calling out a poser for posing while he is in the middle of posing. It’s pure pose-ception, and it’s magnificent.

We encourage and embrace our stores individuality, visit liquorbarons.com.au for more great stories.

SUPPLIER

IAN CAMERON, HEAD OF MARKETING & SALES WESTONS WORLD BRANDS

SUPPLIER

WHAT WERE THE HIGHLIGHTS FOR WESTONS WORLD BRANDS (WWB) IN 2017? 2017 was a particularly hectic year for our people. As a business, we made significant progress on developing our new commercial team, rolling out our new portfolio and making big steps towards our long-term vision for Australia. Sales were strong throughout the year and we achieved most of our key commercial objectives. Both our cider and beer brands performed ahead of their respective categories, organically growing at a combined 38 per cent. Being recognised as the best large producer at the 2017 Cider Australia Awards was a huge highlight, this was complemented by taking out a Best of Class trophy with Wyld Wood Organic Cider. Both accolades were a glowing endorsement for our Westons cider making team and the quality of our ciders. The year saw two new Westons English ciders launched in the Australian market; Caple Road No 3 and Stowford Press Medium Sweet. Feedback from the trade has been tremendously positive on both brands thus far. We’ve also extended our distribution partnership with acclaimed Edinburgh-based Scottish craft brewer Innis & Gunn. The agreement will open up more opportunities in international craft beer, and assure a pipeline of future innovation.

WHAT DO YOU ANTICIPATE AS THE MAIN CHALLENGES AND OPPORTUNITIES FOR WWB IN 2018? In 2018, we expect the ongoing challenges facing liquor to be no less than in the past so we are ensuring we are well positioned for year(s) ahead. Within liquor, cider continues to offer great value for money for consumers and healthy margins for the trade so there is a very healthy outlook. We’ll continue to align our strategic plans to our customers, and press on with our mission to champion traditional and crafted ciders.

WHAT WILL BE WWB’S IMMEDIATE FOCUS IN THE YEAR AHEAD? The main focus for our people will be our

partnerships and supporting our customers. Our strength is in cider making and we have a lot to offer the trade around cider education and ensuring we share our expertise in how artisanal ciders are produced, what sets them apart from other processes and how craft cider increases profit within the category. We’ll utilise our global insights and UK expertise to create a lot more excitement around cider. Within beer we will maintain our focus on innovation and bringing insights from international markets with the support from our partners.

WHAT PLANS DO YOU HAVE TO ENGAGE THE TRADE AND DRIVE SALES IN 2018? Our 2018 plan includes engaging consumers through food and cider festivals, consumer sampling, and we’ll be creating excitement around cider by partnering with key food venues for our cider culinary program. We’ll also be actively driving cider sales during the cooler months so the diversity of cider occasions is recognised all year round, filling the gap for what is traditionally the offseason. Innovation will play a big part and we have a new launch planned for later in the year for a unique addition to the Australian cider market. More to come on that.

WHAT HAVE BEEN THE IMPLICATIONS FOLLOWING THE LAUNCH OF THE CDS IN NSW? WHAT ARE YOUR MAIN CONCERNS, ESPECIALLY WITH MORE STATES SET TO LAUNCH THIS YEAR? It’s still too early to know exactly what long term impact the CDS will have on our NSW sales, although we have noted some administrative costs and cash flow impacts associated with the scheme. If all states adopt similar programs a national approach seems logical so there is consistency and cost efficiencies across the country.

HOW WILL YOU ENGAGE THE OFFPREMISE TRADE TO DRIVE SALES IN 2018? One of our key objectives is to add more value in the category and drive the traditional

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“Our strength is in cider making and we have a lot to offer the trade around cider education and ensuring we share our expertise in how artisanal ciders are produced… and how craft cider increases profit within the category.” and crafted segments, we’ll also answer the ever-growing consumer demand for premium quality cider. We’ve recently redeveloped K Hard Apple Cider 6.9% in collaboration with the team at Magners in Ireland, and launched in late 2017. The new liquid is perfectly suited to Australian flavour preferences, and while it’s early days the response from the convenience channel has been positive. So, we’ll be sharply focused on the higher ABV segment and aiming to grow value in this area. We’ve also formed a partnership with Sidra del Verano. Verano is a fifth generation Spanish cider maker producing artisanal crafted ciders in the Basque region of Spain. Verano is made using 100 per cent fresh pressed culinary fruit and brings a new style of apple and flavoured cider to the category. The brand refresh in early 2018, and new bottle sizes will be a breath of fresh air for the Australian market. Verano perfectly complements our preeminent cider portfolio of premium European ciders.

