National Liquor News February 2019 by The Intermedia Group

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

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vol. 38 no. 1 - February 2019

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Editor’s Note

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GENERAL MANAGER SALES – LIQUOR & HOSPITALITY GROUP:

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he 2019 Annual Industry Leaders Forum issue of National Liquor News is our biggest and best magazine to date. And I don’t just mean that because of all of the fantastic content you’ll find within – I mean it literally. This is the biggest issue of National Liquor News in the magazine’s 38 year history. So I’d like to kick this year off by thanking everyone who has been involved in our February issue, which extensively covers all facets of the retail liquor industry. We’ve spoken exclusively to Australia’s leading retail banner groups and wholesalers, suppliers and associations who have all shared their highs and lows from 2018, along with providing a sneak peek into what we can expect to see in the year ahead. We’ve also got more research, insights and predictions than ever before. We’ve got 16 pages of content from Roy Morgan, Nielsen, Invigor Group, eLease Lawyers, IRI and Peter Hall & Associates, with exclusive content on trends, retail leasing, data collection, and much more that will help you to run your business more effectively in 2019. This year, our friends at IRI have gone a step further and not only broken down the best-selling brands, segments and SKUs from 2018, but using their comprehensive market scan data they have also given us a snapshot of predictions for 2019 – and it may come as no surprise that premiumisation, health and wellbeing and supporting local producers are still all at the forefront. But there’s now also talk of ‘Instagramable drinks’, with consumers seeking out

“THIS IS THE BIGGEST ISSUE OF NATIONAL LIQUOR NEWS IN THE MAGAZINE’S 38 YEAR HISTORY.” products that not only taste good, but will make them look good on social media – maybe this is something that could translate into retail? You could think about dressing your stores with eye catching and inspiring displays if you want to attract that elusive millennial market. You may also notice that the format of the Leaders Forum has changed a bit this year. Since it’s our biggest issue of the magazine ever, we also wanted to make sure that it was the most engaging issue ever, so rather than sticking with our usual Q&A format we’ve mixed it up a bit to try and make it as readerfriendly as possible. I hope you enjoy it and would love to hear your feedback. Lastly, I’d like to thank the team here at National Liquor News for all of the hard work that went into putting this magazine together. Shane T Williams, Kea Thorburn, Paul Wootton, Andy Young and Charlie Whitting, thanks for all of your hard work! Cheers to a successful and prosperous 2019! Deb Deborah Jackson, Editor 02 8586 6206 | djackson@intermedia.com.au

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LARGEST ISSUE OF NATIONAL LIQUOR NEWS EVER!

AUSTRALIA’S LEADING LIQUOR INDUSTRY MAGAZINE

vol. 38 no. 1 - February 2019

THE 2019 ANNUAL INDUSTRY LEADERS FORUM

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Contents February

Retail, Wholesale & Suppliers 19 Aldi 20

Australian Liquor Marketers

Australian Vintage Limited

Australian Whisky Holdings

24 Asahi 26

Bacardi-Martini Australia

Brix Distillers

Brown Family Wine Group

30 Brown-Forman 32 Campari 33

Coles Liquor

34 Coopers 35

De Bortoli

Edgemill Group

Good Drinks

House of Fine Wine

Independent Liquor Group

Independent Liquor Retailers

Kollaras & Co

Research & Insights 74 IRI 80 Nielsen 82 Invigor Group 86 eLease Lawyers 88 Roy Morgan 92 Peter Hall & Associates

Associations 93 Alcohol Beverages Australia 94 ABAC 96 Brewers Association of Australia 98 DrinkWise 100 Independent Brewers Association 101 LSA WA 102 New Zealand Winegrowers 104 Retail Drinks Australia 108 Spirits & Cocktails Australia 110 Wine Australia

45 Lion

Year In Review

Liquor Barons

Liquor Legends

Liquor Marketing Group

McWilliam’s Wines Group

111 We recap the key events that shaped the Australian liquor industry in 2018 124 Top scoring wines of 2018

Nip of Courage

55 Patritti 56

Pernod Ricard Australia

Porter’s Liquor

58 Proximo 60

Red Bottle

62 SouthTrade 63

Stone & Wood

Thirsty Camel (Victoria)

Treasury Wine Estates

Vantage Group

67 Veraison 68 Vinomofo 70

William Grant & Sons

72 Yealands

12 | FEBRUARY 2019 NATIONAL LIQUOR NEWS

FOR MORE INFORMATION OR TO PLACE AN ORDER, PLEASE CALL YOUR ASAHI PREMIUM BEVERAGES REPRESENTATIVE OR CUSTOMER SERVICE ON 1800 090 378

PLEASE DRINK RESPONSIBLY

NEWS

Pilbara alcohol bans described as ‘short-sighted’ and ‘clumsy’ Western Australia’s Director of Liquor Licensing has introduced a number of restrictions regarding the purchase of packaged alcohol in the state’s Pilbara region. From 31 March the restrictions will see a total ban on the sale of packaged liquor on Sundays as well as a ban on the sale of cask and fortified wine and beer in glass bottles bigger than 750ml. Additionally the changes will also restrict the amount of alcohol people will be able to buy in one day to one carton of full-strength beer, three bottles of wine or one litre of spirits. A person may be able to purchase a combination of beer and wine within the restricted amount. Director of Liquor Licensing, Duncan Ord said the imposition of further restrictions on the accessibility and consumption of liquor in the region was in the public interest. “There’s been liquor restrictions in Pilbara since 2003 and they have been adjusted from time to time,” he told ABC Radio. “But the Liquor Control Act, provides for the police and for health to make representations to my office around concerns with harm being caused by liquor consumption and the causes they foresee through the actions they are taking in the community. [They] requested potentially imposing restrictions on the availability of alcohol either by volume or particular time, to lessen harm and to try to provide opportunity for services to help those who do unfortunately abuse alcohol from time to time. “Our role is to find a balance between the responsible drinkers of alcohol, to try and not

impact on them unreasonably, while making sure the restrictions are effective enough to improve difficult circumstances that are faced by people in the community, try to turnaround their health and other behaviours and make for liveable communities.”

A disappointing bandaid decision However, CEO of the Liquor Stores Association of WA (LSAWA), Peter Peck, described the move as lazy and one which would not only impact small businesses and the majority of the population who did the right thing, but it would also fail local problem drinkers and their families. “With such a proactive state government pursuing true liquor reform, it seems the Director of Liquor Control did not get the memo,” Peck said. “This is 1970s thinking to an issue that we have learned needs a more nuanced, collaborative and well thought out solution. It is a very disappointing bandaid decision that will not work and will have large negative impacts for the entire region. “To truly try to help people and families affected by problem drinking, a multi-disciplined, collaborative approach incorporating both proactive and reactive strategies is required. The imposition of liquor restrictions is very unlikely to change the behaviour of a relatively small group of individuals and creates the perception that the area is a dangerous community to live and visit. “There needs to be a targeted approach to

14 | FEBRUARY 2019 NATIONAL LIQUOR NEWS

those who abuse alcohol rather than region wide restrictions which impact the entire community. In this regard, a Banned Drinkers Register system will ensure those causing the issues are targeted rather than the entire community. This was highlighted by numinous groups to the Director but he has failed to listen to the advice. “Every stakeholder, including police, mental health, health and community services, as well as the private sector, needs to collaborate and play their part in delivering a solution to help unwell individuals and protect the broader community against anti-social behaviour and overly prescriptive regulation. “Through the Pilbara Liquor Accords LSA WA members have worked closely with police and voluntarily ceased packaged liquor sales when requested. “The real need is to get additional health and support services to people who are problem drinkers and their families because they will always find a way around blanket restrictions like the ones announced.” The LSA said that it is working with the Australian Hotels Association WA (AHA WA) and the McGowan Government on developing an electronic takeaway alcohol management system to ensure particular individuals are not able to purchase packaged liquor. The association said that this, combined with broader support services, will make a real difference to problem drinking without penalising the majority of the community who do the right thing.

NEWS

Balter XPA named Australia’s hottest beer again Balter’s XPA has retained its title in the GABS Hottest 100 Aussie Craft Beers of 2018 which saw a record 31,000 beer lovers place more than 155,000 votes for their favourite craft beers of the year. From a field comprising around 2,350 beers from more than 260 breweries, it was the Gold Coast brewery that claimed top spot for the second year running. Part-owned by champion surfers Mick Fanning, Joel Parkinson, Josh Kerr and Bede Durbridge, Balter had two other beers named in the top 10, with its IIPA and IPA placing sixth and seventh respectively. Balter’s IIPA was one of 21 beers released in the last 12 months to make the list, demonstrating the impact of a popular new release in the fast-paced craft beer scene. New England IPAs (NEIPAs) were prevalent among the new entries, doubling their presence overall and claiming strong positions, such as Hop Nation’s Jedi Juice (#9), Dainton’s Blood Orange New England Rye IPA (#36) and CoConspirators’ Matriarch (#63). “With over 2,600 beers to vote for including a big offering from our own brewery the votes were going to be split up, so we knew it was going to be very hard to get the top spot again let alone three beers in the top 10,” says Stirling Howland, Co-founder of Balter. “So when the results started dropping we were pretty blown away by the outcome and super thankful to our Balter community for getting behind us. “The standard and choice of beers in Australia right now is exceptional. With 31,000 people voting for over 2,600 beers it demonstrates the good beer movement is alive and well in this country. I also think what GABS Festival and GABS Hottest 100 does for getting good beer to the people is really cool and we’re stoked to be a small part of that.” Stone & Wood’s Pacific Ale once again took second place, the beer’s ninth consecutive podium finish in the year, making it the most loved beer in the poll’s history. The Byron Bay brewery celebrated its 10th anniversary in 2018. “We’re so proud to share the podium alongside Balter and BentSpoke, as well as to all the other indie breweries whose beers have made the list this year,” said Ben Summons, Managing Director of Stone & Wood. “It’s through continuing to support and buy independent that we all can continue to do what we love: brewing good beer. “The last 12 months have been incredible. We celebrated our 10 year anniversary; established our not-for-profit – the inGrained Foundation; opened our new brewery in Byron; introduced cans alongside a whole lot of other limited releases and saw 71 per cent of the team become shareholders in the business – coming second has topped it all off.” Third place went once again to Crankshaft

GABS Hottest 100 Aussie Craft Beers of 2018 Top 10 (credit: The Crafty Pint)

from BentSpoke, topping a charge of five beers from the Canberra brewery, all placing within the top quarter of the list. “The best thing about this competition is that it’s voted on by the people that drink your beer,” says Richard Watkins, Head Brewer and Co-owner of BentSpoke. “It’s awesome to see that Canberra brewers are nationally recognised. Our local community really knows what good beer means. “If anything, it’s inspired us to bend the rules of beer further than we ever have before. We’ve got some really exciting projects brewing for BentSpoke’s fifth birthday year.” With Balter leading the way, Queensland showcased its huge strides in craft brewing, with 22 beers from nine breweries featured in the list, up from 15 beers from five breweries in 2017. While NSW maintained its overall presence in the list, with 26 beers from 13 breweries, Victoria, South Australia and Western Australia all dropped representation from 2017. Localism has been touted as an increasingly influential factor and the results backed that up, with this year’s list featuring the first brewery from the Northern Territory – Darwin’s One Mile Brewery – which had four beers make it into the Hottest 100. The Sunshine Coast also elevated its local brewing scene, getting Your Mates, 10 Toes and Brouhaha into the list. In addition, The Welder’s Dog from Armidale in regional NSW saw four of its beers in the list, including the first ever ginger beer to make the Hottest 100. Last May, the Independent Brewers Association (IBA) launched the Independent Seal and the campaign’s impact can be seen in this year’s Hottest 100, with 88 per cent of the beer listed made by independently-owned breweries – up from 71 per cent in 2017. Lion’s Furphy Refreshing Ale was the highest placed non-independent beer at #25 and was the only non-independent beer to improve its position on the previous year. In contrast, Coopers, South Australia’s

oldest family-owned brewery, saw its fortunes reversed, with its Sparkling Ale jumping from #97 in 2017 to #46 in 2018, the biggest jump of this year’s list. In addition, two other Coopers beers made it onto the list – Original Pale Ale came in at #17 and Session Ale at #22. “I think it’s just become this wonderful tradition that’s grown alongside the craft beer industry, allowing beer lovers to reflect on their favourite beers of the year and give a vote to the brewers who made them,” said GABS Co-founder Steve Jeffares. “With breweries opening in all corners of the country, pushing the boundaries of style, technique and creativity, there’s really never been a better time to be a craft beer drinker. “And with such a huge number of votes behind it, this year’s list is again very revealing about what people are drinking and enjoying, whether that’s a more mainstream pale ale or a strawberry rhubarb sour from their favourite Sunshine Coast local.”

The top 10 beers of 2018 were: 1. Balter XPA (Pale Ale) QLD 2. Stone & Wood PACIFIC ALE (Australian Pale Ale) NSW 3. BentSpoke CRANKSHAFT (American IPA) ACT 4. Young Henrys NEWTOWNER (Australian Pale Ale) NSW 5. Bridge Road BEECHWORTH PALE ALE (Australian Pale Ale) VIC 6. Balter IIPA (Imperial IPA) QLD 7. Balter IPA (American IPA) QLD 8. KAIJU! KRUSH! TROPICAL PALE ALE (Pale Ale) VIC 9. Hop Nation JEDI JUICE (New England IPA) VIC 10. Gage Roads SINGLE FIN (Australian Pale Ale) WA

NATIONAL LIQUOR NEWS FEBRUARY 2019 | 15

NEWS

Carlton & United Breweries’ eBay venture riles retailers By Andy Young, Editor TheShout Carlton & United Breweries is selling direct to consumers, as part of a “trial” conducted by ZX Ventures on the auction and e-commerce website eBay. ZX Ventures is the global growth and innovation division within the AB InBev group, which owns CUB; ZX was also the company behind the purchase of online retailer BoozeBud last year. Speaking about the move to sell CUB products on eBay, Lance Eerhard, ZX Venture’s Head of eCommerce, Asia Pacific South, said: “ZX Ventures has been selling a limited range of CUB products on eBay since November last year. “This is a trial and ZX is continuing to assess the response from consumers. “Australian businesses are increasingly looking to sell their products through fastgrowing digital retailers such as eBay. CUB produces some of Australia’s most popular beers so it makes sense to explore whether eBay is an effective way to get these products into the market.” However National Liquor News has spoken with a number of retailers about the move and no one was happy, saying this was not in the best interests of the retail trades. One retailer who spoke anonymously said: “Suppliers selling direct to consumers is not new, however CUB’s approach with BoozeBud and now eBay is a further challenge for retailers. “Retailers have long worked with suppliers to support their brand image and health, however

taking a route to market where pricing differs from their price vision within retail market along with direct marketing to retail customer’s raises concerns and impacts confidence working with the suppliers’ products.” National Liquor News has looked through many of the products available via CUB’s eBay store and seen Corona Extra, Carlton Draught and Victoria Bitter listed for $56 per case, however there is a 20 per cent discount promotion available so these products can be bought for $44.80 with free delivery. Crown Lager costs $44 and Carlton Dry can be bought for $43.20. With these prices, cheaper than any retailer National Liquor News spoke to, many questioned the validity of this as a trial for CUB, as the price does not reflect what consumers can normally buy the beers for. One retailer said: “If you are running a trial on a level playing field then of course you can take some analysis out of the sales. But when you are below cost how do you get a read on that? People have only bought from you because you are so cheap. It makes me wonder what their strategy is. They appear to be dead set going after the consumer and trying to blow our cost.” Retailer Mal Higgs said that given many of the changes being seen across the beer market at the moment, he would have thought companies like CUB would be looking to make friends with retailers rather than taking them on in this way. “I’m gobsmacked that CUB would be aggressively pursuing a direct to consumer

16 | FEBRUARY 2019 NATIONAL LIQUOR NEWS

approach in an environment where I would have thought they would be looking for our support given the interest shown by our customers in craft beer and them wanting us to stock more and more craft beers.” Higgs said that this approach has been seen before in Australia, most notably when Moët Hennessy moved into online retailing in 2014, he added that a large number of retailers stopped ranging a number of their products and as soon as the company was able to get out of the venture they did. While there are obviously conditions around the Retail Trades Act, many retailers have indicated that this move by CUB will make them seriously consider their position when it comes to ranging CUB products and the purchasing decisions they make. National Liquor News also spoke to eBay to understand the licensing arrangements and how it is ensured that no minors are able to buy alcohol via the website, and what the situation is regarding the minimum unit pricing policy currently in place in the Northern Territory. A spokesperson for eBay said: “You must be 18 years and over to create an eBay account. “As per Australian liquor licensing laws, any retailer who sells alcohol on eBay is required to hold and display the relevant license for each listing and jurisdiction it operates in/to. “When it comes to the Northern Territory and the minimum unit pricing on alcohol sales, eBay has the ability to block these ‘dry areas’ upon checkout but as we are a platform and don’t hold stock, the responsibility lies with the seller.”

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

ALDI

Aldi puts trust in ‘affordable luxury’ After a successful 2018, Jason Bowyer, Aldi’s Wine and Sparkling Wine Buying Director, is keen to maintain the company’s focus on quality and value.

strongly in the show circuit. Everything we do is designed with one purpose in mind: to provide the highest quality products at the best possible prices.” After the successes of 2018, thoughts turn to this year and how to maintain that success and build upon it. “The real challenge will be ensuring that we stay well ahead of our competitors as they look to us to match some of our initiatives. Whether on price or offering our customers on-trend wine regions and styles, we must continue to evolve and adapt our wines to meet the desires of tomorrow’s shopper. “We constantly look for innovation, studying consumer trends, as well as looking domestically and abroad for new varietals and styles. Rosé is certainly the hot topic at the moment and we will be focusing on this category, bringing a range of styles and regions to our customers. Early in 2019 we will launch a Soave (a dry Italian white wine) under our Corte Carista brand.” As well as Rosé, Aldi is looking to focus on the growing popularity of sparkling wine which Bowyer believes is driven by customers’ desire for “aspirational products” and “affordable luxury”. He sees these approaches as “undeniably different” and knows that looking ahead, he relishes the challenge of taking things another step further. While these are the focuses of Aldi as a business, Bowyer believes that there are other aspects that the industry as a whole should be highlighting in 2019. “One area that requires more discussion is how the industry can bring to the forefront more in demand white and red varietals. Consumers have shown an appetite for lighter more refreshing wine styles. We have seen this phenomenon with Sauvignon Blanc, Pinot Grigio, Rosé and Pinot Noir. Breaking away from the traditional varietal segments and looking for other varieties that offer this will be important. Winemakers and marketers attuned to exploring this trend will be rewarded with loyal customers.”

• Consumers are definitely looking for functionality, greater choice and products that deliver refreshment. •W e expect customers to continue seeking aspirational products and adding some affordable luxury to the mix will keep them further engaged and excited. • Sparkling is a hugely exciting category and we see consumers seeking products beyond Prosecco and Champagne. Dry Italian Sparkling, premium French Sparkling and Sparkling Rosé varieties will be on trend. • Rosé, Pinot Grigio and lighter reds will continue to thrive and we are really motivated to lift the image of lesser known varietals. • Nero D’Avola and Carmenere are just two diverse varietals that have proven to be successful within our range. • Other varieties that present much opportunity include Grenache and Gamay as consumers seek out lighter, more friendly wine styles.

NATIONAL LIQUOR NEWS FEBRUARY 2019 | 19

RETAIL & WHOLESALE

ast year was an exemplary one for Aldi. As well as enjoying strong growth, the business won a string of awards, including Roy Morgan’s Liquor Store of the Year, and was named Australia’s ‘most trusted brand’. Jason Bowyer, Aldi’s Wine and Sparkling Wine Buying Director, saw 2018’s achievements as a testament to the company’s “ongoing commitment to doing the right thing for our suppliers, customers, employees, the community and the environment” for which the recognition was immensely rewarding. “Winning awards is a combination of many factors. It is the outcome of fostering great supplier partnerships, being focused on ensuring we source high quality fruit while working alongside incredible winemakers to create outstanding wines which deliver on quality. “Quality and value have always been the main focus for us. When you are focused on the customer, it’s easier to produce wines they will like and will also perform

What are customers looking for?

AUSTRALIAN LIQUOR MARKETERS

ALM: Championing successful independents With a new CEO set to take the helm early this year, Rod Pritchard, Interim CEO of ALM tells National Liquor News that the business is in great shape and will continue to deliver sustainable growth for its independents into 2019.

Q. How was 2018 for ALM? What were the highlights? What were the challenges? It was certainly an interesting year, particularly as we began the transition of leadership following Scott Marshall’s appointment in March to head up the IGA Supermarkets and Convenience business. Testament to Scott’s leadership, the transition has been relatively seamless, with the Australian Liquor Marketers (ALM) leadership team focused on executing the plans that were in place for 2018, and beyond. On a personal note, I have really enjoyed stepping up to fill the CEO role over the balance of the year, and have greatly appreciated the support of our customers and suppliers, and of course, my ALM colleagues in ensuring a smooth transition.

RETAIL & WHOLESALE

Q. What will be the immediate focus for ALM in 2019? Our mantra at ALM (and Metcash) is ‘Championing Successful Independents’, and this will remain our highest priority in 2019. ALM will continue to seek ways to partner with our suppliers to improve our overall offer to our customers, and ensure that we deliver sustainable growth for our stakeholders, in a market that is becoming increasingly competitive. Q. What challenges and opportunities do you see for ALM and IBA looking ahead to 2019? The market has not been without its challenges, however, we remain optimistic around the outlook for the year ahead. All markets have realised value growth over the past year, and independent retail appears to be in a healthy shape across the board. The Independent Brands Australia (IBA) network represents more than half of the total ALM business, and continues to go from strength to strength. The on-premise channel has certainly enjoyed a resurgence in recent years, so that also represents an exciting growth opportunity for ALM into the future. Q. How do you plan on continuing to build and improve the IBA network into 2019? Our IBA offer is fully focused on delivering against the needs of our shoppers. We tailor our offer for each of our retail banners in the IBA network, to best meet the changing shopper expectations across the various retail

channels that exist in the market. We utilise the shopper insights and data that we have at our disposal to make informed ranging and programming decisions, and to fine tune our offer accordingly. We recently announced our partnership with Complexica – who are experts in the artificial intelligence field – and we will be rolling out the new promotions platform that they have developed for us in the first quarter of 2019. This is a particularly exciting initiative for us, and we expect our retailers and suppliers to mutually benefit from the outputs of the new platform. Q. Metcash reported positive earnings in its first half liquor results. To what do you attribute this success? There are a number of factors that helped deliver these results. We have grown volumes within the IBA network, and across all major contract customer groups. We have also attracted new business to the ALM network in the past year. Beyond that, the various Container Deposit Schemes (CDS) and the premiumisation trend continue to have an inflationary effect on the sales value growth across the industry.

Kilmore Cellarbrations, Victoria

One issue that needs addressing in 2019 There has to be a better solution to the current CDS debacle. If our state governments are truly committed to driving environmental benefits from the various CDS across the country, then they should get together and align on a common and consistent platform that the scheme would operate from on a national basis. At present, the cost to consumers, not to mention the cost to retailers and wholesalers of implementing and administering the various schemes, would be far outweighing any benefits these schemes deliver.

Q. Have you noticed any changes in shopper behaviour? Shoppers have been gravitating back to their local shopping strip in recent years, which is ultimately good news for our retail network. There has also been an increased trend for shoppers seeking to support local producers and manufacturers. We encourage our retailers to identify and support local suppliers to create a point of difference in their offer, and to leverage the personal connections that they forge with their shoppers, to make appropriate product recommendations.

same goes for the way that our customers interact with brand marketing and advertising material, as well as the consumer brands they are engaging with. Mainstream simply doesn’t cut it anymore. This represents both the biggest challenge, and opportunity, provided we get our offer right.

Q. What do you expect will be the big trends of 2019? We fully expect to see consumers increase their desire for ‘personalised’ offerings. Consumers have been drifting away from mainstream brands over recent years, in search of new offerings, across new segments. They are more than willing to try new products, and are prepared to pay more for perceived ‘premium’ or ‘craft’ brands that they most relate to. The

Q. Can you tell us a bit about the Mfuture program and how it will benefit your network? Mfuture is a Metcash wide initiative, focused on identifying and driving sustainable growth initiatives for the future, across each of our business pillars. We have been working in recent months on resetting ALM’s long-term growth strategy, and will be sharing more on these initiatives in the months ahead. Stay tuned.

20 | FEBRUARY 2019 NATIONAL LIQUOR NEWS

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AUSTRALIAN VINTAGE LIMITED

Investing in the future Australian Vintage Limited will continue its ambitious investment projects as Cameron Ferguson, COO Australasia North America, looks to grow sales, re-focus brands and reduce carbon footprints.

AVL’s investment plans SUPPLIER

n increase in net profit after tax made 2018 a successful year for Australian Vintage Limited (AVL), although Cameron Ferguson, AVL’s COO Australasia North America expects more this year. He cites the growth of AVL’s three core brands – McGuigan, Tempus Two and Nepenthe – as the driving force behind the financial performance. “Particular highlights on the domestic front were the performance of Tempus Two and Nepenthe, which grew 38 per cent and 15 per cent respectively, which is a fantastic result. “The success of Tempus Two has been driven by a refocus on the brand, establishing a clear hierarchy, moving into customer exclusives and fine tuning the brand’s positioning. With Nepenthe the message is about quality across all tiers, which has seen the brand enjoy its most successful performance on the wine show circuit in recent years. McGuigan has been supported by ongoing investment in above the line advertising as we continue to grow outside of the Black Label range.” Investment played a huge part of last year for AVL, with $19.5 million committed to capital projects, and Ferguson intends to continue this approach with a similar investment in 2019 to improve quality and sustainability, as well as increasingly taking advantage of the latest industry trends. “The continued rise of rosé is a key trend – it’s a juggernaut that is showing no signs of slowing. It’s a premium play, and we’re seeing all the growth coming at higher price points. More broadly, as the consumer palate continues to evolve, we’ll see new and emerging varietals play an ever-increasing role in the retail landscape. “Fresh aromatic white varieties such as Arneis, Grüner Veltliner and Fiano will continue to emerge, as will Malbec, Tempranillo and Nero d’Avola. We’ll also see more unusual blends such as Pinot Grigio Riesling and Shiraz Montepulciano begin to gain traction. Growth in new and emerging varietals will come at the expense of New Zealand Sauvignon Blanc as consumers continue to mature and seek to shift from what is now a homogenous commodity.” As well as looking into other kinds of wine, AVL is investigating different packaging methods, such as the ‘wine in cans’ trend. For Ferguson, innovation is critical to meeting one of the category’s major challenges – bringing younger consumers (of legal drinking age) into wine.

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• At our Merbein packaging facility we’ve installed a new state of the art bottling line, which is one of the most technologically advanced lines not only in Australia, but globally. • At our Buronga Hill Winery we’ve extended our solar farm which will supply 30 per cent of the power required for the site and are nearing completion on a super-premium ‘winery within a winery’. • We are expanding our plantings at no fewer than four vineyards including The Farms vineyard in the Barossa Valley. • The coming year will see upweighted investment in the next iteration of the ‘Bring a McGuigan’ advertising campaign. • We’ll be investing in our first ever above the line campaign (for Tempus Two), which is a real watershed moment for the brand.

$7.7 million NET PROFIT AFTER TAX IN FY18

79%

INCREASE IN NET PROFIT AFTER TAX

“Outside of sparkling, most consumers don’t get into wine until their mid to late 20s – so we’ve got a job to do to transition consumers from other alcohol categories into wine. Innovation around pack format, style and varietal can have some influence here, catering to younger consumers that are looking for exploration. “We explored wine in cans eight or so years ago, and it’s now firmly back on the agenda, however the timing and occasion must be right. Alternate pack formats in general can play a key role in driving true growth in the category through the creation of new consumption occasions. As such we’re actively investigating not only wine in cans, but Tetra Pak and no glass options.” Beyond ambitions to take AVL to new audiences and embrace new styles, Ferguson’s major plan for 2019 is to continue to ramp up sustainable practice within the company. “We’ve accelerated our sustainability initiatives considerably. In late 2018, AVL was the first wine producer in Australia to sign a landmark large scale hybrid Renewable Corporate Power Purchase Agreement (PPA), which will ensure 90 per cent of consumption at our Buronga Hill winery is met by solar and wind power. We are making significant progress on the ambitious sustainability targets we have set and are proud to be at the forefront of the renewable energy movement and leading the field in the wine industry.”

AUSTRALIAN WHISKY HOLDINGS

The craft of Tasmania

After a year of partnerships and structural evolution, Chris Malcolm, CEO of Australian Whisky Holdings, is still pushing to put Tasmanian craft spirits on the map.

SUPPLIER

ast year was one of building, development and amalgamation for Australian Whisky Holdings (AWH), with multiple distribution partners appointed and production capacity at Nant distillery increased. For AWH CEO Chris Malcolm, creating synergies while maintaining the “unique identity” of each brand has been critical. A partnership with Seppeltsfield Estate is expected to boost distribution, as well as the supply of barrels for ageing single malt whisky, while the integration of Lark Distillery, which was acquired in June 2018, has been proceeding positively. “Seppeltsfield is one of Australia’s oldest and best known liquor brands and their experience and knowledge is benefiting us greatly. They have existing contracts in place for the distribution of their products into China, providing working synergies for our brands as we look to expand into this critical market. “Since June we have embarked and made great progress on an enormous change management program with a focus on integrating our people and processes to realise synergies across the group. The program will continue well into 2019 and to date we have integrated all back end management and accounting systems. The most significant change in Tasmania has been the appointment of a Sales Manager to work across all our brands which has been very well received by the trade.” For Malcolm though the job isn’t done yet and 2019 holds more in store, as AWH bids to take advantage of the growing interest in premium products and grow its brands beyond Tasmanian borders. “If we are to realise our vision of creating Australia’s first luxury spirit icon it’s critical that we build our profile beyond Tasmania (where traditionally we have done roughly 90 per cent of our business) and of course beyond Australian shores into Asia, Europe and the US. “The Australian and global consumer’s desire to drink less but better will only continue to become more relevant, and premium. Super

premium and luxury Tasmanian whisky and gin can be at the forefront of this growth.” As well as building the profiles of its brands, AWH also faces the universal challenge of “ageing versus cashflow”, as each distillery seeks to build scale moving forward. Last year, Nant Distillery’s capacity was increased from 700 litres of new make per week to 1,400. Malcolm hopes that in time, an Australian single malt will have the same global prestige as a luxury Scotch or Japanese whisky. “Being the only publicly listed whisky producer in the country we are well funded and have the ability to invest ahead of the curve in production. Building scale for Tasmanian whisky is as much a mental challenge as it is a physical one, where scale is potentially seen as the opposite of craft. We believe our whisky shouldn’t be defined by its batch size, but by its quality, consistency and extraordinary flavour. Only with this mindset can we create Australia’s first luxury spirit icon where batch size isn’t a factor that consumers are concerned with.” Maintaining these craft and premium credentials are the key factors for the industry moving forward in Malcolm’s eyes, as the number of distilleries in Tasmania continues to grow. “The passion and enthusiasm for distillation and the entrepreneurial spirit that can be found in Tasmania is difficult to find anywhere else in the world. We need to continue to encourage this, but from a whisky perspective in particular we need to ensure that maintaining the premium credentials of the ‘Tasmanian whisky’ brand is the single biggest priority for everyone in the industry.”

“If we are to realise our vision of creating Australia’s first luxury spirit icon it’s critical that we build our profile beyond Tasmania.” Opportunities in 2019 • Continuity of supply in 2019 will also be a highlight. While our liquid remains scarce, we will have a record amount of bottles for sale this year. •W e will leverage our distribution partners’ infrastructure, sales people, brand ambassadors and scale to build the profile of our brands in mainland Australia and beyond. • We will further improve synergies across our sites by moving our Nant bottling operation to the Coal River Valley where we also bottle Lark, Overeem and Forty Spotted. • Finally, through our relationship with Spirits Platform we are exploring opportunities to distribute Nant throughout Asia.

NATIONAL LIQUOR NEWS FEBRUARY 2019 | 23

ASAHI PREMIUM BEVERAGES

Asahi enjoys double digit growth in 2018 Scott Hadley, Chief Commercial Officer of Asahi Premium Beverages, considers a successful 2018 and looks ahead to the year ahead. SUPPLIER

Highlights of 2018 •T he launch of our latest Asahi Super Dry campaign ‘Enter Asahi’ which we believe will support growth of both the brand and international beer category this summer. •T he introduction of Peroni and Grolsch has been fantastic. •C ricketers Arms relaunched in an exciting new pack design. •M ountain Goat launched ‘GOAT Very Enjoyable Beer’ in addition to the regular Mountain Goat Rare Breeds released throughout the year. •F irst full year with a spirits portfolio. •R elaunched Vodka O in both RTDs and our full bottle spirit. •N ikka whisky added to its portfolio with a high end ‘Coffey’ range. •T he team proudly built the Untold Rum story – our premium rum brand which launched 12 months ago. • The Cruiser Originals campaign, now in its fourth year continued to add excitement and growth to the category.

sahi Premium Beverages (APB) enjoyed an extremely positive year in 2018, with double digit growth and scooping the Off-Premise Supplier of the Year Award for the second year in a row at ALIA. For Chief Commercial Officer Scott Hadley, the successes of 2018 are a tribute to APB’s workforce and set a benchmark for the year ahead. “I would like to thank our customers and our staff for this fantastic recognition [from ALIA]. We are fortunate to have an engaged and motivated workforce who go out of their way to ensure a great customer experience and this award is recognition of all their hard work. We are certainly going to work just as hard in 2019 to give us every chance to win this award again. “Delivering double digit growth in 2018 creates pressure on our teams to continue to deliver to customer needs and expectations. Ensuring our whole business is able to meet the needs of our customers remains a major focus for us into 2019. “Our approach in 2019 will be to continue to focus on getting the basics right while at the same time improving our business on several levels. I think it’s vital that we continue to focus on developing our workforce to deliver the best possible customer experience and develop the portfolio to continue to push the boundaries and excite consumers with innovation. We have extremely exciting plans for 2019 and we have commenced sharing these with our customers and using their feedback on NPD and execution strategies to further enhance and strengthen our initiatives.” Despite growth in other categories, cider remains a challenge for APB. However, with new Somersby Lower Carb and Somersby Watermelon both launched in October 2018, Hadley is hopeful that progress will be seen in 2019, while the company will also focus heavily on its beer portfolio. “We are extremely positive and confident that these initiatives, together with strong marketing support for the Somersby brand, will regenerate enthusiasm and growth momentum in the cider category. “We will have a heavy focus on building our beer credentials and continue to invest in innovation across all beer segments. The onpremise trade will be a key focus and we will work closely with our partners

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“Delivering double digit growth in 2018 creates pressure on our teams to continue to deliver to customer needs and expectations.” on innovation and how we can drive growth. The expectations of consumers are increasing every year and we all need to take responsibility for how we can work together to ensure that we meet and exceed expectations and deliver an experience that will see our consumers continue to frequent the on-premise location.” As well as his plans for APB in 2019, Hadley has identified the burgeoning excitement within the craft sector and expects to see further growth in innovation in 2019, as well as a greater involvement from larger companies within the movement. “We are seeing craft breweries and distilleries opening up every week and this brings variety and new concepts to our market. I believe that we’ll see accelerated activity in craft spirits, with more experimentation with flavours and botanicals and perhaps a concentration on easier drinking and sessionable spirits. I’m confident that there will be further consolidation in 2019 with a continuation of the trends from the past 18 months, and some of the bigger players potentially expanding their interests in local craft breweries and distilleries.” What are Hadley’s hopes for the future? “My desire is that the industry will be recognised for the great contribution we make as a whole to society through enhancing the social fabric that makes this country great, through direct and indirect employment opportunities as well as the investment we make not only through capital investment but through sponsorship and other philanthropic endeavours that we support as a collective. The industry takes its role in promoting responsible consumption seriously and I hope that the programs we support continue to gain support and traction in the wider community.”

CONTACT WILLIAM GRANTS & SONS FOR FURTHER INFORMATION (02) 9409 5100 OR WGSA.CUSTOMERSERVICE@WGRANT.COM WWW.WILLIAMGRANT.COM

BACARDI-MARTINI AUSTRALIA

Collaborate, innovate and engage After a series of successful collaborative activations in 2018, Denis Brown, Managing Director of Bacardi-Martini Australia, is looking to keep up the momentum in 2019.

or, Denis Brown, Managing Director of Bacardi-Martini Australia (BMA), 2018 represented a huge year for the company’s core category driving brands, with activations in collaboration with customers and partners helping to drive “awareness, demand and engagements among both the trade and consumers” for gin, vodka, tequila and rum. In addition, Grey Goose won the Best Light Spirit awards at the 2018 ALIAs. So what are Brown’s plan for 2019? “As the leader in the premium gin and super-premium vodka categories, we will continue to drive innovative partnerships in market, with memorable and immersive experiences for consumers to enjoy, as well as partnering with our customers to deliver off-premise programmes that resonate with their business goals and showcase our brands. Being distinctive and memorable in such a dynamic and increasingly competitive market is our challenge.” In 2018, BMA acquired Patrón Tequila, and for Brown, the tequila category is one to watch in 2019, hence the continuation of the Patrón Perfectionists competition. “We see tequila as one of the most exciting growth categories in the market and Patrón’s role in the category growth is to excite, educate and engage our consumers in the breadth and depth of the brand. 2019 will be the fourth year of the competition [Patrón Perfectionists] in Australia and we look forward to many more Patrón-worthy cocktails being created by our talented bartenders.” The upcoming year holds plenty of opportunity for the company. With some trends “building momentum”, Brown intends to place BMA at their heart with new innovations and launches.

