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REVIEW AS SALES SLIDE
Woolworths CEO Brad Banducci has announced a
group-wide review in a bid to halt the retailer's falling
sales, market share and profits.
Speaking at the presentation of the company's third
quarter results, Banducci said that the company's
turnaround will take three to five years as it looks to
redress poor systems that have hindered sales.
"The sales performance in Australian supermarkets
continues to be impacted by high levels of deflation,
predominantly from our price investment,"
"However we are encouraged that customers are
starting to notice the improvements we are making.
It will be a three to five year journey to rebuild
Woolworths Supermarkets, but we are confident we are
on the right track."
He added: "We have commenced a Group wide
review across all aspects of our business. We are also
adopting a new operating model designed to move
accountability into the individual businesses as
well as reviewing our corporate and shared service
functions to ensure they are organised to best support
Overall Woolworths' total sales slipped 0.3 per cent
to $14.9 billion for the third quarter, with food and
liquor sales down by 0.9 per cent. That fall comes
despite the company investing more than $400 million
in price reductions in the second half of the year.
In Liquor, the company said that Dan Murphy's
"continued to perform strongly with a record high
Net Promoter Score in March, despite strong price
competition in the market largely focused on wine."
Adding that "BWS continued to record positive
comparable store growth".
Woolworths also said that it opened one (net) Dan
Murphy's store, bringing the total to 205, while it
reduced BWS stores by two (net), bringing the total
Earlier in the month, Woolworths Liquor Group
announced it would change its name to Endeavour
GLOBAL ALCOHOL CONSUMPTION FALLS
Global alcohol drinks volumes fell by 0.7 per
cent in 2015, the first global fall in more than
The figures from Euromonitor International
showed that the overall decline was driven
largely by consumption falls in China (3.5
per cent), Brazil (2.5 per cent) and Eastern
Europe (4.9 per cent). Australasia and
Western Europe "largely flatlined" according
to Euromonitor, with North America providing
"a much needed shot of optimism in an
otherwise sobering global landscape" with 2.3 per cent growth.
Spiros Malandrakis, senior analyst, alcoholic drinks, with Euromonitor said: "While terms
such as authenticity and craftsmanship are losing gravitas as they become ubiquitous
and overused, the trajectories of sophistication, moderation, perceived exotic credentials,
accessibility and restrained yet grounded aspirational attributes remain the key driving forces
fuelling pockets of buoyancy."
Speaking about the categories which are performing best, Malandrakis added: "These are
the common threads behind the categories witnessing the strongest top line growth despite
their seemingly disparate nature. Premium English gin, Irish and Japanese whiskey, dark and
non-alcoholic beer are hence the flag bearers of growth and it is no coincidence that those
also happen to be the segments gaining further momentum with the ever important millennial
demographic in mature western markets.
"Beyond those star performers, tequila and bourbon remained solid at the same time that
cognac bounced back strongly. Cognac's resurgence does allay some of the more astute and
pressing fears weighting heavily on China but glancing behind the frothy exuberance of top line
figures makes it clear that this is primarily due to belated diversification initiatives rather than a
guarantee that China is out of the woods yet."
Looking to the future, Malandrakis said 2016 is in a state of flux. "While initial forecasts
suggest a gradual recovery from 2016 onwards, performance will remain substandard
compared to historical trajectories," he said.
"With risks skewed to the downside, macro black swan events hatching in most continents
and drinking patterns in flux, it is not the industry's vision that is impaired but rather the horizon
that can be treacherous."
NEW HANGOVER PREVENTION PRODUCT NOW
AVAILABLE IN AUSTRALIA
Alcovit, a hangover prevention product, is now available in Australia having initially been
developed in Germany.
The 15g sachet is mixed with water or juice and can be consumed before, during or after
the consumption of alcohol. The product works on the basis that the ingredients within
Alcovit do two main things. Firstly Alcovit absorbs the alcohol in a person's system and
removes it quickly through the digestive system, so alcohol is not processed by the liver,
which is one of the main causes of a hangover. Secondly Alcovit helps to replenish the
vitamins which can be lost as a result of consuming alcohol.
The product is being brought into Australia by Brett Mainon of Salveo for Life and he
said: "Alcovit has only been in the country since January 2016 as it took the best part of
two years to acquire the exclusive rights, register it correctly and develop the branding and
He added: "Ultimately I am looking to increase its availability currently through
independent bottle shops and within the bars and nightclubs industry."
Alcovit is registered as a "listed or complementary medicine" with the Therapeutical
Goods Association in Australia and its ingredients include: natural mineral silicate, retinyl
acetate, folic acid, plus vitamins B1, B2, B3, B5, B6, B12, C, D3 and E.
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