Galatea Presentation May 2015
Swedish Alcohol Market. • Goverment controlled through state owned Sytembolaget, similiar to LCBO. • Alcoholic products above 3,5% can only be sold to consumers in the some 420 stores. • Stores are divided into Standard stores and Premium stores due to consumer pattern in each store. • Systembolaget is the world’s second largest distributor of alcoholic beverages, distributing 470 miljon liters annually. • Some 50% of the volume is beer and 42% wine, beer is the only category growing 2014 vs 2013. • Products are listed though a tender process. • Products are evaluated every three months through a ranking system and given the distribution it’s sales have qualified it for. • Systembolaget has an idividual agreement for all it’s 4 000 products, this agreement is for the product itself, NOT for the distributor of the product. • The On-trade market in Sweden consists of 9 000 outlets with a permit to sell alcoholic beverages.
Wine 2014 vs 2013 • Wine growth as such was stabile in volume, but grew 3,2% in value. – Market more mature. • Etically certified wines grew by 54%. – Mainly due to new launches – SA, Chile and Arg rose from 4,8 to 9,6% • Organic wines had a stable growth with a slight decrease in 2013. – Actions are being taken in hindsight of political desicion of 10% Organic by 2020. – 2014 the Organic volumes grew to 10,8% of the volumes. • Lesson: – Organic and ”all sorts or certifications”
Wine 2014 vs 2013, cont. • For the first year since its entrance, boxed wines decreased, in total by 0,8% – This was only in the low-priced segments – Red BIB up to SEK 199 saw the biggest decrease with 12,9% • Per format: – Boxed wine stands for 52,4% in volume – Or 56,5%, not including sparkling.
Sparkling/ Champagne 2014 vs 2013 • Sparkling wine grew by 11% • Champagne saw a growth in the lowest price segment. • Champagne segment 0-249 grew by 7,7% • Champagne segment 250-399 grew by 5,9% • Champagne segment +400 decreased by 1,9% • Sparkling wine saw the biggest growth in the segment 80-119, 21% • The segment 0-79 grew by 12% • Italy, France and Spain are the three dominant countries.
Wine 2014 vs 2013, cont. • White wine makes up 31% of all wines – Slight increase in volume – Increase in value, 4,5% – Only 30% is bottled wine – Biggest growth from 90-199 – There is a clear trend for Premium wines among the white wines. – South Africa stands for 23% in volume. – And 19% in value. – France has almost the same value, but – 12,5% of the volume
Wine 2014 vs 2013, cont. • Red wine makes up 52,4% of the total wine sales. • Red wine decreased by 2,2% in volume, but grew slightly in volume. – The move appears to have been towards Rosé-wines – Volume growth is mainly between SEK 80- 99. – All cheap bottles are losing volume. • Red wine per country: – Italy has 40% of the volumes – South Africa, Spain and Australia follows, but all are losing volume. – Chile, Argentina, Portugal and New Zeeland are increasing in volume – South Africa, Spain and Chile have the lowest price per liter. • Red wine by grape: – Swedes like their sugar and Zinfandel is now the biggest varietal.
Systembolaget’s Product range model . Ranking/Evaluation and launches: • Ranking (evaluation)is made four times per year. • Launches of new products are made four times per year. • All launches have the chance to qualify for extended listing. • Products will only have a guaranteed distributíon for six months. • Products will be evaluated already after one month, not six as previously. • The current January-March period decides distribution as of June 1st. • Consumer prices can only be changed twice a year, March 1st and September 1st, with a three month lead time .
Ranking
Evaluation • What is evaluated and how? • First of all it’s not about sales, it’s about margin for Systembolaget. • A product with a higher price will get higher points. • So, 1 Margin • 2, Market factor, as compared to other products in same segment, for each shop. • 3, Volume correction • These three will give a product its future distribution and the process is done seperately for Standard stores and Premium stores.