“Convenience and ease of delivery both in on and off-premise are ever present, but not at the compromise of quality. “Cocktail growth is expected to continue at pace, with both variety and complexity complemented by a resurgence of interest in the classics done well. Specifically, we see a strong rise in spritz – St~Germain and Grey Goose in Le Grand Fizz being our example. Highballs are a focus for our Dewar’s brand, introducing whisky to new consumers and allowing more variety in the serve. We are also supporting the drive from the bars for sustainability with purpose. “I would come back to our BMA business promise – to deliver the most memorable brand activations, occasions and cocktail combinations for our customers and consumers, both via the ontrade activations, but also impactful off-premise incentives to purchase. We are striving to ensure that BMA is a great business partner and can drive a profitable outcome for our partners while driving category growth through our brands.” The new year is already upon us and as well as considering what BMA can be doing to get in among the prevailing trends, Brown is also aware of more industry-wide issues of which the company must be mindful and prepared. “As an industry we have a responsibility to discuss mindful consumption. We should also be thinking about how as an industry we can further embrace the trends of ultra-convenience, both in the making of the cocktails and the delivery to consumers, as well as the relevant licensing laws to catch up with these trends. Ultimately our job as brand owners is to not just meet the existing needs of the market, but to drive the development and growth of our market to even greater levels in 2019.”

“We are striving to ensure that BMA is a great business partner and can drive a profitable outcome for our partners.”

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Highlights of 2018 • The year 2018 saw Grey Goose sponsoring the GQ Men of The Year awards in November, an alignment that perfectly positioned Grey Goose as the celebratory brand for special occasions. Our second year of the Grey Goose Riviera Limited Edition bottle has built on the success of previous editions and continues to deliver the brand’s French heritage. • Bombay Sapphire partnered with the National Gallery of Victoria with an immersive pop-up Bombay Sapphire Gin Garden throughout the summer. Off-premise POS and gift with purchase, ensured that the demand converted into sales in the off-premise. • Bacardí has delivered a summer of music and mojitos with the Bacardí El Coco Festival tour offering consumers an all day party with tropical inspired dancing and freshly poured mojitos from the back of a converted 1950s Chevy truck. These feature festivals were also supported by a repeat of the successful mojito Jug offer to the off-premise. • Recognising the importance of Australian bars and bartenders, we have invested significantly in activations and advocacy to build awareness and demand for our brands. This strategy not only supports our recruitment and retention strategy but builds a broader consumer base that ultimately converts into off-premise sales.

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BRIX DISTILLERY

A rum affair in Sydney for Brix Brix Distillery only opened last August, but it is already making waves and changing opinions within the rum category.

SUPPLIER

hen your distillery only opened its doors in 2018, it’s pretty obvious what that year’s highlight will be. Brix Distillery, co-founded by Damien Barrow, opened in Sydney in August last year. A venue and a rum distillery, Brix was built from entirely custom-made equipment and was set up to challenge Australian opinions about this particular spirit and Barrow has been blown away by the response. “The highlights have been how well we’ve been received in the industry. It was a pretty ambitious project that we embarked upon and just to get the doors open and trade for three months was a real success. “The challenge has been and will continue to be to tackle the misconceptions of what rum stands for. That was always something we set out to do: to champion rum. I think what underpins rum is the complexity and the versatility of the spirit on a global scale. There’s so much it can do, there’s so much history and so much versatility in terms of its application. Also, the craft of making rum is very intricate. We’re starting from raw ingredients so from the very beginning we’ve got control over the entire process and therefore we can produce an extremely high quality product. I think that will go some way to changing people’s perceptions of what rum is, particularly in Australia. “Around the world it’s revered as this delicate and appreciated product and category but in Australia there’s a little bit of category baggage, there’s a stigma that surrounds rum. We’re trying to step away from that and appeal to the discerning palate, the discerning drinker. I think there’s a lot of room to grow, particularly off the back of the craft industry.” In the few months since the distillery opened, Brix has ranged its product within at least 100

bottle shops and on-premise venues, focusing on two of the biggest trends of the last few years – local loyalty and a quality product. “People are really quite keen to get behind a locally made product especially given it’s high end and tastes good. Definitely within alcohol but in terms of consumerism, people are looking for a bit more emotion and connectivity with what they’re buying. There’s certainly craft beer and craft distilling that’s doing well in Australia, which was championed by whisky in Tasmania and now more recently with gins. But there’s a lot of opportunity for education in the rum category as well and hopefully we can lead the charge. “The other thing with rum is that rum has multiple sub-categories in it as well that have a lot of stretch. You have white rums and golden rums and spiced rums and aged rums that are essentially categories of their own with very different applications. There’s a lot of opportunity within the rum category to provide people with a different drinking experience to what they’re used to.” Looking ahead, the distillery has plenty of space to grow. It is currently at one-third of its production capacity, so expansion is certainly on the cards, but Barrow doesn’t want things to move too fast. “We’re not about dominating the room. Everything we do is underpinned by wanting to make premium quality rums, so if we grow by virtue of that then great, but our first and foremost is to make premium rum.” Craft distilling remains a smaller player in the

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Changing tastes “People are starting to drink less but are happy to pay a little more for it. It’s about a more mature palate and I suppose it ties in with the recent lock out laws in Sydney. People want to have a good time but be more considered about it. And it goes along with what they’re consuming and the environment they’re consuming it in as well.”

“People are looking for a bit more emotion and connectivity with what they’re buying.” overall Australian drinks market, but there is significant growth from all corners and Barrow looks at the support that Brix has received on its journey as proof that this community will continue to push forward despite the “everlasting discussion about excise”, and give people the opportunity to drink products made locally with local ingredients. “Most people know or have heard of others in the industry and those who are more established in the industry have been very welcoming and supportive when we opened our doors. I think it’s the notion of the rising tide approach: all boats rise. And everyone’s encouraging each other and I hope that that continues.”

BROWN FAMILY WINE GROUP

After a year of rebranding and repositioning, Dean Carroll, CEO of Brown Family Wine Group, has his eyes on expanding the group’s wine portfolio through customer connections.

t was a year of transition for the Brown Family Wine where the variety was first planted decades ago and where Group (BFWG) in 2018, with the business changing the expertise with the wine is most extensive. its name and repositioning as a “multi-branded family “In terms of challenges, the biggest hurdle is the decline wine business”. Over the past 12 months, the company’s of consumption. As younger people and a changing domestic performance has been strong across Brown Brothers, population demographic are less connected to the • Sparkling wine is not Innocent Bystander and its Tasmanian brands, with Devil’s wine occasion, our role of connecting with the joys of just a celebratory Corner becoming Tasmania’s leading brand. In addition, responsible wine consumption is an industry challenge drink. Increasing BFWG continued to be the market leader in Prosecco. that suppliers and retailers need to work together sparkling occasions “A contributor to this result is our ability to connect with on. Health is important to people, so messaging is of and in particular consumers through our sites,” says Dean Carroll, CEO of increasing relevance going forward. Prosecco to more BFWG. “The other major contributor is the commitment “We also need to work together on creating a everyday enjoyment. and ability of our people whose willingness to work clearer shopping experience for wine consumers both • Use our Fruity together for the greater good of the company continues to in a retail and on-premise environment. Another portfolio to overwhelm us.” potentially surprising challenge we are experiencing is inspire more new BFWG entered the canned wine category last year with the recruitment of people into the industry. In an age or infrequent Prosecco Spritz and Innocent Bystander Moscato and of low unemployment and changing workforce needs, consumers into wine. Carroll has been excited to see the customer response. recruitment has become an ongoing challenge for • Create exploration “There is still more knowledge to be gained on the best businesses like ours particularly with, (but not restricted of the wine category way to merchandise alternate packs such as cans and we to) more remote regional sites.” through education work closely with our customer partners to gain insights in The conversation around wine is a critical one, whether and stimulation aimed this space and help shoppers navigate the opportunity. Being it’s to educate, advertise or engage, and Carroll highlights at making that shared recognised as an innovative wine company is important the importance of communication moving into 2019, from drinking occasion to us, so it’s fair to say all aspects of NPD including pack coordinated industry responses to anti-alcohol lobbying, more engaging. formats are on the table at BFWG.” to clear and effective bottle labels and the use of social Other opportunities and challenges await in 2019, not media to connect. least the growing export market in Asia, which Carroll “Social media enables us to be focused with our believes “has helped to bring the demand and supply back communication by connecting with the consumers that into equilibrium”. BFWG will continue to overinvest have potential to resonate with our brands. The balance here to develop things further. Carroll is positive about between engaging and overwhelming our followers the prospects for Innocent Bystander, has seen demand along with creating appropriate content are the areas we exceed supply in Tasmanian wine products, and highlights continue to grapple with. Prosecco as a burgeoning category with still more “How the industry formulates and communicates potential for growth. proactive and positive messaging against the increasing “While the Prosecco juggernaut is recognised, we still feel noise from the anti-alcohol lobby and associated groups it is underdone in terms of actual share of wine in comparison to overseas is important and impacts the entire industry. This in our view is the markets. The key is not to diminish the growth by confusing the shopper single biggest impact on curtailing the decline in overall consumption per and we are working with our colleagues in the King Valley to ensure the capita. The more support that can be generated from outside the industry home of premium Prosecco in Australia is in the North East of Victoria to manage the perception of self-interest will be important.”

Focuses for 2019

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NATIONAL LIQUOR NEWS FEBRUARY 2019 | 29

SUPPLIER

Connection is the key for the Brown Family Wine Group

BROWN-FORMAN

Brown-Forman to hone its premium edge Premiumisation is a trend that holds huge possibilities for Brown-Forman, says Managing Director Marc Satterthwaite, following a successful 2018.

B SUPPLIER

rown-Forman enjoyed a strong year in 2018 led by its biggest and most iconic brand, Jack Daniel’s, which maintained its position as the number one most valuable spirits trademark in Australia (IRI Value Sales MAT 11/11/18). The continuation of the premiumisation trend has been one that the Brown-Forman business has been able to capitalise on with significant growth across its premium portfolio, as consumers continue to drink less, but drink better. Gentleman Jack saw growth of +17 per cent year on year, while Woodford Reserve had a phenomenal year recording growth of +34 per cent. As you branch outside of whiskey and move to tequila, El Jimador was the number one growth driver, growing at 17 per cent and Herradura saw growth of 13 per cent. Marc Satterthwaite, Brown-Forman’s Managing Director, says “both tequila brands are positioned perfectly with over 50 per cent of consumer spend apportioned to our messaging around 100 per cent agave. And, of course, the new additions to our portfolio, GlenDronach, BenRiach, and Glenglassaugh single malt Scotches as well as Slane Irish Whiskey have quickly doubled in size over the past 12 months with what, we believe, is a very long runway. “It really is a wonderful time in our industry to see these brands continue to grow, whether small or large, and further reinforce BrownForman’s position as whiskey experts.” Another key category is the dark spirit RTD segment, which thrived in 2018, leading to some successful new launches. “With the category returning to growth last year (+ eight per cent), we see two clear trends driving the growth: bold full flavoured whiskey at one end, and lighter more refreshing options at the other end of the scale. “Double Jack is the number one growth driver for Bourbon RTD (measured in incremental dollars). The success of this brand saw us launch our first flavour extension Double Jack and Dry in August last year, and initial results are positive. The second big launch for us was Jack Daniel’s and Ginger Beer, our new favourite bar call that is a refreshing twist for the brand.” After its acquisition of BenRiach two years ago, Brown-Forman has taken a “grass roots approach” to marketing, which has resulted in significant growth for the three brands within the distillery.

Flavoured whiskey returns to growth The flavoured whiskey category is seeing 8.6 per cent growth, cinnamon whiskey is leading the charge, growing at +37 per cent while honey continues to see steady +2 per cent growth. Jack Daniel’s Tennessee Honey is the leading growth brand up +34 per cent. Last year we saw a return to growth for Jack Daniel’s Honey and Jack Daniel’s Fire as consumers are beginning to better understand how to drink these products. Plus, the accessible taste profile they have is an easy entry point for people exploring and coming into the category. We have put more emphasis on additional activity in-store on these brands which has certainly contributed to their growth as well. These brands play an important part of our mix, they help to support our core products and appeal to different consumers. The plan is to continue to build the brands, particularly Jack Daniel’s Fire through focused activities in the on-premise driving the key drink serve in relevant occasions and getting as much visibility for these brands in-store so consumers pick them up. We are also exploring smaller format spirit options to better capture consumers and shoppers who are looking to experience and discover new flavours.

“The new additions to our portfolio, GlenDronach, BenRiach, and Glenglassaugh single malt Scotches, as well as Slane Irish Whiskey have quickly doubled in size over the past 12 months. All signs are that these brands have tremendous potential and we are

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excited by the potential that they have in the Australian market.” As he looks ahead to 2019, Satterthwaite admits that a decline in alcohol consumption, tariffs and regulatory changes, as well as increased competition are all significant challenges that lie ahead. He is alert to questions that need to be answered moving forward and recognises opportunities in super premium North American whiskey. “It challenges us to think about our things differently: how do we compete for a bigger piece of a smaller pie? How do we structure and diversify into making our brands more viable through new channels of opportunity such as e-commerce? “When compared to Scotch the superpremium segments of North American whiskey significantly under-index. We have a portfolio of brands with Gentleman Jack and Woodford Reserve both ready to capitalise and drive this growth and deliver on consumers’ ongoing interest in discovery and better quality whiskey. A similar trend will continue in the ready to drink segment with continued growth in premium full flavoured RTDs. “Consumer interest in discovery of Scotch and Irish whisk(e)y portfolio is important. Single malts continue to grow in popularity among Scotch drinkers, so we will push to accelerate the distribution of our Scotch portfolio to capitalise on this trend.” As well as capitalising on emerging and growing trends, Satterthwaite also intends to accelerate collaboration within BrownForman’s trade partnerships in order to develop “longer term planning horizons” and ensure future success. “The retail shopper landscape is constantly changing in terms of how people shop, consume and share our brands. This means we need to work with our retail partners to help create experiences in-store that give consumers more than just a transaction and move towards creating a positive shopping experience.” On top of that, there are legislative challenges to overcome, whether it’s the “ongoing six month CPI rise” or restrictions on advertising from local councils. “Through our continued work with Spirits and Cocktails Australia, Brown-Forman supports a CPI tax freeze that would at least slow the everincreasing prices that Aussies endure on whether they purchase a bottle or a drink.”

Craft Beer-Barians Storm the Gate Nathan receives a call from his beer rep to let him know he has a case of limited edition Juicy as Phuck New England IPA a beer that resulted when a piece of rotten fruit fell out of a brewer’s beard while he was attempting to express how terrible mainstream music is in liquid form.

Fear grips Nathan as he posts to social media to announce the new arrival, “Get down to Liquor Barons Ocean Reef tomorrow for this limited edition IPA; we only have 1 carton so strictly 1 can each! First in best dressed, NO HOLDS” News of the legendary beer sends ripples through the hipster-verse. Nathan knows all too well that exclusivity is paramount in the realm in the beer snob. After all, every faux-flanno wearing hop-wanker wants to be the first to write a review of why the beer is overrated, despite the fact they’d go full Dustin Martin on their own mothers to get a can. Thanks to the joys of recent fatherhood, Nathan manages just a few hours sleep before getting up for work the following day. He pulls into the carpark and notices the entrance to his shop has been transformed into a stout-whisker shanty town. As he snakes past sleeping bags & camping chairs he thinks to himself, “who the hell would queue overnight for a beer”, then he remembers, this is Perth. Nathan is bombarded with unanswerable questions ranging from whether the water used was “fair trade” to whether the earthy tones are “biscuity or bready”. Suddenly, a beer-beret wearing dissident bails Nathan up, “you said no holds mahn, and I only count 20 cans”. Chaos breaks out as Nathan is accused of crimes against beer-manity.

While explaining he put some aside for his brother in law he hears a whisper from the rabble, “I hear he keeps a stash in the cool room”. Out of the corner of his eye, he spots a malt-muncher with hooped earlobes slip into the fridge and begin rummaging around like Idiot-ana Jones in search of the holy fail. He manages to stop this particular raid but is forced to pull a staff member away from stock-take to stand guard over the remaining tins.

retail banner group of the year

2011 . 2014 . 2015 . 2017

Frankly, this is a step backward for humanity. Later in the day, Nathan’s wife pops in with the kids to say hi. He holds his kids, points at the hipster trying to bribe his staff member with a shout out on his beer blog. He takes the opportunity to impart some fatherly wisdom, “please don’t end up like this kids”.

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

CAMPARI

Campari to ride the ‘orange wave’ into 2019 Simon Durrant, Campari’s Managing Director, says the company will continue to champion the Aperitvo movement in the year ahead.

W SUPPLIER

ith the global success of the Aperol Spritz and the rise of the Aperitivo occasion in Australia, Campari will continue to drive that movement in 2019, while also exploring new opportunities in premium spirits, low-alcoholic drinks and cocktails. After a few years away in the grocery sector, Simon Durrant is back in liquor and has been Managing Director of Campari Group in Australia, New Zealand and Pacific Islands for the last five months. He has relished finding out how the landscape has changed while he’s been away. “There’s been a lot of industry consolidation during my absence; and there have been changes to consumption styles with a focus on better quality and low-alcohol offerings. We can benefit from both of these consumption trends.” During his brief tenure so far, Campari has focused on remaining “at the forefront of development in the industry and driving brand advocacy through our on-premise offerings while continuing to ensure broad availability in retail”. Digital marketing, partnerships, a focus on responsible drinking and highlighting the Aperitivo occasion have also been core activations. “For us, 2019 will focus on the Aperitivo occasion, linked to a lighter style of convivial and discerning cocktail experiences. It helps us to introduce Australian and Kiwi drinkers to the Italian style of socialising and drinking. The Aperitivo occasion has been growing steadily over the last year and consumers have shown us they appreciate the genial and very hospitable way that Italians socialise and enjoy their alcoholic beverages. “The great example of how this category is gathering fans over the world is the global success of Aperol Spritz that is surging – as we like to call it – a real orange wave. Our continued support for Aperol and embedding of Italian drinking styles has led us to see some gratifying and proven changes in consumers’ drinking behaviour in that aperitivo space. And – in the sincerest form of flattery – we’ve seen a range of new products entering that category.” As well as the Aperitivo, Durrant sees further opportunities in low-alcohol beverages and Bourbon. “Our Bourbon business has had a real flash of Hollywood star power, as the work that Matthew McConaughey has done with us has really resonated with our Wild Turkey consumers. We see a part for our Bourbon beverages to play in the authentic craft beverage space”

Opportunities in 2019 for Campari

“The global success of Aperol Spritz is surging – as we like to call it – a real orange wave.”

32 | FEBRUARY 2019 NATIONAL LIQUOR NEWS

Campari also plans to expand social and digital marketing, as well as planning more traditional support for retailers like point of sale items, display bins, in-store signage and themed displays. “We’re increasingly making use of in-store tastings to drive trial of our brands with great success. This year, we produced an ‘all-in-one’ kit which helped us to standardise the shopper experience in stores at scale and it helps us to reach a broader audience to trial our signature beverages. “In the year ahead, we’ll continue to look more closely at how we can support retailers with their online shopping offerings and making the online shopping experience more attractive to consumers.” In the growing craft beverage movement, Durrant sees opportunities for premium spirit brands to shine, brands that focus on their provenance and authenticity at a time when these are placed at a premium. He cites the ever-broadening cocktail culture as an example of the opportunities out there. “All of these changes have fostered a much more multi-layered and exciting landscape for consumers which has increased the space that we work in and given rise to richer experiences of our beverages. “We need to be discussing how we keep a vibrant and cultured scene going in Australia and New Zealand with a fundamental understanding and practice of responsible service and drinking of alcoholic beverages. We are already in those conversations thanks to a number of our crossindustry partnerships, and these will only expand and deepen over time.”

• Premium spirits: “The authentic craft beverage business which has grown exponentially over the last few years in many categories starting from craft beer, increasing interest in provenance and authenticity, and giving rise to more premium brands across the spirits business. • Cocktails: “Consumers are rediscovering classic cocktails, which gives us the opportunity to expand the Campari experience with its wonderful range of classic drinks such as the Americano and Negroni cocktails that are rediscovering an exceptional popularity worldwide. • Low-alcohol beverages: “We have also seen the rise of lower alcohol beverages where we are well positioned thanks to our global priority brand Aperol and its global success with the Aperol Spritz signature cocktail – it helps to broaden the diversity of opportunities for consumers to choose their preferred experience.

COLES LIQUOR

Coles Liquor continues to deliver growth With Coles Liquor’s transformation strategy now into its fifth and final year the retail group has seen a steady improvement in revenue and store numbers. We chat with Acting Chief Executive Cathi Scarce about what we can expect in 2019.

Q. What is the strategy for the First Choice Liquor Market brand? We opened the first Liquor Market store as a trial in 2016, and since that time we’ve fine-tuned the offering to provide a broader range of products while retaining a low-cost operating model. Now, we’re combining the best of the Liquor Market offering with First Choice to create First Choice Liquor Market, offering a hand-selected range of wines, beers and spirits sourced from some of the best producers across Australia and around the world, including exclusive products not available from any other Australian retailer. The four existing Liquor Market stores were rebranded during 2018, and we’ll be transforming additional First Choice stores to the new format this year. Q. What challenges and opportunities do you foresee for Coles Liquor following the demerger? For most of our team, there won’t be any noticeable change as a result of the demerger from Wesfarmers. Our job remains to make life easier for our customers and that’s what we’re going to keep doing. In terms of opportunities, a major focus for us is how we address the changing preference of customers to drink less but better quality. We’re seeing that in a number of ways, like an increase in demand for sixpacks rather than cartons, more craft beer, more artisan spirits, wines that have a real story and

a regional identity, and more questions to our store team members about our products. So this is front of mind for us when making decisions on everything from ranging to store layout, signage, team member training and advertising. Q. You’ve just finished the fourth year of your five year turnaround strategy, it’s been positively reported to the ASX, so how is the plan progressing? We’ve seen a steady improvement in revenue as we continue to transform the business. In our most recently reported results for the first quarter of the financial year, we were very pleased to mark 12 consecutive quarters of growth in comparable sales. We’ve seen a significant expansion of our store network since the turnaround began – from 831 stores at the end of the 2014 financial year, to now over 900. At the same time we’ve optimised our network, replacing and renewing stores to improve the shopping experience for customers. We

Main focus for Coles Liquor in 2019 Like many other parts of the retail sector, our customers are increasingly looking for convenience, and that’s a major focus for us. We now have click and collect available at every store across all banners, and now that we’re doing same day and next day delivery, we’ve seen online sales grow at more than 20 per cent over the past financial year. Another important part of convenience is in having the right range. Customers are more interested than ever in trying new things, but they want to buy with the confidence that they’ll enjoy the product and that they’re getting fantastic value. One way we’re delivering this is through our portfolio of exclusive liquor products, which are continuing to collect accolades like our Story Bay Semillon Sauvignon Blanc picking up the Winestate Best Wine under $20 award in November – the second time one of our wines has won that prestigious award in the past three years.

“In our most recently reported results for the first quarter of the financial year, we were very pleased to mark 12 consecutive quarters of growth in comparable sales.” completed 163 store renewals for Liquorland over the 2018 financial year – that’s more than three every week and makes up more than 20 per cent of the Liquorland network, so our transformation team has been very busy. Now that Coles Group is listed on the ASX as a company in its own right, it makes sense for us to provide that extra detail, so we’ll continue to report Liquor separately from the supermarkets business. It’s part of having a more direct relationship with our shareholders, and the team is really energised by having that level of transparency and accountability on our performance. The growth we’ve seen in our underlying earnings is driven by improved sales growth, as well as expansion of our exclusive brand offering and productivity efficiencies. Q. Coles joined Retail Drinks Australia this year. What is it about the new direction for Retail Drinks that appealed to you? We’ve been very pleased with the approach being taken by Retail Drinks CEO Julie Ryan, which is to work for the benefit of the entire packaged drinks industry. There are obviously a range of different stakeholders and priorities to balance, but in terms of representing the sector to governments and regulators the issues we face are generally the same, so it’s important that the industry body is able to speak with the voice of all players in the market. From what we’ve seen so far, we’re confident the Retail Drinks is going to do a great job representing the sector as a whole.

NATIONAL LIQUOR NEWS FEBRUARY 2019 | 33

RETAIL & WHOLESALE

Q. What were the highlights for Coles Liquor in 2018? We’ve reached some major milestones in the past year including opening our 900th store and rolling out click and collect to every store in our network. There were also some highprofile awards for our exclusive wines that really underlined the work we’re doing with Australian winemakers to deliver fantastic products to our customers. Probably the most gratifying thing has been to see the ongoing improvement in our stores as we continue to progress our transformation strategy, and the positive response of customers to the work our team have put in over the past four years to deliver a fantastic shopping experience.

COOPERS

Moderation the key for Coopers Coopers in 2018

There were a number of new developments for Coopers in 2018, with more on the way according to Cam Pearce, Director Marketing and Innovation.

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Using the new malting facility: “The opening of our $65 million malting plant in November 2017 has given Coopers greater control over malt supply and quality. All Coopers beers are now produced using our own malt which gives us savings on malt costs and improvements in malt quality. It has also opened up a new market for the supply of malt to other brewers and distillers.”

fter a year full of new launches and exciting developments, Coopers is looking to reinforce its position within the market, while growing and exploring the new trends within the beer category. The launch of low carb beer Coopers Dry was driven by the increased interest in wellbeing among the Australian beer drinking public, a trend that Cam Pearce, Director Marketing and Innovation at Coopers, believes will continue to evolve. “While the low carb and mid-strength beer sectors are expected to remain strong in 2019, other forms of moderation are expected to become increasingly important. As the current wellbeing trend continues, we expect product benefits such as no additives, no preservatives and quality ingredients will become purchase drivers as well as being increasingly important to consumers. “While craft is all about flavour, the brands in the market that will see growth will be those craft beers that have high drinkability and are sessionable. Another growing area of the market is ultra-low or no alcohol beers. Overseas, these beers have attracted a significant proportion of the market. In Australia there is definite growth in this area and new products are entering the market to meet this demand.” The past year has not been without its legislative challenges – the Container Deposit Scheme (CDS) in NSW and “continuing twice yearly increases in beer excise”. Pearce does not expect a let up from the government this year either, but 2019 holds many possibilities, not least the opportunity to get further involved in the canned beer sector. “The Coopers ale can portfolio is a significant opportunity as we see the can format in strong growth. Cans are no longer solely chosen based on occasions such as camping or fishing. They are now a preferred vessel for many consumers, particularly ale drinkers within the craft segment. The release of

34 | FEBRUARY 2019 NATIONAL LIQUOR NEWS

15%

OF THE TOTAL AUSTRALIAN BEER MARKET IS DRY OR LOW CARB BEERS limited edition beers remains a live option, while new packaging options continue to be explored.” During 2018, Coopers enjoyed the benefit arising from its new malting plant, which opened in November 2017, giving the brewer greater control over one of its key ingredients, malt. However, there were challenges on a meteorological level, with dry conditions impacting barley yields and a fire at Ellerslie Hop Australia destroying much of the 2018 crop. Coopers has been able to secure its barley requirements for malting for 2019, but Pearce sees challenges ahead. “Greater variability in weather conditions will provide more challenges for farmers in the future, with good years mixed with more difficult seasons. However, considerable research is being undertaken on barley genetics and new varieties are emerging that will help mitigate these risks.” Looking to the year ahead, Pearce cites communication and responsibility as key targets for Coopers and talking points for the industry. “Coopers will continue to operate a service model that ensures we have regular contact with our customers, whether it is at a national retailer level, at store level or with our on-trade partners. Trade activation will be a priority as we look to improve point of purchase communication. “The industry needs to ensure that it is marketing alcohol in a responsible manner. All suppliers should be committed to ensuring that their marketing and packaging complies with the ABAC Responsible Alcohol Marketing Code to ensure we are protecting the community and also to ensure that we remain a trusted, self-governing industry.”

Brooklyn Brewery: “Our contract brewing arrangement with the US brand Brooklyn Brewery has come to an end. In 2016 Kirin, which owns Lion, purchased a 24.5 per cent ownership in Brooklyn, so it was a logical conclusion for Lion to eventually take over the brewing and distribution of Brooklyn. Coopers will continue to review and assess other international contract brewing opportunities.” 2018 Vintage Ale: “Our 2018 Vintage Ale was the first in the series to use our own malt with the brewers sourcing it from Westminster barley grown entirely on Kangaroo Island.”

“Cans are no longer solely chosen based on occasions such as camping or fishing. They are now a preferred vessel for many consumers.”

Still revolutionising after 90 years In its 90th year, De Bortoli Wines was awarded for its innovation, and Managing Director Darren De Bortoli intends to keep experimenting this year and for the next 90 years.

e Bortoli Wines (DBW) celebrated its 90th anniversary in 2018 with three awards at the Australian Liquor Industry Awards (ALIA). For Darren De Bortoli, Managing Director of DBW, winning these awards was an “honour” that he plans to defend in 2019 in true De Bortoli style – with innovation. “The De Bortoli team were extremely excited by the wins on the night. We always strive for innovation and ingenuity, and we plan to retain our ‘crowns’ by being at the forefront of trends, and using this to innovate our wines, bottles and labels to ensure our brands have maximum consumer and shelf appeal. “We are incredibly proud to still be a family-owned winery, three generations and 90 years on from when Vittorio [De Bortoli] first planted Shiraz grapes near Griffith. Continuing their legacy in pushing the boundaries of winemaking from Noble One, which is one of the most awarded wines in the world, to igniting Australia’s love of pale, dry rosé with the Rosé Revolution. We are committed to continuing this legacy to be at the forefront of winemaking innovation and look forward to seeing the next generation find their place in the company.” DBW’s approach was rewarded last year as the company won the inaugural Winery Innovator of the Year Award at the 2018 International Wine and Spirit Competition for the packaging of its Rosé Rosé. Moving forward, De Bortoli highlights the importance of standing out in a crowded marketplace. “Regardless of how good the wine is, you need to attract customers’ attention with eyecatching packaging. The colour of the rosé is also an important factor, as pale rosés let customers know that the wine is generally dry in style. The judges commented that the packaging was a visual, tactile way of bringing the essence of what’s in the bottle to the outside. This is what we always aim to do – demonstrate to our

De Bortoli’s 2019 growth plans • As the market leader of Botrytis wines, we aim to drive excitement to this category with a limited edition De Bortoli Botrytis Semillon by Florence Broadhurst. It is a lighter and more sessionable style which evokes a striking balance of fresh citrus characters and refreshing acidity. • Rosé is still one of the leading wine segments in Australia, with $10-20 rosé making up 70 per cent* of sales, and it isn’t slowing down anytime soon. We will continue to challenge the norm with positioning rosé as the perfect drink all year round, not just in summer, and also encouraging everyday indulgence for our sparkling wine portfolio. The key is to drive penetration for rosé as a lifestyle wine, beyond specific varietals or occasions, which is what makes it so appealing. •W ith our recent acquisition of Rutherglen Estates we look forward to exploring new GI opportunities and varietal blends that will continue to position us at the forefront of wine innovation and delight our consumers.

“Regardless of how good the wine is, you need to attract customers’ attention with eye-catching packaging.”

71.2%

ROSÉ PORTFOLIO GROWTH COMPARED TO 2017* customers the personality of the wine through the packaging and attract their attention.” Last year also saw De Bortoli Wines introduce Australia’s first Wine Advent Calendar and acquire Rutherglen Estates. So for De Bortoli, it was a big year, but not without its challenges, and he expects plenty more opportunities and trials in 2019. “The challenge we faced in 2018 was managing the rising cost of production and price elasticity of our wines. Since our beginning in 1928, we are proud to be continuing the work of Vittorio and Deen De Bortoli by pushing the boundaries of winemaking to produce premium wines that are enjoyed by everyone.” As well as innovating and experimenting with its wines, DBW is also committed to exploring environmental possibilities as 2019 moves forward. De Bortoli lists “sustainable, organic and low alcohol products” as major opportunities this year, with water security another major issue that the industry should be discussing. “We are already leading the industry in our quest to become a zero-waste winery and have received recognition for our work on wise water management and improved waste management. We are currently converting 10-15 per cent of our Riverina vineyards to organic. The challenge for us is to continue challenging ourselves with unique innovations and managing the continuous increases in costs. “The wine industry should be discussing water security in 2019. We need to ensure we are all working on improving social, economic and environmental outcomes for the Murray Darling Basin.” *Source: IRI Market Edge, Australian Liquor Weighted, MAT to 21/10/2018

NATIONAL LIQUOR NEWS FEBRUARY 2019 | 35

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DE BORTOLI

EDGEMILL GROUP

Supporting independents A series of launches and an embrace of the wine industry were the highlights for Edgemill Group in 2018. In the New Year, the Edgemill Group wants to see more collaboration and experimentation.

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hile other companies expanded their portfolios in 2018, the last year saw Edgemill Group bring a whole new portfolio into play, going from a “predominately spirits based business into a spirits and wine business”. Edgemill Group enjoyed double digit growth last year and launched BeGin Pink Gin and Old #15 ‘Bacon’ Bourbon. In addition, David Hounsome, the National Sales and Marketing Manager, is excited about increasing the acreage of Edgemill vineyards and to launch Black Bart Spiced Rum. He says that these new launches have tapped into the continuing trend of people “drinking less but better”. “Black Bart Spiced Rum is a small batch hand crafted spiced rum which signals our intent to supply excellent quality spirits that offer exceptional value in the higher value end of the market. Consumers are prepared to experiment and seek out innovative and different products. The consumer enjoys the ‘discovery’ of new products. “All in all, 2018 was a fantastic year with double digit growth and the ‘independents first’ motto for which we stand finally started paying off and delivering the kind of results our independent retail partners deserve.” Edgemill’s relationship with independent liquor partners remains the business’

Top Edgemill performers in 2018 • Spirits were and continue to be our first love and they are going from strength to strength. While they pose some significant challenges we enjoy innovating to support the independent trade with everything we do. • Our wine portfolio is being led by the Rare Penny Wine range which offers excellent drinking and great value closely followed by Matilda’s Ghost a regionally specific and authentic Australian wine. • As Kulara Estate, our vineyard in the Barossa continues to develop higher quality fruit. We will be in a position to deliver some exceptional quality wine that offers excellent value.

cornerstone and Hounsome believes that suppliers and retailers working more closely together is the greatest opportunity for 2019. “I believe the independent retailer should support suppliers who support them exclusively, and they are few and far between in the spirits category. The ‘indies’ should not accept second or even third best from suppliers. We are committed to their sustainable future and we believe by offering good quality, value for money products along with innovation, the independent liquor retailer can compete and flourish in the future and in a market where they can co-exist on their own merits. “Edgemill’s growth is directly related to the enthusiasm and engagement of our independent retail partners, so we will be seeking their support for Black Bart Spiced Rum and any other NPD we have planned for 2019. Their support fuels our NPD research and development and our trading model is simple – ‘Best price on a single case’ – so we can get on with the very real job of creating the point of difference they so badly need to compete effectively.” Hounsome believes that, as a family business, Edgemill has better opportunities to “innovate and operate with scale and pace” with everyone “deeply involved in every aspect of the business”, something which is critical when it comes to improving the working relationship between retailers and suppliers to drive growth. “I think it is very important for each to have a sound understanding of their respective businesses and to consider medium and long term strategies. All too often there is a shortterm view and the future is left to take care

36 | FEBRUARY 2019 NATIONAL LIQUOR NEWS

“We believe by offering good quality, value for money products along with innovation, the independent liquor retailer can compete and flourish in the future.” of itself, which leaves the way clear for more planned businesses to beat them to the punch. “Our independent retailers are slowly learning that their future lies in a portfolio that differs from the national chains. This has been done with success in the wine category but the spirits category is still flooded with large international equity brands and they have been slow on the uptake for Australian-made.” As well as working together to create strong working relationships and offers that will appeal to consumers’ tastes for quality and experimentation, Hounsome believes that retailers and suppliers across the board need to come together and shout louder in 2019 to combat the legislative challenges that lie ahead. “The liquor industry needs to become far more vocal and challenge the current taxation rules regarding alcohol in this country. The current taxes penalise everyone and do little to educate responsible consumption. Taxation seems to be more punitive and revenue raising rather than strategic and is not used for education and responsible sales and marketing programs.”

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GOOD DRINKS

From “branded house to a house of brands” When Gage Roads rebranded its sales and marketing arm to Good Drinks Australia, it was a conscious decision to demonstrate how the company has changed over the past few years. SUPPLIER

ollowing a steady expansion in its brand portfolio, Gage Roads had an enormous 2018, which saw it acquire Matso’s and rebrand its sales and marketing arm to Good Drinks Australia. For Aaron Heary, Chief Strategy Officer at Good Drinks, the rebrand was about representing this growing group from a “branded house to a house of brands”. “It provided us a vehicle to be able to better represent this growing portfolio in a more balanced way. The name Good Drinks actually started out as the code name for the project, but as it went on the name stuck. There was a humble simplicity about it, and we just wanted to cut through all the jargon. We are passionate about brewing, selling, and marketing good drinks... it’s that simple.” However, it wasn’t just the rebrand and Matso’s acquisition that made 2018 a massive year for Good Drinks. It was also a great year for Gage Roads Single Fin, which Heary hopes can be a springboard for 2019. “There’s a great opportunity for Good Drinks to continue building on the strong national growth across our brands. The Gage Roads range is performing strongly, with Single Fin now the fastest growing craft beer brand in the country.” With 2019 now underway, Good Drinks has more plans for the future. Opening breweries and taprooms in “key locations” on the east coast is expected to provide “fresh local beer” and “direct engagement with consumers” as the company seeks to establish a base there. In addition, new products will be joining the Good Drinks portfolio as its brewers work on new creations. “At this stage, we are not actively seeking any further acquisitions. But in this industry, you never say never. The Matso’s deal made a lot of

38 | FEBRUARY 2019 NATIONAL LIQUOR NEWS

sense because of our strong relationship with the family for more than a decade. During this time we helped them develop and brew the Matso’s beers at our Palmyra brewery so we were really close to it. In 2019, you’ll see a refreshed Matso’s Mango Beer, made using real Australian mangoes and unfiltered to enhance the freshness and flavour. “On our new products, I can’t say too much other than they are coming soon, so watch this space. You won’t have to wait too long to see new products in 2019.” The new year also brings plenty of opportunity for Good Drinks to get more involved in the prevailing trends within the craft beer world. And, in Heary’s eyes, two of the major talking points within the industry are the growing love for canned beer and the seismic change that is online shopping. “Obviously cans are growing strongly in the craft beer market, and we hope our move into cans with our strongest brand Single Fin will be popular with customers this summer. We’ve also launched it in a custom loose 24 can box with no wrappings or internal packaging, that makes it easy and simple to get your beers on ice or into the fridge this summer. We call it the ‘good times box’. “I think online retailing is going to change the way shoppers buy alcohol at some point in the not too distant future. Online retailing is surging in most other industries, having a major impact on bricks and mortar stores, but so far, the alcohol industry has been largely shielded. However once disruption technology allows you to have a cold six-pack delivered to your door within 15 minutes of ordering, the game will change and there will be winners and losers out of that.”