SUPPLIER

COLIN ROCHESTER, GENERAL MANAGER ANZ WILLIAM GRANT & SONS

SUPPLIER

WHAT WERE SOME OF THE HIGHLIGHTS FOR WILLIAM GRANT & SONS (WG&S) IN 2017? There were a number of highlights in 2017 that as a business we are all very proud of. Firstly, the WG&S business in Australia has continued to implement its strategic change program and I’m delighted in the way our customers and team here internally have embraced the new ways in which we go to market and present our wonderful portfolio. As a small player in the spirits category, we have worked very hard to engage with our customers to develop more collaborative working and trading relationships with them. We have continued to drive value growth for our customers’ premium spirits categories and we’re delighted that the trade feedback continues to indicate that our business is increasingly being recognised as improving in all aspects of what we do. The launch of the Glenfiddich Experimental Series was consolidated this year and new variants of IPA and XX (pronounced 20) have been well and truly established. Both these new and premium Glenfiddich expressions have brought new news to the malt category and have tapped into shoppers and drinkers’ increasing knowledge and curiosity of malt Scotch whisky.

IN WHICH AREAS DID YOU SEE THE MOST AMOUNT OF GROWTH? As has been the case for some years now, Australians are drinking ‘less but better’ and this trend has greatly assisted a business like ours which is firmly positioned in the premium and above sector of spirits. We see our business as one which can greatly support our trading partners in developing their own premium and above portfolios; particularly with malt Scotch whisky, premium gin and spiced rum. Malt Scotch whisky is an area which is underdeveloped in the Australian market and with leading brands such as Glenfiddich, The Balvenie and Monkey Shoulder we see enormous potential with assisting our customers to premiumise their own sales through our brand building capability and reputation as their ‘Scotch whisky experts’.

The gin segment continues to flourish and premiumise and Hendrick’s Gin has contributed significantly to where the gin segment stands today.

WHAT MAJOR CHALLENGES HAVE YOU HAVE FACED IN 2017? Apart from the ongoing challenges of our dynamic but extraordinarily competitive industry and market, the most important challenge we continue to face is the ever increasing taxation on spirits. The Australian spirits sector is contributing positively and responsibly to the more mature and safer drinking culture in our country, yet spirits continue to be taxed unfairly and disproportionately versus other alcohol categories: • Australian drinkers currently pay nearly 20 times the tax on a cocktail compared to cask wine, four times as much as a cider and more than twice as much as a packaged beer. • Since 2000 the tax on spirits has increased by over 50 per cent. • Spirits excise continues to increase twice per year. These are facts and simply don’t support nor contribute to the long term sustainability of the spirits industry. It inhibits investment and will eventually get in the way of supporting the emerging and flourishing local Australian distilling sector.

WHAT DO YOU SEE AS MAJOR OPPORTUNITIES FOR WG&S OVER THE NEXT 12 MONTHS? Apart from our leading brands of Glenfiddich, Hendrick’s Gin, Grant’s and The Balvenie we have a number of real emerging ‘heroes’ such as Monkey Shoulder; a blended malt Scotch, Sailor Jerry Spiced Rum; Australia’s number one spiced rum and the relaunch of one of the world’s most iconic spirit brands in Drambuie. Apart from Scotch whisky, we also see the Irish whiskey category as an exciting one to develop. William Grant & Sons owns Tullamore Dew Irish whiskey and this year our business commenced distilling in the new plant in Tullamore. We see our Irish blend having immense appeal for the increasingly discerning and premium Australian spirit consumer.

