PRICE INCREASE IMPACT REVIEW
MARKET CONDITIONS
Inflation is increasing around the globe, putting inflationary pressures on the wine & spirits industry. Double digit cost increase YOY in production process and transport. Brands across many categories & markets have already had to pass on price increases to consumers.
+7% 5% GLOBAL INFLATION RATE
COST OF PRODUCTION
+8.5%
+70% FREIGHT
+7.5%
+51% ENERGY
+5.1%
+25% GLASS
+2.1%
+1.2%
+5% LABOUR
+1.13%
Mar 2022
Feb 2022
MACAU
JAPAN CHINA AUS UK EU USA
2021
FEB 2022 2021
JAN 2022
CONSUMER BEHAVIOUR
Consumers continue to show a willingness to spend with brands and experiences they trust. Consumers have accelerated their use of online channels for retail purchases. The W&S category will continue to premiumise to 2025 across all markets. (SOURCE: IWSR)
FOR SUPERIOR QUALITY 84%
OF CONSUMERS ARE WILLING TO PAY MORE
COMPETITOR REACTIONS
ALL W&S SPIRITS COMPANIES ARE INCREASING PRICES
MULTIPLE PRICE INCREASES
Martell +15% +12% Perrier-Jouët
+12% The Macallan +13% Highland Park
+12% Remy Martin
MOËT HENNESSY DIAGEO SPECIFIC ACTIONS
Use RSP and elasticity studies comforting retailers to protect their margin and increase prices
Focus price increases on hero skus
Support sales team with strong story to trade and key account coaching
Invest in brand awareness and desirability
Review promotions
Start selectivity journey
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