Highlights of 2018 • The Gage Roads Single Fin brand had a roaring year which according to IRI data grew more dollar value than any other craft beer brand in Australia. • L ast year was our first full year as the exclusive beer and cider supplier at Perth’s new Optus Stadium. Beer sales at the new stadium soared past expectations, pushing past the 1 million litre mark in less than 12 months, which is a testament to team. • During the year we installed a canning line at our Gage Roads brewery in Palmyra and cans of Single Fin have been released in time for summer.

“We are passionate about brewing, selling, and marketing good drinks... it’s that simple.”

HOUSE OF FINE WINE

House of Fine Wine exceeds first year expectations A year after Villa Maria, Société Jacques Bollinger and Henschke joined forces to create the House of Fine Wine, the distribution company is exceeding expectations and is set for a solid 2019.

“As a family company, the desire to leave something for the next generation is an everpresent and overriding business objective.”

leverage consumer trends and customer needs. “Our major challenge continues to be the aggressive retail pricing which in turn increases the importance in developing strong business plans with our customer’s outlining price vision and strategy to move in the right direction.” When it comes to trends for the year ahead, Bird says that while Sauvignon Blanc will remain a key variety for the Villa Maria business, the rise of rosé and Chardonnay cannot be ignored. “We will continue to champion Sauvignon Blanc as it’s the most important variety to the Villa Maria business and although the category has recently experienced a growth slowdown it is still the largest segment in the Australian wine category. It has high consumer loyalty and we know there are still a lot of wine drinkers just discovering or still enjoying Sauvignon Blanc and the Villa Maria brand. “We certainly can’t ignore the rosé phenomenon and resurgence of Chardonnay, and in regards to reds, Villa Maria and Henschke are well positioned to supply quality Pinot Noir and Shiraz, both experiencing the most significant growth in the red wine category.” And as for the industry overall, Bird hopes that sustainability will remain at the forefront of the agenda. “With our reliance on, and close relationship with the land, our industry must take the lead on sustainability. There is increasing pressure from consumers that brands are doing the right thing for the future, so we need to find ways to embed sustainable principles into the culture of our businesses.” As Villa Maria’s owner and founder, Sir George Fistonich says, “As a family company, the desire to leave something for the next generation is an ever-present and overriding business objective”.

Key messages from each of the HoFW’s brands: Société Jacques Bollinger: Our sales team is very excited about Champagne Ayala. Owned by Société Jacques Bollinger this contemporary house dating back to 1860 is producing a fresh, elegant style of Champagne. Aligned with the independent retail and on-premise channels Ayala will deliver trade customers with a quality Champagne that can return healthy profit margin. It’s been really encouraging to see the recent value growth achieved for both Bollinger Special Cuvée and rosé however in 2019 our focus will be on the launch of the 2008 La Grande Année in July. From arguably the best vintage in the past two decades Champagne aficionados will be seeking out this wine. Also keep your eye out for a special release later in the year to celebrate the next James Bond movie. Henschke: After a busy year the Henschke’s will be looking to build on the positive momentum gained from their 150th year celebration. Offering a wide range of varietals along with back vintage and channel exclusive wines the team has a comprehensive luxury wine portfolio for our supporting customers to consider. Villa Maria: Villa Maria has recently enjoyed healthy growth for Chardonnay, Pinot Gris and rosé. This year we will continue to provide a point of difference for customers by offering more options such as organics, alternative varieties and channel exclusive wines. Vidal winemaker Hugh Crichton will visit Australia later this year to launch the new vintages of his highly regarded Legacy Chardonnay and Syrah from the Hawke’s Bay region. With exclusivity to the independent retail and onpremise channels the Vidal range of wines continue to over deliver at their respective price points.

NATIONAL LIQUOR NEWS FEBRUARY 2019 | 39

SUPPLIER

t was an exciting 2018 for the House of Fine Wine (HoFW), with the business performing above expectations in its first full year of trading. HoFW was created in May 2017 and saw three family-owned and multi-generational wineries, Villa Maria, Société Jacques Bollinger and Henschke come together to develop a dedicated distribution business for the Australian market. David Bird, the General Manager of HoFW said that in 2018 “the focus was to improve product mix and average retail price across the portfolio, increase distribution across all states and territories, and provide best in class customer service”, which allowed the business to finish the year on a high. Looking to 2019, Bird says that it will be a commitment to customer education and developing strong business plans with customers that will be the key to another strong year. HoFW has an in-house team of certified WSET educators who in 2019 will focus on providing key customers with “best in class” education and qualifications, from WSET level one to level three. “We all have a role in helping to educate the industry which in turn builds future industry leaders, increases job satisfaction, customer service and attracts high calibre new talent. “Our successful ‘Museum and Rare’ program will continue to evolve and provide customers with alternative varieties, organics, small parcel back vintages and large format wines. We know consumer interest in alternative varieties and access to back vintage wines continues to grow, with Villa Maria and Henschke leading the way through this program. “We will continue to work closely with our key customers to gain better understanding of their business needs, profit drivers and opportunities, and create tailored brand activation and NPD to

INDEPENDENT LIQUOR GROUP

Onwards and upwards for ILG The Independent Liquor Group is putting the “surreal” events of 2018 behind them and are on track for what will be an exciting year ahead.

RETAIL & WHOLESALE

espite an attempted leadership spill that made headlines in October, overall 2018 was a strong year for the Independent Liquor Group (ILG), finishing with net assets of $19 million and in a solid cash flow position. Rather than letting the events of October slow down the business’ momentum, CEO Paul Esposito says they were instead “the catalyst of reshaping our future”. At ILG’s AGM at the end of October it was decided that Esposito would remain CEO, Chris Grigoriou would remain Chairman and a new board was voted in. And Esposito said, “Under the leadership of our current Chairman and the new board we have successfully implemented measures to ensure good governance and compliance for the benefit of our members.” He told National Liquor News: “As bizarre and surreal as the events in October were, we have moved on, thanks to a new board with a sensible professional approach providing good governance. This positive shift is very encouraging; it feels like we have not wasted time as the recovery process was easily achieved with overwhelming support from our members.” Overall in 2018 the positives far outweighed the challenges for ILG. The business experienced growth in each state across every category and trading concluded with double digit growth in sales across NSW and Queensland for November and December. “The switch to category management has definitely proved its worth. Having a more focused approach on each category has gained us better market insight that has helped plan our promotional campaigns. Resurrecting press ads and introducing seasonal campaigns have evidently strengthened our marketing approach. “This strategic operational change has also reinforced relationships with our supplier stakeholders. It has made both sides understand the partnership better and deeper, continuing to add commercial value mutually.” Esposito provided an update on the implementation of a new ERP system, which he said is near completion and is slated to roll out in September. “A decision has been reached and we have engaged the successful provider of ILG’s new ERP system. The transition schedule is being finetuned for the targeted roll out in early September. This will extend us the ability to streamline operational practices across the board, assimilating accounting, sales and inventory through to human resources and member relationship management.

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ILG’s highlights in 2018: • The rebranding of Super Cellars kept the team very busy in terms of the aesthetic changes. More importantly it initiated engagement and successfully secured more members for the co-operative. • Our public website’s refreshed contemporary feel and look came to fruition last year, allowing potential members to access information easier. Complemented by a new tax invoice, with a more user friendly format and source of reference for our members. • ‘Apply Easy’, our online credit application software created ease and swift requests for approvals, providing new members quicker access to trading with ILG.

“With three warehouses across NSW and QLD and the addition of the Melbourne retail operations, this upgrade to our technological infrastructure will contribute to improved productivity, increased efficiencies and reduced costs on top of the realisation of simplified processes.” The Melbourne operations that Esposito is speaking of is the new Liquor Co-op Bacchus Marsh, which opened in November and has been performing above expectations. It is ILG’s first venture into retail and also operates as a wholesaler, and Esposito said that he is “very proud of the achievements so far” at Bacchus Marsh. “Given this is our first attempt in retail, which is in direct reverse of our specialised wholesale operations and expertise, the results are incredibly rewarding. “The aim is to learn retail more, what works well and pass on this knowledge to our off-premise members. Our mission is to keep the longevity of the independent liquor retailers, the more we can help them and support their businesses, the better and stronger we will get to sustain our calling.” ILG is also set to launch a new premium retail banner in mid- to late February called Fleet Street. “[Fleet Street is] inspired by the former hub of London’s newspaper industry, ILG’s new premium banner will be on offer to a more specialised market. Potential business out there looking for a more urbane ambiance, who has the clientele for the same. The warmth and appeal of the rustic charm in a modern facility complemented by high end products in all categories. This is what we aim to deliver.” With so many highs and lows in 2018, ILG is ready and excited to take on 2019 and with the addition of Bacchus Marsh and Fleet Street, the future looks bright. “I’d like to take this opportunity to thank our member partners both suppliers and retailers for their ongoing support of ILG. “The farfetched events of 2018 have only braced the bond between the co-operative members. We are all looking forward to 2019 with excitement, as we progress with our major missions in Melbourne, Fleet Street and our new ERP System, all of which will contribute to a brighter future for our members and cement the co-operative’s significance for the independents in the liquor industry. “The key message for 2019 is we are Australia’s largest member-owned co-operative and we will continue to grow to secure the future of our independent members.”

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INDEPENDENT LIQUOR RETAILERS

Finding opportunities among the challenges With the introduction of multiple Container Deposit Schemes and a change is consumer habits and trends, the challenges have been many, but Independent Liquor Retailers is also finding new opportunities.

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here are many challenges facing liquor retailers at the moment, as Corey Leeson, General Manager of Independent Liquor Retailers (ILR), points out. This includes the introduction of multiple Container Deposit Schemes (CDS) across the country, as well as changing consumer habits, the growth of online retailing and an increase in the number of liquor licences being issued. But, while the challenges are real and many, so are the opportunities and Leeson believes ILR has the capabilities and plans in place to deliver strong growth for the group and its members. “Highlights for 2018 included our continued membership and volume growth, especially with the move into Queensland and the strategic review we conducted to ensure ILR’s future success,” Leeson said. “The ideas and projects that were born from that process certainly position us to be dynamic and relevant to our consumers while also providing better decision making and programs to drive our members’ profits.” He added: “The constant changing of consumer drinking habits and rise of local products has provided its challenges when constructing promotional programs for members. Each sub-region within states is seeing local independent brewers, distillers or wineries get more share of shelf and fridge space. “But I see this as an opportunity also for our members to have a point of difference over our chain competitors by supporting local products to have a different range offering.” The strategic review Leeson speaks of, has seen the company set out a three-year strategy, which looks at four key areas affecting the market over the next three to five years. These are: consumers, retail, category, members. Leeson said: “We summarised all aspects and developed key initiatives to line up with the findings. For example, we identified that we needed to understand our business better by analysing transaction and shopper data to provide insights into our member stores scan sales. “That way we can build more effective promotional plans and marketing activity which create the best profit for members and value for shoppers. To understand our transactional and shopper behaviour better we signed a partnership agreement with expert

Bulletin Brewing Co Last year, ILR launched its own independent beer brand – Bulletin Brewing Co – an innovative approach to the craft beer trend. Its Daily Pale Ale was “well received” by customers. “This is a long-term play for us and will take time for consumers to be aware of the product and to pick it up. We will be conducting tastings for trial and will also be releasing limited edition products under this brand over key periods like Easter and Christmas that will keep the craft beer consumer interested.”

“We want to understand our shoppers better and market relevant products at the right time.” data analysists, Summit Insights. “In just two months we have already seen some insights on what certain products drive basket spend increases and what products are bought with what and we are looking forward to more insights in the future. “The other key initiatives that grew from this was capitalising on the online retail space via click and collect and having this service available to members, developing our own brands that will help members’ profits and offer us a strong point of difference. An example of this is the development of our craft beer brand Bulletin Brewing Co. “We need to also step up our in-store shopper experience as our strongest asset is our convenience. A good shopping experience will keep customers coming back. Therefore,

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ensuring ranging, shop-ability, category management, promotions are all well executed in-store.” In looking at the more immediate future, that focus on transactional behaviour will be key for ILR, as Leeson explained. “ILR is focused on involving as many stores as possible in our scan data insights so we can analyse transactional behaviour and gain insights on what we can do to enhance profits,” he said. “We want to understand our shoppers better and market relevant products at the right time, and to ensure we are providing the strongest promotional marketing programs to deliver more customers through our doors. “Independents need to align to make us stronger and compete more effectively. Suppliers also need to provide independents with a point of difference over the chains to remain competitive otherwise we will continue to source our own products.” Looking at the wider market, Leeson believes that governments need to do more to help small business. He told National Liquor News: “There is a national decline in consumption, but more liquor licenses are being issued. Therefore, the value of a license is declining, and shoppers have more choice where to shop but there is less of them. “This makes no sense in our marketplace. The government needs to look after local businesses as they are the engine room of the economy. More local independent businesses will close their doors if this trend continues.”

HOUSE OF FINE WINE | PH: 1800 845 526 | orders@hofw.com.au

KOLLARAS & CO

SUPPLIER

Kollaras & Co. draws inspiration from the ‘hipster revolution’ Kollaras & Co. enjoyed a year of growth in 2018 with multiple award-winning brands entering its portfolio. Now Managing Director John Kollaras is looking to expand further.

he evolution of Kollaras & Co. “from a wholesaler to a brand-focused business” has been the principal focus of the company for the past few years, and in 2018 Managing Director John Kollaras was excited to start receiving recognition for the company’s portfolio. For example, Two Truths was named New Wine Product of the Year at the 2018 LSA NSW & ACT Retail Liquor Industry Awards for Excellence, and Kollaras has more products he plans to release in 2019. “This was an important moment for our whole business, when we talk about our goals and something tangible is delivered to represent successful delivery of them, it makes you proud. We have a few brands in the works and are gearing up for a massive year. “In addition to this, outside of continued growth coming out of Asia, our cruise business is expanding its footprint with the appointment of new resources in the USA to support our existing cruise business but also to support our focus for growing our brands into the global cruise market, a new frontier of growth for us.” Kollaras has also stressed the benefit of “bringing in capable, experienced and strategic minds”, such as Doug Misener, who has brought extra edge to the third-generation family business. “Bringing in capable, experienced and strategic minds is essential to any organisation that is challenging itself to grow and evolve. The appointment of many of our people from both within and outside the industry is representative of our recognition of just how important this is in our pursuit of organisational excellence.” Kollaras highlighted the advantages of running a family business, combining “nimbleness” with a more long-term approach. “Family businesses have a great sense of authenticity, both when dealing with internal

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Michael, Jono, Georgia, Tass and John Kollaras

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WON BY KOLLARAS & CO. and external stakeholders. There is a passion within them that is not easily curated as part of a corporate culture, it is in the DNA of a family business and can be very powerful. Further to this, there is a great benefit in being both nimble and not focused on often limiting time horizons of public companies, which gives you a platform for more long-term decision making.” The upcoming year will see Kollaras & Co. continue to target new drinking demographics and occasions, in particular the “hipster revolution”, which Kollaras describes as “fun, funky and mysterious”. “Two Truths was very much an example of success in this space and both retailers and consumers told us they want more of this.

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What is also an important differentiator for our brand portfolio is we focus equally on targeting the right value chain outcomes for our customers, so that the total package delivers for everybody. From brand development, this is as important a part of the brief as anything else.” That’s not to say that Kollaras doesn’t foresee challenges lying ahead in 2019 in the form of regulation. To ensure that things are done correctly, he is calling for unity from the industry, alongside informed conversations at all levels moving forward. “With the benefit of some perspective of a product with even greater regulation than alcohol, through our business unit Tobacco Imports Company (TIC), I think it is important that there is a united voice coming from our industry in the form of an informed position on good alcohol regulation in the future. There is a real risk across all layers of the liquor industry if regulation is approached incorrectly in the long-term. A sensible, industry wide conversation, including players big and small, is really important to ensure the right outcomes long-term.”

LION

Lion building on a positive year After a busy 2018, Lion is looking to keep moving in 2019, with Managing Director James Brindley pursuing more innovation and growth.

SUPPLIER

n the opinion of Managing Director James Brindley, “2018 was a very full year for Lion,” featuring wins at the Australian Liquor Industry Awards (ALIA), along with new launches and campaigns. But 2019 is here and there are new beers to launch and new business to be uncovered. A major trend that Lion has followed and responded to is the effect of health considerations on drinking habits, resulting in the launch of alcohol-free and gluten-free beers. “Mid-strength is an important category for Lion. With the launch of Heineken Zero last year, and Remedy Kombucha moving into our portfolio, we are very excited to pursue more alcohol-free options this year. We are also about to launch a new Hahn beer, which has been brewed with rice, water, yeast and hops. Hahn Ultra Crisp is a legitimate gluten-free beer, and is certified by Coeliac Australia,” said Brindley. In 2018, Furphy was rolled out nationally following growth of over 100 per cent and “overwhelming demand from publicans, retailers and drinkers”. In addition, Lion acquired Fourpure (UK) and the contract brewing, sales and distribution rights for Brooklyn Brewery in Australia. “Lion has a history of investing in excellent businesses and letting the founders keep doing what they do best, while providing financial and system support to get their products to more people.” As well as acquiring breweries, Lion has also started Malt Shovel, launched in 2017. Byron Bay, Eumundi and Bevy Brewing Co all feature in this collection that aims to provide customers with a broader range of beers. A brewery and brand in Townsville is on the way too. “Malt Shovel is a dedicated team looking to nurture a collection of new brands and breweries, and to make business easy for the licensed trade around Australia. The Malt Shovel model cuts out the paperwork with quick online sign-up on the Ordermentum platform, and next day delivery. We value the importance of having patience with new brands and allowing them to find their feet in the market, and for that reason Malt Shovel is the perfect incubator.” So, as we move into 2019, what craft beer trends can we expect? “We are seeing a return to simplicity in craft. Consumers are increasingly looking for traditional lagers and pale ales made simply and made well. Brewers are also focusing on sessionable beers that are perfect for the Australian climate. “There is strong interest in local breweries and drinkers are actively seeking out the unique experience they can enjoy by visiting a local brewery, tasting fresh beers, eating great food, and hearing the story behind the brewery. Another trend is experimentation with styles and ingredients, using things like hemp, fruits, herbs and spices.” Beyond beer sales and launches, Brindley sees 2019 as a year when the industry can look to reducing its environmental impact. Lion recently partnered with REDcycle, “a soft plastic initiative which makes it easy for people to recycle soft plastic items, such as plastic bags, straws, and even the plastic wrap from six-packs. These items have traditionally ended up in landfill, but now they can be placed in REDcycle bins at Coles and Woolworths supermarkets around Australia. The plastic collected is transformed into a range of products, such as park benches, bollards, signage and outdoor furniture. “In 2019, the time is right for the liquor and hospitality industry to think about what more we can do to tread lightly and reduce our environmental footprint.”

“Consumers are increasingly looking for traditional lagers and pale ales made simply and made well.” 2018 highlights for Lion • As one of the largest funders of DrinkWise Australia, we are proud of our work in promoting moderate consumption and reducing misuse. Lion supported the launch of two new educational advertisements as part of DrinkWise’s Fetal Alcohol Spectrum Disorder (FASD) Awareness Campaign. The ads focus on the risks of consuming alcohol while pregnant. • The national rollout of Furphy Refreshing Ale – a beer with a brilliant story and universal appeal – coincided with the brand taking the reins at this year’s Melbourne Cup Carnival. It was fantastic to be able to share the Furphy story with racegoers. We thank the Furphy family of Shepparton, in particular Adam and Sam Furphy for allowing us to cultivate this great Australian brand. • Following the launch of Iron Jack mid-strength in 2017, we were pleased to introduce Iron Jack full strength in 2018. The launch was supported by a brilliant television

commercial, all about the great mateship and loyalty that exists between a man and his dog. • In Queensland we celebrated XXXX’s 140th birthday at the Castlemaine Perkins Brewery in Milton by looking back on all the times XXXX has been a great mate of the Sunshine State. • The team behind James Squire joined forces with the Australian Wine Research Institute and the Queen Victoria Museum and Art Gallery in Launceston to recreate the world’s oldest surviving beer, The Wreck Preservation Ale, which became the biggest beer story of 2018, reaching more than 200 million people worldwide. • I ron Jack’s drought relief campaign ‘Beers for the Bush’ raised $1 million for Rural Aid, and we were delighted to host Christmas dinner for nearly 300 locals at the Armatree Hotel, where we handed over the cheque to Rural Aid CEO Charles Alder.

NATIONAL LIQUOR NEWS FEBRUARY 2019 | 45

LIQUOR BARONS

Liquor Barons sales up by more than a quarter Chris O’Brien, General Manager of Liquor Barons, sees plenty of room for improvement after a hugely successful 2018.

Opportunities in 2019 Cannabis: “The inevitable legalisation and broad acceptance of cannabis as a recreational drug is equally a threat and an opportunity, and one that our industry will have to make a decision on one way or the other. We believe there is strong opportunity to act responsibly and productively in this space, and it is certainly not a topic that we are afraid of discussing.”

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Ultra-Convenience: “The roll out of fast delivery will fundamentally challenge our retailers’ business models. Customer expectation in the delivery space has increased exponentially, and our plans around ‘Ultra-Convenience’ could see same hour delivery – something that would revolutionise customer experience, but as I say, will be a challenge for our retailers.” Streamlining: “Does a liquor store need on average 2,000 SKUs – should we only carry a bespoke range of say, 500? We will seek to further diversify our range, with a focus on customer driven ranging. Simplifying the retailer’s working environment while providing more control to them; ‘work smarter not harder’.”

t was a positive 2018 for Western Australia’s Liquor Barons, with the acquisition of new sites and members, a 26 per cent growth in retail sales from the previous year and a small increase in operating margin. And following the impact of the second year of the home advertising campaign, Chris O’Brien, General Manager of Liquor Barons, is optimistic for the year ahead. “This has been the second year we have enjoyed brand exposure on this scale and we are very optimistic about our 2019 plans in this area. Our focus on fostering a collegiate, unified culture means we have an environment where 70 odd small business owners get on and actually support each other. The overall success of the group and its strong brand have contributed to the continued growth of our cooperative member numbers.” O’Brien highlighted several categories that shone in 2018, including craft beer, craft gin, “quality and modern Chardonnays”, and international wine categories – particularly New Zealand Sauvignon Blanc and Pinot Noir, and French Provencal rosé, while cider continued to drop. Looking ahead, he sees provenance as the key driving factor for drinks. “Drinkers don’t just want to know what they’re drinking, they now have an increased interest in who made their drinks, and where they came from. This is ideal for our business model, as our staff have great product knowledge, are engaged, family-owned and operated, and they have an interest in passing on knowledge to customers in-store. We have seen a huge uplift in sales of products that fit this mould.” The Highly Commended Banner Group of the Year at last year’s ALIAs (and having won four ALIAs in the last seven years) served O’Brien as recognition for Liquor Barons’ business model, innovation and

“These days, drinkers don’t just want to know what they’re drinking, they now have an increased interest in who made their drinks, and where they came from.”

46 | FEBRUARY 2019 NATIONAL LIQUOR NEWS

26% GROWTH IN TOTAL RETAIL SALES

110,000

WEST AUSTRALIAN MEMBERS OF THE LIQUOR BARONS LOYALTY PROGRAM commitment, and he believes that success is achievable through consistent focus on these things. “For us, 2019 is not about re-inventing the wheel; we will consistently maintain our independent message and we will continue to focus on a superior level of customer service, in-depth product knowledge at a store level, a diverse and exciting range of product, and above all creating enjoyable shopping environments for our customers.” Policy changes are afoot in WA, with minimum unit pricing and a Banned Drinker Register being discussed, and O’Brien is looking forward to working with Minister Paul Papalia, Minister for Tourism; Racing and Gaming; Small Business; Defence Issues; Citizenship and Multicultural Interests, to find a workable solution. “We believe that while the intentions of the policy are good, it is a blunt instrument. We support the alternative Banned Drinker Register, being trialled in the Pilbara region of WA.” As the new year rolls in, O’Brien wants to take advantage of the growing economic confidence in WA, as well as focus on a new marketing campaign. “We are starting to experience a return to confidence when it comes to corporate hosting of celebration events, such as Christmas parties. It is essential that we not only cater to these events where we can, but that we make this a smooth and easy corporate decision. We are executing a dual-pronged targeted marketing campaign on both the digital and ‘out-of-home’ space. Coupled with an increased and highly engaged social media presence, we expect to be able to reach more people on more occasions.”

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LIQUOR LEGENDS

More Rewards on the horizon for Liquor Legends Challenges for the future of Liquor Legends are far outweighed by opportunities and ideas according to Managing Director John Carmody.

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or John Carmody, Managing Director of Liquor Legends, “the adrenalin kicks in whenever the prospects of Liquor Legends are spoken about”. After a prosperous 2018, he is looking forward to taking advantage of the numerous trends that are growing in strength while continuing to find new ways to engage and communicate with his customers. “We are more than eager to launch our online click and collect and delivery program through our existing app and website in early 2019. We hope to extend the quality and convenience of our unique offer to the online forum and generate a wave of interest, innovate digital promotional programs and maintain our competitive edge in the current market. “Our database is already giving us unquestionable opportunities highlighting trends as they form and allowing us to adapt to what our customers want and need. Feedback is imperative and provides us with the opportunities to grow and shape categories to create our own trends to satisfy demand. From hipsters in major metro to the west of the Great Dividing Range in regional areas, we understand each store’s catchment is unique to them. “Rewarding our members and celebrating our Legends is important for us and we plan to announce a tiered level system within our membership. Ultimately this means the more members accumulate and engage, the bigger their benefits will become. “Another exciting opportunity is our brand new detached bottleshop located just off the Pacific Motorway. The new store flaunts the fresh and upgraded executional standards of the group in its entirety.”

“Feedback is imperative and provides us with the opportunities to grow and shape categories.” 48 | FEBRUARY 2019 NATIONAL LIQUOR NEWS

406,000+

REWARDS PROGRAM MEMBERS Liquor Legends’ rewards program app, which was launched back in 2017, has been growing in leaps and bounds, and Carmody included “Bonus Rewards Points” in the back to back Christmas Catalogues. “This year we are focusing on greater engagement opportunities that provide best value for both our members and suppliers. We see our member rewards program as being a bridge for our suppliers to communicate directly to our customers via our rewards and recognition program.” If Carmody, who was recently invited to join the board of Retail Drinks Australia, has any bones of contention following 2018, it would be with the governments of Queensland and the Northern Territory for the Container Deposit Scheme (CDS) and Minimum Unit Price respectively. “The reality is that there are nowhere near enough container refund centres to reasonably meet community needs and it’s simply arrogant of the State Government to expect their constituents to travel more than 10 kilometres to redeem containers for 10 cents. We have an obligation to find efficient local solutions to minimise the financial burden imposed of approximately $2.40 to $3.00 per case on water, soft drink, beer and RTD. “The NT Minimum Unit Price (MUP) has also caused almost the extinction of cask and value wine sales in the NT, impacting small retail liquor businesses negatively.”

Some winning Liquor Legends • Toronto Hotel – AHA NSW 2018 Best Retail Liquor Outlet • George Tavern – AHA NSW 2018 Best Traditional Hotel Bar & Country Best Traditional Hotel Bar Hotel • Bartlett’s Tavern Rockhampton – Liquor Legends 2018 Retailer of the Year (back to back titles) • Scott Hosking – Liquor Legends 2018 Business Development Manager of the Year • Paul Cains, Urban Cellars Prohibition – Liquor Store Owner of the Year, LSA NSW/ACT Retail Liquor Industry Awards for Excellence

John Carmody talks trends • The biggest result has come from contemporary beer, with craft beer growing at an equally impressive rate. Now we are stocking beers from breweries within a walking distance from our office and seeing outlets with eight+ fridge doors dedicated to craft. This rapid expansion in craft is exciting because it offers the customer so many options and broadens the drinking occasions for beer. • The ‘health conscious’ consumer lingers with lower calorie, zero sugar and organic liquor on the rise entwined with premium and high ABV RTDs at the other end of the scale are equally flying. • P remium spirits have also intensified as a category, with both in-store presence and sales uplift across brands like Wild Turkey and Jack Daniels. • We are also seeing Lion and CUB move sponsorships from old brands to new or reinvented brands in the contemporary beer segment which seems to be the ultimate success factor for the category. • Rosé in its entirety has turned the wine segment on its head. Rosé has managed to capture all occasions, switch already entrenched customers to its territory and familiarise and tangle itself within the millennial age group and trend.

100+

LIQUOR MARKETING GROUP

LMG leads the way in convenience In 2019, LMG will continue with further retail and e-commerce improvements, as well as supporting its members with further innovation, says CEO Gavin Saunders. Q. How was 2018 for LMG? What were the highlights and challenges? Liquor Marketing Group (LMG) enjoyed a truly exceptional 2018 calendar year which saw strong growth along with recognition by the industry and shoppers during the year. Highlights for the year included being awarded the Retail Group of the Year at the Australian Liquor Industry Awards (ALIA) and being recognised by Shopper Tracker (survey of liquor shoppers) as the leading convenience liquor retailer for price, premium products, innovation, and as the only liquor retailer to improve overall customer satisfaction. These results recognise the health and appeal of the Bottlemart, Sip’n Save and Harry Brown brands. However, the absolute focus and highlight for the year was achieving significant growth for our members, with growth achieved in each month of 2018. The December 2018 quarter and month recorded the highest volumes on record for LMG with total national growth for the quarter approximately nine per cent (like for like also approximately six per cent).

Q. To what do you attribute LMG’s growth and do you expect it to continue into 2019? LMG achieved record growth across each major category and state for the 2018 year, which given market challenges across some categories (e.g. CDS) and states, is a significant achievement. The results being achieved for each calendar month, state and category as well as significant like-for-like growth, highlights the impact of the LMG marketing and retail support programs. This support and health of the Bottlemart and Sip’n Save brands will be enhanced further in 2019, therefore there is no reason to consider that 2019 will provide anything less than a continuation of the extraordinary performance achieved throughout 2018.

RETAIL & WHOLESALE

Q. What are the key strengths of LMG? Without a doubt, LMG’s key strengths are our brands, marketing programs, member support systems and teams along with our committed national membership base. LMG has the benefit of being an organisation that is owned, governed and operated solely for the benefit of our members. This allows us to invest in our programs with the goal of providing the best trading performance for each member without having to manage outside shareholders expectations. This investment in our go-to-market plans has driven the results achieved in 2018, which has an enduring benefit for the brand health and consumer appeal of the Bottlemart and Sip’n Save brands.

Q. How successful has the one-hour delivery trial been and how is the rollout progressing? The Bottlemart and Sip’n Save app and online with delivery integration was launched in August 2018. Results to date have been encouraging with 25 stores fully integrated and we have plans for another 100+ stores to be set up in first half of 2019. Initial results are impressive with an average basket size 73 per cent greater than in-store sales and approximately 45 per cent of customers re-ordering through the app. The real game changer for this route to market will be integration of social media click through for customers to buy from their local Bottlemart or Sip’n Save which will be enabled in 2019 with the roll out of the next tranche of stores. E-commerce provides LMG retailers the opportunity to continue to compete effectively through their stores, however adds the point of difference of app integration, online and delivery for the next level of convenience for their customers.

Q. What will be the main focus for LMG in 2019? The focus for 2019 will be further enhancing the investment in go-to-market plans and momentum of 2018 along with complementing these programs with the e-commerce platform for Bottlemart and Sip’n Save members. This platform offers our retailers the opportunity to engage their customers through the app/online and provide the convenience of delivery or click and collect.

Q. What innovation can we expect to see from LMG in 2019? Along with further retail improvements and e-commerce, LMG will continue to support its members with innovation during 2019. A focus for the coming year is providing our retailers greater access and deeper insight to their data and trading information with the benefit of LMG analytics. The provision of data and analysis provides

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Q. What consumer trends have you noticed? Consumer trends in liquor retailing are similar to the broader retail market. Shoppers are looking for greater convenience, whether that is through smaller top up shops or online and home delivery, and more information, inspiration and premium selections for their purchase choices. LMG supports our members to meet these consumer trends through premium programs, including ticketing which is designed to inform and inspire on shelf, along with retail improvements to enhance access and convenience for top up shoppers to navigate the store. The addition of e-commerce and delivery provides the opportunity to meet this segment which continues to grow significantly in liquor and all retail.

“There is no reason to consider that 2019 will provide anything less than a continuation of the extraordinary performance achieved throughout 2018.” our retailers the opportunity to identify areas of performance and opportunities for their retail versus benchmark and therefore improve profitability. Q. How do you see the retail liquor landscape evolving in 2019? I expect that the year ahead will provide a continuation of the trends seen to date, although at a much faster pace. Retailers who have not already done so, will initiate their investment in online and focus on premiumisation. Our Bottlemart, Sip’n Save and Harry Brown retailers are in a strong position to meet these retail trends with programs and systems already in the market.

MCWILLIAM’S WINES GROUP

An exhilarating and fast-paced new chapter Having successfully completed a refinancing transaction worth $15.8m, McWilliam’s Wines Group is refocusing its business and its brands on consumer trends and tastes, as CEO David Pitt explains.

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Q. What can you tell us about the strategic corporate partnerships MWG has been working on? MWG has been working with strategic partners Margaret River Wine Productions and Laguna Bay to take a long-term view at continuing to build future growth both domestically and overseas. We are thrilled to have successfully completed a refinancing transaction with both parties and look forward to MWG continuing to build upon its fine reputation with the support and vision of our partners and shareholders. Q. What does this mean for the company going forward? It means an exhilarating and fast paced new chapter in the MWG story. We are working with some great new and historical strategic partners who, like us have a long-term view for the development and prosperity of the company and the vision to elevate MWG to where it was and beyond.

current position and commence the process of determining where we want to focus to ensure we build a sustainable future for MWG. That process is still very much underway however it has allowed me to really work with our key stakeholders both internally and externally to identify how we can leverage our strong heritage to move our business forward within a renewed focus on our consumers. Q. And highlights? Making exceptional wine is always a highlight. Historically, MWG has always produced wines of great quality and provenance and that’s something that we’ve seen celebrated over the last year. We saw great success in the 2018 wine show circuit, in particular having our 2017 Mount Pleasant Old Paddock and Old

Q. Will it affect any of the current brands you own/represent? This is an opportunity for us to really invest in our core pillar brands and develop them with a clearer understanding of where the consumer is going. We are always evaluating how our brands resonate in market and what we need to do to continue pushing them from strength to strength while maintaining their unique identity. Q. What will the major focus be for MWG going forward? To be painfully consistent we need to ensure we have a real focus on what the consumer wants and not just make wines that we enjoy making; trends and tastes change and evolve. We want to not only create wines that people want to buy, but buy again and again to enjoy at any occasion. We know this is something that MWG has demonstrated it does well, 141 years young, and we plan to push this further, taking our stakeholders on the journey too. Q. Did you find 2018 a challenging year? 2018 was a big learning curve across the board coming back into an industry I left behind some time ago as there has been lots of change as you would expect. It was an ideal time for us to take stock as a company on our

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Will MWG be different with a non-family member at the reigns? “I don’t think it will change its essence or identity, and to me those are things to cherish with a company like this. The McWilliam’s family are still very much involved with the company, both on the board and within operations which I’m very reassured by. They are proud of their legacy and I certainly respect the support and guidance they are providing, the stories coming from their 141 years and still counting are incredible.”

“This is an opportunity for us to really invest in our core pillar brands and develop them with a clearer understanding of where the consumer is going.” Hill Shiraz awarded as the NSW Wine of The Year in the NSW Wine Awards. Similar success has been seen with our McW range with wines winning numerous trophies and medals from across the range. This collection really reflects the great skill of our McWilliam’s winemakers to over deliver in style and quality at any price point which is no mean feat. Q. Are there any market trends that you are getting excited about in 2019? Some interesting areas that I feel are going to gain more visibility certainly in this market are lighter style reds. We’ve seen the continuous shift in drinking style towards lighter, brighter, food friendly red wines and we feel it will only become more relevant. It’s a great opportunity for MWG as we have the expertise working with, and developing this style offering a great competitive edge. Another area we think will only be getting bigger this year is alternate varietals. Consumers are embracing the idea of alternate varietals and the great reception received especially when made in a medium bodied style, like our McW Alternis range. As the development of wine made to enjoy with food continues, we think this trend will develop and grow into exciting new areas. Finally, health and wellbeing are always elements that tend to crop up on the wine roadmap but how it develops its offering to engage consumers who are wellness conscious is a new frontier. A great development that exploded in Australia last year was the launch of canned wines and I think that the continued development of packaging specifically related to portion size will be something that will be a great step in bringing more people into wine and increasing consumption occasions for existing consumers.

CHANGE IS GOOD We are a fami ly rich in histor y. We are strong in member relations. We are committed to exceptional ser vice. Be a part of A ustraliaâ&#x20AC;&#x2122;s largest Liquor Cooperative, ser vicing the industr y since 1975.