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“We see our business as one which can greatly support our trading partners in developing their own premium and above portfolios; particularly with malt Scotch whisky, premium gin and spiced rum.” WHAT DO YOU SEE AS THE BIG TRENDS FOR 2018? We get really excited about how consumers and shoppers are exploring Scotch whisky, gin and spiced rum as well as their increasing experimentation and knowledge of cocktails. The reason we are excited about this trend, which isn’t particularly new but is now becoming a long term trend, is that we have a portfolio of brands that tap into this need. As consumers premiumise, experiment and increase their knowledge of spirits, they will continue to demand quality – another key need which our portfolio satisfies. Once again this year, William Grant & Sons was named ‘Distiller of the Year’ and ‘Scotch Whisky Producer of the Year’ at the prestigious International Spirits Challenge awards and our Master Distiller; Brian Kinsman was also awarded the title ‘Master Distiller of the Year’. To all of our customers, partners, stakeholders and friends of William Grant & Sons, I take this opportunity to thank you for your ongoing support and wishing you good health, happiness and prosperity in 2018. We look forward to helping you build your business again next year.

ALWAYS HAS YOUR BACK with a crisp clean flavour and no bitter aftertaste For more information or order enquiries please call 1300 45 BEER (2337) or visit us at www.wingmanbrewery.com.au

ASSOCIATION

ANDREAS CLARK, CHIEF EXECUTIVE OFFICER WINE AUSTRALIA WHAT WERE THE MAJOR AREAS OF FOCUS IN 2017?

ASSOCIATION

Wine Australia has three key roles: global marketing and insights; funding research and development (R&D) and supporting the adoption of the findings to support practice change; and helping Australian wine exporters access markets. Wine Australia doesn’t grow grapes, make wine or sell wine. That is the role of our grapegrowers and winemakers and they do that exceptionally well. We focus on providing the information and services to grape and wine businesses to help them succeed. We’re funded by grapegrowers, winemakers and exporters through levies, and by the Australian Government for RD&E activities. Our ongoing engagement with the grape and wine community is vital to ensure we are meeting their needs and delivering value for them. In 2017, we outlined the next three years of activities under the Australian Government’s $50 million Export and Regional Wine Support Package. This is an additional and most welcome opportunity to support growth for our sector through growing export demand for wines and encouraging more international visitors to visit our wine regions.

WHAT WERE SOME OF THE OVERALL HIGHLIGHTS IN 2017? In 2017, we continued to see strong market signals. Vintage 2017 saw the third consecutive rise in both the crush (to 1.98 million tonnes) and the average purchase price ($565 per tonne), which was the highest price since 2008. In our export markets, value increased overall by 15 per cent to $2.56 billion (the highest growth rate since 2004), volume was up by eight per cent to 811 million litres and there was a seven per cent increase in the average value per litre free on board to $3.16, the highest since 2009. These results are credit to the hard work of exporters in-market, who cultivate successful relationships to grow their businesses, and the growers and winemakers who are producing wines that reflect our unique regionality and speak to the trade and consumers. Wine Australia issued 56,238 export

permits for the sector in 2017, which is seven per cent more than 2016 and reflects the growth of demand that we’re seeing for Australian wine overseas.

WHAT DO YOU THINK WILL BE THE BIG TRENDS IN WINE IN 2018? Mainland China is now Australia’s largest export market worth $848 million and it grew by a remarkable 63 per cent in value in 2017. Australia is outpacing our key competitors in market growth and we need to ensure we can continue to sustain supply and grow demand. Red wine dominates Australia’s exports to mainland China, it accounted for 95 per cent of the export value in 2017 and growth is strong. However, an important trend is the increasing acceptance of white wine, principally due to an increased number of younger Chinese people drinking wine who are more open to trying new styles. It is an exciting opportunity for Australian businesses.

WHAT BIGGEST CHALLENGES ARE FACING THE WINE INDUSTRY? The under indexing of Australian wine in the USA is our biggest challenge. The USA wine market is the largest in the world – valued at US$44 billion and growing at 2.7 per cent per annum – and we need to work as a community to unlock growth opportunities for Australia. The China wine market is also not without its challenges; we need to fuel and support sustained growth in the market in a multi-pronged approach through areas such as education and cultivating relationships with buyers. We also need to support growth in the premium end of our wine exports to the UK. In 2017, there was solid growth in our exports priced at $7.50–9.99 per litre (£11–12.99 per bottle retail) up by three per cent to $13 million. The UK is still our largest market by volume, but we need to find opportunities to grow our premium priced wines. Within Australia itself, our market is relatively strong and our customers are loyal to locally produced wines. We have the opportunity to maintain our strong market share domestically by providing compelling wines at each price point.