Evaluation, cont. Category Name Points Mark points Factor Vol. corrected points Volymkorrigering Final points Fut. SMIX4 Fut. SMIX5 Fut. SMIX6 Curr. stores in cat. No Sold Tot Sold Premium Foot of Africa Chenin Bl Box 3L 233 926 233 926 1,00 77 975 3 77 975 ABCD ABCDE B 92 16 959 62 091 Premium Robertson Chardonnay box 3 L 140 986 140 986 1,00 46 995 3 46 995 ABCD ABCDE B 92 8 611 30 435 Premium Leva Chard Dimiat & Muscat box 3 l 139 356 140 119 1,01 46 706 3 46 706 ABCD ABCDE B 90 10 077 46 185 Premium Il Nostro Catarratto Grecani box 3L 132 103 134 789 1,02 44 930 3 44 930 ABCD ABCDE B 76 10 058 33 163 Premium Inycon Chard Pinot Grigio Box 3L 117 558 119 084 1,01 39 695 3 39 695 ABCD ABCDE B 32 7 791 20 932 Premium Casas Patronales Char Sauv Bl 3L 118 753 118 753 1,00 39 584 3 39 584 BCD ABCDE 92 7 505 26 382 Premium Chapel Hill Riesling Sauv Bl box 3l 110 744 110 744 1,00 36 915 3 36 915 BCD ABCDE 85 7 308 34 469 Premium Chill Out Fresh&Fruity Chard box 3L 108 554 108 554 1,00 36 185 3 36 185 BCD ACDE 92 6 649 28 041 Premium Drostdy-Hof Steen box 3 l 103 946 108 342 1,04 36 114 3 36 114 CD CDE 32 7 137 21 916 Premium Ecologica Torrontés Chardonnay 3L 99 101 99 356 1,00 33 119 3 33 119 BCD BCDE 91 5 641 17 903 Premium Mandala SB CB Chard box 3 L 80 475 83 289 1,03 27 763 3 27 763 D DE 71 4 974 14 898 Premium Opal Springs Chard Viogn 14 3 L 53 539 60 127 1,12 20 042 3 20 042 D DE 71 3 571 15 431 Premium Oude Kaap Chardonnay box 3l 34 987 51 115 1,46 17 038 3 17 038 8 2 006 6 826 Premium Black Tower Rivaner box 3 L 34 284 50 393 1,47 16 798 3 16 798 32 1 731 12 022 Premium White Roses Chard Viogn Box 3 L 16 299 31 454 1,93 10 485 3 10 485 0 994 5 165 Premium Wildboar's Rock Riesling box 13 3L 13 675 26 694 1,95 8 898 3 8 898 0 776 1 375 Premium KWV Chenin Blanc Muscat box 3 l 7 449 21 845 2,93 7 282 3 7 282 0 452 11 547 Premium Moselland Riesling Kab box 3 l 6 698 21 269 3,18 7 090 3 7 090 0 329 3 425 Premium Californ White box 3 l 7 417 18 734 2,53 6 245 3 6 245 0 533 6 351 Premium Königsmosel Riesl box 3 l 5 114 17 414 3,40 5 805 3 5 805 0 246 1 020 Premium Florentina Torrontes S Bl box 3L 2 690 9 277 3,45 3 092 3 3 092 0 177 3 248 • This example is for Premium Category white wine 3 Liter BIB. • Factor is how the wines are performing in comparison with competing wines.
Galatea • Situated in Stockholm, Sweden. • 2014 turnover € 92 million. • 5th largest supplier to State monopoly for alcoholic beverages. • 4th largest supplier to the On-trade • Own it’s warehouse and distribution chain, through daughter company KGA • 100 employees (including KGA staff) • Sales volumes 2014, 29 million liters. • Since October 2014 100% owned by Martin&Servera
Sales team • Our sales team consists of: – 9 sales reps, covering the whole of Sweden – 3 full time tele sales – 1 coach – controller for installation maintenance – 1 Sales director – 1 Sales manager On-Trade – 1 Wholesaler KAM – 1 KAM Systembolaget, -former buyer at Systembolaget • We deliver weekly to 1 000 premies, 100% access to all outlets through our distribution set-up and collaboration with the major breweries.
Key of Galatea: • Route to market: • Though our set-up with: – 5 Brand Managers, all specialized in their field – Own sales force – Martin&Servera partnership – Logistical set-up – Giving us Contol of the entire logistical flow, from order to final delivery at end consumer. – Making life easier, more secure AND more cost efficient We have an unrivalled Route To Market
Galatea Logistics • Galatea owns it’s own distribution, something that very few importers apart from the major breweries do • KGA, is the largest distributor of alcoholic beverages in Sweden. • KGA offers a lot of advantages to Galatea, especially through pricing, Galatea pays ONLY when a case leaves the warehouse – No off-loading cost – No registration cost – No rent • These savings are generally invested back into either, – Marketing – Consumer pricing – Better margin for the producers • Plus we have excellent service when it comes to trouble shooting. – And extra services, such as re-branding and re-packing • http://www.galatea.se/eng/about-us/videos/the-kga-video/
Outside the box campaigns • Galatea was in 2011 the first company to do marketing in Cell-phones. • Cell phone campaigns have the benifit of being: – Gender specific – Age specific – Area specific – Time specific – Measurable through CTR:s • People us the cell phones when they have the time and often actually are looking for something.
Outside the box campaigns • Here is a campaign summary from the summer of 2014: – 670 000 unique viewers – 32 887 has swiped – 17 000 used the map (CTR 0,85%) – 50 used the store locator
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