For more information contact Andy Clement (NSW)

0427 846 902

www.ilg.com.au

Craig Stephenson (QLD)

0434 575 589

NIP OF COURAGE

Nip of Courage continues to champion Aussie distillers Five years after founding Nip of Courage, Kathleen Davies will have an increased focus on the ‘hosting at home’ occasion in 2019, as more consumers look for quality crafted cocktails at home.

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ip of Courage celebrated its fifth and “busiest” year in 2018, according to Founder Kathleen Davies. GIN4, a limited edition, “first of its kind” collaborative gin was created by the “gin producers in our portfolio”, while Nip of Courage was also part of the Emirates Wolgan Valley ‘1832 Gin’ project with Mikey Enright from the Barbershop and Stone Pine Distillery’s Ian Glen. “Our last major focus was drawing attention to amazing achievements of women in the distilling industry. Extremely unrepresented, we applauded and encouraged them through our Aussie Tipple gin cocktail packs and masterclass events, featuring them as guest speakers, something we hope to keep emphasising into the new year.” The last five years have seen a significant change in the craft distilling scene and while the “uptake of locally produced spirits has been a slower process than what craft beer and wine saw”, Davies has witnessed steady growth as more brands appear in Australia. And as far as she’s concerned, growth comes from support. “We have always supported local, rural distilleries and highlighted their craftsmanship, but we are also focused on bringing awareness to the whole industry. We aim to do this in our constantly updated distillery directory list and by supporting other brands’ events and through social media channels.” This year, Davies hopes to expand Nip of Courage’s focus from small bars into new territories and venues, with the ‘hosting at home’ occasion a major target. “The growth of people hosting at home has been a keen interest of ours, not only for our current stocked portfolio, but also with our bottled cocktail range by the Aussie Tipple Company. We would love to target those who have a growing curiosity about Australian craft, and not only provide the spirits but also ways to enjoy them. This was what spawned the Aussie Tipple idea, we would love to provide an off-premise solution for consumers planning to entertain at home who still want quality crafted cocktails.” The new year also brings its challenges for craft spirits, not least vying for attention in an increasingly crowded market and getting products and distilleries in front of consumers. However, Davies remains positive for the future that the category will grow together, utilising Australia’s unique flora. “Getting people to physically visit a remote distillery is a massive challenge and in turn the exposure and access to their product can be very low. Without a distributer, moving volumes can be very costly and coupled with slim marketing budgets it can pose as a massive barrier to getting Australian brands into the market.

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Credit: Jill Haapaniemi

“We would love to provide Categories to watch in 2019 Gin: “In past years the Australian gin market has seen growth through larger producers acting as gateway to craft spirits. Only recently have we seen smaller local brands really push through which has led to broader representation of distilleries around the country and I believe it will only continue to grow.” Whisky and rum: “I am particularly excited to see the growth of Australian whisky and rum consumption. The wait for whisky and rum to mature is often torturous for both trade and consumers, but many players have committed to larger and consistent volumes which are scheduled to be released soon and should reap the rewards in 2019.”

an off-premise solution for consumers planning to entertain at home who still want quality crafted cocktails.” “However, a key strength for distilleries is that Australia is home to an abundance of quality raw, unique, native botanicals. Another advantage is the growing consumer market for ‘home-grown’ spirits and more venues recognising the fantastic products being produced locally. As the sales channels expand for everyone, so too will the exposure of Australian craft spirits.” And so, with 2019 already well underway, what steps does Davies think the craft distilling industry should be taking to expand and thrive? “I feel the Australian craft distilling industry should be striving to gain a larger piece of the overall market, with a particular focus on their social media presence. The world has truly moved into the digital age and having a strong, clear marketing message across social media, regardless of how small of a budget, will be crucial in building brand reputation and exposure. “Another key factor in driving the industry into mainstream consumption that could be more openly discussed is the overall inter-industry support of Australian-made and owned. Seeing more local spirits being supported in national bottle shops, venues and bars would be fantastic for artisan distilleries in 2019.”

PATRITTI

Patritti to expand national distribution in 2019

n award winning 2018 saw Patritti enjoy domestic growth through an increase in online sales, as well as a boost to its export business, particularly in the UK, Germany, Poland, Sweden, China and Vietnam. The company also retained its red five star winery rating. In 2017, Patritti released wines for the domestic market and James Mungall, General Manager and Winemaker at Patritti, says there is more to come. “In 2017 we curated a range of wines for the domestic market, bringing our stories and wines home again. This year will see us continue to tell these stories and broaden our Australian footprint by taking these wines to consumers through tastings, sponsorships and advertising. “We’ve really had to consider our distribution model for Australia to ensure we achieve our brand objectives. We have confidence in our products, we’ve received great third-party endorsements and our strong shelf presence has been critical to our success in NSW and the ACT, but our distribution in other states remains limited. We look forward to securing new distribution partners in 2019 and turning this challenge into an opportunity for everyone involved.” An important thing for Patritti is its

South Australian wine scene “South Australia boasts a diverse range of wine regions and styles close to the CBD. Within an hour of Adelaide, we have the regions of McLaren Vale in the south, Adelaide Hills to the east and Barossa in the north, influenced by the ocean, high-altitude and warm inland temperatures respectively. “Each region may produce similar varieties, yet the resulting wines are vastly different in style. A little further afield we also have the Clare Valley, Coonawarra and Riverland regions, with many other smaller regions falling around the major regions, each adding to this diverse patchwork of regions and styles on offer.”

dedication to grape varietals that Australia hasn’t seen much of, such as Georgia’s Saperavi or Portugal’s Trincadeira. It’s a challenge, but a rewarding one. “Australia’s quarantine laws, especially when it comes to plant material, are some of the strictest in the world and for good reason. As a result, bringing vine cuttings into the country is a lengthy process. There are vine nurseries that assist with this process, which is making alternative varietals more accessible for winemakers and viticulturalists. “Once the vineyard is established it’s really about working with the grower and viticulturalist to determine the best practices for the variety. Watering regimes, pruning, canopy management and fruit development. It can be a bit of trial and error but you can’t make great wine from bad fruit, so it’s worth the effort. “Having our own winery and the ability to process small batches means we can get creative and try new things. We aim to get the best out of these alternative varieties when grown in Australian conditions rather than trying to emulate the wine produced in their native countries.” As “Adelaide’s only 100 per cent familyowned fully operational urban winery,”

Mungall also believes that Patritti has another source for its success. “Our story is unique, the people are real and our history is tangible. The company’s success lies in the family’s ability to be innovative and entrepreneurial.” One trend where Mungall believes Patritti leads the way is “drinking less but drinking better” or indeed just drinking less. Patritti’s response has been to make higher quality products and focus on its non-alcoholic grape juice and de-alcoholised wine products. “We’re seeing growth in Pinot Grigio and Grenache varietals and this is where we can have an impact. There has been a lot of talk about rosé and Grenache in the last few years and we expect these wines will continue to grow. There is potential for Pinot Grigio to be the next big varietal. Our Pinot Gris comes from the Adelaide Hills, a region that we believe produces some of the highest quality fruit in Australia. “We believe that to achieve significant long term change it should be driven by consumers, not stronger legislation. As an industry we can be part of the solution by offering quality low and no alcohol alternatives, providing choice for consumers and a sustainable product range within our own business to enhance rather than replace existing alcoholic product lines.”

34%

ONLINE REVENUE GROWTH FROM 2017

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After years of international growth, Patritti has been focusing on domestic fronts, while still innovating with grape varieties from around the world.

PERNOD RICARD AUSTRALIA

Pernod Ricard’s premium adventures Pernod Ricard Australia will continue to champion its premium credentials in 2019, while also exploring more adventurous options and reacting to changing consumer demands.

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t has been a year with many highlights for Pernod Ricard Australia (PRA), with a host of new launches including Beefeater Pink, Allt-á-Bhainne and Brancott Estate Identity, as well as the reintroduction of Glenlivet 12. But when Bryan Fry, Managing Director of PRA, thinks about 2019, there is one key word on his mind: premiumisation. “We need to continue to reinforce the quality and craftmanship of our wines and spirits. We have one of the greatest brand portfolios in the world. For example, premium Champagne has seen steady growth over the past several years in Australia, which is perfect for our GH Mumm Millésimé and our entire Perrier-Jouët range. However, we need to manage the fact that our supply is not bottomless, demand is outstripping availability, especially as it takes time and craftsmanship to create.” Beyond premiumisation, PRA is also looking at other major trends for 2019, such as “convenience, sustainability, the revival of gin, and the resurgence of whisky”, as the company looks to respond to consumer demands. “Our consumers are on-the-go more than ever before, and want quality wines and spirits, but also great experiences that go with them. We’ve tapped into this with the launch of cans for Jacob’s Creek Brancott Estate and Kahlua Espresso Martinis, which use smart nitrogen integration to bring bubbles to the surface instantly to recreate the creamy foam of an Espresso Martini. “Our consumers are keen to understand what our brands stand for and how they’re giving back to the community. We’ve focused this year on great initiatives including the Altos Global Sustainability Competition, and Absolut’s commitment to a CO2 neutral distillation process celebrated by the Laid Bare campaign. Pernod Ricard Winemakers committed to 100 per cent renewable electricity in Australia by mid-2019. “We are seeing more men drinking rosé, we are seeing more women drinking whisky, and the resurgence across genders and ages will play a big part in our activity next year, particularly for our latest release, Allt-á-Bhainne.” Allt-á-Bhainne, a peated Speyside whisky, was created to reflect the adventurous and unconventional consumer demands and Fry believes this “challenger whisky… will succeed in pushing the boundaries and meeting the needs of the whole new generation of whisky drinkers in 2019”. This year, PRA will also focus on communication, whether it’s improving online consumer activations or “maintaining a two-way dialogue” with customers. Making research products easily accessible on

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mobiles, capturing consumer data and making brand platforms more seamless are all PRA targets for 2019. “We’re developing a suite of engaging social content that can be easily accessed by retailers for use on their platforms, and we’re continually looking for new innovative digital initiatives. “Maintaining a two-way dialogue with all of our customers is essential to ensure that we are meeting their needs and maximising the strength of the portfolio in the market. Our role is to be the best possible conjugate between the product and the consumer. The key question we ask ourselves is how do we bring more value to the consumer than just price?” There are always new questions to be answered as each year passes and Fry thinks that the on-thego approach will continue to drive “demand for convenience and delivery services”, while responsible drinking and responsible practices are also topics requiring swift and decisive action. “We are working on bringing new skills and capabilities into our business to ensure we are adapting to the changes demanded by consumers. We also believe that it is critical that the industry remains united in continuing the fantastic work done so far with regard to promoting responsible consumption and building a more sustainable industry for the future. The continued growth of local wine, spirits and beer producers, as well as the growth of existing players, has seen positive job growth and economic contribution.”

“We need to continue to reinforce the quality and craftmanship of our wines and spirits.” Biggest brand campaigns of 2018 • Chivas’ Success is a Blend • Absolut’s Drop of Love • St Hugo’s first advertising campaign – For Love and Honour • New pack for Stoneleigh Wild Valley • Marketing activations at Melbourne Cup and Laneway Festival • Jameson’s one-off day festival • Altos’ sustainability drive

PORTER’S LIQUOR

Porter’s on track to hit 100 stores Giuseppe Minissale, the General Manager of Porter’s Liquor, has told National Liquor News that it is set to achieve its threeyear plan of 100 stores – with a more premium edge.

“We’re on track for the expansion and just watch this space around some of the promotions that will be a little bit left of field.” What are the biggest challenges and opportunities for Porter’s? • The biggest challenges would be craft beer and getting a gauge on what’s happening in that market. Understanding how consumers are jumping from one brand to the other and then trying to be ahead of that is a challenge. • A real key issue for me is that most craft breweries are under capitalised so their credit terms are really short and that creates issues for retailers if they really want to invest into craft beer. You can’t commit in volume or value and really invest when the craft brewers are expecting payment in 14 days so I think we need to find a solution for them. I think we need to find a vehicle that allows the craft brewers to get their money in 14 days but for retailers to receive volume benefits. I think the responsibility should sit on the shoulders of the craft brewers, but, we as ALM can help the suppliers and our retailers be strong in this space and obviously from an ALM point of view it would be an ideal way of bringing them all into the shed. • Champagne was challenging around Christmas. It was a really good footfall driver but had its challenges at the retail level. • The challenges then become your opportunities, and with craft beer and craft spirits we are really going to look at high value rewards for our consumers, we see that as an opportunity in our market. • Obviously the growth of the business and the new people coming into our business is going to bring us new energy and new ideas, for us to act on quickly, but we at Porter’s are up for the opportunities that will give us.

that three year plan. It looks like at the moment it is a lot of new greenfield but nothing internally is being swapped over as yet. It is greenfield or competitor stores making the enquiries.” Premium has been a real push for Porter’s over the last 12 months and will continue to be for the year ahead. “We will be playing into that premium category quite strongly this year,” said Minissale. “Premium alcohol, premium categories and premium promotions are where we’re going to be focused.” In 2018 Porter’s ran a gift with purchase promotion for Father’s Day where they gave away a pair of R.M. William’s boots on a consumer spend of $500, and this proved to be very successful. “That mechanic had hairs all over it in the initial concept, we thought it may or may not work, but it ended up teaching us a lot about what the consumer values and what the consumer will pay to get a good reward. And so in 2019, Minissale says “We’re on track for the expansion and just watch this space around some of the promotions that will be a little bit left of field”.

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ust two years after Australian Liquor Marketers (ALM) acquired the Porter’s Liquor business, the company is well planned to achieve its aim of Porter’s trading nationally in the next three years. At the time of the acquisition, all 25 Porter’s stores were transferred across to become one of the brands under Independent Brands Australia (IBA) and IBA began investing in the Porter’s model. Today, the Porter’s brand has a far more premium offering, and according to General Manager Giuseppe Minissale, it’s “the old versus the new” that is piquing the interest of consumers. Minissale said that the highlights of 2018 were a new catalogue design and the further rollout of the new colours and brand positioning for Porter’s. “The great marketing team at ALM, led by Cynthia Fernandez, have done a fantastic job. The way that we’ve gone from the old green and red to the new colours and the new design and brand positioning – all of the branding changes have been superb and really well received by the consumer.” The first store that was opened under the new look and feel was Porter’s at Roseville, and in 2018 that store went on to be named the New Liquor Store of the Year at the LSA NSW & ACT Retail Liquor Industry Awards for Excellence. “Version two is about to be rolled out and I just think that consumers like that fresh new look and the contemporary feel, and it’s why we’ve gotten to where we’ve gotten to.” Porter’s is on track to have this new brand positioning rolled out to the rest of its stores this year, and already the stores at Willoughby and Castle Cove have been converted. The focus for Porter’s in 2019 will be to continue to grow towards 100 stores nationally and Minissale says the business is “well on the way to deliver on target over the next three years”. He said: “We have a lot of interest from around NSW and interstate and we are very confident that we are able to deliver on

PROXIMO

Proximo prefers a premium approach SUPPLIER

Proximo Spirits Managing Director, Justin Casey, is celebrating strong growth across the portfolio while looking to the future and seeking out new opportunities.

ince becoming part of the global Proximo business, Proximo Spirits has taken a longer-term approach to brand strategy. The company took over island2island in 2017, and in 2018 island2island became Proximo Australia. Through all these changes, the company achieved double digit growth in 2018, which Managing Director Justin Casey attributes to his team. “The way the team has navigated the change has been first class. the changes made we will have even more focus on the longer-term strategy and execution of our plans. The mindset shift to becoming a brandled business has been an exciting transition.” The past year saw further development of the Irish whiskey category, with the launch of The Sexton, a “single malt with a striking black hexagonal bottle and enticing name for the new whiskey drinker”. In addition, Proximo handed over distribution of the Stoli Group to Think Spirits, a business in which Stoli’s parent company recently bought a majority stake, highlighting the importance of the Australian market to the global spirits industry. With a portfolio that champions premium brands, Proximo is looking forward to further growth in 2019. Indeed, with premiumisation only growing in Australia, it is within premium categories like gin, whisk(e)y, bitters, and premium tequila, where Casey sees the most potential for growth given current trends. “Whiskey and gin are the best examples of the premiumisation trend. Consumers are exploring whisky regions such as Scotland, Ireland, America, Japan, Australia and Canada as it’s a wonderfully diverse category. “Gin is another great example of consumers exploring the raft of flavours which have broken away from the traditional juniper-led product. The opportunity for further premiumisation in other categories is underway as consumers become more adventurous through exploring spirits in a broader sense.” Casey adds that tequila and rum – with their great variation and premium liquids – are obvious areas with huge potential. “The growth in The Kraken Black Spiced Rum’s

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“We will be utilising our premium spirit portfolio to leverage the consumer thirst for both exploration and refreshment.” footprint in Australia is incredible and we foresee even further opportunities for The Kraken to grow in 2019 and beyond. “Tequila and particularly premium tequila will feature more in 2019. The 1800 Tequila range has been growing at a phenomenal rate, and innovation in premium tequila and mezcals globally will be a great opportunity for Proximo to engage Australian consumers with agave-based products.” Alongside premium, Casey sees refreshment as another key category, with premium spirits also able to play within this market. The consumer trend towards low-ABV and non-alcoholic drinks over the past few years is not one to be ignored, with drinkers looking for what they perceive as healthier alternatives as well as options that are easy to make and mix for home entertainment – a huge trend that is only slated to grow in 2019. Casey believes that engaging at-home consumers, with Angostura aromatic bitters through the lens of the classic Lemon, Lime & Bitters serve, as well as a range of simple 1800 Tequila Spritz recipes, are key. “We will be utilising our premium spirit portfolio to leverage the consumer thirst for both exploration and refreshment. We will be focusing our plans in 2019 around leveraging key calendar dates and occasional drinking to talk to these trends with key occasions such as summer, through to Day of the Dead and Cinco de Mayo, providing a platform for consumers to experience tequila in long serves and in innovative new ways. “We also plan to further disrupt the dark spirits category with The Kraken Rum through more unique and engaging above the line (ATL) platforms designed to drive consumers in-store to trial the product.”

Three wins for Proximo in 2018 •K raken Rum: “We have seen the consumer engagement scores for The Kraken move significantly this year, which has been achieved through brilliant and creative above the line programs, coupled with relevant below the line support at the customer level. This has also resulted in fantastic sales growth.” • World of Tequila Program: “This is a key growth driver and we have been delivering this through our 1800 Tequila and Jose Cuervo Tequila brands. Tapping into the education and sociability of tequila is driving increased consumer interaction within the category. We are very focused on changing consumer perception from the shot occasion, to premium long serve drinks to educate and engage more people to discover tequila as an easy-todrink and refreshing product.” • Structural changes: “Proximo has more than doubled the number of personnel in the key account teams, has a new dedicated on-premise team, a Tequila Specialist and overall more customer facing roles. This is backed up by our marketing and head office support team.”

Re-Styled

F O R M O R E I N F O R M AT I O N O R TO P L A C E A N O R D E R , P L E A S E C A L L Y O U R A S A H I P R E M I U M B E V E R A G E S R E P R E S E N TAT I V E O R C U S TO M E R S E R V I C E O N 1 8 0 0 0 9 0 3 7 8

RED BOTTLE

Building on an award-winning year It was an incredible 2018 for the team at Red Bottle claiming both Liquor Store of the Year and Young Retailer of the Year at the LSA NSW & ACT awards, and Director Scott Towers explains how the group will build on this success

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hen Red Bottle Director, Scott Towers, says “we had a great 2018” it is no exaggeration. Not only did the group see tremendous success at the LSA NSW & ACT Retail Liquor Industry Awards for Excellence, there were all-round improvements across key metrics and improvements and refreshes for all its stores. However, Towers is adamant the group will not rest on its laurels and he said there will be increased investment in key areas in 2019. “I am very proud of the results we achieved at the LSA Industry Awards,” Towers said. “For a group of seven stores to be able to win Liquor Store of the Year, Young Retailer of the Year, have two stores in the top 10 and six stores in the top 50, and take home the Best Training Award, was a fantastic achievement. This is a great opportunity for me to publicly thank the entire Red Bottle team. “This great result comes from being very aware of who and what Red Bottle is to our customers; we don’t try to overreach and be something to our customers that we aren’t. We are the ultimate convenience liquor outlet and everything we do needs to promote convenience.” He added: “The team has continued to improve in everything that we do and I do believe we are close to being the best in independent retail – we certainly won’t rest on our laurels though and will be increasing our investment in staff training and recruitment in 2019.” As well as the crucial staff investment, part of not resting on laurels is investment in the stores both in terms of quality and quantity, as Towers explained to National Liquor News. “We have continued to invest in store refreshes and improvements,” he said. “All stores had some form of improvement from a coat of paint to a good clean right up to new fridges or entry doors – this is all part of continuing to improve our offering to our customers. “We have spent time and money refurbishing and relaying our stores to ensure they are warm, inviting, shoppable and ‘convenient’. “We have installed metal shelving and removed cut case displays, installed category signage, improved lighting, cleaned-up our ticketing processes, painted, cleaned and polished floors, installed additional fridge space, tidied up entries with automatic closing doors and new displays and reviewed our range constantly.”

Doug May from Lion presents Josh Towers the award for Liquor Store of the Year

Trend predictions for 2019 • I think there is big potential in Australian rosé, especially in the sub $20 price point. • Premium, boutique spirits are strong, with Australian gin and Japanese and American whiskey leading the charge. • Craft beer is selling strongly, with the independent beer market diverging into two markets – commercially available, sessionable styles growing very strongly and specialty craft rate of growth starting to slow down in the stores. • There is solid category growth in imported wines with South America and Italy leading the charge.

“We have spent time and money refurbishing and relaying our stores to ensure they are warm, inviting, shoppable and ‘convenient’.” Innovation is another crucial aspect for the Red Bottle business, with Towers saying that one of the group’s biggest advantages should be its ability to be agile and implement innovation in its stores. “Our customers are definitely looking for

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it and want that personal offer and something different in-store,” Towers said. “We just can’t keep doing the same old thing year on year. “The biggest hurdle to innovation in small business is the potential cost; both the dollar cost and the opportunity cost. Having strong supplier partnerships helps us out; we have recently installed a custom-built Jack Daniel’s display into our Pitt Street location. “Being retailers, we want to sell things, and we have seen a great uplift in sale over the entire Jack Daniel’s range.” With award-winning stores being refreshed and investments in people and training, Red Bottle is well-placed to deal with what Towers sees are the big challenges for the year ahead. “Government regulation has the potential to be one of our biggest challenges – not so much the regulation itself but often the way it is implemented and the way in which legislation is communicated to the industry and the community. “The ultra-convenient home delivery model has the potential to be a significant threat to the industry – while models like Jimmy Brings and Tipple have been working responsibly in this area, the fact is that anyone with an internet license and outside the responsible service of liquor legislation that packaged liquor licensed venues operate under has the potential to cause harm to the industry. “The key is that we have the confidence that Red Bottle has the right building blocks and people in place to ensure that we capitalise on the right opportunities that we have identified or as they come our way.”

Discover a contemporary collection celebrating six generations of McWilliam’s winemaking excellence. For more information contact McWilliam’s Wines Group on 1800 800 584 or your McWilliam’s Customer Account Manager.

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SOUTHTRADE

SouthTrade’s on fire Following a major company restructure in 2018, Ray Noble, Managing Director of SouthTrade, is predicting even stronger growth in 2019 across their portfolio with local craft spirits a key focus.

SUPPLIER

ecord growth could be seen as a major highlight for Ray Noble, Managing Director of SouthTrade, but the return to growth after a decade of decline for Southern Comfort, the doubling in size of Fireball and the expansion of Fever Tree’s footprint “come second to the successful restructure of the company while not losing our great family culture”. “Without doubt the major highlight for 2018 was the successful recruitment of exceptional new talent in key leadership roles following a major restructure undertaken to set up SouthTrade to be more channel and customer-focused. “Our challenge is being able to remain entrepreneurial and agile as we evolve into a more structured and better planned business. We have introduced a new team structure, new data and CRM systems, new brands and new planning processes over the last 12 months. “I am extremely confident we now have the talent ready to action our plans with key trade partners. We remain focused on building our brands through education and developing memorable experiences that engage consumers. “We are growing rapidly and changing with pace, so it is a very exciting time in the evolution of SouthTrade. Our mantra is ‘Dream Big; Get It Done; Have Fun’. I can proudly say we are living this every day.” Last year saw SouthTrade part ways with Patrón. Noble sees it as “a blessing in disguise for the business longer term” as it forced the company to explore new brand partners and “refocus our energy on opportunities still to be unlocked within our existing portfolio”. The acquisition of 666 Vodka, Mr Black, Adelaide Hills Distillery and a number of whiskies all

All SouthTrade Australian craft brands are in double digit growth Adelaide Hills +315% value vs. last year Mr Black +174% Starward +17% 666 Tasmanian Vodka +16% 62 | FEBRUARY 2019 NATIONAL LIQUOR NEWS

Things to think about in 2019 Bottled cocktails: “We see the demand of quality convenience bottled cocktails continuing to build as the cocktail culture expands into the home and pre-batch becomes more accepted in the on-trade.”

point towards SouthTrade’s new focus on local craft distilleries. “SouthTrade made the decision in 2018 to help champion the development of this exciting segment and are already reaping the benefits. I see an explosion in local craft spirit brands over the next few years then a consolidation where a small number will make it big while the others will continue more regionally or unfortunately close down due to lack of cashflow needed for working capital.” SouthTrade also stands ready to lead the resurgence of whisky in Australia, with Bourbon, Scotch, Irish, Japanese and Australian brands all within its portfolio. And Noble also sees India as an exciting new space to be uncovered. “We were impressed at the quality of the liquid and the great story, so are keen to help develop this new world whisky.” “For Fireball where over 60 per cent of the volume comes from the on-trade we are taking the shot occasion to retail with the rollout of the new six-pack 50ml and other innovation that appeals to our target drinkers. For Southern Comfort, we have some really exciting partnerships in place to rebuild equity and awareness for the brand. This includes a through the line collaboration with Barney Cools, a Dunlop Volley on-pack promo and a major branding partnership with The Bottle-O for the V8 Supercars. Lastly, for Fever Tree we will continue to educate on the premium mixers opportunity in the on-trade while expanding our grocery footprint and bring in new innovation.”

Local benefits: “I think with the exciting expansion of local craft spirits and the benefits this brings to the local economy we need to review the unfair taxation regime currently in place to help this grow.” Education: “We should always be focused on reducing alcohol related harm however I do not believe you will achieve this through more taxation or unworkable regulations. I am a big believer in achieving this through education and by putting more personal responsibly on ourselves as adults. Venues are running scared because the responsibly sits entirely with them which I think is unfair – we should take ownership of our actions and keep an eye out for your mates.”

“Our mantra is ‘Dream Big; Get It Done; Have Fun’. I can proudly say we are living this every day.”

STONE & WOOD

Stone & Wood celebrates 10 years

ast year marked a decade since Stone & Wood’s foundation and saw plenty of celebration, upgrades and new launches, such as Pacific Ale becoming available in cans, Green Coast Lager getting a brand refresh, an upgrade at the Murwillumbah brewery that increased capacity, as well as a relocation and rebuild of the Byron brewery. In addition, a new sister entity Forest for the Trees was created, alongside a not-for-profit entity, the InGrained Foundation, which aims to drive legacy fundraising efforts for the community. But for Ben Summons, Managing Director of Stone & Wood, reaching this milestone is not only a time to reflect but to look ahead to the next 10 years. “It seems like yesterday that there was only a handful of people in our team brewing and selling ‘that fruity’ beer Pacific Ale. When we started there were only 40 breweries, now there’s 600, and a lot of change with drinkers and customers. We’ve had to keep evolving and adapting. “We do see ourselves only 10 years young on a very long journey as an independent brewery and are even more excited about what’s to come. We’ve put a lot of focus on evolving many parts of our business in the past year, so the next 12 months will focus on consolidating those moves, especially our new look portfolio.” It has been a massive year for craft beer, with more breweries opening and new beers appearing on the scene in 2018, so what has Summons made of it all? ”We are now seeing drinkers’ tastes evolving quite quickly, leading to much more exploration of styles and flavours, more interest and acceptability of more

“We do see ourselves only 10 years young on a very long journey as an independent brewery.”

flavoursome beer, leading to drinkers expanding their beer repertoire overall. At the same time we see a huge proliferation of brands, but not necessarily a lot of differentiation. This is a challenge for both drinkers in choosing and retailers for getting their assortments right. “The ongoing acquisition of craft brewers from multi-nationals is a concern. The business model of brewer consolidation that has been happening globally and locally for years, is done in the interest of increased market share for the overseas owners, resulting in less real choice for the drinker and squeezes the little independent guys.” Summons’ plans for driving sustainable growth in 2019 revolve around quality and innovation above all else, “growing the ‘good beer pie’”, as he calls it. “Strong, quality and trusted brands like Stone & Wood play an important role in helping the drinkers navigate the sea of choice when they are trading up into the good beer space, or across the different segments. Our portfolio with Pacific Ale as an approachable craft beer, Cloud Catcher in the Pale Ale segment and Green Coast as a step up for lager drinkers, provides some good spread to help provide reliable trade up choices across different occasions. Over time we’ll also keep innovating where we think there is an opportunity or a sweet spot for drinkers and customers.”

SUPPLIER

As Stone & Wood celebrates its 10th birthday, Managing Director Ben Summons looks ahead to the next year and the next decade.

72% OF STONE & WOOD’S

EMPLOYEES ARE SHAREHOLDERS

Three key focuses for the craft beer industry Independence: “As a proudly independent brewer and a part of the Independent Brewers Association, we feel that we collectively need to continue growing awareness around what it means to be an independent brewer. People should support local and home grown businesses that are providing real diversification and choice in the beer industry, while adding real value to our local economies through job creation and investment in our communities.” Quality: “There are a lot of great beers on the market, but to keep the drinkers coming back to the craft fridge doors again and again, there needs

to be consistent quality available. Brewers need to prioritise and invest in quality systems to ensure their brands and the greater craft beer category is presented in the best light possible. Likewise care for the beer throughout the supply chain once it leaves the brewery is super important.” Responsible Drinking: “This is something we as an industry need to be able to talk openly and honestly about to be able to influence Australian drinking culture. We have always held the view of ‘drink less, drink better’ and ‘less is more’, and this is something that we feel all breweries need to lead by example.”

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THIRSTY CAMEL VICTORIA

Taking the initiative In 2018, Thirsty Camel Victoria began a series of initiatives to fuel their members’ profitability and improve the shopper experience. And more is planned for 2019.

RETAIL & WHOLESALE

ia Lloyd, General Manager of United Innkeepers Association Ltd (which oversees the operations, sales and marketing for Thirsty Camel Victoria), cites “price compression and competition” as the major challenges of 2018 but believes Thirsty Camel is “well placed” to meet these challenges as it moves into 2019. “The ongoing external market competitive challenges will continue to dominate the liquor retail trading environment. This will be especially challenging for the independent channel therefore it is important for us to optimise shopper missions and occasions to ensure the independent channel remains healthy. “Just as important, the rationalisation of major trading partner head counts is making it increasingly difficult for independent retailers to do business with them. This rationalisation has particularly affected independent suburban and regional members. The value of face to face relationships cannot be ignored.” One of the major highlights of 2018 for Thirsty Camel was its inaugural Summit, which was attended by over 200 delegates from more than 80 Victorian bottleshops as well as key supply partners. The key focus was Excellence in Execution, educating members on growth categories, tailored insights from Thirsty Camel’s exclusive Venue Capsule, which gives retailers an understanding of their key profit drivers, and the launch of a bespoke training program. “We successfully collaborated with our key suppliers to collectively deliver hands-on education across beverage categories, shopper trends and market insights to educate, empower and improve profitability for our members. This approach has cemented with our membership what and how the Thirsty Camel program will deliver for them and how important excellent execution is at the point of purchase.” In 2018, Thirsty Camel commenced its Perfect Store project, trialling new store configurations through four test bottleshops to improve the shopper experience instore, drive penetration into more profitable categories and increase basket spend. “In collaboration with key supply partners, we added shoppable cool rooms, wine education and navigation, premiumisation of the spirits category and

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3.1% VOLUME RISE IN THIRSTY CAMEL BOTTLE SHOPS OVER SUMMER

26% RISE IN HUMP CLUB ‘MY OFFER’ REDEMPTIONS 16% RISE IN HUMP CLUB MEMBER SPEND chilled execution of premix. From our learnings, we are creating blueprints for success which will be rolled out to the wider Thirsty Camel membership in 2019.” Thirsty Camel has also put strong emphasis on its shoppers in its 2019 program, with the V2 launch of the successful Hump Club loyalty program a finalist for loyalty program of the year at the Retails Awards 2019. “We will progressively roll out the launch of a tiered loyalty program that will reward Thirsty Camel customers for every dollar they spend in store, presenting a huge additional benefit to our shoppers and a great opportunity for our Members to further drive loyalty at the bottleshop level. We will also continue to utilise our customer segmentation research, tailoring our messaging and media mix to maximise impact for each identified segment. This research is underpinned by an ‘always on’ media strategy, utilising both traditional and digital media to connect the right message, to the right shopper, at the right time, ultimately driving sales for our retailers.” As we move into 2019, Lloyd sees other issues that the industry should be discussing, including price compression within beer and the NSW Container Deposit Scheme (CDS). “The temporary assistance package for small to medium-size businesses in the border region is just that, temporary and is coming to an end with no further visibility on how these businesses can be assisted.”

Mia Lloyd’s predictions for 2019 • The mainstreaming of craft beer will deliver growth to the all-important beer category as brewers develop more approachable ‘hero product’ SKUs to drive volume beyond casual exploration. • J apanese spirits are becoming the new must have luxury item, particularly in the whisky and gin categories. Sake is also gaining popularity. •W e expect to see growth from the premiumisation of spirits and in particular ‘Ginnovation’ with subtle flavoured, coloured and ‘beyond botanicals’ gins hitting shelves. • Consumers will embrace ‘make at home’ apéritifs and classic cocktails such as Aperol Spritz, Negroni, Martini and Old Fashioned as evident from their on-premise popularity. • 2018 was the year of rosé, and this trend will continue, with an increase in Australian brands replicating the popular dry French style as well as imports of French rosé by consumers looking for authenticity. • Prosecco will continue its domination of the sparkling category with other international styles such as Cava also gaining popularity in 2019.

TREASURY WINE ESTATES

TWE gets into the ‘refreshment’ game

ast year saw the strengthening of existing brands at Treasury Wine Estates (TWE), but there was also a plethora of new launches, which was a source of great excitement for Angus McPherson, Managing Director, Australia and New Zealand. “Following the runaway success of our Living Wine Labels with our 19 Crimes brand, in 2018 we expanded the augmented reality experience to Wolf Blass Yellow Label, Matua, and most recently, Squealing Pig. “TWE also launched its first-ever Sustainability Report, which outlines how we work to create long-term value through our Corporate Responsibility Program, as well as through effective management of environmental, social and governance topics.” However, perhaps the biggest innovation of the year was the introduction of wine in a can, which was launched under the A’tivo, Squealing Pig and T’Gallant brands. “We’ve been absolutely thrilled with their reception among consumers and their performance to date. The response we’ve had to our wine in a can range tells us that consumers love the convenience of the can format, while being able to enjoy the brands they know and love, without compromising on quality and taste. They’re quick to chill and easy to transport, making them the ideal drink for summer and spur-of-the-moment celebrations. I am confident about how these cans will perform over summer and beyond.” In 2019 there will be plenty more opportunities for TWE to improve and innovate, with McPherson citing Prosecco, Rosé, Pinot Noir and Pinot Gris as the “top varietals contributing to category growth at the moment and we have some exciting offerings in each of these categories”. In particular, he is excited about the canned spritzed rosé and the celebratory plans for Penfolds’ 175th anniversary year, as TWE looks to explore premiumisation and refreshment, and experiment with new marketing techniques. “Bringing more consumers into the wine category and expanding wine to more occasions will be our key incremental growth activity for 2019, while continuing to expand our heartland and drive premiumisation in the wine category. “One of the key mega trends that we’re focusing on, not only this year but into the future, is the refreshment category, with wine being enjoyed during occasions that might have traditionally been other alcohol occasions – such as summer afternoons and backyard barbecues. “The consumers’ interest in storytelling is reflecting the way wines must be marketed – augmented reality (AR) experiences such as 19 Crimes and the recently launched Squealing Pig AR experience, where consumers can watch the irreverent Curly Tales of Squealing Pig films plus create their own ‘Curly Tale’ to share on social media, are great examples of this.” Expanding his thoughts beyond TWE to the wider Australian wine market, McPherson cites ‘Brand Australia’ and responsible drinking as the key talking points he’d like to see in 2019. “Given the strong opportunities for Australian wine on the global stage, the wine industry should be continually focused on how we continue to grow ‘Brand Australia’, and keep driving the reputation of Australian wine as a premium, quality choice in export markets. “More broadly, we must continue the conversation and take action around encouraging adults to enjoy our products in a responsible manner. This requires a collective effort from producers, retailers and associated bodies. TWE takes its role seriously in marketing our wines in a responsible manner. We also 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.”

“One of the key mega trends that we’re focusing on is the refreshment category.”

SUPPLIER

Following the launch of canned wines in 2018, Treasury Wine Estates has more plans within the ‘mega trend’ refreshment space for 2019, according to Angus McPherson, Managing Director, Australia and New Zealand.

Wine categories that soared in 2018 Chardonnay: “TWE’s portfolio of outstanding Chardonnay dominated across the board and saw us pick up 20 gold medals and 11 trophies at local and international wine shows – a testament to the work and dedication of our world-class winemaking and viticulture teams.” Rosé: “One of the largest growth segments at the moment at more than 10 per cent of the market. Our Squealing Pig Rosé is an outstanding wine that became the number one premium rosé in Australia (volume and value) last year.”