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WHAT KEY POINTS SHOULD THE WINE INDUSTRY BE DISCUSSING? It is vitally important that the wine community continues to work hard to capture and grow markets. Australia currently exports 60 per cent of the wine we produce and we need to maintain our focus on growing and servicing our export opportunities. Through the $50m package, the government is providing support for companies through the $1m Wine Export Grants and $2m capability development workshops, which are designed to help small- and medium-sized businesses leverage overall international marketing activities. Complementing these grants are the $5m of state-based and $5m of competitive international wine tourism grants, which will see the expansion of our wine tourism offering nationally.

WHAT IS ONE ISSUE THAT YOU WOULD LIKE TO SEE URGENTLY ADDRESSED BY THE INDUSTRY? The biggest opportunity and the biggest challenge we face as a whole wine community is the USA market. It is the fastest growing and most valuable wine market and Australia needs to capture more of the growth in the USA. There are positive signs of change. Australian exports at $10 per litre or more (roughly US$14 or more per bottle retail) increased by eight per cent to $45 million, and this growth in premium exports is also evident in retail figures. Off-trade sales figures from IRI show at US$11 or more per bottle, Australian sales grew by 32 per cent while the total sales in this segment increased by seven per cent. This is supported by a renewed interest from wine influencers and the wine trade in the fine wines Australia has to offer. At our Taste of Australia event in New York last year Joe Czerwinski, the Managing Editor of Wine Advocate, said “People should drink Australian wine because it’s probably not what they think it is. There’s this whole new wave of producers and a whole new wave of wine styles.” It is a market with huge opportunities for Australian wine across all price points and we need to continue to work together to find, create and capture new openings.

SUPPLIER

SEAN SHORTT, EXECUTIVE DIRECTOR, SALES AND MARKETING WINGARA WINE GROUP WHAT WERE THE HIGHLIGHTS FOR WINGARA WINE GROUP IN 2017? SUPPLIER

Wingara Wine Group exports our Australian range to most wine consuming countries. We’ve seen excellent performance in export recently, which indirectly is a good thing for domestic. Australia consumes less wine than we produce so we need to ensure a healthy export business to ensure a balanced domestic market for supply and demand, particularly with the growth in imported wine into Australia. Domestically, innovation has been driving much of the category and our La La Land range of lesser known varieties has seen significant growth, particularly for Pinot Gris and Malbec. We have recently added a Pinot Noir Rosé and Vermentino, targeted at the onpremise and independent retail trade. Product differentiation has also been key, ensuring that in the $15-$25 range we have exclusive ranges with the Katnook brand to reduce friction between the channels. The Freixenet brand that we import from Spain continues to blossom in the market, driven by a combination of new product development with the addition of two styles of Sangria, personalisation with limited edition ‘skins’, and premiumisation with the addition of a DOC Prosecco. An obvious lowlight for us in 2017 was the sudden passing of our senior Katnook winemaker Wayne Stehbens in November, after 38 years at the helm. Wayne was a charismatic and talented winemaker, so this is a huge loss to the company, as well as to the broader wine community in Coonawarra.

WHAT DO YOU ANTICIPATE WILL BE THE MAIN CHALLENGES AND OPPORTUNITIES FOR WINGARA IN THE YEAR AHEAD? The market is becoming more fragmented. Long gone are the days when one brand fits all channels. Managing pricing and ensuring a differentiated product offering will continue to be a challenge, however we are confident that we are nimble enough to trade in all areas. Across the world the wine market is chasing the millennials. Their buying habits are noticeably

different to baby boomers – when they shop, how they shop etc. They cannot be ‘marketed’ to in the traditional manner and they are more sceptical, wanting authenticity and customisation. Prosecco and rosé have seen a meteoric rise the last 24 months and will continue to grow. There is a noticeable demand for softer, lighter styles of reds and Pinot Gris/ Grigio will continue to climb the preference ladder in white wines. At Wingara, we started planting alternative varieties such as Malbec, Tempranillo, Pinot Grigio over eight years ago at both our Deakin and Katnook vineyards. We have brought in a Prosecco under the Freixenet brand, a pale-dry rosé under La La Land and we continue to do trials on alternative varieties and wine styles.

