Alongside our daily news coverage, features and interviews, the Just Drinks news team sifts through the week’s most intriguing data sets to bring you a roundup of the week in numbers.
This week, we delved into Chile’s wine export data as Valdivieso discussed opportunities in South America, looked back at Sapporo Holdings’ patchy profits as the brewer begins a strategic review, dug into the UK’s energy-drink market and eyed growth potential for Portugal’s still-wine sector as The José de Mello Group set up wine platform WineStone.
Go deeper with GlobalData
UK energy drinks fizzing since pandemic
The value of the UK’s energy-drink category is set for steady growth until (at least) 2028 despite a fall next year, data shows.
Worth $3.97bn in 2022, the category is set to soar to $4.84bn in 2028, representing a five-year CAGR of 3%, according to research from Just Drinks’ parent company GlobalData.
Speaking to Just Drinks at the Innovation In Non-Alcoholic Beverages Conference 2023 in London last week, Mark Dempsey, senior consulting director at GlobalData, said companies need to focus on functionality but should “try and make it as specific as possible”.
The UK is not the only country set for growth in the energy-drink category. Analysis by GlobalData also shows Brazil and India are set to see category sales value grow by 2027. Brazil’s energy-drinks category could see double-digit growth in annual sales by value by 2027 to $2.4bn. India, meanwhile, is set to hit sales of $2.63bn in 2023 and $12.79bn in 2027. If sales do reach that level, that would represent a five-year CAGR of almost 69%.
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By GlobalDataOne to watch: Portuguese still wine
Portugal's still-wine sector is set for strong growth over the next five years, research suggests.
Despite a slow pandemic recovery, the category’s market value is forecast to rise rapidly according to analysis by GlobalData.
By 2027, the value of Portugal’s still wine could reach $5.3bn, compared to a $3.4bn value in 2022.
It comes as Portuguese conglomerate The José de Mello Group this week set up a platform to focus on the country’s wine market. The José de Mello Group is already involved in wine production through the Ravasqueira brand but has created WineStone to drive its expansion into Portugal’s Douro and Vinho Verde regions.
It has also snapped up wine brands Quinta do Retiro Novo, Krohn, Quinta do Côtto and Paço de Teixeiró.
José de Mello Group is not the first to invest in the country’s still-wine market in recent months.
Back in the summer, Porto-based holding company The Fladgate Partnership made its first move in still wine with the acquisition of Portuguese wine estates formerly owned by Ideal Drinks. The deal included 200 hectares of vineyards in three regions of Portugal, Vinho Verde, Bairrada and Dão.
Meanwhile, Symington Family Estates launched its first rosé wine to sit among its portfolio of Ports. And Portuguese trade body Wines of Tejo created a new category of wine, Campo do Tejo, which will focus on regional still whites.
Patchy profits for Sapporo Holdings
Japanese brewer Sapporo Holdings booked a half-year net loss of Y5.1bn ($34m) in the first half of 2023, against a Y375m loss in the first half of 2022. The past two years have seen net profits in the black for the Tokyo-headquartered group. In 2020, however, Sappro ran up a hefty annual loss.
In the six months to 30 June 2023, the company made an operating loss of Y2.8bn. Sapporo’s revenue was Y238.53bn ($1.59bn), up 11.6% on the same period of 2022. Core operating profit – which is calculated by deducting the cost of sales, plus selling, general and administrative expenses, from revenue – was Y3.51bn.
Sapporo is lining up a strategic review via a committee tasked with “enhancing corporate value” following pressure from shareholders. Potential actions could include “a sale or spin-off” of the company’s real-estate business
This week, Sapporo shareholder 3D Investment Partners welcomed the move and said the company had begun “a comprehensive and objective evaluation of strategic alternatives to improve corporate value”.
Chile remains South America’s largest wine exporter
The shipment value of wine across major exporting nations has remained steady over the past six years, with the exceptions of a few, including France and Italy. Italy, France and Spain account for 61% of global exports in value.
Sparkling wine performed better than average in both France and Italy, seeing above-19% rises in value in both countries compared to 2021.
Chile, South America’s largest exporter by volume and the fourth largest in the world, saw a 4% increase in volume compared to 2021, reaching 8.3mhl, and a 9% increase in value in 2022 to €1.7bn ($1.8bn).
Chilean wine producer Valdivieso told Just Drinks it is eyeing export opportunities for its sparkling wine range in South America, particularly as costs push up the cost of transportation from Europe – making alternatives like Champagne and Prosecco more expensive.
Sparkling wine only forms around 1% of the country’s total export value, with volumes less than 1%. But CEO Patricio Arenas, who joined the group in July following a career in the forestry industry, said he saw an opportunity both in export and the domestic market.
Valdivieso export and import director Christian Sotomayor said South America was a “natural” export focus for the company, particularly “huge markets like Brazil, interesting markets like Peru, Colombia, Mexico, etc”.
In Chile, by contrast, the company said it was stronger in sparkling wine and was focusing on increasing sales of still.
Vintage Wine Estates income plummets as group tries to tackle losses
Struggling US wine company Vintage Wine Estates this week booked a net loss of more than $190m in its fiscal year 2023, with operational losses of $208.8m.
It posted net revenue of $283.2m, down from $292.8m in 2022 – lowering its expected revenue for 2024 to between $260m and $270m. Adjusted EBITDA for the year was down $11.4m, compared with an adjusted EBITDA of $16.3m in 2022.
The company reduced its debt by almost $25m, primarily through asset sales.
Vintage Wine Estates also revealed it had slashed its workforce by 7% over the last eight months as part of what interim-CEO Jon Moramarco called its “miserable progress” towards margin improvement. The company has also cut its portfolio by over 50% to less than 2,000 SKUS.
Moramarco said the company had made “measurable progress” on a five-point plan he introduced upon taking over as interim CEO. The plan tackled the five areas of: margin expansion, cost reduction, cash management, monetising assets and growing revenue.