NATIONAL LIQUOR NEWS FEBRUARY 2019 | 65

VANTAGE GROUP

Loyalty drives growth for 9/11 Bottleshops Vantage Group, which owns the 9/11 Bottleshops in Tasmania, enjoyed a highly successful 2018, and the launch of a new loyalty program will bring further opportunity for the group in the year ahead.

RETAIL & WHOLESALE

n 2018 the Vantage Group launched a new loyalty program for its 9/11 Bottleshops which led to growth in a number of its outlets and cost controls being well maintained. Retail Operations Manager Sharni Wise-Fenton said the new loyalty program will be a great opportunity in 2019, giving the group an increased ability to be agile and flexible in the market. “We launched a new loyalty program in 2018 to help us gain customer insights as well as provide us with an alternate way to communicate with our customers. This will continue to be an opportunity for the group and our ability to be agile and flexible in the market with our product range and programming. “Additionally we have trialled and changed some go to market strategies which are proving to be advantageous to the brand.” That ability for the group to trial and change strategies is something that Wise-Fenton looks at as one of its key strengths. She told National Liquor News: “Vantage Group owns all the outlets within the 9/11 banner, which is unusual in the independent market. It gives us a level of compliance, agility and execution that is very hard to achieve otherwise and we feel this should be attractive to suppliers as well as it puts us in a unique position within the market.” She added: “Our other key strength is that the 9/11 Bottleshop banner has been operating for over 25 years in Tasmania and has a strong connection to the local liquor producers. Our Tasmanian product range is extensive and has been highly successful for us for many years.” That localisation of the product range is a trend that Wise sees everyday on the shop floor, and is something she highlights as a big shopper change over the last year. “We see a strong surge in shopping for local products, particularly in the spirit and wine categories. We are also seeing the same trends in rosé, gin and craft beer that are being reported around the country. “The major change and challenge for us is the importance of new products and how we manage the tail end of our product range. Now, more than ever, there is a consumer base that has no loyalty to brand,

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it is about what they can try that is new and exciting. “Therefore ensuring we have space on our shelves, and cycle through products quickly and cost effectively with limited wastage is highly important. Adapting to this from a process and procedure point of view has been something we have had to work on to ensure we meet the customer needs.” That time on the shop floor also gives Wise-Fenton a particular focus on the key issues for the year ahead. She said: “With armed hold ups and crime being quite prevalent in our industry we need, as an industry, to be having better and more relevant conversations about the impact this has on our staff that are confronted with these situations and how the risk can be minimised to them. “The cost to them can be immeasurable and there potentially can be an ongoing detrimental impact to their broader lives. We need to lead the conversation about how we can lessen this impact and the perception that we are an easy target.” In 2018 Wise-Fenton was named as the third Australian Liquor Stores Association (ALSA) Young Liquor Retailer of the Year and it’s led to an incredible year for the young Tasmanian. That award has delivered a lot for Wise over the last year, in particular an observer seat on the board of Retail Drinks Australia, and it’s an experience she has thoroughly enjoyed. “This is an amazing opportunity, and one that I am very thankful to be part of,” she said. “Given the current timing with the transition from ALSA and into Retail Drinks, it’s a particularly interesting time to be involved and learn more about the industry and the direction moving forward. “This sort of opportunity also gives you more scope to expand your network and cement relationships with people that you otherwise would probably not get the opportunity to interact with.”

The importance of the Young Liquor Retailer award “I believe the competition recognises and encourages the next generation to engage in opportunities within the retail liquor field. Finding and retaining good passionate people is one of the main challenges we face as retailers. For many, the retail liquor industry is seen as a stop gap to get through university or as pathway before your next career step. As leaders within the industry we need to think about how we can engage and encourage people to forge a career within the retail liquor industry, ensuring the experience and knowledge we currently have is passed on and the industry continues to grow.”

“Vantage Group owns all the outlets within the 9/11 banner, which is unusual in the independent market. It gives us a level of compliance, agility and execution that is very hard to achieve otherwise and we feel this should be attractive to suppliers as well as it puts us in a unique position within the market.”

VERAISON WINES

Tapping into trends Veraison’s mantra of “service, knowledge and cooperation” looks set to help it continue the successes of 2018 into the new year. “Success will come from working closely with our trade customers, sharing information with each other, and providing the products that meet the demands of the market and therefore mutually increase our market share.” The year ahead promises plenty of opportunities for those able to spot incoming trends and do something about it. Biddle is fascinated by the “constantly evolving” Australian wine scene and expects changes in the new year. “Broadly speaking, the new generation of wine consumer is less set in their preferences than the consumer of the past and is looking to embrace the new and innovative. Grape varieties that few people had heard of a year prior can become part of the national wine vocabulary seemingly overnight. As a result, a snapshot of the current wine scene sees a diverse range of varietals, a broader range of styles, and increased accessibility and acceptance of international wines.” And moving forward, what other burning issues does Biddle think the industry should be tackling in 2019? “The changes to Wine Equalisation Tax (WET) legislation that came into effect in July 2018 is a topic that I think requires more discussion and understanding within the industry. The reduction in the WET rebate for producers is yet to flow through the industry, but will have an effect on profitability, employment and investment in some areas of the industry. “The other area for discussion is climate change and the effect of warmer temperatures on wine styles; and the effect of continued temperature changes on the suitability of grape varieties in existing wine growing regions.”

“Grape varieties that few people had heard of a year prior can become part of the national wine vocabulary seemingly overnight.”

Categories that impressed in 2018 • The wine category that most impressed in 2018, and one we expect will continue to thrive, is organic wine. Following the trend towards health and wellness, we’ve seen sales of organic, preservative free and vegan-friendly wines increase significantly. We are fortunate to be working with Windowrie Wines, who are at the forefront of organic production in Australia, and expect to see further strong growth in 2019. • Rosé continued to be a powerhouse in 2018 and shows no sign of abating. The notable trend we saw in 2018 was that the rosé season extended into the cooler months in the middle of the year, which indicates a category that is firmly entrenched, at least for the medium term. • Chardonnay was also a strong performer, with ‘old is new’ being the catch cry. The shoppers’ rediscovery of traditional Chardonnay styles has been met by winemakers embracing judicious use of oak to present modern, more elegant versions of the buttery Chardonnays of the 1980s and 1990s. • Premiumisation in the beer and cider categories is now an established trend and one that we forecast to continue. • More recently we have seen the growth in more ‘sessionable’ beer styles and the proliferation of full flavoured mid-strength (3.5 per cent ABV) craft beer.

NATIONAL LIQUOR NEWS FEBRUARY 2019 | 67

SUPPLIER

eraison Wines enjoyed a successful 2018, with its customer base growing and the distribution of its existing wine brands expanding. Founding Director Sam Biddle puts this down to the hard work and professionalism of his team. “Increased distribution of our existing wine brands was complemented by diversification into the premium cider, craft beer and Aperitivo categories, via our partnerships with Small Acres Cyder, Southern Highlands Brewing and SOFI Spritz.” And as we move into 2019, he sees further opportunities on the horizon, provided they maintain their standards in the execution of fundamentals. “The major opportunities in 2019 will come from identifying and tapping into emerging consumer trends. The most significant of these is the continuing global trends of sustainability, health and wellness, and natural products. The emerging shopper is increasingly health conscious and environmentally aware, and is looking to both the origin of the product they are consuming, as well as the way in which it is produced. Accordingly, the opportunities are for products in the wine, beer and cider categories that practise minimal intervention and use natural ingredients. “This trend is closely related to premiumisation, the now established trend of ‘drink less, drink better’. The challenge for all of us in 2019 will be in maintaining the propensity of the consumer to trade up, in the face of economic uncertainty and the potential squeeze on household income.” Biddle believes that Veraison’s core principles of “service, knowledge and cooperation” will stand it in good stead moving into 2019 as it seeks to support the retail trade and succeed through collaboration.

VINOMOFO

Vinomofo returns to the black In 2018 Vinomofo returned to profitability and CEO Justin Dry has no plans of slowing down in 2019, with international expansion and some exciting new projects on the cards.

O RETAIL & WHOLESALE

nline wine retailer Vinomofo enjoyed a successful 2018 with the business returning to profitability, and in 2019 it will continue to grow, both locally and internationally. CEO Justin Dry told National Liquor News that 2018 was a strong year for Vinomofo with overseas markets scaling quickly and Australia continuing to grow strongly. “Continued growth along with the normalisation of marketing spend in 2018 brought us back into the black as planned,” he said. “[And in 2019] we will continue to double down on our current efforts plus look at further opportunities to partner both here and globally.” Since its launch in 2011, Vinomofo has grown its membership base to around 600,000 loyal “Mofos” across Australia, New Zealand and Singapore. And in 2019 the business will turn its attention to the US. “Managing a growing global footprint comes with significant challenges but it’s also one of our greatest opportunities,” said Dry. With no firm launch date in place yet, Dry said that they are currently finalising the licensing for the US market and working through potential partnerships. He said, “[Our] entry strategy changes depending on the market but generally speaking, we go in grass roots, ground up. Building the community from oneon-one to one-on-100 and beyond. “There is always a big focus on events, PR and delivering the best possible country specific user experience.” In 2019, Vinomofo plans to improve that user experience with an increased focus on online content, events and partnerships, as well as a “secret project” that is yet to be announced. Dry said that 2019 will be all about “delivering the best possible experience for our Mofos” and that there are a few “exciting major projects in the pipeline but I can’t talk about these just yet, so watch this space”. “However, what I can say is we will continue

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to expand the content side of Vinomofo and our involvement in physical events and activations.” In 2018, Dry was named as one of the foundation board members of the newly formed industry body, Retail Drinks Australia, formerly the Australian Liquor Stores Association (ALSA). The new direction of Retail Drinks aims to “enhance the freedom to retail responsibly” and Dry says that it’s important to have a single association representing the entire packaged liquor retail industry. “I think it’s super important to have an association whose purpose is to focus on and advocate for the industry as a whole. As a collective we can have a much larger impact in driving the right conversations and outcomes. “One of the major challenges for our space is that regulations are constantly changing and they can have a huge impact on our businesses. Hence it’s important to have an association that understands what is happening across all territories and can apply the lessons learned from one state to another.” And for Dry, a key factor that the industry needs to work on in 2019 is “how we can embrace new and disruptive ways of doing things, but at the same time, avoid reactive and short-sighted policy from governments”.

Clicks and mortar In January, Vinomofo announced it would permanently open its warehouse for wine tastings, click and collect and on the spot sales, five days a week. This is the first permanent physical retail presence for Vinomofo and Dry says the move has enabled the brand to bridge the gap between online and offline, which is a challenge for any e-commerce retailer. “The retail landscape is changing rapidly, but creating strong relationships with your community is and always will be one of the best ways to build a great business.”

“The retail landscape is changing rapidly, but creating strong relationships with your community is and always will be one of the best ways to build a great business.”

Trend predictions for 2019 • The more obvious trends are the increasing popularity of rosé, Prosecco and natural/ biodynamic wines – and yes I do believe these will continue in 2019. • We also continue to see an increasing desire to build deeper and more real relationships with brands and the people behind them. This extends to an increasing number of wine consumers needing to feel like the brands they are buying into are aligned with them in terms of values.

START CELEBRATING WITH BOTTLEMART (WINNER OF BEST RETAIL GROUP AT 2018 ALIA AWARDS)

BOTTLEMART IS WINNING WITH THE SHOPPER1 AND THANKS TO THE INDUSTRY, WINNING AT 2018 ALIA AWARDS. THE DRIVING FORCES ARE OUR FAMILY OF RETAILERS WHO REPRESENT THE BOTTLEMART BRAND ON A DAILY BASIS.

SO, CHEERS TO YOU AND START THE CELEBRATIONS WITH BOTTLEMART!

Call us now to find out how LMG can grow your business. New South Wales Aidan Desmond 0427 250 618 | Queensland David Gyte 0411 039 723 Victoria Chris Christofi 0401 714 257 | Western Australia Mike Stubber 0419 992 542 South Australia & Northern Territory Simon Rowe 0417 417 886

Leading convenience liquor retailer for price perception, innovation, premium products and shopper satisfaction.

WILLIAM GRANT & SONS

A premium education Following an action-packed year, Williams Grant & Sons is focused on promoting its premium portfolio through education, inspiration and innovation. SUPPLIER

he importance of provenance, experimentation and premiumisation were writ large for William Grant & Sons (WG&S) in 2018, with strong performances from brands that emphasise and embrace these traits. Hendrick’s, Monkey Shoulder, Glenfiddich and The Balvenie all enjoyed a strong year, while Ailsa Bay was also launched in Australia. For Colin Rochester, General Manager ANZ for WG&S, the whisky scene, like other spirit categories, is all about authenticity and experimentation. “Consumers are looking to truly experience the whisky category in its entirety and not just the liquid. They are increasingly interested in provenance, the process and the stories behind a brand. Authentic brands with a clear point of difference, just like Ailsa Bay, are the ones that will win in this context. “We expect to see continued recruitment of new and younger legal age drinkers into the category. This is happening as the perception of single malt changes, increasingly being viewed as an aspirational category for those younger drinkers seeking to explore and discover new experiences in all aspects of their life.” As well as whisky, Rochester saw premium gin as the standout category of 2018, with some of his customers citing premium gin as having “accounted for nearly half of their spirits growth year on year”. “Hendrick’s has been instrumental in leading the dynamic growth of super-premium gin and continues to perform strongly.” However, while premiumisation is a growing trend, it is also accompanied by a desire for accessibility from consumers who can find certain categories or cocktails slightly daunting. Moving forward in 2019, WG&S intends to showcase its premium spirits range, but also to “inspire and educate” consumers. “Our desire is to create a more accessible and explorable category. Breaking down restrictive rules, establishing balanced price ladders, and drawing in new drinkers through innovative production processes and accessible

25%

YEAR ON YEAR VOLUME GROWTH OF HENDRICK’S serves are some of the ways we are doing this. “Education and inspiration continues to play a key role, especially in whisky. Our vision is to be the ‘Scotch whisky experts’ in the eyes of our customers and partners. We will focus on supporting our retailers and their shoppers in their knowledge of our brands and the category, in addition to engaging with more consumers than ever before through significantly weighted campaigns. Throughout 2019 we will be looking to add a number of exciting new expressions across Glenfiddich, The Balvenie, Grant’s and some new to market innovation. “We believe there is a significant opportunity in premium social consumption moments. Q1 2019 will see the ongoing rollout of our cross channel summer drinks initiative which features Hendrick’s Gin, Sailor Jerry and Monkey Shoulder. It is aimed at inspiring and educating consumers about simple premium serves that can be enjoyed at bars nationally and then replicated at home. Research tells us that while consumers are looking for inspiration, over-complicated cocktails and serves can be intimidating, so we have created a suite of simple ‘how-to’ films to demystify the world of premium mixed drinks.” Rochester has also highlighted the growing relevance of health and wellbeing across all facets of life and thinks this is something the industry should think about to a wider degree. “Behaviours have changed more than ever, with the focus on the experience of drinking and not just consumption on its own. As an industry we have a responsibility to support the ongoing wellbeing of our industry people.”

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Achievements in 2018 • Grant’s Family Reserve was relaunched to Grant’s Triple Wood highlighting the brand’s triple wood maturation process. • Glenfiddich Experimental Series, which included the launch of Winter Storm, creatively used heavyweight media to reach both consumers and shoppers in the lead up to Father’s Day. • Hendrick’s Gin went to market with its largest integrated campaign to date, handing out more than 5,000 cucumbers in Sydney and Melbourne to adults who exchanged them for Hendricks G&T’s in on-premise venues. • The Balvenie celebrated 25 years of the Double Wood process; a pioneering feat that changed the whisky industry forever while its creator, David Stewart MBE, named 25-year-old Kelsey McKechnie as his new apprentice malt master. • We relaunched the Sailor Jerry, complete with a refreshed bottle, ATL and festival support. These changes are critical for 2019, with increasingly crowded shelves and back bars, and softening category conditions within spiced rum likely to continue.

“Our vision is to be the ‘Scotch whisky experts’ in the eyes of our customers and partners.”

Family is at the heart of everything we do, we are Brown Family Wine Group. For 130 years the Brown Familyâ&#x20AC;&#x2122;s sense of adventure and innovation has led us to create new wine varieties, push boundaries and develop vineyards in some of the best regions in Australia. We have evolved from a single brand to a family of brands that now includes Brown Brothers, Devilâ&#x20AC;&#x2122;s Corner, Tamar Ridge, Pirie and Innocent Bystander.

From the first vintage in Milawa, in Victoriaâ&#x20AC;&#x2122;s King Valley in 1889, to the multifaceted business we are today, we pride ourselves on our family heritage, our connection to consumers whilst being a valuable partner to our customers. Above all is our desire to remain a sustainable and successful family owned company for generations to come.

YEALANDS

Continuous innovation Yealands Wine Group CEO Adrian Garforth is excited for 2019 to be filled with sustainable growth and innovative initiatives, following a year of big change.

D SUPPLIER

espite a challenging 2018 for Yealands, the business heads into 2019 with a positive outlook, according to CEO Adrian Garforth. Founder Peter Yealands retired last year, prompting a “strategic review” and the “resolution of a number of historical operational issues”. In addition, 2018 saw Marlborough Lines buy the remaining shares in Yealands Wine Group, while the 2018 vintage was “another challenging one for the entire industry”. “Against this background, Yealands remains exceptionally buoyant exceeding volume targets, seeing fantastic growth across all markets and we continue to develop our vineyards with the addition of a further 80 hectares of plantings this year. “Marlborough Lines are incredibly supportive shareholders and have provided great stability over the last 12 months of change. They have brought a higher degree of governance to our operations and share our passion and excitement about the future. With their backing we have recently acquired a further 110 hectares of prime vineyard land for development.” As we move into 2019, Garforth sees challenges ahead from the global economy, but believes that sticking to Yealands’ core principles is the way to continue the growth and development the company has enjoyed so far. “We believe our commitment to sustainability, our vineyard ownership model and outstanding product quality remain as genuine competitive advantages and the reason we continue to develop our existing business. “Global economic uncertainty (Brexit, Trump, China slow down, etc.) and the impact on currency exchange will mean that we will need to remain as market orientated and nimble as ever if we are to respond

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quickly to the challenges and inevitable opportunities that will inevitably ensue. We genuinely believe that the value of our brands Babydoll, The Crossings and Yealands truly resonates with consumers.” This new year will see Yealands implementing a number of strategies aimed at innovation within the business. One of the major innovations will be to look at ways to experiment with its principle grape – Sauvignon – as well as exploring other varieties. “Sauvignon remains the core of our offer, and we are continuously exploring ways in which we can produce ever more interesting and complex styles with this variety. In addition, we will be giving extra focus to Pinot Noir and this year will be planting more Chardonnay and also Albariño.” This diversification of approach is supported as the company looks to explore all options moving forward in a world where “sustainability, diversity and innovation” are key, driving factors in the wine category. “We are looking at leveraging our current listings and growing these organically through our innovation activities. Although much growth is being driven through the off-trade we were recently recognised for being the most widely distributed brand in the UK on-trade, which demonstrates just how effective our multi-channel strategy has been, and the suitability of our wines for each sector. “The challenge is to maintain growth levels when most people are consuming less but better quality. There needs to be an increased focus on varieties in addition to Sauvignon Blanc. There should also be greater emphasis on the uniqueness of New Zealand and its individual growing regions that genuinely sets the country apart from other wine producing countries.”

Top trends in 2019 according to Yealands • Lower alcohol products • New packaging formats • Innovative pack designs • Increased interest in organic, sustainable and vegan wines

“Sauvignon remains the core of our offer, and we are continuously exploring ways in which we can produce ever more interesting and complex styles with this variety.”

Research & Insights Weâ&#x20AC;&#x2122;ve got insights from IRI, Nielsen, Invigor Group, eLease Lawyers, Roy Morgan, Peter Hall & Associates and Australiaâ&#x20AC;&#x2122;s leading liquor associations.

IRI

RESEARCH & INSIGHTS

IRI’s predictions for the year ahead IRI makes its predictions for what will be the key trends and how each category will perform over the next 12 months.

here are a number of factors which will influence Australia’s packaged liquor retail market in 2019 and IRI has used its experts and data to make its predictions for the year ahead. As well as understanding the impact of the wider local and global economies on consumer spending, the data insight specialists at IRI have also looked at what they believe will be the trends that retailers can expect to see in different liquor categories. Liquor Channel Manager, Stephen Wilson has given National Liquor News his predictions for the retail liquor market over the next 12 months. “The themes of moderating alcohol consumption, cross category innovation, harm minimisation and associated government legislation, continued occasion-based packaging innovation along with local and global political factors will all have an influence on growth for the Australian off-premise liquor market in 2019,” he said. “On the local front, global uncertainty, high household debt, slowing household consumption, expected wages growth increasing inflationary pressures and falling house prices may weaken growth prospects and economists are forecasting a slowing economy for 2019. However, with strong employment outcomes, a stable unemployment rate and steady interest rates, Deloitte Insights are expecting GDP growth to be in a range of 2.5 per cent to three per cent. “Australian off-premise liquor dollar growth of 3.2 per cent for 2018 was slightly higher than 2017 dollar growth of 3.1 per cent. Volume declined -0.6 per cent for 2018 compared to 1.1 per cent growth for 2017 and based on that trend there is no reason to suggest that volume will return to growth in 2019.” Looking at the total liquor market, Wilson expects the overall trend of consumers drinking less but spending more to continue, while

concerns over global political instability will also be a factor. “With global and local political factors in play, the first half of 2019 growth is expected to be more subdued until the fallout from Brexit, the impact of the current paralysis in the US driven by Trump policies, fears about an escalating trade war with China and the outcome of the Australian Federal Election are known,” Wilson said. “Growth for the Australian off-premise liquor market for the first half of 2019 based on these events and trends is expected to be subdued, before reverting to stronger growth following the Federal Election for the remainder of the year. Based on historical growth numbers and

“Based on historical growth numbers and trends, the prediction is for 2.8 per cent dollar growth.” trends, the prediction is for 2.8 per cent dollar growth and a further volume softening of -0.8 per cent for the 2019 calendar year.” In terms of category-specific predictions, Wilson said that beer drinkers will continue to seek out easy drinking, sessionable styles. He added: “Contemporary beer is predicted to continue to deliver strong growth and become the number one sub-category in beer.” IRI expects that new brands will help premium beer to grow, while classic beer sales are predicted to move lower again and a slowing growth for domestic gateway craft beer will mean more subdued growth in the craft beer segment. With wine, lighter styles and rosé are predicted to continue to rise along with growth

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from red bottled varietals Shiraz, Pinot Noir and Cabernet Sauvignon. Wilson said: “Innovative packaging, half bottles and canned wine will increase the number of occasions that wine can be consumed and help drive growth. Cask wine sales are expected to soften further, while spritz is predicted to deliver growth aligned with global trends.” Glass spirits growth is predicted to remain at similar levels to 2018, with Wilson saying this is “driven by the influence of social media making the look of your favourite cocktail or aperitif almost as important as the drink itself and continued growth of gin, vodka and world whiskies”. He added: “More Scotch drinkers will gravitate from blended Scotch to single malt Scotch, a trend which aligns with the ‘premiumisation’ theme, more Bourbon drinkers will continue to gravitate towards offerings with premium cues. Irish whiskey and Canadian whisky are both predicted to deliver double digit growth in 2019 based on increased interest from whisky drinkers’ experiences in 2018.” While RTDs experienced resurgent sales and strong growth in 2018, IRI is predicting this will be tempered slightly in 2019. Wilson said: “Based on trends, lower growth for RTD Bourbon appears likely and will be the main factor in the expected 2019 result. Growth from lighter RTD styles will balance the ledger with gin and vodka the catalysts. RTD drinkers’ interest in Canadian whisky and Irish whiskey RTD will also drive category growth and counteract the expected continued decline in RTD Scotch sales.” And speaking on the cider category, Wilson added: “Cider sales have been relatively stable for each of the last three years. While pear/perry cider is experiencing significant lower sales fruit flavoured cider growth has been offsetting these losses and combined with stable apple cider sales, category sales are predicted to remain largely unchanged in 2019 based on trend.”

IRI

RESEARCH & INSIGHTS

The international trends influencing Australia Trends from key overseas markets, particularly the US and UK have long influenced trends in Australia, here’s what you can expect to see in 2019.

he notion of overseas trends influencing the Australian market is nothing new and this has been seen recently with major trends such as premiumisation, health and wellbeing and the rise and rise of craft drinks. From ‘indies’ and ‘Spiders’ to social media and politics there are a huge range of trends and factors that IRI’s Liquor Channel Manager Stephen Wilson predicts will influence Australian consumer drinking habits in the year ahead. He said: “Trends from the US and UK markets are largely influencing trends in the Australian market. “The popularity of spritz cocktails, the rise of pink spirits, increasing momentum behind gin and the emergence of non-alcoholic beer are perfect examples of some key trends that have been replicated in the local market. “Millennial influence with the ‘Instagramable’ nature and visual appeal of their beverage of choice, aspirations to lead a healthier lifestyle that include better choices and occasion-based product offerings are largely driving these trends.” He added: “The interest in supporting ‘indies’ we have witnessed in Australia is alive and well globally with drinkers looking to support the plethora of craft micro-breweries and craft distilleries whose numbers continue to grow.” Many retailers will know that the process of the packaged liquor purchase has changed in recent years as consumers look at ways to improve the knowledge of the products they are buying and increasingly look for a ‘story’ behind their purchases. This is something that Wilson said he expects to continue in 2019. “Globally drinkers are more engaged with their beverage choices, wanting to know about the product’s origin, who is making their beverage, use of local ingredients, terroir, environmental impact and sustainability,” he said. He added that category blurring and innovation will be an increasing factor. “Category blurring is gaining momentum,” Wilson said. “This appeals to a drinker’s sense of fun and adventure with ‘Speers’ and ‘Spiders’ (a combination of spirits and beer and spirits and cider) a great example of innovation that has become more prominent.” Finally, Wilson said that the political

“The interest in supporting ‘indies’ we have witnessed in Australia is alive and well globally.” landscape, which is increasingly unstable in both the US and UK, with shutdowns and Brexit respectively, is influencing liquor sales in both the US and UK. “US President Donald Trump has been making a lot of noise about the inequity in trade between the US and its trading partners, threatening to introduce targeted new tariffs and increase existing tariffs and having the potential to destabilise the global market,” Wilson said. “Trump tweeted in November 2018 ‘On Trade, France makes excellent wine, but so does the US. The problem is that France makes it very hard for the US to sell its wines into

France, and charges big Tariffs, whereas the US makes it easy for French wines, and charges very small Tariffs. Not fair, must change!’.” In terms of the UK’s political landscape, Wilson said: “Brexit looms large on the horizon for the UK driving a slowdown in retail sales as the March 2019 deadline looms. “Uncertainty is driving economic growth lower as shoppers rein in spending. This also impacts on the level that drinkers are willing to spend. As an example, imported wine which accounts for 60 per cent of Britain’s wine sales has become more expensive due to higher import costs as the exchange rate for the pound moves lower making locally produced wine at a lower cost more attractive to drinkers.” While the political landscape in Australia is largely seen as unstable because of the number of Prime Ministers the country has seen recently, we are not experiencing the issues seen in the US and UK. However, there is a Federal Election looming this year and while Wilson said IRI expects there will be subdued growth prior to the vote, he added he expects the market will “revert to stronger growth following the Federal Election for the remainder of the year”.

NATIONAL LIQUOR NEWS FEBRUARY 2019 | 75

IRI

RESEARCH & INSIGHTS

Liquor market overview Stephen Wilson from IRI gives an overview of how the total off-premise liquor category performed in 2018.

etailing overall is facing a challenging environment at the moment, and this is the case whether it’s for stores that are part of large multinational brands or independents. And that challenging environment is definitely one faced by liquor retailers. Factors such as government legislation seeking to address harm minimisation from excessive alcohol consumption, demographic change and consumers moderating their level of alcohol consumption as a part of an overall health and wellbeing plan all combine to create challenges for both retailers and suppliers to generate growth. Australian off-premise liquor has generated higher sales dollars in 2018 off the back of softer volume continuing the trend that has been consistently called out – drinkers consuming higher priced liquor but drinking less of it. The moderation of alcohol consumption is highlighted by the increased profile of low/no alcohol products in the local market and driven by drinkers aligning with the overall consumer trend of making ‘better for me’ choices.

Total off-premise performance • Wine and ready to drink categories over traded in 2018 generating share of growth above their respective share of total liquor sales. • Wine generated the highest contribution to total liquor growth delivering 31 per cent of dollar growth from 26 per cent of dollar sales. • Ready to drink continued its renaissance generating 26 per cent of dollar growth from only 14 per cent of dollar sales. • Glass spirits made a fair share of growth delivering 21 per cent of dollar growth from 21 per cent of dollar sales. • Cider experienced softer year on year dollar sales. • Beer experienced the largest under trade of all liquor categories delivering 22 per cent of dollar growth from 37 per cent of dollar sales. • Liquor growth was driven by the top 10 liquor growth brands which collectively accounted for seven per cent of total dollar sales but generated almost $8 out of every $10 of growth. • Beer brands dominated the top 10 growth brands populating eight of the top 10 growth rankings. On the flip side the bottom 10 growth brands were all beer brands which collectively shed -$207 million in sales year on year.

MARKET VALUE

$17.96bn up 3.2 per cent MARKET VOLUME

205m* down 1.2 per cent

TOP 5 GROWTH BRANDS** 1. Great Northern Super Crisp (+37%)

TOP SEGMENTS** 1. Contemporary beer (+10%) 2. Dark spirits RTD (+6%)

2. Great Northern Original (+53%)

3. Bottled red (+6%)

3. Canadian Club (+22%)

4. Craft beer (+10%)

4. Iron Jack (+170%)

5. Bottled rosé (+33%)

5. Furphy (+106%)

CATEGORY BREAKDOWN BEER (36%)

WINE (26%)

SPIRITS (21%)

RTD (14%)

CIDER (3%)

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

76 | FEBRUARY 2019 NATIONAL LIQUOR NEWS

TOP

BEER CATEGORY VALUE

Beer and cider category overview

$6.6bn up 1.9 per cent

BEER CATEGORY VOLUME

126m* down 1.1 per cent

eer sales in 2018 were heavily influenced by several factors: the continued long term contraction in classic beer sales, beer drinkers seeking healthier options through low/no ABV beer, continued contemporary beer growth driven by a handful of brands and drinkers desire for easy drinking, sessionable and innovative beer options. Cider continued to struggle for growth with the decline in sales for pear/perry largely negating gains made from innovation, better for me product availability and the rise of the next generation of fruit flavoured ciders. • Beer growth was primarily generated by contemporary beer which delivered 163 per cent of category dollar growth with handy growth contributions from craft beer (51 per cent) and premium beer (nine per cent) of category dollar growth. • Cider revenue which accounts for almost three per cent of total liquor dollar sales has been remarkably stable over each of the last three years with little change year on year. • Classic beer sales declined -$147 million year on year driven by a decline in ‘big brand’ sales. This sub-category still accounts for almost one-third of all beer sales however it is predicted, based on current trend, that contemporary beer will surpass classic beer as the leading beer subcategory in 2019. • Fruit flavoured cider generated $11.4 million in growth, apple cider dollar sales were flat year on year with pear/perry cider sales softening -$12.4 million year on year and driving the category into -0.2 per cent lower dollar sales. • Craft beer continues to contribute to category growth however this growth is slowing and has trended lower over the last three quarters of 2018. • Apple cider losses for some brands have been negated by low carb and low sugar brand extensions. Higher ABV apple cider has also been a growth driver. Pear/perry cider revenue decline has primarily been driven by a single brand. • The top 10 beer growth brands generated 19 per cent of beer sales and delivered a massive 328 per cent of category dollar growth. • The top 10 cider growth brands collectively generated $38 million in growth in a category that experienced softening year on year sales.

GROWTH BEER BRANDS**

CIDER CATEGORY VALUE

$495m down 0.2 per cent CIDER CATEGORY VOLUME

7.7m* down 5.5 per cent

1. Great Northern Super Crisp (+37%) 2. Great Northern Original (+53%) 3. Iron Jack Crisp (+170%) 4. Furphy (+106%) 5. Iron Jack Full Strength (NEW)

TOP 5 GROWTH CIDER BRANDS** 1. Little Fat Lamb (+82%) 2. Mercury Hard (+27%) 3. Mr Finch (NEW) 4. 5 Seeds Lower Sugar (NEW) 5. Rekorderlig Low Sugar (NEW)

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

NATIONAL LIQUOR NEWS FEBRUARY 2019 | 77

RESEARCH & INSIGHTS

IRI

RESEARCH & INSIGHTS

Wine category overview

ine sales in 2018 were heavily influenced by the popularity of rosé, the introduction of new pack formats more suited to different drinking occasions and wine drinkers seeking lighter styles and varietals. • Wine growth was primarily driven by red bottled wine which over traded delivering 51 per cent of category growth from 34 per cent of dollar sales. • Pink bottled wine driven by rosé also over traded generating 24 per cent of category growth from just four per cent of dollar sales. • White bottled wine experienced an under trade with a marginal year on year dollar decline from 33 per cent of dollar sales. • Cask wine sales declined with both red cask and white cask sales softer year on year. Pink cask wine driven by the ‘halo’ effect of rosé generated some growth. • Newcomers spritz (+ three per cent dollar growth) and canned wine (+ four per cent dollar growth) while both in their infancy over traded compared to their individual 0.2 per cent share of wine dollar sales. The expectation is that sales of both of these emerging sub categories will continue to grow as continued innovation, lighter styles and convenient packaging come to the fore in 2019. • The top 10 wine growth brands for 2018 accounted for just nine per cent of category dollar sales but generated 49 per cent of category growth. • Product innovation, focus on growth varietals, attractive presentation and a sense of fun are key attributes of these top 10 growth brands.

CATEGORY VALUE

$4.6bn up 3.9 per cent CATEGORY VOLUME

40.5m* down 1.5 per cent

TOP 5 GROWTH BRANDS**

TOP SEGMENTS** 1. Bottled red (+6%)

1. Squealing Pig (+68%)

2. Bottled rosé (+33%)

2. 19 Crimes (+141%)

3. Sparkling (+4%)

3. Brown Brothers (+24%)

4. Champagne (+3%)

4. Pepperjack (+11%)

5. Canned wine (NEW)

5. Elephant in the Room (+225%)

TOP 5 GROWTH SKUS** 1. Squealing Pig Marlborough Sauvignon Blanc (+50%) 2. Mumm Cordon Rouge NV (+16) 3. Penfolds Bin 389 Cabernet Shiraz 2016 (New) 4. Boatshed Bay Marlborough Sauvignon Blanc (+129%) 5. Penfolds Bin 407 Cabernet Sauvignon 2016 (NEW) *9 Litre Equiv (000) **Sorted by dollar growth, presented by year on year growth

78 | FEBRUARY 2019 NATIONAL LIQUOR NEWS

Spirits and RTDs overview

he continued rise of gin, the influence of ‘Instagramable’ cocktails and aperitifs, resurgent vodka sales and increased popularity of Canadian and Irish Whiskies have all heavily influenced the value and volume growth seen in the glass spirit category in 2018. In the RTD category, a clever marketing campaign by a leading brand as well as drinkers trading up, the emergence of lighter less sugary styles and drinkers gravitating towards higher ABV options have all influenced the resurgence of RTD sales experienced in 2018. Gin was the primary driver of category growth accounting for almost $1 out of every $2 of glass spirits growth. Canadian whisky generated 16 per cent of category growth from just three per cent of dollar sales, while Irish whiskey delivered nine per cent of category growth from just two per cent of dollar sales. • All RTD sub-categories with the exception of Scotch and coolers contributed to category dollar growth. This is in contrast to contracting volumes experienced by all sub-categories except Canadian whisky, gin and dark other – this underlines the trend of trading up to brands with more premium cues. • Scotch, which generated 23 per cent of category dollar sales, managed to deliver a marginal 0.2 per cent increase in dollar sales due to strong growth in single malt Scotch which negated a similar sales decline for blended Scotch – yet another example of drinkers trading up. • RTD dark spirits continue to dominate accounting for 81 per cent of category dollar sales and 81 per cent of category dollar growth. RTD dark spirits growth was primarily driven by Canadian whisky, Kentucky Bourbon, dark rum and Tennessee Bourbon with a handy contribution to growth from RTD dark other. • Growth for total Bourbon glass spirits which generated almost $2 out of every $10 spent in the segment delivered mixed results by origin with Bourbon sales growing strongly at 4.2 per cent. Tennessee Bourbon dollar sales were flat year on year and Kentucky Bourbon dollar sales contracted -0.7 per cent year on year. • RTD light spirits achieved a fair share of category growth with this growth primarily driven by vodka and gin. RTD vodka experienced an under trade generating 10 per cent of RTD dollar growth from 16 per cent of dollar sales. RTD gin however benefited from the glass gin ‘halo’ effect generating almost eight per cent of category growth from just one per cent of category dollar sales. • The top 10 glass spirit growth brands accounted for 14 per cent of category dollar sales but generated 66 per cent of the category’s growth. • The top 10 RTD growth brands accounted for 34 per cent of dollar sales generating 88 per cent of category growth and eight out of 10 of the growth brands were dark spirits with Bourbon brands heavily represented.