WHAT WILL BE YOUR IMMEDIATE FOCUS IN 2018? A new Senior Winemaker at Katnook Coonawarra will commence after vintage 2018. We are grateful to have Greg Clayfield act as our vintage winemaker, as he brings decades of experience and talent to the winemaking helm. We anticipate the style of Katnook will evolve, while maintaining our commitment to capture the essence of Coonawarra. In the broader context, Wingara has several strategic partnerships which showcase our wines to a targeted audience across different arts and culture offerings. This year, we are into our 10th year as Opera Australia’s official wine (Katnook), our third year with The Arts Centre Melbourne (Azahara) and a new partnership with ACMI (Australian Centre of the Moving Image) at Federation Square Melbourne (Deakin Estate). We find the brand recognition resulting from these partnerships strongly supports our distributors’ efforts, which in turn enhances sales domestically.

WHAT DO YOU THINK THE WINE INDUSTRY SHOULD BE DISCUSSING IN 2018? The Australian wine industry has never been at a more exciting, yet challenging juncture. Export will continue to be of vital importance to all large and medium sized wineries. With two consecutive short harvests in Europe. As

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“PROSECCO AND ROSÉ HAVE SEEN A METEORIC RISE THE LAST 24 MONTHS AND WILL CONTINUE TO GROW. THERE IS A NOTICEABLE DEMAND FOR SOFTER, LIGHTER STYLES OF REDS AND PINOT GRIS GRIGIO WILL CONTINUE TO CLIMB THE PREFERENCE LADDER IN WHITE WINES.” well as reduced harvests in Chile and the USA – key markets are looking at Australia to fill some of the supply gaps. The domestic market will continue to be highly competitive with imports, with new entrants challenging established brands. The range of brands and wines within chains, independents and HORECA will continue to diversify. The market is not homogenous and so product differentiation is required. Water availability and rising energy costs will affect growers and wineries. Grapes are competing with other agricultural products which deliver higher returns. We are seeing consumers moving towards the nascent categories of organic and sustainable wines, possibly as part of millennial ‘mindfulness’. From a marketing perspective, the constantly changing face of social media remains a challenge for the wine and all industries. What do consumers want and how can we deliver appropriately and cost effectively? We are confident of maintaining overall sales growth in both the domestic and export markets and look forward to the challenges and rewards that 2018 is sure to bring.

SUPPLIER

WHY DID YOU DECIDE TO LAUNCH WINGMAN AND HOW HAS IT BEEN RECEIVED BY THE TRADE? Wingman Lager began with a passion, a passion for lager and a passion to present consumers with a beer that was brewed proudly in regional Australia. For us to perfect the taste of the Wingman Lager you enjoy today it took us three years of trial and error, until we found a product that we were passionate about and suited what we wanted our beer to be. We have had an overwhelming response from the public supporting our premium lager and we could not be happier with the success of the beer. It has been extremely rewarding for us to have a massive amount of support from Macquarie Media Network, who have been supporting us from day one, from the first announcement to broadcasting our Christmas promotions.

WHAT ARE THE CHALLENGES OF BEING A SMALL INDEPENDENT BREWER? The challenges that we have as an independent brewer are also some of our greatest strengths. Being a small independent brewer we rely heavily on our product to sell itself, because of that we have had to ensure the quality of the beer remains at our high standard. We want the stockists to be as passionate about Wingman as we are, so we let the stockist make the decision to sell the beer on their own. Initially, we struggled for people to take us seriously, but as soon as they tried the product and realised how strong it was those challenges have been eliminated.

CAN YOU TELL ME A BIT ABOUT THE BEER? Wingman Lager is a crisp, clean lager with little to no aftertaste. We are boldly and proudly presenting the 4.5 per cent ABV because we believe that it is our responsibility as a brewer to let people know how much alcohol they are consuming. We are lucky enough to be brewing in state of the art facilities in Yenda, NSW. Not only does it have the best facilities but it also helps us to support rural Australia, which is

beer will have the same great taste that our customers have come to love in the full strength 4.5 per cent premium lager, only with less alcohol content.

WHY DID YOU DECIDE TO GO WITH THE CLEAR BOTTLE?

something that is very important to us. Yenda also has the capabilities for Wingman to grow and as we release new products and take on the international market, the brewery will be able to keep up with demand.