GLASS SPIRITS CATEGORY VALUE

$3.7bn up 3.3 per cent GLASS SPIRITS CATEGORY VOLUME

7m* up 2.0 per cent

RTD CATEGORY VALUE

$2.5bn up 6.2 per cent

RTD CATEGORY VOLUME

23m* down 0.1 per cent

TOP 5 GROWTH SPIRITS BRANDS** 1. Canadian Club (+17%) 2. Tanqueray (+32%) 3. Jameson (+13%) 4. Bombay Sapphire (+20%) 5. Gordons Gin (+12%)

TOP 5 GROWTH RTD BRANDS** 1. Canadian Club (+24%) 2. Cruiser (12%) 3. Jim Beam Black Double (NEW) 4. Jack Daniels Double Jack (+15%) 5. Woodstock Gold (+13%)

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

NATIONAL LIQUOR NEWS FEBRUARY 2019 | 79

RESEARCH & INSIGHTS

IRI

NIELSEN

RESEARCH & INSIGHTS

Increasing alcohol brand exposure through sponsorship Glenn Channell, the Sports Product Leader at Nielsen talks about the link between sporting events and building liquor brand exposure.

lcohol brands and sports, unsurprisingly, have a strong link in Australia given their association with social occasions. According to Nielsenâ&#x20AC;&#x2122;s 2017-2018 Sport Report: Alcohol, there were more than 50 alcohol-related brands present in Australian sports sponsorship during the last financial year. With focus on minimising the link of traditional advertising and excessive drinking, alcohol brands are increasingly considering indirect and responsible ways of engaging sporting fans. Sports partnerships with governing bodies, teams, events and stadia

serve as an opportunity to establish and extend alcohol brand reach and meaningful consumer connection opportunities. Leading the charge are mainstream Australian beer brands. For example, the sports-related partnership footprints held by CUB brands, Carlton Draught and Victoria Bitter, have the ability to reach more than 12 million unique Australian sporting fans â&#x20AC;&#x201C; accounting for over 60 per cent of the total population aged 18+. Beer and cider brands are the most prominent alcohol-related companies involved in sport sponsorship. As these brands tend to

80 | FEBRUARY 2019 NATIONAL LIQUOR NEWS

be involved in major partnership agreements, they account for more than half of the total QI media value (dollar value of brand exposure through sponsorship) generated by the alcohol category across the sports landscape. The AFL records the highest number of alcohol-related brands present (24). However, rugby league and tennis generate the highest dollar value of brand exposure for alcohol brands within their sports. For rugby league, this is largely due to the status of alcohol partners VB and Bundaberg Rum, with tennis generating substantial value throughout the Australian Open, primarily accounted for by Jacobs Creek.

Staying ahead of the game Nielsen’s 2017-2018 Sport Report: Alcohol details some key future growth opportunities for alcohol and sports sponsorship that warrant further consideration and exploration. • Tier two sports: Sports such as horse racing, golf or basketball have the potential to provide valuable consumer connections for alcohol brands – at a price point that may prove more cost-effective than the larger major codes – with an over-indexing of category consumption noted across these fan bases. • Spirits: Spirit brands are less present in sport, yet their target consumers over-index in sports interest outside of the major codes including boxing, MMA/UFC, Moto GP and eSports. • eSports: With a significant proportion of eSports fans believing alcohol is relevant to the sport, there is an opportunity for alcohol brands, particularly beer, to engage with this market. • Millennials: This group of consumers drink less than their older counterparts, however they are more open to trying new products, sampling international alcohol varieties, selecting brands with interesting packaging and they are also more likely to trade up to premium product offers.

About Nielsen’s 2017-2018 Sport Report: Alcohol This report highlights the key trends among alcohol-related brands within the sports industry. It allows brands, rightsholders and agencies to compare across brands and codes with consistent metrics. Drawing upon Nielsen’s syndicated Sports and Entertainment data sources, the major components of the sports sponsorship industry are addressed including brand presence, share of voice, reach, value and consumption.

NATIONAL LIQUOR NEWS FEBRUARY 2019 | 81

RESEARCH & INSIGHTS

NIELSEN

INVIGOR GROUP

RESEARCH & INSIGHTS

Building a data strategy for liquor retail

eclining alcohol consumption in Australia means liquor retailers need to work smarter to compete and be successful. The largest retailers often rely on teams of analysts, alongside competitive pricing and convenient store locations to outperform competitors. However, independent retailers can also benefit from a more datadriven approach when managing their business for profitable growth. Rather than engaging in a price war, independent retailers need to harness the single most valuable weapon available to them to support their decisions: data. Successful retailers are those that already embrace data analytics for informed everyday decisions like what products to have on the shelves, at what price to buy stock, what promotions or bundles to offer to maximise sales and/or margin, and where to direct their operational investments to grow more profitably. In the past, access to data has been a barrier, as well as concerns around cost and access to internal resources with the right skills. This may have prevented some liquor retailers from fully embracing data analytics. However, new technology and ready-built tools are making it easier and more affordable for retailers of

The Invigor Group analyses data to identify growth opportunities for businesses. Here Claire Mula, COO of Invigor Group, discusses what liquor retailers need to know when building a data strategy in in 2019.

any size to leverage the power of data to make better decisions that grow their businesses. There are many benefits for liquor retailers to use data to drive decision-making, here are four of them:

1. I mprove product range and promotions When retailers can see what products are selling well, which ones are delivering the most margin, and which ones keep customers coming back to their store, they can make better decisions around merchandising, assortment, bundling and product placement. Data-driven decisions can help retailers move beyond volume to understand margin and drivers of profit or growth. The right insights can help retailers not only efficiently manage their own merchandise, but will also enable a more informed and balanced dialogue with banner groups, liquor suppliers and brands. Data analytics can also be applied to promotions to understand the success in terms of volumes, sales and profit. In some cases, promotions that are successful at driving volume (which means they are effective) are not successful at driving the necessary uplift in sales to deliver a profit or return on the promotion.

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There can be a variety of reasons for this. For example, it could be the product is not very price elastic, a competitor brand ran a promotion at the same time or the product was purchased at the wrong price from the supplier. Using advanced analytics, retailers can see the factors that drive promotion success at a glance and adjust their campaigns as necessary. Without this knowledge, they may fail to make the changes to protect margins or they may result in a positive net return for those planned promotions.

2. P rice adjustment and competitive position Retailers can use data to understand when prices are going up or down at competitor stores in real-time via alerts and live dashboards. In the Australian liquor market, this happens daily and up to multiple times per day among the larger liquor retailers and e-commerce retailers. Using data analytics helps retailers understand the impact of competitor price changes on key â&#x20AC;&#x2DC;powerâ&#x20AC;&#x2122; products and pack sizes for their business. Depending on the strategy, it will help to decide when and where to play on price and when not to be making price adjustments. This lets retailers get on the front foot and be responsive when managing their own pricing.

There may be opportunities for more margin that are being missed because a competitor has raised a price or gone off promotion. If the retailer is unaware of these changes until days or even weeks later, they could be missing valuable margin that flows to the bottom line.

3. Customer understanding Customer analytics can help retailers understand what drives customer purchase behaviour such as frequency and spend, and therefore how to turn occasional customers into high value or loyal customers. Customer analytics can demonstrate the most valuable customers and deliver insights into how to acquire more of them, and where there are opportunities to upgrade existing customers with the right product or bundle that impacts profitability. This greater understanding of customer behaviour lets retailers make better operational decisions such as product buying and assortment decisions, creating marketing campaigns that will resonate with high value customers, and developing bundles that are more likely to be purchased. This shifts the focus away from margin-eroding strategies such as discounting and price matching, into more intelligent ways of increasing customer value and profitability.

4. Personalised engagement Gaining a greater understanding of customers naturally leads to an increased ability to provide personalised engagement through initiatives such as loyalty programs, gifts with purchases, individualised recommendations and more. Beyond in-store improvements, customer understanding needs to be linked to investments in customer engagement and marketing. This might be done by taking a segmentation approach to marketing such as through automated eDMs or through targeted acquisition campaigns on Facebook and Google. Ultimately customers will respond well to the messages that are most relevant to them. For example, if we take a category lens to segment our customers, we may find a segment of consumers who typically purchase premium red wines and, on occasion, craft beers together. We see that these customers are predominantly female, visit early in the week and have a high spend per visit, but that the frequency of their visit is lower than other customers. Our options may be to design targeted campaigns that can be sent out via email (if we have a customer database) or via targeted advertising aimed at the profile at the beginning of the week designed to drive them back to store more frequently than usual or to create a specific premium red plus craft beer bundle to assist with increasing basket or spend per visit on each occasion. The likelihood the bundle is adopted among this segment can be analysed in post transaction data as a way to understand what works to lift average spend among this segment.

RESEARCH & INSIGHTS

INVIGOR GROUP

Once a liquor retailer has decided to adopt a data-driven approach, there are a number of capabilities to consider building in 2019 for the greatest chance of success:

1. Improve data literacy The first and most important step in a data strategy is to build a roadmap to begin improving the organisation’s data literacy. Following a maturity model, this starts from flying blind to becoming data-aware. Even if the retailer isn’t already using analytics or advanced technology to collect and analyse data, they should at least be trying to develop reports and gain insights manually. The retailer can then progressively become more mature as key staff learn more about how to incorporate data into their strategic and operational decision-making processes, with the ultimate goal of becoming more automated and sophisticated over time.

2. Cleanse the data The quality of the insights derived from data is directly related to the quality of the data itself. If retailers are working with out-of-date, inaccurate, or irrelevant data, then the insights won’t be trustworthy. It’s therefore worth taking some time to organise the data and cleanse it. That means removing duplicates and replacing old information with new information. While this may involve an upfront effort or investment, it will provide a significant return down the track as the business relies on the data more heavily.

“Gaining a greater understanding of customers naturally leads to an increased ability to provide personalised engagement through initiatives such as loyalty programs, gifts with purchases, individualised recommendations.”

3. Shift mindset and behaviour If the retailer hasn’t worked with data in the past, it’s important to take a methodical approach to embedding data in the operation. Start with accessible data such as transactional data from a point of sale system or e-commerce software. Make this easily accessible on a daily or weekly basis for different users in the organisation who

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INVIGOR GROUP

RESEARCH & INSIGHTS

make key decisions around merchandising and promotional plans. Over time, build a roadmap of additional data. Start by thinking about what you don’t know about customers or products today that if you did would make a significant difference to the business and work backwards. One of the key questions clients often ask Invigor is “how much should I invest in data?”. One way to approach this is to identify the ‘hard’ and ‘soft’ outcomes the organisation is looking for from data analytics. Review the decisions that affect investments, revenue or profit, and key supplier discussions that are critical to the business. Then determine how data can help, how to get it to the people who make decisions, and what data to provide to frontline staff. Once this has been identified, then the business can begin to review whether the data they have today is enough to deliver against these outcomes and what the value of those outcomes will be on the business in the short and long term.

“Liquor retailers have a unique opportunity to grow their businesses in 2019 if they can harness the wealth of data available to drive strategic decision-making.”

4. Monetise the data Information is so valuable that some organisations are beginning to list it as an asset on their balance sheet. Retailers need to understand what their data is worth and determine who has the legal right to access and use that data. It’s also possible to monetise the data by turning it into revenue. This can be done by analysing the data to identify new revenue opportunities or partnership possibilities.

5. Privacy regulations Collecting customer data brings a range of privacy and security compliance requirements. Australia’s Privacy Act includes the notifiable data breach (NDB) scheme, which requires businesses that collect personal data to keep it secure, and to notify the affected individual and the Office of the Australian Information Commissioner if a breach does occur. Aimed at giving individuals more control over their personal information, this legislation currently applies to businesses with an annual turnover of more than $3 million. However, regardless of whether the legislation strictly applies, it’s good business practice to keep customer information secure given the potential brand damage if customer data is compromised. All businesses that handle customer data should have a privacy policy, that is made available to customers and that is internally understood and complied with.

6. Choose key data sources Retailers already have access to a range of invaluable data sources and it’s important to tap those before investing in third-party data sources. For example, point of sale (POS) data can yield valuable insights into sales revenue, margin, and volume drivers. It can

help retailers segment their products and drive assortment recommendations. It provides the clearest view of what’s happening in-store, and can help identify which products sell the most, at what prices, and when. Analysing promotional data can help liquor retailers understand the immediate impacts of a promotion on volume, sales or margin. It can determine promotional efficiency and elasticity, and clarify the relationship between the promotion and volume, sales, or margin. Customer data lets retailers segment their customers by personas and loyalty levels, then track their customers’ spend, frequency, and lifetime value. It’s important to understand who their most valuable customers are and focus on acquiring more of these customers, which ultimately will provide the highest return. It’s also important to understand which customers are at risk to reduce churn. Once owned data sources are fully leveraged, it can be valuable to seek third-party data. For example, gaining insights into competitor products and pricing strategies, including their online and offline or promoted pricing, in an industry that’s still heavily based on catalogues, can help retailers understand how to manage their own pricing strategies.

7. Make data actionable Data can be analysed in any number of ways to yield insights about a vast range of topics. To avoid being overwhelmed by the possibilities, it’s important to determine what actions the retailer needs to make regularly. Based on that, the retailer can devise specific questions to ask of the data, which will yield insights that are

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actionable. In other words, information that is sufficiently detailed and provides enough insight into the future that makes it clear what actions the retailer should make.

8. Test and learn Many retailers already make successful decisions based on their instincts and industry knowledge. Data can help support these decisions and test new theories. This makes trial and error less costly and risky, because the theories can be tested on data before actions are put into real life. Knowing that theories can be tested before they’re implemented can help unleash the creativity of the decision-making team, considering more ambitious ideas than would have been possible in the past. This can pay dividends in a market where it’s difficult to stand out from the crowd.

9. Build capability Retailers should start to build data-related capabilities in whatever way is possible as soon as possible to avoid being overtaken by competitors. This could mean outsourcing data initiatives or recruiting for data skills. Regardless of the approach, it’s important to start now to avoid being left behind. Liquor retailers have a unique opportunity to grow their businesses in 2019 if they can harness the wealth of data available to drive strategic decision-making. Doing so will let them compete more effectively with larger retailers and improve their own business performance dramatically. It’s important to take a data-driven approach to maximise every revenue opportunity.

ELEASE LAWYERS

RESEARCH & INSIGHTS

Leasing and tenancy Marianna Idas, the Principle Solicitor of eLease Lawyers, talks us through the legalities involved when entering into a new lease agreement.

t is important to obtain the right tenancy and lease to help protect your growing business. It is best you seek specialist legal advice before entering into any lease as these documents are not ‘standard’. A lawyer can: • obtain the best terms for your tenancy • save you money over the life of your lease • ensure the agreed terms are incorporated into the lease, and • provide you with advice on the law.

A summary to leasing 1 Find a property that suits your needs 2 Negotiate terms of the lease with the landlord 3 Have your lawyer review the lease 4 Negotiate changes to the lease via your lawyer 5 Agree on the final lease 6 Sign the lease 7 Have the lease registered (recommended if possible) 8 Keep a copy of the registered lease

1. Find a property that suits your needs. What things should you consider before choosing a location for your store? • Profit: Project your revenue and expenses before entering into a lease, including the length of time required to make a profit. Ensure the terms of the lease meet your needs. • Target Customers: Know your target customers including age, financial status, buying behaviours and habits to decide on the appropriate location. • Location: Speak to neighbouring tenants and ask them questions about the traffic of people in the area, main entry and exit points (if in a centre), why the previous tenant vacated and about business in general in the area. • Condition of the premises: Prepare a condition report before deciding on the premises, including photos. Consider the type and costs of the fitout. • Parking: Consider where your customers and staff will park. If there are dedicated car spaces, ensure they are clearly documented in the lease. 2. Negotiate terms of the lease with the landlord. Have your lawyer or agent assist you before agreeing on the terms of your lease. Things you can negotiate include: • Outgoings • Limiting outgoings • Incentives • Security • A rent free period or a monetary

contribution towards your fitout • The landlord may seek to obtain a personal guarantee and or a cash bond or bank guarantee. Please exercise caution and avoid providing a personal guarantee where possible. • Option period: It is always advisable to have one or multiple options to extend the term of your lease. This will assist if you are considering selling your business in the future. • Lawyer costs: Try to avoid agreeing to pay for any lawyer costs of the landlord. If you are a retail shop then some states have a legislation that prohibits these costs being recoverable by the landlord. • Exclusivity: You could request a sole right to conduct your type of business within the ‘centre’ which will decrease competition. • Assign or sublet: Ensure you are able to assign or sublet the lease with minimal conditions. • Once the above terms have been agreed this is generally documented in a ‘letter of intent’ or ‘heads of agreement’ and then signed by both parties. 3. Have your lawyer review the lease. • Do not be fooled by the term ‘this lease is standard’. You may be agreeing to a lease that you may not be able to afford due

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to its hidden costs. You may risk losing thousands if you do not obtain specialist leasing advice from a lawyer. • Many leases are skewed to the landlord’s advantage and by obtaining advice from a leasing lawyer you can ensure that the lease is favourable to you. • Good lawyers pay for themselves. In most cases they can save you more than you pay for them over the life of your lease. Seek expert legal advice to your advantage. 4. Negotiate changes to the lease via your lawyer. • It is often the case that even though terms are agreed between the parties they may not be incorporated into the lease. If agreed terms are missed in the lease then you will lose the benefit of these terms. • Further, many clauses have hidden costs which your lawyer can seek to amend to save you money. 5. Agree on the final lease. • Once all negotiated amendments are finalised and your lawyer has advised you of your rights and obligations under the lease, you are then ready to sign the lease. 6. Sign the lease. • The lease will be signed by you and the landlord. Some states require it to be signed in duplicate or triplicate. If you are able to register the lease then your lawyer will advise you where to sign to ensure you are compliant for registration. 7. Have the lease registered. • The cost of registration is minimal and is recommended but not mandatory. Registration of the lease will protect your interest in the property by giving notice to third parties including buyers of the property and any mortgagee seeking to obtain possession or sell the property. 8. Keep a copy of the signed lease on your computer for future reference.

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ROY MORGAN

RESEARCH & INSIGHTS

The huge shifts changing alcohol retailing in Australia Roy Morgan reveals how a change in Australia’s population has had an impact on off-premise liquor sales.

o really understand what’s happening in the alcohol retail sector, the essential first step is to look at the changing characteristics of the Australian population. Put simply, we’re going through several historic transitions. The population has been growing strongly, with the lion’s share of that growth coming from immigration. At first blush, that might sound like good news. More people – the resident population now sits at 25.2 million – should equal higher sales. But when we look at the kinds of people streaming into the country, they turn out to be much more modest consumers of alcohol than previous generations of Australians. One in three of Australia’s millennials were born in Asia, and 40 per cent of Gen Z were either born in Asia or have both parents born in Asia where abstinence is more common than in Australia. Sydney, Brisbane and, most of all, Melbourne have booming populations with domestic migration adding to flows of immigrants to inflate resident numbers. Australians have become far more mobile in recent years – a trend we expect to continue.

Socially, we’re increasingly learning to live in high-rise apartments, are more affluent overall, and the housing boom – such as it was – has made many Australians very wealthy. All those factors are changing the way we drink, how much we drink, and where we drink. As younger generations come through they have successively higher levels of education, are more progressive socially, and are oriented towards the ‘experience economy’ – that is, they want to spend more money on entertainment and leisure than discretionary ‘products’ to take home. In the drinks space that means more going out – in the year to September 2018, Australians made 97 million visits to a pub/ hotel for a drink, 127 million visits for a meal at a pub or hotel, and 179 million visits to a licensed restaurant.

Market breakdown In that turbulent context, it’s worth going back to basics to better understand the market. In an average four week period, 50.2 per cent of Australians aged 18 years or over buy some kind of packaged alcohol, with 4.96

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million customers buying in an average week. Over the year to September 2018, the average weekly spend per drinker on packaged alcohol was $66.70. That’s a large slice of discretionary spending, but it’s a slice coming under pressure from some of the trends mentioned above. Total spending on alcohol was up $1.5 billion over the past four years, but the total actually fell $500 million to be $15.1 billion over the year from September 2017 to September 2018.

Where we buy The packaged alcohol market is dominated by supermarkets, which collectively hold 75 per cent market share. Woolworth Group-owned outlets alone command 50.8 per cent of the market in dollar terms. In the past three years supermarkets have increased their share of the packaged alcohol market from 69.7 per cent in 2016, to 73.3 per cent in 2017, and again to 75 per cent in the 12 months to September 2018. As the latest Roy Morgan Alcohol Retail Currency Report shows, in the past 12 months Woolworths Group’s Dan Murphy’s stores

ROY MORGAN

RESEARCH & INSIGHTS

Chart One:

have leapt ahead, growing market share from 30.5 per cent in September 2017, to 32.4 per cent a year later in terms of dollars spent. As Chart One shows, that appears to be at the expense of the Coles Group’s Liquorland stores and, apparently, by cannibalising sales at BWS, which is also owned by Woolworths Group.

Who drinks what? The majority of Australian adults consume some kind of alcoholic beverage in an average four week period, with those that do imbibe averaging 33.8 glasses per four week period in the 12 months to September 2018. The biggest change in drinking habits over the past 10 years, by a long way, is the decline in consumption of non-premium or non-imported beer. Between September 2009 and September 2018, the number of glasses drunk nationally in an average four week period fell from 215 million to 135 million – a decline of 38 per cent. That change is so stark that we have left it off Chart Two, which shows volumes consumed by drink category, to allow other categories to be analysed more easily. The number of adult Australians reporting they had drunk white wine in an average four week period fell by just over six per cent over the past two years, from 5.6 million to 5.2 million between September 2016 and 2018. Over the same period, volumes consumed fell by 9.6 per cent. Red wine has held up a little better. The number of red wine drinkers has been virtually flat for two years, although volumes consumed have fallen 4.6 per cent over the past year after peaking at 58.5 million glasses for an average four week period in the year to September 2017. The major category growth stories have been in premium or imported beers, and spirits, both of which fit with a longer term trend away from larger quantities of basic products and towards smaller quantities of premium products. Volumes of premium and imported beers consumed have increased by 36 per cent over the past decade, from 48 million to 65 million glasses, and in the past year alone have increased by 2.9 per cent – one of the few categories to outstrip population growth, which is running at 1.6 per cent. Spirits have also done well in terms of volumes consumed – much better than their mixed cousins in the ready to drink (RTD) market. The number of glasses of all spirits combined has grown strongly for the past three years, from 49 million glasses in an average four week period in 2015 to 59 million in the year to September 2018 – a 21 per cent increase overall.

Chart Two:

Chart Three:

Has cider peaked? One of the biggest growth stories of the past decade was cider, which some predicted would take substantial market share from beer categories over time. That trend hit a plateau in 2016 in volume terms – Australians currently drink 17 million glasses in an average four week period – but has declined in terms of numbers of drinkers (see Chart Three). After that long decade of growth, the number of drinkers in an average four week period fell from 2.5 million to 2.4 million, or 4.2 per cent. Elsewhere, compelling growth stories are hard to find, though the Canadian Club range of RTDs have shown impressive year-on-year growth

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ROY MORGAN

Total spending on alcohol was up $1.5 billion over the past four years, but the total actually fell $500 million to be $15.1 billion over the year from September 2017 to September 2018. – from 398,000 drinkers in the year to September 2017, they are now being consumed by a total of 526,000 in an average four week period.

Chart Four:

Targeting the right customers In a tightening market, marketers need every tool at their disposal to track existing customers and attract the best new customers. That’s where precise market segmentation comes in. For five years Roy Morgan has been introducing a new level of precision marketing to Australia with its Helix Personas platform. The recently recalibrated and relaunched Helix Personas tool divides consumers into 54 mindsets or ‘personas’, grouped into six ‘communities’ (see Chart Four) such as the high-spending and cultured ‘Leading Lifestyles’ community or the socially aware, successful and career focused ‘Metrotech’ community. By mapping these personas and communities down to street block level, the platform allows even relatively small retail chains to maximise their marketing spend. To illustrate the point, Chart Four shows three major drinks categories, with the percentage of total volumes consumed attributable to each of the six Helix Communities. As you might expect, the lower socio-economic ‘Fair Go’ community drinks a much larger share of RTD volumes, and the wealthier and more sophisticated ‘Leading Lifestyles’ community drinks a much larger share of red wine. The great leveler of non-premium beer is more evenly spread across those groups. What the chart cannot show, however, is the granular level of detail that Roy Morgan has on the 54 Personas inside those communities. Because the Helix Personas platform is built around deep psychographic insights, rather than just simple demographics, two Personas within, say, the Leading Lifestyles community can have very different habits when it comes to drinking wine, RTDs or any other category. The Helix Personas market segmentation tool can therefore help target specific customers, and where they live, work and shop, mapped down to street blocks of around 60 people. That’s the kind of precision Roy Morgan’s clients are using every day to get more from their marketing dollar. And in an alcohol retail market that is changing so quickly, and where volumes and price pressures are extremely tight, that’s the kind of competitive advantage that will separate tomorrow’s winners from the struggling pack.

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.

The Helix Personas market segmentation breakdown

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PETER HALL & ASSOCIATES

RESEARCH & INSIGHTS

Being ‘intrepreneurial’ Peter Hall discusses why we should be concentrating not on our entrepreneurial skills but rather on our ‘intrepreneurial’ strategies.

ne of the key aspects to business development that I have learned over time is that there’s nothing new under the sun, that is, the same issues keep cropping up time and time again. With that in mind, I often review concepts introduced into my development workshops over the last year and the concept of the ‘intrepreneur’ is one. I have introduced the term of intrepreneur to many hundreds of managers over the past year when discussing management skillsets and the balance of skills required to be effective in today’s business world. Why intrepreneur? While we are certainly familiar with the tag ‘entrepreneur’ with all its positive vibes and, possibly, negative stigma, we are perhaps less familiar with the intrepreneur. Let’s look at the former – the entrepreneur first by looking at the 12 characteristics that I use to rate business owners and managers: • Clarity of vision • Creativity • Responsive to customer base • Initiative • Risk taking • Strong business knowledge • Concentration on core strengths • Carries out market research • Committed to their own mission • Can deal with failure • Diversification • Solid business structure

So, how do you rate as an entrepreneur? How important is it for us to show entrepreneurial characteristics in a market that is steady at best with a potential downswing? Interestingly, you can study the list as you rate yourself and others around you and no doubt see some contradictory or, at least, conflicting aspects. Now, here are the same characteristics, coupled, and you can see that when placed together some aspects are, indeed, contradictory. • Clarity of vision and a solid business structure • Creativity with strong business knowledge • Responsive to customer base and committed to their own mission • Risk takers who can deal with failure • Carry out market research and take initiative • Diversification and concentration So, you can see that it takes a special skill set for the word entrepreneur to apply. In reality, our balance of skills changes over time and, indeed, in reaction to changing circumstances. Take current market conditions, which are characterised by: • Moderate sales growth at best, given decreasing per capita spend, but determined by market demographics, relevant growth and competitive pressures; • Contradictory pushes and pulls on overall margin, depending to a large degree on sales mix and internal margin boosting strategies; • Expenses growth in total, even though many per unit costs are down due to usage rates.

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And then look at what is required of the entrepreneur by once again viewing the lists of characteristics. Typically, we have been looking outside our business to assess entrepreneurial strategies or at least looking at the external effects of our entrepreneurial actions. I’m always wary of introducing new terms, but to my mind what we should be concentrating on is not our entrepreneurial skills but rather our intrepreneurial strategies. By these I mean the strategies that many may not notice but ones that still place us in a more profitable and viable position. I may well be playing with words here but given that the word entrepreneur has been over-used, and, in fact as stated earlier, often in a derogatory manner (think 1980s entrepreneurs), I think it’s time to be intrepreneurial. By concentrating on getting our internal structure, systems, training a data analysis issues under control, our intrepreneurial strategies come far more easily to mind and to fruition. It’s interesting to note that all the current compliance areas such as RSA, WHS, tax and IR have in fact forced us to be more intrepreneurial and we are undoubtedly better off for it. It’s been said before but I’ll say it again; perhaps we need to worry less about what everyone else is doing and concentrate a little more on our business. Intrepreneurs of the world unite – but unlike entrepreneurs we don’t have to tell everyone else about it.

ALCOHOL BEVERAGES AUSTRALIA

ABA urges industry to keep working together Alcohol Beverages Australia enters its fourth year and there are several key issues facing the industry at present.

its major opportunities and challenges over the next 12 months. “At the UN’s High-Level Meeting on Communicable Diseases late last year (2018), the signed political declaration included a paragraph which identified the private sector as one of several stakeholders who should be consulted when it comes to addressing noncommunicable diseases,” he said. “This presents an opportunity for the industry to contribute to the reduction of alcohol-related harms and reinforce our commitment to produce, market and sell our products responsibly. “There is a growing public sentiment against what people see as unnecessary nanny state intervention by governments, and recent calls for increased taxes and advertising bans have been met with strong opposition. This is an opportunity for the industry to provide evidence-based input which supports people being free to make informed and sensible decisions about how they live. “The End Alcohol Advertising in Sport campaign has also flagged its intention to continue to pressure governments. Once again, the evidence shows there is no correlation between advertising and underage drinking, while adults make up more than 80 per cent, in some cases 90 per cent, of the audiences of sports broadcasts in Australia. The ABAC Scheme is explicitly designed to ensure alcohol is marketed responsibly to adults over the age of 18 and those audience figures comfortably

exceed ABAC’s 75 per cent threshold.” So with the agenda and plans in place for tackling the key issues in 2019, Taylor also took time to reflect on why 2018 was a successful year for ABA. “ABA’s diverse membership organisations have continued to put aside competitive differences to demonstrate we can achieve so much more when we work and speak as one on the issues that relate to our businesses,” he said. “We provided balanced factual arguments to a range of media issues, including the sensationalist annual FARE poll and two highlycriticised Lancet Journal reports around safe levels of drinking. This balance ensured people got both sides of the story and could make up their own minds based on the facts.”

The key issues for 2019 “There are several issues facing the industry at present and no one issue is any more or less urgent. The key is developing and collaborating on solutions which will ultimately ensure problem drinking is addressed without impacting the majority of people who drink responsibly. It is critical we continue to be part of the solution; we must present our facts and research when we have opportunities to contribute to consultation processes.”

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ASSOCIATION

lcohol Beverages Australia (ABA) enters its fourth year of existence this year and Executive Director Fergus Taylor says the association’s success continues to be its capacity to “encourage and promulgate industry wide cohesion”. Over the course of the last year ABA helped to balance a number of media issues with factual arguments, but looking ahead Taylor says to “keep working together” and “talk to your local member about our industry” are the two key messages to share with the industry. He added: “Beer, wine and spirits are an integral part of Australia’s social fabric and millions of us enjoy our favourite drinks in moderation with family or friends. Our cooperation is vital so our customers can continue to enjoy themselves without being punished or unfairly impacted by increased costs or overbearing regulation. “The industry contributes significantly to Australia’s economy and generates hundreds of thousands of employment opportunities for hardworking Australians. Your local member needs to know you are part of this important contribution, and that you expect it to be regulated based on evidence and fairness.” While this is what the industry, and those who work in it, can do to make a difference in the year ahead, Taylor told National Liquor News: “ABA’s primary focus [for 2019] will continue to be operating as the representative voice of our members and their customers to allow Australians who drink responsibly – they are the overwhelming majority – to continue to enjoy their favourite beers, wines and spirits in moderation. “This means collating and injecting evidence-based content into state and national discussions and processes around issues like mandatory pregnancy labelling, the National Alcohol Strategy and the National Health and Medical Research Council (NHMRC) Drinking Guidelines review. We will also continue to work with stakeholders to better understand and encourage responsible and moderate consumption across the country. “It also means continuing to work with governments and other stakeholders to explore and encourage targeted measures to address problem drinking where it exists, which don’t impact unfairly on responsible drinkers.” Further, Taylor explained what ABA views as

ABAC

ABAC addresses social media challenges Harry Jenkins AO, the Independent Chair of ABAC, talks about the challenges that have arisen from the rise of digital marketing and the changing liquor landscape in Australia.

D ASSOCIATION

uring 2018 the Alcohol Beverages Advertising Code (ABAC) celebrated its 20th year and over that period of time there have been significant changes to the methods and regulation of alcohol advertising. Not only has the rise and changes to the digital arena brought challenges to ABAC, but so too has the changing landscape of Australia’s alcohol market as craft products become more popular and the number of small, craft producers increases rapidly. Harry Jenkins AO was appointed as Independent Chair in 2018 and he highlighted some of the big changes that ABAC and the industry has seen over the last 20 years. “The greatest change would be the move away from broadcast media to narrowcast media primarily through the evolution of digital marketing,” Jenkins told National Liquor News. “The ABAC Adjudication Panel considered digital alcohol marketing for the first time in 2004 initially in relation to company websites and banner advertisements and from 2009 in relation to alcohol marketing on social media platforms. “Since then the Panel has considered complaints in relation to marketing via apps, television and audio streaming and social media influencers. In 2018 over 40 per cent of determinations made by the Panel related to digital marketing.” Jenkins added that this evolution of the market and the subsequent changes it brings to ABAC will always be an important focus for the Code, to ensure it remains relevant across the industry. “Ensuring that ABAC operations are transparent and accountable and raising awareness of ABAC standards among the industry, community and policy makers remains an important focus for ABAC,” he said. “During 2018 we have improved our direct engagement with a wider range of industry participants, policy makers and State Liquor Licensing bodies. This was enhanced by publicly releasing and widely circulating detailed quarterly reports on the operation of ABAC and holding our first free annual webinar which is a more accessible format and available to a wider range of industry participants. “These measures improve awareness of ABAC, educate on the standards for responsible alcohol marketing set by ABAC and ensure transparency of ABAC operations.”

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ABAC’s challenges and opportunities “Our challenge is to keep pace with changes in the digital media landscape, however this form of marketing has an advantage of being able to be better targeted to an adult audience than is the case with broadcast media. ABAC believes there is an opportunity to work with platforms to ensure they have robust and effective age targeting tools to support responsible alcohol marketing on their platforms.”

Focus for 2019 “In 2019 ABAC will continue to monitor and evaluate the placement rules to ensure they operate to prevent the targeting of alcohol marketing to minors. “Industry should be asking themselves how they can be proactive and on the front foot in ensuring their marketing is responsible and aligned with the community’s expectations in both its content and its placement. In particular, they need to ensure they are doing everything they can to target their advertising toward adults and away from under 18s.”

Jenkins also said that while digital marketing regulation was one of the major challenges last year, ABAC is looking at how to address that in 2019. “A challenging area is regulation of digital marketing, particularly within social media platforms and keeping up to date with its rapid evolution,” he said. “ABAC addresses this by monitoring complaints, listening to feedback from the public and industry and engaging with relevant media associations and platforms. “ABAC recently updated the ABAC Digital Best Practice to provide guidance on best practice for alcohol marketing via social media influencers.” In terms of other learnings from the year that will be addressed in 2019, Jenkins added: “During 2018 a higher number of breaches of the ABAC, particularly in relation to alcohol beverage packaging by non-signatories and marketing on social media platforms, was seen. “ABAC has engaged with the Independent Brewers Association to raise awareness of the ABAC standards for alcohol packaging among small breweries. This has led to the inclusion of ABAC requirements in the Independent Brewers Beer Labelling Guidelines. “Already there has been an increase in pre-vetting of packaging by this sector and participation in our free education webinar.” Jenkins was appointed Independent Chair in June, after Alan Ferguson’s retirement and after a period of consolidation he is encouraged with ABAC’s position. “I have been encouraged that those responsible for ABAC have continued their serious intent to ensure that the scheme operates effectively. “In addition I am now fully aware the ABAC operates in a marketing landscape that is ever changing. So in 2019 my learning curve continues to ensure that I independently can provide oversight and comment on ABAC’s important purpose.”

WHENEVER, WHEREVER, WHATEVER

BREWERS ASSOCIATION OF AUSTRALIA

Collaboration the key to bolstering beer Brett Heffernan, CEO of the Brewers Association of Australia, calls for a united brewing front in 2019 and highlights mid-strength beers as the future.

ASSOCIATION

hile 2018 was a positive year for the Australian brewing industry, according to Brett Heffernan, CEO of the Brewers Association of Australia, much of that positivity has gone under the radar in more subtle ways, as he and the association seek to clarify and rebut anti-beer agendas. “A significant part of this job is raising awareness of key issues with those who make decisions. Alcohol, as a general policy area, is a space where various false claims, misnomers and outright lies get peddled as fact. The great thing that alcohol has going for it is that the official Australian Government facts, statistics and research are unambiguously in our favour, so debunking opponents is that much easier.” Looking ahead to 2019, Heffernan expects to see more of the same – major brewers continuing to launch new products and new breweries continuing to appear – but there are plenty of issues lying in wait. “The National Alcohol Strategy should be finalised shortly, labelling – especially mandatory pregnancy warnings, but don’t forget carb and sugar labelling and energy labelling, are all in the mix. In an era of apps and websites containing more product information than can be placed on any label, the label is simply outmoded. Taxation is also going to be interesting. With Aussies paying among the highest excise in the word for beer, people are increasingly asking why and government has little rebuttal that makes sense. With the federal election looming, these and other issues will be swirling around. “It brings risk and opportunity. While neither side of politics wants to piss off more than nine million beer drinking voters before polling day, it’s what comes after that counts.” The craft beer revolution has dominated headlines in brewing over the last decade, but Heffernan remains convinced that the three major brewers – Coopers, CUB and Lion – remain in strong positions, accounting for around 60 per cent of the craft market. “Underlining all of that, quality is king. Many smaller breweries are to be applauded for their dynamic approaches, but often the quality between brews and between breweries are noticeably variable. Their production runs are small and price is a huge problem – not everyone wants to pay $12-$15 for a beer at the pub. So until the smaller producers can achieve

Lower ABVs: The major beer trend for 2019 • Alcohol consumption per capita in Australia has been falling, decade on decade, for more than 40 years. It is now at its lowest level in 55 years. Likewise, underage drinking, women drinking while pregnant and rates of binge drinking have been plummeting. Australians have overwhelmingly accepted the moderate consumption message to the point that it is now the norm. • Australia is the world leader in light and mid-strength beer sales. A decade ago that would have been unthinkable. And the choices are endless, with new products coming onto the market all the time. That’s great for the category. While many are light or mid-strength, even the full strength options tend to be lower in alcohol. A standard full strength beer used to be five per cent alcohol, now it’s around 4.4 per cent. We don’t see that trend changing.

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26.5% OF ALL AUSTRALIAN BEER SALES ARE MID-STRENGTH

the volume to meet demand, including peak demand periods, can get quality assurance under control and can rein in price, they will struggle. “Following several years of the larger mainstream breweries acquiring smaller breweries, Heffernan doesn’t believe “there is an appetite for acquisitions in the foreseeable future”. “My inkling is that they will be developing within their existing stable of brands. If that were to change, there would be no shortage of indie brewer hands shooting into the air screaming ‘pick me, pick me’.” Instead of acquisitions, Heffernan believes that collaboration is what the industry should be discussing in 2019, so that larger and smaller breweries can come together for the benefit of the beer industry as a whole. “We can achieve far more for the category of beer together, with agreed policy positions, shared resources and intelligence than each pushing our own barrows. That has certainly been the recent experience and lesson out of the US and it makes sense in Australia. Distillers and wineries, big and small, have their argy-bargy over some issues, but they get it on key issues of mutual advantage. “Some in the independent beer space are very anti-establishment, that’s to be expected, but for the major brewers’ part, we really don’t care about marketing pitches pitting small against big. It’s water off a duck’s back. So to allow those views to see us fail to come together on issues of mutual agreement and serious policy approaches, is extremely short-sighted and weakens beer’s hand in the broader alcohol policy debate.”

“We can achieve far more for the category of beer together, with agreed policy positions, shared resources and intelligence than each pushing our own barrows.”

DRINKWISE

Promoting generational change is an ongoing endeavour DrinkWise CEO Simon Strahan says promoting positive generational change in attitudes towards alcohol is an ongoing process for the organisation.

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rinkWise has enjoyed a busy year, with three major launches running alongside its ongoing campaigns and educational activities. While there are many positives, including a continuing drop in total alcohol consumption, CEO Simon Strahan said DrinkWise has to keep on going with its messages regarding consumption and moderation. “In 2016-17, the total alcohol consumed in Australia was at its lowest since 1961-62 (ABS Apparent Consumption of Alcohol, 2016-17),” Strahan said. “These statistics, coupled with the National Drug Strategy Household Survey data (2016), are evidence of the continued trend of the Australian population reducing its overall consumption and increasingly focusing on moderation. “Promoting positive generational change in attitudes towards alcohol is an ongoing endeavour. While the trends are overwhelmingly positive, it’s important to remember that they don’t hold true for everyone, which is why DrinkWise will continue to invest in research and programs to reduce alcohol harms in key life stages and community sectors.” Looking at the year ahead, Strahan detailed to National Liquor News, how DrinkWise will set out its ongoing endeavours. “In 2019, DrinkWise will continue our focus on new and innovative ways to promote moderation messages through our evidencebased campaigns,” he said. “Continuing to remind those target audiences most likely to undertake risky drinking will be undertaken through our young adult-focused How to Drink Properly campaign and event-goer message You Won’t Miss a Moment if you DrinkWise. Excitingly, in addition to the AFL, cricket and food and wine events across Australia, this year we will also be partnering with the NRL. “Extending Fetal Alcohol Spectrum Disorder (FASD) awareness will also be a focus for 2019. Our FASD awareness communications, developed during the past six months, will be boosted through partnerships with the Winemakers’ Federation of Australia (WFA) and retailers. “Materials will feature in cellar doors and medical clinics across Australia, educating consumers and encouraging medical staff to discuss alcohol consumption with patients.

Industry support is crucial – in many ways “The success of our FASD Awareness Program has shown the strength that can come from a collaborative approach between DrinkWise, industry and government. The generous additional funding for the program, provided by WFA, Lion, Coca-Cola Amatil, Coopers and CUB, as well as a significant federal government grant, reaffirms government and industry commitment to the message. We would like to see more industry producers proactively demonstrate their commitment to the cause by working with DrinkWise to include moderation messages on advertising materials and at sponsored events.”

DrinkWise FASD videos will also be played in rural and remote general practices and across the Aboriginal Health TV Network.” And while these plans are in place, Strahan did highlight that the year ahead will bring its challenges as well as opportunities. “Our relationship with the alcohol industry places DrinkWise in a very privileged position as it allows us to promote our moderation messages to consumers via innovative point of sale channels, which significantly increases our reach and impact,” Strahan said. “A key challenge will be ensuring that positive consumption trends are highlighted within media reporting. This is important as it will reinforce community standards around drinking habits. “A major opportunity will be to further showcase our innovative work and the way in which DrinkWise contributors and members – AHA, Aldi, Accolade, Bacardi-Martini Australia, Beam Suntory, Brewers’ Association of Australia, Brown-Forman, Campari, CocaCola Amatil, CUB, Coles Liquor, Coopers,

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Diageo, Endeavour Drinks Group, Lion, Pernod Ricard, Retail Drinks Australia, Spirits & Cocktails Australia, Treasury Wine Estates and WFA – are demonstrating their commitment to a safer and healthier drinking culture in Australia.” Additionally Strahan said that he was very proud of all the amazing work that the small DrinkWise team has been able to produce and that the community and consumers are understanding the messages. “I am really proud to be leading such a dynamic organisation,” he said. “Despite our small team, we have an extensive national reach and initiatives such as The Internet Remembers continues our track record of innovative behavioural change campaigns that provide those Australians who choose to drink with actionable reminders of the benefits of moderation. “As evidenced through the [falling consumption] trends, the community is increasingly recognising the importance of moderation when drinking to maintain a balanced and healthy lifestyle. This is a positive and substantial shift, with moderation now the expected behaviour – and the only acceptable behaviour. “With consumers expecting industry producers to promote moderation, a collaborative approach to including the DrinkWise Get the Facts website logo on product packaging, advertising collateral and event marketing materials will assist consumers to search for and access consumptionrelated health advice.”

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INDEPENDENT BREWERS ASSOCIATION

Independent Seal of approval

After a huge 2018, Alexis Roitman, CEO of the Independent Brewers Association, is looking to further champion Australia’s independent brewers this year.

ASSOCIATION

t has been a huge year for the Independent Brewers Association (IBA) and its new CEO Alexis Roitman, with the number of brewers and the range of beers on offer continuing to grow apace. In May 2018, the IBA unveiled its Independence Seal, which championed independently-owned breweries and “their positive impact on their local community and beer culture across Australia”. In addition, new IBA Labelling Guidelines are expected to make it easier for brewers to comply with regulations and the Queensland Craft Beer Strategy was another step to victory against red tape. “It’s a huge opportunity to mitigate some of the ongoing regulatory problems brewers face and to evolve our young industry with the support of government. We will be looking to work with the other State Governments and the Federal Government in similarly constructive ways in 2019. “The response to the Seal has been fantastic. Member take-up has been good and our new IBA Labelling Guidelines now make it easy for brewers to comply with regulations and incorporate important new elements into their labelling. I expect that in 2019 Seal takeup will climb further in tune with the cycle of labelling updates. “Indie beer is unique; it’s infused with ingenuity and local character, to be discovered and enjoyed.” After all the achievements of 2018, there is still much to do in 2019 and there are already plans in place. The partnership with Good Beer Week “extends the IBA’s reach into trade and consumer markets, supports the growth of GBW into its ninth year and brings complementary teams together”, as well as giving the IBA a

“Over the past three years a new Australian independent brewery has opened every six days, on average.” presence in both Victoria and New South Wales. “The IBA is taking a wider, more datadriven perspective of the role of the brewer and evolution of beer culture in Australia. With the Victorian election just gone and a NSW State and then Federal election in the first half of 2019, the IBA will be busy with advocacy across this period. Our recently-published Annual Report contains a summary of the issues that are close to the hearts of independent brewers. “In an election year, the IBA will be a vocal advocate for our members’ interests to State and Federal Governments. More widely, we will be raising the profile of our industry, the work that we do and the importance of brewery ownership. We will be guiding members on a range of critical issues, from quality to innovation to legal compliance to funding and professional development.” There is so much positivity and growth in the independent brewing world, and Roitman aims to help the industry grow and develop further. “Over the past three years a new Australian independent brewery has opened every six days, on average. We don’t see signs of this slowing down in the short term. So we’ll be seeking greater market access for independent brewers to provide taps and fridge space for our beers right around the country. We think there’s plenty of room to grow our market

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Independent opportunities •W e see plenty of ongoing opportunities for independent brewers to establish in local communities, serving the area around them and providing a different option for friends and families to meet, dine out and enjoy themselves. • As our industry grows and develops, funding sources are developing around us, with lessons learned from global markets. For instance, currently a number of brewers are crowdfunding their expansions. Other national independent brewers are examples of how to scale up without selling to mainstream brands. • Small independent brewers bring so much to their marketplaces, the economic benefit, the strong sense of community, the creation of local employment, and the value that our products provide to our trade partners and consumers. Beer tourism is also going to be huge.

share to 15 per cent. That means employing more staff, buying more equipment and brewing more beer, all of which is great for the local economies where our brewers are located. “As our industry grows, we will also be focusing beyond foundational technical brewing issues into professional development opportunities and career pathways for brewers, working effectively with suppliers and retailers, developing R&D and innovation strategies and of course promoting the work of our industry to consumers. It’s an exciting time to be an independent brewer.”

LIQUOR STORES ASSOCIATION WA

LSA WA enters a new era It was a year of new direction for LSA WA in 2018, and Chair Lou Spagnolo, says the association is looking to a successful 2019 of fighting for the best interests of its membership base.

“So far, 2019 is shaping up to be a very busy and important year for independent and packaged liquor outlets, and LSA WA looks forward to meeting challenges head on and fighting for the best interests of our members at every turn.” “LSA WA has continued to work hard to build a very strong relationship with the current State Government and with the Australian Hotels Association (AHA). LSA WA and the AHA have worked together on several projects and both mutually understand the need to have a strong working relationship with each other to represent the retail packaged liquor industry successfully. “Another important outcome this year has been the ability for regional packaged liquor stores to trade on Sundays of a long weekend. This has worked very well and there is a strong case for this to be repeated in 2019. We have requested the 2019 trading dates be announced early in the new year to enable retailers to better manage their businesses. “We are currently working with the Government to complete legislative amendments left over from the term of the previous Government. This work includes establishing the definition of a ‘Tourism Town’. This will enable retailers in these areas to have restrictions of trade on a Sunday revised, based on population growth. For example, if applied, a packaged liquor store in a town with a static population of 10,000 in the off-season would be able to trade more freely during peak tourist season when thousands of additional people come to the town and boost demand for goods and services. “The Government and health agencies have been working with LSA WA to ensure that nonbricks and mortar licenses have Responsible Service of Alcohol (RSA) processes in place. These operations are flooding the market, and the last person to handle the product sold is usually a third-party delivery company, who are not controlled by RSA obligations. Due to LSA WA’s advocacy, we are confident that amendments to the Liquor Control Act will be

implemented to ensure that an RSA process is in place before delivery. “An issue that we have been following closely is the ongoing political impasse of representative liquor groups and the Northern Territory Government. This relationship breakdown has the potential to become a firestorm that will jump state borders and affect the liquor industry Australia-wide. Without active dialogue a resolution will not be found. We are very closely monitoring the players in this jurisdiction and will act if or when the threat requires us to. “On social initiatives, the LSA WA and AHA have worked with the State Government to introduce a trial of an electronic Banned Drinkers Register. The trial is currently scheduled to commence in the Pilbara region mid-2019. The focus of this trial will be to curb alcohol-fuelled incidents by targeting the ability to purchase alcohol. This has the broad support of packaged liquor retailers who were consulted in town forums across the Pilbara by the Minister for Racing and Gaming, the Director General for Local Government, Sport and Cultural Industries, principal policy advisors to the Minister, as well as Local Members of Parliament. “LSA WA has been selected to be a member of the State Environment Minister’s Container Deposit Scheme (CDS) advisory panel. We are working to ensure the scheme promotes a responsible recycling culture while seeking to minimise the financial impact on the consumer and the industry. “So far, 2019 is shaping up to be a very busy and important year for independent and packaged liquor outlets, and LSA WA looks forward to meeting challenges head on and fighting for the best interests of our members at every turn.”

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or the Liquor Stores Association of Western Australia (LSA WA), 2018 was a year of ending eras and fresh beginnings, says Chair Lou Spagnolo. “The year began with changes to our policy and our member base. Firstly, the State Government proposed new legislation to amend the Liquor Control Act. The Government’s announcement of these proposed amendments led to the Endeavour Drinks Group (EDG) resigning its membership of LSA WA. EDG reached this decision due to LSA WA failing to condemn the proposed changes to the State legislation, prior to either EDG or LSA WA being given an opportunity to examine the proposed legislation in detail. “Rather than see this situation as a detriment, LSA WA has seized it as an opportunity and has undertaken a seismic shift in its policy direction. It heralded a new focus on independent packaged liquor outlets and policy that is focused solely on what is best for small, independent business owners who are the backbone of communities throughout Western Australia. “With this shift, the Board of LSA WA moved to support the State Government’s Liquor Reform Legislation. Nearly 12 months on, with a lot of work behind us, the legislation is at its final hurdle with the development of the accompanying regulations. We are pleased that the changes are expected to be introduced into Parliament in late March 2019. The support we have received from both our members and business partners has reaffirmed that our decision to support the Government Legislation was the right one,” says Spagnolo. Another big change for LSA WA in 2018 was the decision to not join Retail Drinks Australia – formerly the Australian Liquor Stores Association (ALSA). LSA WA was the only former state chapter of ALSA to not move across to the new Retail Drinks structure, and Spagnolo says that this was a unanimous decision of the LSA WA Board. “The new Retail Drinks structure was not in line with our policy and after much consultation the Board of LSA WA chose not to become a member of the newly formed association. We believe the new direction of our State Association will better serve our members.

NEW ZEALAND WINEGROWERS

New Zealand wine eyes a sustainable future

I ASSOCIATION

n 2018, New Zealand Wine celebrated its 23rd consecutive year of export growth, with value rising 2.5 per cent to $1.7billion. Far from resting on the laurels of long-term success, New Zealand Winegrowers, the association which advocates for the country’s wine industry is focused on what it will take to meet the trends and demands to ensure future success. Looking at future and growing trends, Natalie Grace, Manager - Australia of New Zealand Winegrowers, said the association expects the ‘drinking less, but better’ trend to continue as health conscious wine drinkers change their consumption patterns to include less frequent and lower levels of alcohol. But she added that there is an increasing element of environmental awareness that is beginning to have more influence on buying decisions. “Changing demographics suggest sustainability will increasingly affect purchase decisions, with 75 per cent of New Zealand wine drinkers saying they would prefer to drink sustainably produced wines,” Grace said. “We expect to see this reflected in Australia where wine value growth has doubled the growth in volumes implying Australians are happy to pay more for premium, sustainable products.” She added: “Another trend in New Zealand is the growth of the lighter wine category which has enjoyed a compound annual growth rate of 17 per cent over the last four years. “In Australia, a recent study showed lighter-in-alcohol wine appealed to a growing proportion of premium wine drinkers whereby 50 per cent were likely to purchase lower alcohol wine as long as the flavour and quality were comparable to their preferred wine. “Those wineries involved in our New Zealand Lighter Wines programme are well placed to leverage the growing demand for this category.” With the sustainability trend gaining momentum, Grace strongly believes this is something that the industry needs to address urgently. “Wine drinkers and wine buyers demand

New Zealand Winegrowers believes sustainability is a major trend and issue for the industry as a whole.

“Varietally, New Zealand Pinot Noir is the second most premium product in the market at an average price of AU$25 with year on year price and volume growth of three per cent and 11 per cent respectively.” sustainable products,” she said. “Sustainability upholds premium pricing and, in instances, enhances it. It protects our industry’s social licence to operate, protects against regulation change, assists market access and reduces risks to industry reputation. “Our Sustainable Winegrowing New Zealand (SWNZ) accreditation is recognised as the world leading sustainability programme for the wine industry, with 98 per cent of vineyards area SWNZ certified, however this means little if its value and benefits are not promoted to differentiate our products. “While sustainable activities may be second nature to our grapegrowers and winemakers, we must work together in sharing what sustainability means to us – delivering excellent wine to the world while helping the natural environment, local businesses and communities involved to thrive. A commitment to protect the places that make our famous wines.” While sustainability is firmly on the association’s agenda, there is also a focus on growing or maintaining market share in exports markets and, as Grace explained, this includes Australia. “In Australia, the shift away from other alcohol categories into wine and an increasing preference towards more premium products provides further head room for New Zealand to grow. “While Australians prefer to consume local produce, our competitive advantage across the ditch is the ability to create high quality, easily accessible produce at a relatively affordable price point offering a prominent alternative. And of course, sharing with the world our sustainability credentials. “Varietally, New Zealand Pinot Noir is the

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second most premium product in the market at an average price of AU$25 with year on year price and volume growth of three per cent and 11 per cent respectively. Increased awareness and availability of Pinot Noir present an opportunity for increased growth of our second most planted variety and will remain a focus.” To say Marlborough Sauvignon Blanc has been successful would be somewhat of an understatement after average yearly value growth of 7.8 per cent between 2011 and 2017. But the country is determined not to rely solely on the varietal, despite the challenges that brings for the future. Grace said: “Sauvignon Blanc’s unique profile means it is widely recognised as the international standard bearer for the varietal, and is a strong favourite in New Zealand’s key markets, the US, UK and Australia. “However; the New Zealand wine industry needs to continue to innovate and ensure we are at the leading edge when it comes to meeting consumer perceptions, and relevant to consumer’s changing tastes.”

What can we expect from NZW in 2019? “Globally, an increased focus on emerging and growth markets. In Australia, wine tourism will be a major focus as we investigate new growth avenues and leverage our largest visitor market. Continuing to innovate our education programmes including trade immersion initiatives and in market seminars remains a top priority.”

2019

RETAIL DRINKS AUSTRALIA

ASSOCIATION

Educating on Australians’ relationship with alcohol is key Retail Drinks Australia urges industry to gain control of the dialogue in media, community and government.

here is no doubting the importance of 2018 for Retail Drinks Australia, after it saw the development of a new structure, transformed out of ALSA, in order to better navigate Australia’s changing regulatory landscape. In just three months Retail Drinks was able to evaluate the landscape and then deliver on a groundbreaking change for retail advocacy in Australia. Part of that change has seen new board members secured, and CEO Julie Ryan says the importance of those appointments, cannot be understated. Here we chat with Ryan about the change from ALSA to Retail Drinks, and the new direction of the association. Q: What have been some of your major achievements since joining ALSA/Retail Drinks Australia? I have to start with the transformation from ALSA to Retail Drinks Australia in just three short months – to be able to evaluate the landscape and then deliver on such a groundbreaking change for retail advocacy in Australia (despite some considerable headwinds)

was beyond my expectations. This includes the development and design of the brand, structure and constitution, and the building of the new website through to the fantastic launch in Melbourne which was so strongly supported. Within that restructure and transformation there were other milestones that really stand out, including membership wins such as gaining the agreement of Coles to return (who had left ALSA three year ago), and securing the long term commitment of several corporates who had served notice on ALSA to withdraw their membership. I cannot look past the amazing work of the LSA NSW team who helped shepherd the 450+ independent members of LSA NSW to a successful vote to merge with Retail Drinks, and the tireless efforts of Faye Hartley to achieve the same outcome in NT. The calibre of the independent directors who were sought and then secured for the Retail Drinks board (in many cases with a new banner membership as well) cannot be understated for its importance either – it is the strong, recognised leaders that now sit on the Retail Drinks board that make it a credible industry body.

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Q. What was the thinking behind changing from ALSA to Retail Drinks? Structurally, ALSA was no longer fit for purpose for the changing regulatory landscape in Australia. It is critical to the success of protecting and defending against further regulatory creep that uniform policy positions are developed and advocated with Government in all states and territories, and this could not be done through five separate linked organisations. In developing a new structure, we had to be conscious of the headwinds that lay in much of the ALSA legacy – in historical actions, people, relationships and policies. A new entity, structure and brand allowed a genuine line in the sand from that legacy. Retail Drinks was a brand that represented the intended vision for the future – enhancing the freedom to retail responsibly. Q. How has Retail Drinks been received by the industry? This change to Retail Drinks has been overwhelmingly embraced by industry and it is clear that there is support for leaving behind minority and siloed voices and putting the

RETAIL DRINKS AUSTRALIA

strength of industry (and its resources) into one credible and unified voice. I am not pretending there are not dissenters, or those who have sought to undermine the change. However, the priority was separating legitimate concerns from those motivated by siloed or selfinterest. Legitimate concerns were accommodated into the structure and so I feel confident that those that genuinely have the best interests of industry at heart are those that have embraced the change. Q. Coles re-joined Retail Drinks this year. How significant was that for the association? It is one of our priorities that the majority players in each membership category are a part of the organisation and contributing their expertise. Within Australia, the two organisations with the largest number of packaged liquor licenses in the chain category are Endeavour Drinks Group (EDG) and Coles Liquor Group, so we definitely knew the acquisition of their membership was critical. Q. Now that the former LSA state chapters have merged, what do the next 12 months look like for Retail Drinks on a national level? We still have a lot of work to do in order to finalise the legal elements of the mergers and wind up of state LSAs, and we also have a full review of membership services and priorities occurring in February. Nationally, we represent liquor retailers on industry bodies such as Alcohol Beverages Australia (ABA) and DrinkWise, and so we will work with these entities to identify which issues Retail Drinks will manage and which we are best to support through them. We also need to consider our national footprint of membership and recruit the staff who will support the independent stores on a daily basis with store visits, health checks and other key services best delivered in person. Our membership manager in NSW conducts over 1,200 store visits annually so members can be pretty excited about the level of support they will get in-store. With the first AGM in October where we bring all members together nationally for a meeting as well as related seminars and activities, it is bound to be a full schedule for 2019.

Q. What are the major issues that the industry should be discussing in 2019? I am going to hijack this question a little, because the known issues embedded in the draft National Alcohol Strategy (which will only be amplified if the federal election results in a portfolio change, which is widely expected), and the range of populationwide measures proposed throughout Australia for restrictions on advertising, access and availability, are probably already well covered by other leaders in this publication. I believe the most important issue for the industry is to gain control of the dialogue in media, community and government regarding Australians’ relationship with alcohol. Australians’ drinking is at a 50 year low and continues to decline. Per capita consumption has declined since a peak of 13.1L in 1971 to now 9.4L per person. Rates of single instance harmful drinking have declined and rates of teenage drinking have also decreased. In addition to the fact that almost all trends in harmful drinking are declining, we know that light to moderate drinking can be good for your health and wellbeing. Yet despite these positive trends, media reporting and government policy are dominated with communications and proposed strategies to tackle the allegation that Australians have an unhealthy relationship with alcohol and that intervention is required. This message is delivered uniformly and consistently by the temperance (anti-alcohol) lobby who seek to demonise alcohol like tobacco. We must start to talk as loudly, and as often, with the real facts and evidence about alcohol consumption in Australia. Issues with alcoholrelated harm do exist, but these are not populationwide and so should not be addressed with population-wide measures. If we do not balance the dialogue, we will have no voice on all the issues we know we will face. To date, industry has not achieved the collaboration necessary to have a consistent and unified voice to do that. This is the issue we must continue to challenge ourselves on and find a solution to. Q. What do you see as major challenges and opportunities for Retail Drinks over the next 12 months? As a new organisation, there is a huge challenge in

What are the key issues facing each state and territory? “There are many common threads across different states and territories, which is why as a national organisation we will apply the learnings from each jurisdiction to benefit the others. “Government in both ACT and Western Australia continue an exploration of the appropriateness of a minimum unit price. Evidence clearly demonstrates that heavy or problem drinkers are the least price elastic and yet measures such as minimum pricing are being proposed to tackle alcohol related harm. Critical analysis of the health claims of a minimum price must be provided by industry, and the broader impacts on business need to be communicated. “Online alcohol sales and delivery regulation is being considered in each of Western Australia, NSW and Victoria. Online alcohol sales and delivery have been in steady growth, and represent a significant segment of the alcohol retail industry. Retail Drinks has already undertaken significant consultation with all of its members to develop a proactive strategy for working with the Government to develop regulation that supports the sustainable growth of this segment. “De-regulation of licensing remains on the advocacy agenda by some other associations in Queensland, and consultation with Retail Drinks’ members will commence in 2019 on this issue to determine our position. “The Northern Territory government will continue its alcohol reforms and draft legislation (and regulation) can be expected in early to mid-2019. Supporting business through the changes, and continuing to work with current sitting and opposition government to seek fairer outcomes for business, will remain a key issue. This year will also see the introduction of risk-based licensing for all licensees in NT, and Retail Drinks will be representing its members in consultations to seek a fair and balanced regime.”

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ASSOCIATION

“We must start to talk as loudly, and as often, with the real facts and evidence about alcohol consumption in Australia. Issues withalcohol-relatedharmdoexist, but these are not population-wide and so should not be addressed with population-wide measures.”

RETAIL DRINKS AUSTRALIA

“Our membership services team will spend each and every day providing valuable services to members in-store, to help them to do business better and more efficiently, and support them in compliance with the complex regulatory framework in which they operate.”

ASSOCIATION

how much we have to achieve: develop and approve Retail Drinks’ policies, solidify its relationships with all arms of governments, maintain its stakeholder engagement and of course, prepare for its very first AGM and national meeting. The opportunities though are where the real excitement lies. Membership acquisition and maintenance will be a core focus, and ensuring that we maintain a constant dialogue with all our stakeholders will help keep us focused on where the value in Retail Drinks is for them. There is also huge opportunity to further develop and secure our relationship with other parts of industry to enhance collaboration for a better, stronger and more unified industry. Q. How do you intend to support the retail industry in 2019? That’s an easy one to answer – through the delivery of our objectives. By advocating on our vision to enhance the freedom to retail responsibly, we will: 1. Aim to nurture a stable political, social and commercial environment in which the retail liquor industry may grow sustainably. 2. Act as a single unified forum on agreed retail liquor issues in Australia and communicate the collective views of members. 3. Contribute to an informed debate by: • Co-ordinating industry position and response on agreed retail liquor issues; • analysing, summarising and disseminating research, data and practice on retail liquor issues to members and external stakeholders; and • ensuring the views of those who sell alcohol responsibly are represented. Our membership services team will spend each and every day providing valuable services to members in-store, to help them to do business better and more efficiently, and support them in compliance with the complex regulatory framework in which they operate.

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SPIRITS & COCKTAILS AUSTRALIA

Reforms to realise the potential of Australia’s spirits industry Last year saw DSICA rebrand as Spirits & Cocktails Australia, a move which CEO Alec Wagstaff sees as a huge positive. ASSOCIATION

n 2018, the Distilled Spirits Council of Australia (DSICA) rebranded to become Spirits & Cocktails Australia. With Australia seeing great growth in the popularity of spirits, both in themselves and as ingredients for cocktails designed to meet all occasions and tastes, CEO Alec Wagstaff explains the thinking behind the change. “Our new name and branding reflects that trend and that the industry we represent covers a wide range of stakeholders beyond our members,” Wagstaff said. “Our new name and look have been very well received by all stakeholders. We are the first spirits association in the world to incorporate cocktails in our name.” Reflecting on a great year of change, Wagstaff added that the association is now in a much stronger position to look forward. “We’ve rebranded, we broadened our membership base, built stronger relationships across the industry and political spectrum, and expanded our team,” he said. “All these form a strong platform to achieve some real reform that will help realise the potential of the spirits industry in Australia. “We don’t underestimate the challenges ahead but we are better positioned at the end of 2018 to meet them than we were at the end of 2017.” As well as rebranding and being in a strong position to tackle the important issues surrounding Australia’s alcohol industry in the coming years, one of Spirits & Cocktails Australia’s other big achievements of 2018 was recruiting Pernod Ricard as a member of the association. As Wagstaff said this move helps to strengthen the association’s position and influence in Australia. “It’s great to have Pernod Ricard on board,” he said.

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“Their experience and expertise in spirits, as well as their perspective as a global investor, can only strengthen an already strong Board. “Our influence is a combination of the strength of our relationships and the trust we build, combined with an absolute commitment to fact-based advocacy.” And in terms of looking forward, Wagstaff highlighted the important role that Spirits & Cocktails Australia can play for the industry in 2019. “A Federal election creates an opportunity to again make the case for policies which will encourage investment in a sector which has the potential to be a major exporter as well as protecting the existing manufacturing and marketing base,” he said. “More broadly, we have an important role in working across the alcohol industry to ensure fact-based public policy which encourages responsible consumption, and recognises the positive role the industry and our products play in the lives of many Australians.” Beyond the trade and political issues, Wagstaff also used his vast experience in the industry to predict what he believes will be the big spirits trends for the year ahead, and his ideas present retailers with strong opportunities. “Continued innovation with premix products,” he said, adding, “cocktails are increasingly being seen as an essential offer for any generous host and this brings flow-on opportunities for retailers, and [I predict] renewed interest in whisky of all kinds.” Finally Wagstaff said that despite the many challenges the industry is facing, he is optimistic about the year ahead. Why? “In one word – opportunity.” He added: “We have a great industry with the backbone being the manufacture, marketing, sale and distribution of global brands complemented by exciting growth in the emerging local spirits sector. Despite the steep taxation and regulatory hurdles we face there is a spirit of excitement in the industry.”

Supporting retailers in 2019 “Retailers are always looking for growth and our agenda of promoting the category and removing barriers such as the six-monthly spirits super tax increases can only strengthen spirits’ existing position as an extremely attractive growth category.”

Concerns for the year ahead “The whole alcohol industry should be concerned about the trend for poorly thought out regulation be it Container Deposit Legislation, labelling changes, licence restrictions. It is vital all sectors work together to make sure our voices are heard.”

WINE AUSTRALIA

Exports soar for Australian wine in 2019 Demand for Australian wine is expected to remain strong in 2019 however the global market will become increasingly competitive, says Wine Australia CEO Andreas Clark.

ASSOCIATION

nternational demand for fine Australian wine continued to grow in 2018, with wine exports to China reaching $1 billion – a first in Australia’s exports to a single market. A decade ago, Australia sent two million cases to China at around $100 million. Now, we are sending 19 million cases, and at over a billion dollars. Andreas Clark, the CEO of Wine Australia, spoke to National Liquor News about the significance of the China market to Australian wine, as well as what trends, opportunities and challenges the industry can expect to face in 2019. “China has been critical to our wine sector’s fortunes over the past few years and in 2018, we helped our sector to continue to nurture relationships in the market and support ongoing commercial outcomes. Funding from the Australian Government’s $50 million Export and Regional Wine Support Package (the $50m Package) allowed Australia to secure Country of Honour status at Vinexpo Hong Kong. The largest ever cohort of Australian wine exhibitors at an international event took part and it was uplifting that we were able to impress potential customers with a very strong presence at the exhibition. “Positively, perceptions of Australian wine continued to improve in our key export markets, particularly in China and the USA. There is room for growth in our exports and the improvement in perceptions show that Australian wine continues to entice the palates of wine drinkers worldwide. “And critically, we saw these strong international signals for the demand for our wine reflected in the increased prices that wine grape growers were paid at vintage for the fruit that goes into making our premium wines – 2018 was a big year and we look forward to continuing the momentum.” Demand for Australian wine is expected to remain strong this year. However, the global market environment is going to become increasingly competitive as additional wine comes onto the market from competing wine producing nations. “The OIV estimated that world wine production in 2018 was 27.9 billion litres, which is 13 per cent higher than 2017 and (if realised) will be the fourth largest production in the past 18 years. The big increases have come from Italy, France and Spain and between them, they are estimated to have produced an additional 2.4 billion litres – roughly double Australia’s total 2018 wine production – which is expected to put downward pressure on wine prices internationally.” According to Clark, the USA market presents one of the greatest opportunities but also biggest challenges for the Australian wine community.

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“It is the fastest growing and most valuable wine market and Australia needs to capture more of the growth in the USA. “In the USA, the opportunity for growth is at the higher price points so our focus is on raising the perception of, and demand for, Australian wine. There are positive signs of change. A Wine Intelligence study of USA wine drinkers reported quality perceptions of Australian wine have seen a significant increase from 7.82 in 2010 to 8.14 in 2018. It is also pleasing to see that exports to the USA with an average value above $10 per litre free on board increased in value by 21 per cent in the last quarter of 2018, compared to the same quarter in the previous year. “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.” And so what is the key to unlocking new opportunities for Australian wine? Clark believes that lies in skills development and investing in future generations of industry leaders. “We must continue to support and invest in the next generation of our leaders so that they are prepared for the challenges that face our sector in the future and can be catalysts for innovative change. This year our Future Leaders program will guide a new generation of leaders on a personal leadership journey and ask them to consider the opportunities and challenges facing the sector so that our community is prepared for the future. “Protecting Australia’s unique natural assets is a challenge not only for the wine sector, but for the whole country. Our grape and wine community is well aware of the risks that exotic pests and diseases present to our prosperity and it’s vital that we continue to work together to protect our vineyards and livelihoods. “Premiumisation is arguably the most significant trend influencing the global alcoholic drinks market. Generally, most markets worldwide have seen consumers trading up to higher value products across a wide range of categories. We need to continue to support growth in the premium end of our wine exports to meet this growing trend that, in turn, may unlock further growth opportunities for Australia. “The $50m Package also continues apace and will be delivering a range of activities to support for business growth this year – from events in market to skills development and our education program. I encourage our wine producers to sign up to notifications through our website to find out how to participate.”

What should we expect to see from Wine Australia in 2019? “ In 2019, we will maintain our strong focus on delivering value to our levy payers. We’re ramping up our activities overseas and at home that are supported through the $50m Package, and it will be a big year of launches for Australian wine. “In the first half of the year, we’ll launch our free and comprehensive new wine education program Australian Wine Discovered and a new website aimed at providing consumers with the stories of the people, the grape varieties and the places that make Australian wine unique. These new offerings take education and consumer engagement to a new level. “Across September and October, Australian wine producers will hit the USA market en masse for our inaugural Aussie Wine Month celebrations, which aim to put Australian wine front and centre for trade and consumers alike. “Within Australia, we’ll see the Growing Wine Exports and Growing Wine Tourism workshops delivered across the country. There is also an exciting raft of new business tools and viticulture apps that will be released this year, providing further support to Australia’s grapegrowers and wine businesses.”

YEAR IN REVIEW

The biggest off-premise stories of 2018 We take a look back at the defining moments which shaped the retail liquor industry over the past 12 months.

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January David Halliday

David Halliday resigns from Campari In January 2018, David Halliday suddenly resigned from his position at Campari Australia for health reasons. Halliday was appointed to the role of Managing Director Australia, New Zealand and Pacific Islands in September 2015 and at that time said he was “excited” to “spearhead the growth” of Campari’s brands in Australia. “The business has grown impressively since establishing its Australian office around five years ago and I’m excited to have the opportunity to lead the company’s highly motivated team and to work closely with business partners to spearhead the growth of some of the world’s most loved spirits brands in this region,” he said. Before being appointed at Campari Halliday was Diageo’s Commercial Director, Australia, New Zealand and South Pacific. In May, former Accolade Sales Director Simon Durrant was appointed as Halliday’s replacement. Halliday has since made a full recovery.

Endeavour Drinks Group names new Managing Director Endeavour Drinks Group announced that Steve Donohue would become its new Managing Director, beginning in April and taking over from Martin Smith who had retired. Donohue previously held a number of positions throughout the Woolworths Group’s drinks businesses, starting as a Dan Murphy’s store manager at 19-years-old. Brad Banducci, Woolworths Group CEO said: “We are pleased to announce Steve as the new Managing Director of Endeavour Drinks. Steve re-joins our drinks team after spending the last five years rebuilding our buying and merchandising capabilities, first with Countdown in New Zealand and more recently in his role with Woolworths Supermarkets in Australia. “He’s been instrumental in delivering our Woolworths Supermarkets pricing and range strategy as well as transforming our supplier engagement program.” Banducci added: “I would like to thank Martin Smith for his significant contribution to Endeavour Drinks.”

Steve Donohue

Beer tax increase idea “tremendously naïve” Australia’s alcohol industry dismissed a pre-Budget submission by the Foundation for Alcohol Research and Education (FARE) as “tremendously naïve”. FARE recommended volumetric tax changes to the Wine Equalisation Tax, an industry-wide 10 per cent increase on all alcohol tax as well as an increase in the tax rate on draught beer to bring it in line with the rates applied to packaged beer. “This demonstrates FARE’s one-size-fits-all approach to dealing with targeted groups and issues,” Stephen Ferguson, CEO of the Australian Hotels Association, said. “Targeting the draught beer tax is tremendously naïve as this will simply put the on-premise industry at risk, which will put jobs at risk and will do nothing to address harmful drinking. “FARE continues to exclude the industry trends which show that alcohol consumption is declining, the amount of mid-strength beer being consumed is increasing as well as all the positive work the industry is doing.”

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YEAR IN REVIEW

Lion takes Furphy national and halves NSW CDS charges

February

Lion halved its NSW Container Deposit Scheme (CDS) charges in February, as a result of a refund from Exchange for Change (EFC). EFC advised that it had reduced its forecast recovery rate for the scheme down to 67 per cent, bringing invoicing rates down from 12 to nine cents per container. Lion’s reduced charges of six cents per container were to off-set the over-recovery for the first three months of the scheme. In the same month, Lion confirmed that in response to huge demand from across the country its Victorian beer – Furphy Refreshing Ale – was being rolled out nationally. To meet the increased demand, Lion doubled the capacity of its Furphy brewery in Geelong and started brewing the beer at its Lidcombe brewery outside of Sydney.

Coles’ five-year turnaround ‘remains on track’ In February, the Liquor Director of the Coles Liquor Group, Greg Davis, highlighted the group’s progress in its five-year turnaround strategy and his hopes for the year ahead. Coles had just finished the third year of its five-year strategy and Davis said after the initial hard work, the plan remained on track. “At the beginning of the turnaround, we worked really hard on building a plan we thought would allow our brands to succeed in the marketplace. “We’re proud to be delivering a much more consistent experience for our customers and team members, particularly in-store. “We stay close to our customers’ needs by investing in detailed customer insights and engaging directly with our customer base. Customers are increasingly looking to try new things and expand their repertoire.”