WHERE SHOULD RETAILERS POSITION WINGMAN IN-STORE? WHAT SALES ANGLES SHOULD RETAILERS EMPLOY TO PROMOTE WINGMAN TO THEIR CUSTOMERS? Retailers should be positioning Wingman Lager among Corona, Pure Blonde and Hahn Super Dry lagers in the fridge so that the label turns blue and the beer is ready to drink as soon as they purchase it. Wingman is a socially responsible beer that always has your back, from a label that changes colour when it has reached the optimum chill, to a bottle cap reminder of how many standard drinks have been consumed, and a 4.5 per cent proudly worn to show the alcohol content, unlike other beers. Wingman is dare I say it the ultimate Wingman.

WHY DID YOU DECIDE TO LAUNCH WITH A LAGER? WILL YOU BE RELEASING ANY FURTHER BEERS? We decided to launch a lager because that’s what we enjoyed, it’s a beer that not many breweries have grappled with because of the precision that it takes to make a good lager. We saw a hole in the market which was the need for a clean and crisp lager that wasn’t heavy. There has been a strong shift towards craft pale ale and we believe there will be a shift towards the need for a crisp clean lager. We will be releasing a mid-strength beer, Wingman 3.5% on 3 May (3.5.18). This

Our product is crisp and clean, so why would we want to hide it? A lot of people discussed the importance of green or brown bottles to protect the beer but for us that wasn’t a concern, we use the best ingredients, in the best brewery so there is no concern for the quality and shelf-life of the product. We want people to see what they are buying and to admire the clean lager. With a product that is crisp and clean why wouldn’t our bottle be?

WHAT DO YOU SEE AS MAJOR OPPORTUNITIES FOR WINGMAN OVER THE NEXT 12 MONTHS? Our major opportunities are in our ability to grow this year, we have a committed team ready to market our lager and take it to the next level. No one in our team doesn’t believe that this can’t be a market leader. This year we believe we have the manpower, the commitment and the team to make Wingman a household name. Also, with the launch of 3.5% mid-strength beer on 3 May (3.5.18) we are allowed a massive opportunity to disrupt the mid-strength market with a quality Australian product that is brewed and owned by Australians.

WHAT DO YOU SEE AS THE BIG TRENDS IN BEER FOR 2018? For us it isn’t particularly about following trends, rather what we strive to do is to listen to the wants of the public. We presented Mr and Mrs Public with a product that they wanted. Before we even attempted to brew the flavour of our beer we went out and asked the public what they liked and what they disliked about other lagers and with that information we were able to create the well-loved beer we have today. Wingman in 2018, won’t be following the trends per se, rather we will be listening to the voices of the public and adapting our offering accordingly.

NATIONAL LIQUOR NEWS FEBRUARY 2018 | 107

SUPPLIER

DAVID HENDERSON, MANAGING DIRECTOR WINGMAN

SUPPLIER

ADRIAN GARFORTH MW, CEO YEALANDS WINE GROUP WHAT WERE THE MAIN HIGHLIGHTS FOR YEALANDS IN 2017? SUPPLIER

2017 was an extremely challenging vintage for all, but I am delighted to say that our winemaking and vineyard teams excelled, winning the Champion Sauvignon Trophy (Peter Yealands Reserve) at the Marlborough Wine Show, and collecting the most awarded winery at Sydney International Wine Challenge.

WHAT DO YOU SEE AS THE MAJOR OPPORTUNITIES FOR YEALANDS OVER THE NEXT 12 MONTHS? We will continue to build and develop our existing distributor relationships. Although we are active in more than 80 different markets, we recognise that we are still a relatively new player in the market (we will be celebrating our 10 year anniversary on 8 August), and need to work ever harder to ensure trade success and raise consumer awareness. We have bolstered our commercial team globally with more people on the ground, and have recently announced the appointment of a new GM Sales and Marketing and an EU Market Manager.

HOW IS THE NEW VINTAGE LOOKING FOR YEALANDS? It’s a bit early to call, but the vintage is looking very promising – with some of the best flowering conditions we have had in years. Growing conditions have been excellent in the Awatere Valley, and we are very optimistic for the coming vintage. We also have challenged the team to see just how good we can be, and are doing some exciting work identifying our premium blocks, lowering yields and giving the winemakers the tools to make some genuinely innovative, great tasting wines. We understand the appeal of Marlborough Sauvignon, but also recognise the need for innovation if we are to retain customer interest.

WHAT TRENDS DO YOU SEE AS COMING FOR 2018? Wine tourism – we have a truly unique vineyard and winery location – so are investing in our Baby Doll sheep viewing area, improving our White Road visitor experience and generally trying to encourage as many of our customers

to come visit. There is also interest in low alcohol wines, and new varietals both of which are projects that we are actively engaged in. We also want to encourage a greater consumer awareness of sustainability; we only have one world and we like to think that we enjoy an industry leading position in this critical area, but also recognise that others are catching up (which has to be good for everyone).

WILL YOU BE EXPERIMENTING WITH ANY NEW WINE STYLES? The winemakers have been given a license to produce the best wines possible and within this we will be experimenting with new styles. We want to demonstrate that Marlborough Sauvignon can genuinely produce a high quality style that will bear comparison with the great white wines of the world. With regards to packaging, we have been focussing on improving paper recycling with our label suppliers. Looking at other formats, we are already the number one brand in Norway and Sweden with our The Crossings Bag-in-Box, and also have a surprisingly successful PET format in Sweden. We are also looking at premium small bottle formats to appeal to the

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convenience sector, and are constantly looking to tweak and improve our label designs

WHAT PLANS DO YOU HAVE TO ENGAGE THE TRADE TO DRIVE SALES IN THE YEAR AHEAD? Our recruitment strategy reinforces our understanding that we need to get closer to our customers and consumers. We have a huge number of in-market initiatives around the globe and need to improve our consumer engagement at the same time. Thankfully our quality remains exceptional across the portfolio, so we need to get more ‘glass in hand’ experiences and ensure our communication is relevant and easy to understand

WHAT KEY FACTORS DO YOU THINK THE INDUSTRY SHOULD BE DISCUSSING IN 2017? Sustainability – it is well recognised in New Zealand, but for many consumers struggling with the economic challenges that surround us, it is almost too big an issue for them to engage in. Our wines show that you don’t need to pay a premium to enjoy a great drink and do something good for the environment.

FEATURES LIST 2018

DEADLINES

WINE

WINE TASTING REVIEW

BEER

SPIRITS

RETAILING FOCUS

JANUARY/ FEBRUARY

Booking: FRI 24 NOV Creative: FRI 8 DEC

MARCH

Booking: FRI 9 FEB Creative: FRI 16 FEB

Premium Cask

Chardonnay

Lower Carb & Mid Strength Beer

Cognac & Brandy

Premium Mixers & Energy

APRIL

Booking: FRI 9 MAR Creative: FRI 16 MAR

Hunter Valley Wine Report

Semillon

Premium Australian Beer

RTD 101 Checklist

MotherÕs Day Retailing

MAY

Booking: FRI 6 APR Creative: FRI 13 APR

Family Wineries

Cabernet Sauvignon

Cider

Tequila

Retail Banner Groups

JUNE

Booking: FRI 11 MAY Creative: FRI 18 MAY

McLaren Vale Wine Report

Shiraz

Imported & International Beers

Liqueurs

Small/Medium Sized Wine Distributors

JULY

Booking: FRI 8 JUNE Creative: FRI 15 JUNE

Coonawarra Wine Report

Cabernet & Shiraz Blends

Authentic America American Spirits & Beers

Smaller Distilleries

FatherÕs Day Retailing

AUGUST

Booking: FRI 13 JULY Creative: FRI 20 JULY

Rose

Canned Beer Photoshoot - Craft & Mainstream

Spiced Rum & Rum

Retail Snacks & Convenience

2018 Annual Leaders Forum

NSW Cool Climate Prosecco Report

SEPTEMBER

Booking: FRI 10 AUG Creative: FRI 17 AUG

New Zealand Wine Report

Pinot Noir

Cider

Upselling Premium Gin

Superannuation Hospitality industry

OCTOBER

Booking: FRI 7 SEPT Creative: FRI 14 SEPT

Sparkling Wine & Champagne

Asian Beer

RTD

BBQ Retailing

NOVEMBER

Booking: FRI 12 OCT Creative: FRI 19 OCT

Western Australian Riesling Wine Report

Summer Beer & Cider Retailing

Whisk(e)y Scotch & Irish

Christmas Feature

DECEMBER

Booking: FRI 9 NOV Creative: FRI 16 NOV

The Rose Report

Lager Photoshoot Craft & Mainstream

Vodka

Products To Stock This Summer

110 | FEBRUARY 2018 NATIONAL LIQUOR NEWS

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