Dan Murphy’s trials new ultra-convenient pick up model In February, Dan Murphy’s trialled a new smaller format store model on the Gold Coast featuring an express pick up service linked to mobile technology, aimed to provide ‘ultra-convenience’ for the modern Australian shopper. Campbell Stott, Dan Murphy’s General Manager said: “We have reinvented our online order and collection system from the ground up to create a seamless and ultra-convenient shopping experience for our customers. This is a great service for people who live in an apartment or housing complex or workplace that cannot accept a home delivery or just want to pick something up on the way home or take to a special occasion.” The Dan Murphy’s App sends customers a push notification to tell them their order is ready. The customer then uses the app to let the store know they are close.

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March Senior management movement at Metcash Scott Marshall stepped down as CEO of Australian Liquor Marketers (ALM) to be named as the new CEO of the Supermarkets and Convenience pillar of Metcash. Marshall was the CEO of ALM for four years and has more than 25 years of experience with Metcash. Marshall said: “I have always been very passionate about independent retailers and I am looking forward to leading the team and creating further opportunities in supermarkets and convenience. It is a bittersweet day for me as I have loved working for ALM and will never really leave the liquor industry as it in my blood.” Rod Pritchard, General Manager Merchandise of ALM, stepped in as Acting CEO until Chris Baddock commences this year. Pritchard has extensive experience in the liquor industry, including three years at Metcash working closely with Marshall on ALM’s growth initiatives, as well as more than 15 years with Brown-Forman. Pritchard said: “Scott certainly leaves big shoes to fill, but I look forward to the challenge and it will be business as usual while we continue to execute the strategies already in place. We will continue to work closely with our retailers and suppliers on supporting and growing independents in the liquor market.” The senior management changes came following the resignation of former CEO, Supermarkets and Convenience, Steven Cain, who had been commuting from Melbourne to Sydney for three years for the role.

Scott Marshall

Changes at the top for Coles Liquor In March Coles confirmed that Greg Davis was moving on from his role as Coles Liquor Director to become Coles’ Chief Operating Officer. General Manager of Operations, Cathi Scarce was appointed as Acting Liquor Director. Scarce has been with Coles for 25 years and has led the Coles Liquor operations team for the last three years Davis said: “I know that in Cathi’s hands we will continue Greg Davis Cathi Scarce to see the Liquor business go from strength to strength. “We are delivering our best ever customer service scores, we have reset a record number of our Liquorland stores, and we are growing our exclusive liquor brands at an impressive rate. It’s clear our strategy is working and we are in a strong position to continue our growth.” The changes came following Wesfarmers’ announcement that it was planning to demerge the Coles Supermarket business, and that Coles Managing Director John Durkan was leaving the business, to be replaced by Steven Cain the former CEO of Supermarkets and Convenience with Metcash. “As part of our strategy to make life easier for our customers, it is important that we have exceptional individuals leading our business so that Coles is set up for success into the future,” said Durkan. “Greg has been responsible for the successful transformation of our Liquor business, which has resulted in nine consecutive quarters of growth in comparable sales. Prior to running Coles Liquor, Greg ran our fresh food business where he also delivered outstanding success.” Coles accounts for around 60 per cent of the Wesfarmers group’s capital employed and 34 per cent of the group divisional earnings. Wesfarmers said that the decision to demerge Coles “follows a review of the Wesfarmers portfolio and an assessment of the composition of its capital employed to support higher levels of future growth and total shareholder returns”.

Neil McGuigan attacks natural wine

Neil McGuigan

Four-time international winemaker of the year, Neil McGuigan, delivered a brutal criticism of the natural wine category describing it as a “grape-based alcoholic beverage”. Speaking at ProWein in Düsseldorf, Germany, McGuigan was asked for his opinion on natural or orange wine – wine made with minimal or no chemical or technical intervention and generally minimal or no sulphites for preservation. “I am actually in the wine industry – that natural or orange wine is a grape-based alcoholic beverage – it’s not really wine. We can turn people off wine – that is the issue and that is the risk and as a result – I am sorry – I cannot support it at all,” he said. When asked about targeting wine specifically to millennials, McGuigan was equally evocative. “I don’t recognise millennials as a trend – any wine company has got to continue to evolve and also we Neil McGuigan have to be sustainable. We have embraced all of the things you have to do to become a contemporary wine business – new wine styles, new varieties in the ground, solar panels and all of the technology like wide bore crossflows and discharge centrifuge that you must continue to embrace and continue to evolve your wine styles.” McGuigan had some advice for wine companies looking to embrace ‘millennial’ consumers by creating fancy packaging and sub-standard wine: “You’ll sell your first bottle, but you won’t sell your second. By all means, innovate with wine styles and packaging – but don’t forget the basics – you still have to make those basic varieties better this year than you did last year.”

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YEAR IN REVIEW

April Neville Blair retires from ILG Chairman and Director Neville Blair announced his resignation from the Independent Liquor Group (ILG) in April 2018. Blair was on the ILG Board for 10 Neville Blair years. Deputy Chair Chris Grigoriou assumed the Chair’s responsibilities ahead of a by-election which was held at the scheduled Board meeting in May and Grigoriou was formally elected to the role. In a statement, ILG said: “During his 10 year tenure on the Board, Neville has overseen a period of substantial change at ILG and is highly regarded by his fellow Directors for his active involvement and hands on approach during those challenging times for the co-operative. “Mr Blair said he is honoured to have worked closely with a committed and supportive Board and expressed his appreciation for their contributions over the years.”

Eumundi Brewery Brewers Chris Sheehan and Allan Tilden

Lion looks to Malt Shovel as a new way to do business As Lion’s Malt Shovel business, which launched in June 2017, looked to build on its early momentum its General Manager Gordon Treanor explained how Malt Shovel helps the craft beer industry. “Malt Shovel is a dedicated team of people looking to do two things; nurture a collection of new brands and breweries and make business easy for the licensed trade in Australia.” As well as having access to the entire Lion portfolio, Malt Shovel nurtures an additional craft range of beers including Panhead, Byron Bay, Eumundi and the Bevy Brewing Co in Western Australia. “We have a dedicated team out on the road, who are all about building knowledge and passion for beer. They are all Cicerone trained or taking the exams, so they know a huge amount about beer and they are focusing on the customers’ needs first. “With Malt Shovel it’s about patience, brewing great beers and building strong brands.”

Report predicts Kaufland’s Australian growth A report published by Morgan Stanley predicted that the German discount supermarket Kaufland could open as many as 300 stores in Australia and potentially be more successful than Aldi. Australia represents Kaufland’s first expansion outside of Europe with reasons for the move including Australia being a relatively high growth market with higher existing margin structures by global standards, discount penetration is low and Kaufland has historically followed Aldi into new markets with success. “Kaufland takes a very adaptable approach to stores to suit the local area (in complete contrast to Aldi) and is prepared to alter the store format after the store has opened,” the report stated. “Based on our understanding of the market and on precedents we estimate that Kaufland may be targeting opening seven to 10 stores when it ‘launches’ in Australia in either late 2019 or early 2020.”

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May

Industry welcomes tax break for craft brewers and distillers Australia’s craft brewers and distillers widely welcomed an announcement from Treasurer Scott Morrison on changes to tax rates. The Government will increase the amount that beverage companies can claim back on excise and extend the concessional draught beer excise rate to smaller kegs. The alcohol excise refund scheme cap will increase from $30,000 a year to $100,000, effective from 1 July 2019. “The excise break is terrific news and sensible policy from the government and we warmly welcome it,” said Stu Gregor, Co-founder of Four Pillars and President of the Australian Distillers Association. “We still have some way to go to get proper equity in excise but the increase in the rebate from $30,000 to $100,000 is terrific news.” Morrison said: “The extra help to craft brewers and distillers will drive competition in a sector currently dominated by large domestic and multinational brewers, opening the door to new products and will likely put downward pressure on prices.”

David Pitt

McWilliam’s appoints new CEO Jeff McWilliam announced he would be stepping aside as the CEO of McWilliam’s Wines Group (MWG) effective 23 July, with David Pitt taking over the role. McWilliam took up an interim CEO position in 2016 under recommendation from the MWG board of directors. “Back in 2015 we put together a significant restructure plan for the business and we had what we felt was a very well planned and stepped out three year journey,” McWilliam said. Pitt has worked at multinationals including Campbell Arnott’s and Red Bull and has held both the Sales Director and General Manager roles for Parmalat Australia. “It was that proven track record, the key relationships he has with retailers and the fact that he has been in that space and he has done the job, which was really key for us,” said McWilliam.

EDG wins latest leg in bid to open Dan Murphy’s in Coogee In May 2015 Endeavour Drinks Group (EDG) lodged a development consent with Randwick City Council to develop the ground floor of the former Randwick Rugby Club premises on Brook Street in Coogee, into a Dan Murphy’s store. In May 2018, the NSW Land and Environment Court allowed the development to go ahead. Both EDG and the Council put forward experts to give social planning evidence, with Professor Roberta Ryan speaking on behalf of EDG, and Dr Alison Ziller for the Council. Senior Commissioner of the Land and Environment Court, Susan Dixon, said: “On balance I prefer Professor Ryan’s social impact evidence to that of Dr Ziller in this case. I have formed that view because I think Professor Ryan’s assessment is more objective and balanced. She factored into her assessment the social impact of the development, the particular circumstances of this case including the support for the development expressed by the local police and the residents in the complex above the proposed development.”

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YEAR IN REVIEW

June

Industry responds to ABC ‘fake’ alcohol story The industry was buzzing following an ABC report which claimed there is a “roaring trade” of fake alcohol in Australia. The story pointed to The Black Scot Scotch Whisky. ABC claimed to have seen test results from an international laboratory “that show ‘The Black Scot’ lacks the unique chemical compound that identify a true Scotch”. However, Rex D’Aquino, Managing Director of the D’Aquino Group of Companies, said that the ABC “has misrepresented the facts”. The (former) CEO of ALSA, Terry Mott, said: “If they look too cheap and too good to be true, that’s probably a warning sign to steer away from them. The reality is that there is already a pretty strict regulatory environment in place between Food Standards Australia and New Zealand and Customs and Excise. So I’d be surprised that any counterfeiting and incorrectly labelled spirits products would have slipped through the net of both of those Federal Government agencies.”

Coles targets private label growth in $800m transition Coles announced an $800m investment for a revamp of its stores and the evolution of its Liquorland format. John Durkan, Managing Director of Coles, announced that he was leaving and discussed the five year turnaround. He said that Coles Liquor was on-track to deliver on the five year transformation plan and that there would be a continued focus on store investment. “There is still plenty of opportunity for us to deliver greater value and a better offering to our customers through improving our exclusive brand portfolio and liquor direct. These are two areas where we continue to build a point of difference. “We are making significant investments in providing our customers with innovative home delivery and pick-up solutions. We are building an extensive click and collect network across all our brands and providing customers with an array of options like in-store service desk grocery pick-up, concierge pick-up, click and collect at Coles Express sites and dedicated click and collect lockers.”

CDS compensation to be paid to border businesses Retailers in NSW, located within 80 kilometres of the border with Victoria, became eligible for compensation for losses stemming from the introduction of the NSW Container Deposit Scheme (CDS). Following the launch of the CDS, business owners close to the border were reporting significant drops in business of up to 30 per cent. The NSW Business Chamber lobbied for compensation as customers were deserting these stores to buy drinks across the border at non-CDS prices, meaning that they were also taking their associated grocery spend with them. Under the scheme, retailers within 80 kilometres of the border who could demonstrate impact on sales or profits resulting from the CDS were compensated directly to cover those losses. “This is a huge win for businesses across the border, as many were struggling with ongoing viability and many had cut back on staffing or hours as a result,” said Michael Waters, Executive Director of the Liquor Stores Association NSW and ACT.

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July

Northern Territory liquor retailers prepare to fight

The world’s biggest-selling spirits brands revealed In July the South Korean soju brand, Jinro, was once again named the world’s biggest spirits brand by volume in The IWSR annual Top 100 listing. Jinro, owned by Hite-Jinro, sold almost 76 million nine-litre cases, 44 million more than the secondplaced brand Ruang Khao. The 2016 second and thirdplaced brands swapped places in 2018, with Thai Rum Ruang Khao increasing sales by 1.8 per cent, while Indian whisky Officer’s Choice dropped by 2.5 per cent. The annual list highlights the capacity of some local spirit brands to outgun global powerhouses, with Smirnoff (in sixth place) the only truly global brand in the top 10. The most represented category in the Top 100 was whisky with 29 brands featured, while there were 19 vodka brands and six rum brands. Eighteen of the brands in the Top 100 belonged to Diageo, making the British company the most represented owner on the list.

In July, the Liquor Stores Association NT (LSA NT) met with the NT Government’s Alcohol Review Implementation Team (ARIT) to discuss LSA NT’s response to the Alcohol Policies and Legislation Review. ARIT’s position was that local liquor stores are the cause of alcohol related harm in the community and that NT liquor retailers were in for “one hell of a fight to survive”. The two main concerns for LSA NT were the recommendation of the physical separation of groceries and alcohol in stores and a 15 per cent cap on alcohol sales. If these measures were to be imposed then a large number of small businesses would be rendered unviable and forced to close. At the time, Terry Mott, the former CEO of the Australian Liquor Stores Association (ALSA) said: “There is no evidence that suggests or unequivocally demonstrates that licensed stores are the problem. If it’s based on anecdotal evidence that someone has told the commission about or told Mr Riley about then we would like to see that evidence, but at this stage they have not produced anything that demonstrates one form of license being more responsible than another.”

Bottlemart launches one hour delivery The Liquor Marketing Group (LMG) launched a new e-commerce platform for its Bottlemart and Sip’n Save stores, with options for one hour delivery, nominated delivery times and parcel pick up in 30 minutes. LMG’s CEO Gavin Saunders said that the new platform complements the Bottlemart and Sip’n Save brands. “The addition of an e-commerce platform allows our customers to shop anytime, anywhere and choose when they’d like to come into store to pick up, have their purchases delivered in as short as one hour or nominate an alternate delivery time which is convenient for them. “The e-commerce platform provides a direct connection with the customer to provide offers or information on products or promotions which they have enjoyed. “Customers can download the Bottlemart App through the App store or Google Play for android devices.”

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YEAR IN REVIEW

August Gavin Saunders

L-R Alex Gale, Rodolfo Chung, Andy Williamson and Mark Woollcott

A flurry of online liquor acquisitions There were two major liquor e-commerce acquisitions in August, with ZX Ventures, a group within AB InBev acquiring BoozeBud and the 7-Eleven Group taking a majority stake in Tipple. “What really attracted us to BoozeBud was the founders,” Rodolfo Chung, Australia’s Head of ZX, said. “We believe that we are in the right moment in terms of the growth of the e-commerce business in Australia.” Andy Williamson, BoozeBud’s Co-founder, added: “This is very much a continuation of the on-going growth and building of our business. We have spent the last four years putting in place, what we think are some of the best building blocks. Most pleasing for us, we have now got the backing and the resources that we need to accelerate those plans and to bring that to market faster.” Tipple’s founders developed a proprietary technology platform that integrates with local bottle shops to offer a delivery service. With the 7-Eleven Group’s investment, the plan is to take the delivery logistics platform to a national scale and to focus on accelerating the growth and expansion of Tipple as a standalone business. “This partnership is about bringing our customer insights and marketing expertise to help accelerate the growth and expansion of Tipple as a standalone business,” Angus McKay, CEO of 7-Eleven, said. “While in time there may be interesting opportunities for the two businesses to explore and work together serving convenience customers, for now this partnership is about bringing our customer insights and marketing expertise to help accelerate the growth and expansion of Tipple as a standalone business.”

CDS and energy costs hurt Lion’s earnings Lion released its trading update with the first half of the year revealing a drop in net sales revenue and operating earnings. The results were released in conjunction with Kirin Holdings’ half year report and Lion said that despite the first half challenges, it remains on track to deliver a full year increase in operating earnings. Lion’s net sales revenue decreased by 1.6 per cent to $1,912.5 million, which the company said was impacted by challenging trading conditions in Australia and New Zealand’s mature beer markets. However, Lion said that its sales in premium categories remained strong, particularly in the growing craft and contemporary beer segments. The company also said that the impact of the NSW Container Deposit Scheme (CDS) and rising energy costs had contributed to a 9.2 per cent decrease in the first half group operating earnings to $241.8 million. The national rollout of Furphy and the continuing momentum of Iron Jack have helped to boost Lion’s volume share.

LMG experiences growth in every state and every category The Liquor Marketing Group (LMG) achieved an average national growth rate of 4.5 per cent, with growth coming from all states and territories and all major categories. “Not only is it growth, it’s good growth from five consecutive quarters across all states and all major categories,” said LMG CEO Gavin Saunders. “We’ve had to fight for every single percentage point of growth over the past few years and this is a fantastic result. “Having consistency of growth across all states and all categories has come from the continual evolution of our programs. Our programs are working well and we’ll continue to focus on them over the coming year.” He went on to say that given their current platform and momentum, along with an additional 10.9 per cent investment in FY19 he was comfortable to say that growth in 2019 would be much higher than four or five per cent.

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YEAR IN REVIEW

September

Paul Esposito

TWE explores new wine drinking occasions Over the past three years Treasury Wine Estates (TWE) conducted its largest ever usage and attitudes study, finding that in 2011, 6.1 million Australians drank wine at least twice a week but in the last six years, 9.8 million Australians drank wine, but just once a week. The age bracket found to have the lowest level of engagement was millennials. The TWE study showed a decline in wine consumption at home, with more people shifting towards the on-premise and that in the off-premise more than 60 per cent of shoppers were deciding what brand of wine to purchase while in-store. “One of the key segments that we’re focusing on, not only this year but into the future, is all about refreshment,” said Kylie Farquhar, State Sales Manager at TWE. “We believe that bringing wine into that whole refreshment category is the biggest incremental growth activity that we could do in the next 12 months and beyond.” In response to the findings, TWE launched a range of wine in cans under the brands of A’tivo, Squealing Pig and T’Gallant. Taking findings from the US and UK, all of the wines released into the market were spritzed. “All of the cans that we’re launching into the market right now are spritzed,” added Farquhar. “They are 100 per cent wine-based and something very new to the market. “Our campaign is what we’re calling ‘The Big Chill’ so chill it, ice it, share it. By doing that, we believe together we will drive wine into more occasions, we will drive more foot traffic into stores and venues and then obviously a key part of this is trying to inspire new consumers into the wine market.”

Kylie Farquhar

ILG: “We’re ahead of the game” The Independent Liquor Group (ILG) announced it was experiencing growth in every category of its business, with an improvement in net assets sitting at $18.7 million. At the 2018 ILG Conference in Singapore and Bangkok, CEO Paul Esposito told delegates “we’re ahead of the game”. In September 2017, ILG reported net assets of $16.8m and in 2018 that balance had risen to $18.7m. Sales revenue in 2018 saw 13 per cent growth versus 2017. Esposito said that the Townsville warehouse is now fully-owned by the co-operative and the Super Cellars and Bottler Banners were up 13 per cent in value and nine per cent in volume compared to 2017. Another area of focus Esposito spoke about was increasing ILG’s membership base by five per cent year on year.

Capitalising on the digital age Speaking at the 2018 ILG Conference in Singapore, Luke Van Staveren from Pernod Ricard Australia looked at the power of digital and identified some key consumer opportunities. Van Staveren pointed to the frequency of internet use in Australia, saying that 82 per cent of consumers look up information about a product or brand while they’re in-store and 52 per cent of in-store purchases are being driven by digital content. “Sixty-three per cent of people compared prices from a competitor retailer while they were in a store,” he said. Van Staveren identified seven key consumer opportunities: it’s better for me, human authenticity, shaking the codes, power for the consumer, easy at home and everywhere, doing good for the environment and the feminine identity. “Our consumers need online inspiration. Shopper behaviour has changed. Convenience and speed is key. Gaining that data capture is important.”

Luke Van Staveren

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YEAR IN REVIEW

October The future of the IBA Metcash Group CEO, Jeff Adams, spoke about his vision for Independent Brands Australia (IBA) and laid out plans for a “better Metcash” at the annual IBA Conference. “It’s a continuous cycle of improving your customer offer through foresight, through insight, through action,” he said. Adams highlighted convenience, availability, price and range as the key drivers influencing shopper behaviour in today’s market. “Customer trends are showing that customers are shopping more frequently, less planned and more local. As a network, I believe IBA is well positioned for this trend, with some great convenient locations, and we’ll need to keep developing a strong local presence. “Having what they want when they want it is important so managing our stock replenishment and warehouse deliveries to make sure we’re always in stock is another key factor.” To keep up with the evolving shopper, Adams said that Metcash would launch a new program called Mfuture. “Mfuture will be a five-year program working on building a better Metcash to serve all of you: our retailers, our suppliers and your customers. Mfuture will be a balanced program focused both on sales growth initiatives and driving cost efficiencies.”

Giuseppe Minissale, Shane Tremble, Sharni Wise-Fenton, Faye Hartley, Paul Heilman, Cathi Scarce, Justin Dry, Julie Ryan, David Short

Retail Drinks Australia announces Foundation Board Retail Drinks Australia officially launched in Melbourne in October, announcing its Foundation Board Members. The Foundation Board includes CEO Julie Ryan and Giuseppe Minissale, the President of Porter’s Liquor as Chairman. They are joined by the Presidents of ALSA’s former state-based chapters including Paul Heilman the Managing Director of Top Cellars Group (formerly President of LSA NSW), Faye Hartley the Owner of Stuart Park Corner Store (formerly President of LSA NT), and Sam Cufone the Owner of Parafield Airport Liquor Store (formerly President LSA SEA). It was rounded out by Shane Tremble the General Manager Corporate Services at Endeavour Drinks Group (EDG), Justin Dry the Co-founder of Vinomofo, Rod Pritchard the Interim CEO of Australian Liquor Marketers (ALM), David Short the Managing Director of Shorty’s Liquor and Cathi Scarce the Director of Coles Liquor.

Jeff Adams

L-R: The new ILG Board - Douglas Dalley, Steven Speed, Kent Walker, Sergio Colosimo, Chris Grigoriou, Damien Bottero, Bobby McGhee, Shaughn Murphy, Peter Cox, Paul Esposito

Confusion reigns at Independent Liquor Group A turbulent week for the Independent Liquor (ILG) ended with a new board voted in, following four Directors attempting to serve termination papers against CEO Paul Esposito, which were overturned by the Supreme Court of NSW. The rebel Directors, Malcolm Russell, Michael Thomas, Kylee Dennis and David Mellor had also attempted to oust Chairman Chris Grigoriou and fellow Directors Sergio Colosimo, Kent Walker and Damien Bottero. Ultimately, the four rebel Directors resigned their posts from the ILG Board. Paul Esposito retained his role as CEO. Damien Bottero, Kent Walker and Sergio Colosimo were duly voted to remain on the board. The remaining nominees – Peter Cox, Douglas Dalley, Robert (Bobby) McGhee, Shaughn Murphy and Steven Speed – successfully joined the board. In his AGM opening address, CEO Paul Esposito admitted, “It’s been a really tough week, full of emotion and passion. So let’s be respectful, we’re in it together. Our job is to grow.”

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YEAR IN REVIEW

November

Coles demerger approved by Supreme Court The Supreme Court of Western Australia approved the scheme of arrangement for the demerger of Coles Group Limited from Wesfarmers. The demerger was approved by shareholders at a General Meeting and Scheme Meeting. In a statement about the Supreme Court approval, Wesfarmers said: “Wesfarmers intends to lodge a copy of the orders made by the Supreme Court of Western Australia with the Australian Securities and Investments Commission on Tuesday, 20 November 2018 and the Scheme will be effective on that date. “The Coles transformation under Wesfarmers ownership has been remarkable – with the store base renewed, a step change in fresh food quality, and a significantly better value position all aimed at improving our offer to Australian consumers,” Steven Cain, Managing Director of Coles, said.

Three major wine groups to join forces to create super site The Wine Society, Cracka Wines and Wine Growers Direct announced they would join forces in February 2019 to create a super site that will service a combined 400,000 strong database. The new digital platform, called The Wine Collective, features a bespoke wine recommendation engine with the ability to identify customers’ tastes and present a tailored selection of wines to that particular shopper. The Wine Collective stems from 2017’s merger between Australia’s first wine club, The Wine Society, and the Online Liquor Group, owners of Cracka Wines. “The bedding down of this merger has unlocked immediate scale and synergies,” said The Wine Society CEO Lloyd Heinrich. “With online being the fastest growing sales channel in Australia, and representing only four per cent of liquor sales, we are well placed to really step up our offer and service this rapidly growing market better.”

Lloyd Heinrich

The LSA NSW and ACT Retail Liquor Industry Awards for Excellence

LSA NSW and ACT celebrates a record breaking Retail Liquor Awards night The 23rd annual Liquor Stores Association NSW and ACT (LSA) Retail Liquor Industry Awards for Excellence broke records in November, with record nominations and a record turnout. Around 400 liquor retailers, suppliers, representatives and key industry stakeholders attended the Sofitel Sydney Wentworth. During his welcome speech, LSA Executive Director Michael Waters reflected on LSA’s past year and decade calling out a number of achievements in representing and servicing the needs and interests of members and the broader retail liquor industry. Red Bottle Pitt Street won Liquor Store of the Year; Porter’s Liquor Roseville won New Liquor Store of the Year, and Cellarmasters won Online Liquor Store of the Year.

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YEAR IN REVIEW

December Retail Drinks adds to its ‘industry leading’ board of directors Retail Drinks Australia announced that Gavin Saunders, the CEO of Liquor Marketing Group (LMG) and John Carmody, the MD of Hotel & Tourism Management, had joined its board of directors. CEO Julie Ryan said that Saunders and Carmody would both join the Retail Drinks board to represent banner group members, and to give substantial weight to the representation of independent stores. LMG operates the Bottlemart, Sip’n Save and Harry Brown banners and Carmody’s Hotel & Tourism Management operates the retail banners of Liquor Legends, Urban Cellars and Clubslink. “We promised members that we would deliver a board of industry leaders, providing equal representation and voting rights to each category of chain stores, multi-state banners, single state banners, liquor stores, corporates and online. “Together with the directors already appointed to date, we have recognised industry leaders to agree the strategic advocacy and membership services that will underpin the Retail Drinks vision of enhancing the freedom to retail responsibly,” said Ryan. The board is rounded out by CEO Julie Ryan and Australian Liquor Marketers’ Giuseppe Minissale, as Chair. They are joined by the former Presidents of the state-based Liquor Stores Association chapters including Paul Heilman, the Managing Director of Top Cellars Group (formerly President of LSA NSW); Faye Hartley, the Owner of Stuart Park Corner Store (formerly President of LSA NT); and Sam Cufone, the Owner of Parafield Airport Liquor Store (formerly President LSA SEA).

L-R: Store Manager Andree Almario with Ben Braun from ILG’s retail services department

ILG’s pilot retail outlet exceeds sales expectations The Independent Liquor Group’s (ILG) pilot liquor store in Victoria announced a positive first month of trading with sales exceeding expectations. The Liquor Co-op opened its doors on 5 November in Bacchus Marsh and was a new concept for ILG, with the site acting as a retail outlet, a wholesaler and a place to trial new initiatives and consumer offerings that could be shared back to ILG members. CEO Paul Esposito said the Victorian depot would bring to fruition the opportunity to service corporate accounts, which “adds to the enthusiasm being a new market, a new challenge and hopefully a new beginning to what ILG’s retail venture is predominantly undertaking by the co-op to trial different initiatives and consumer offerings we can share back to our members”. “We stand by what we say, ILG is all about its members and everything we do is aimed at empowering the independents.”

Liquor sales increase for Metcash Metcash released its results for the first half of the financial year, showing an overall increase in revenue, earnings and profit as well as an increase in liquor sales and earnings. Metcash’s total liquor sales increased 6.7 per cent to $1.8 billion, which the company said reflected “continued growth in sales to the IBA bannered group and ALM wholesale customers”, adding: “Wholesale sales through the IBA network increased 7.2 per cent, partly due to the conversion of a number of contract customers to the IBA banner, including Thirsty Camel in South Australia and the Northern Territory.” Earnings for the liquor division were impacted by the new accounting standard AASB 15, with earnings under the new standard down 1.0 per cent to $29.1 million, however excluding the impact of the new standard, earnings increased 5.4 per cent to $29.1 million. The group said this result reflects the strong sales performance, which was partly offset by higher costs including fuel and CDS costs.

L-R: Gavin Saunders and John Carmody

NATIONAL LIQUOR NEWS FEBRUARY 2019 | 123

TOP WINES OF 2018

2018’S Standout Wines

The National Liquor News tasting panel has selected its favourite wines from throughout 2018.

Red Deer Station 100 Royal Reserve Cabernet Sauvignon Region: Eden Valley/Barossa Valley VIN: 2015 LUC: $45 “Rich, dark fruits, chocolate, liquorice, so much power and intensity, jammy.” – Daryl Fisher, Fisher Fine Wine

Carillion The Crystals Chardonnay Region: Orange VIN: 2016 LUC: $17.90 “Rich, complex oak, peaches and lychee. A lovely, complex wine with good balance.” – Daryl Fisher, Fisher Fine Wine

“Rich, creamy oak, palate holds the alcohol and a great tannin structure.” – Damien Smith, Casama Group

“A vibrant yet nuanced example displaying roasted pineapple, spicy aromatics and background notes of coconut.” – Bryn Lucas, Heinemann Australia

Distributed by: Swan Wine Group

Distributed by: Free Run Distributors

96 Brokenwood Trevena Vineyard Semillon Region: Hunter Valley VIN: 2012 LUC: $32.68

Stoneleigh Wild Valley Chardonnay Region: Marlborough, New Zealand VIN: 2016 LUC: $15.73 “Tropical fruit aromas with subtle background oak. The integration of fruit and oak on the palate is seamless.” – Bryn Lucas, Heinemann Australia

“A classic, complex white. It starts broad and punchy but the length of mouth-watering flavours rights the ship.” – Andrew Graham, The Wine Collective

“Impressive palate, rich lovely honeyed oak with an amazing finish.” – Daryl Fisher, Fisher Fine Wine

“A lovely wine that pairs great zesty citrus with lively minerality and some yeasty green notes.” – Andrew Stubbs, Vine, Providore of Fine Wine

Distributed by: Pernod Ricard Australia

Distributed by: Samuel Smith & Son

THE SYSTEM 95-100 Classic: an exceptional wine

90-94 Outstanding: a wine of remarkable character

124 | FEBRUARY 2019 NATIONAL LIQUOR NEWS

85-89 Very good: a wine with impressive qualities

TOP WINES OF 2018

Fox Creek Family Shiraz Region: McLaren Vale VIN: 2016 LUC: $13.29

Harewood Estate Semillon Sauvignon Blanc Region: Great Southern VIN: 2016 LUC: $21.50 “Fresh cut grass, goose berry, green pea.” – Con Stamoulis, Corkscrew Cellars “Reminded me of the classic Margaret River SBS, hopefully that’s what it is.” – Duncan MacDonald, Cherry Tree Hill

Distributed by: Single Vineyard Sellers

“A lovely, elegant Shiraz with vibrant fruit balanced with lifted spices and some grippy tannins.” – Andrew Stubbs, Vine – Providore of Fine Wine “Moderate aromas of blackberry and satsuma plum following through on the palate. Bright and easy to drink.” – Amy Hayes, McWilliam’s Wines Group Distributed by: Pure Wine Co (SA/NT/QLD/NSW), Nelson Wine Company (VIC), DWS (TAS), Terra Wines (WA)

33° South Semillon Sauvignon Blanc Region: Margaret River VIN: 2013 LUC: $10.07 “Secondary characteristics of key lime pie showing through. Strong acid/lime with considerable length.” – Ambar Maddox, Pernod Ricard Australia “Tight acid freshness. Honeycomb, cream, honey. Aged characteristics. Pleasant on second look.” – Amy Hayes, McWilliam’s Wines Group Distributed by: Kollaras & Co

McGuigan Philosophy Cabernet Shiraz Region: South Australia VIN: 2014 LUC: $75.25 “Bright lifted, cocoa dusted fruits, medium bodied and elegant style. Quite complex with tobacco notes, lovely palate weight with the flavours building on the finish” – Reneé Foster, Moppity Vineyards “Old oak, violets, cloves, blackcurrant, soft tannins and very elegant. Great balance, length and clarity” – Michael Quirk, formerly of McWilliam’s Wines Group Distributed by: Australian Vintage Limited

J acob’s Creek Double Barrel Cabernet Sauvignon Region: Coonawarra VIN: 2015 LUC: $17.73 “Young, tight, good French oak - needs time.” – Stephen Knight, Red Bottle “A fruit bomb. Luscious fruit, big tannins, lots of oak, lots of presence.” – Andrew Graham, The Wine Collective

Shingleback Local Heroes Shiraz Grenache Region: McLaren Vale VIN: 2016 LUC: $15.05 “Enjoyable aromas of blackberry, vanilla and mocha. Medium body and grippy tannins” – Amy Hayes, McWilliam’s Wines Group “Blackberry, cassis, jammy, green, rich, good balance, firm dry finish, a bit of coffee” – Daryl Fisher, Fisher Fine Wine

Distributed by: Pernod Ricard Australia

McGuigan Hand Made Shiraz Region: Langhorne Creek VIN: 2014 LUC: $26.88

Distributed by: Muster Wine & Spirit (SA), Domaines & Vineyards (WA), Shingleback Wine (rest of Aus)

Bird in Hand Pinot Rosé Region: Adelaide Hills VIN: 2018 LUC: $16.33

“Blackberry jam, vanilla oak, tarry. Big tannins, charred oak coming through.” – Daryl Fisher, Fisher Fine Wine “Tight despite its age with liquorice, berry and pencil shavings on the nose.” – Tom Lynar, DMG Fine Wine

Distributed by: Australian Vintage Limited

“A great wine! Rich and creamy with strawberries and peaches on the palate. Long lasting and toasty” – Nigel Jerram, Fisher Fine Wine “Elegant, closed, perfumed strawberry. Good balance, stalky finish” – Daryl Fisher, Fisher Fine Wine

Distributed by: Bird in Hand

THE SYSTEM 95-100 Classic: an exceptional wine

90-94 Outstanding: a wine of remarkable character

85-89 Very good: a wine with impressive qualities

NATIONAL LIQUOR NEWS FEBRUARY 2019 | 125

WINE TASTING

Castel Côtes de Provence Rosé Region: France VIN: 2017 LUC: $11.03

Katnook Founder’s Block Chardonnay Pinot Noir Region: Coonawarra VIN: NV LUC: $14.51

“Finishes a little tart, but this is just the savoury characters coming through” – John Quinn, IconicWinemakers.com.au

“Lemon, floral, citrus, cedar, vegemite, toasty finish, good length” – Daryl Fisher, Fisher Fine Wine

“Heady nose, very perfumed, floral and musk. The palate is quite dry, grapefruit and citrus. Finishes fresh and bright” – Renée Foster, Moppity Vineyards

“Dry, medium length, very pale in colour, subtle fruit” – Elizabeth Schoen, Samuel Smith & Son

Distributed by: Fesq (VIC, NSW, QLD), Muster (SA), Off the Vine (WA)

Distributed by: Kollaras & Co

Handpicked Collection Pinot Noir Region: Tasmania VIN: 2017 LUC: $32.35 “Nice tertiary flavours. Mushroom, earthy. Good ripe fruits and nice acid balance.” – Geoff Bollom, Fennell Bay Cellars “Lovely juicy raspberry and cherry fruit if just a little simple.” – Andrew Graham, The Wine Collective

Distributed by: DMG Fine Wine

De Bortoli Wines Sacred Hill Traminer Riesling Region: Wine of Australia VIN: 2017 LUC: $4.82 “A classic off-dry.” – Duncan MacDonald, Cherry Tree Hill “Floral, citrus bloom and lavender. Good acids and complexity. A tart finish.” – Daryl Fisher, Fisher Fine Wine

Distributed by: De Bortoli Wines

Howard Park Flint Rock Pinot Noir Region: Great Southern VIN: 2017 LUC: $16.72 “Good intensity on nose. Caramel, toffee, red fruits. Well balanced. Will age well.” – Geoff Bollom, Fennell Bay Cellars “A bright varied style with lovely fruit. A proper meaty Pinot that has been really well put together.” – Andrew Graham, The Wine Collective

Distributed by: Burch Family Wines

Lisa Bunn Orbel Riesling Region: Nierstein, Rheinhessen, Germany VIN: 2016 LUC: $31.55 “Hints of aged Riesling. Good balance of acid and fruit. Really interested to try this with some age.” – Andy Young, TheShout “Stone fruits on the nose, a crisp freshness with a refreshing acidity.” – Craig Hawtin-Butcher, Australian Hotelier

Distributed by: Decante This

Rotari Riserva Brut Region: Trentino Alto Adige, Italy VIN: 2010 LUC: $19.35

Framingham Nobody’s Hero Pinot Gris Region: Marlborough, New Zealand VIN: 2017 LUC: $16.13

“Big yeasty, toasty and of course vegemite. Lots of fruit with a long honey finish” – Daryl Fisher, Fisher Fine Wine

“Slightly toasty, sweetness well balanced on the palate. Excellent length.” – Bryn Lucas, Heinemann Australia

“Oaky on the nose, good structure and acidity. A nice wine” – Andy Young, TheShout

“Brioche and dried apricots on the nose with apricots and perfume on the palate, long length and medium body.” – Elizabeth Schoen, Samuel Smith & Son

Distributed by: Single Vineyard Sellers

Distributed by: McWilliam’s Wines Group

THE SYSTEM 95-100 Classic: an exceptional wine

90-94 Outstanding: a wine of remarkable character

126 | FEBRUARY 2019 NATIONAL LIQUOR NEWS

85-89 Very good: a wine with impressive qualities

BATCH PROJEC E L G T SIN HAND CRAFTED

BATCH FERMENTED

Available to order now Please contact your Australian Vintage Ltd Representative on 02 8345 6377 for more information.

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