just-drinks received 172 responses to the Confidence Survey 2018

just-drinks received 172 responses to the Confidence Survey 2018

We conclude our four-part review of the just-drinks Confidence Survey for 2018 with a look at the last eight questions. Among the topics discussed are domestic and export markets, sales channels and marketing spend.

15. Do you expect your company's domestic sales to increase in 2018?

Source: just-drinks Confidence Survey, Dec 2017

As was noted last year, companies don't tend to move into a new year thinking that their sales are going to fall over the next 12 months, so optimism tends to be the default option here. In fact, there's little change compared to last year's survey, with 69.4% of respondents expecting an uptick in domestic sales in the year ahead, up from 66.2% in 2017 (but still short of 72.7% in 2016).

In line with this, there's a slight reduction in the numbers of those expecting a reduction in domestic sales levels (5.4%, versus 7.5%), while there's little change in the number of those expecting a broadly similar performance (25.2%, slightly down from 26.3% in 2017).

16. Do you expect your company's export sales to increase in 2018?

Source: just-drinks Confidence Survey, Dec 2017

As in previous years, responses here tend to mirror those for question 15, but there is a gradually pessimistic trend beginning to emerge: While 51.9% of respondents expect their export sales to rise this year, that's down from 52.6% last year, and 55.9% in 2016.

However, the numbers predicting export declines are fewer, at 5.6% versus nearly 7% in 2017, while there's an uplift in the number of respondents expecting little or no change (42.6%, up from 40.5%).

Overall, it equates to 94.5% of those surveyed predicting that their exports will increase or remain largely unchanged – an identical result to that of 2016, and up from 93.7% last year.

17. Which regions do you expect to offer greatest opportunities for your company’s growth during 2018?

The Americas57.01
Asia44.86
Europe35.51
Africa21.5
Oceania10.28

Source: just-drinks Confidence Survey, Dec 2017

A change to the methodology here elicits a very different result to previous years, when an open-ended question prompted a fragmented response, namechecking a wide range of countries and/or regions. This time around, those surveyed were encouraged to highlight a particular geographical region, including Africa, the Americas, Asia, Europe and Oceania.

Previously, the US has been identified as the key destination for the drinks industry, so it's no surprise to see the Americas as the most popular response here, with 57% of respondents mentioning it. Outside of the US, markets including Brazil, Mexico and Canada are significant countries in the global drinks marketplace.

It's a reflection of the changes wrought to the global marketplace over the past decade or two that Asia ranks second in our survey, comfortably ahead of the mature, but perhaps less dynamic, markets of Europe.

Further down the pecking order, Africa secured more than double the number of responses of Oceania. In population terms, that's perhaps not surprising, but it illustrates the increasing importance of Africa's markkets for the global drinks industry.

18. Which retail channel(s) do you expect to offer the greatest opportunities for your company's growth in 2018?

On-Premise58.04
Online49.11
Off-Premise - Multiple Outlet Retailers33.93
Direct Selling32.14
Off-premise - Convenience Channel24.11
Other8.04

Source: just-drinks Confidence Survey, Dec 2017

A big change here: while the on-premise hung onto top spot in terms of the most-mentioned channels in which drinks companies look to sell their wares, online sales are becoming increasingly significant – as is direct selling.

Three years ago, multiple retail – rephrased as off-premise (supermarket chains) for this year's survey – was still viewed as the crucial sales channel. But, that changed in 2016 and, since then, supermarkets have been referenced by respondents in increasingly small numbers, from 43.9% (2016) to 33.9% this year.

This year, while the on-premise attracts a response rate of 58%, that's down from 63.1% in 2017, and online selling has surged to capture more than 49% of the vote. Meanwhile, direct selling stands at 32.1% – closing in on the supermarket chains – ahaed of convenience retailers at 24.1%.

These shifting trends are partly related to opportunity. In many markets, retail consolidation has cemented buyer power, leaving producers to explore other avenues, including the on-premise and, increasingly, the internet and direct sales.

19. Will your company increase its marketing investment during 2018?

Source: just-drinks Confidence Survey, Dec 2017

A marginally more bullish response to this question for 2018, with 51.8% of respondents expecting to spend more on marketing in the next 12 months, compared to 50.5% last year (and 47% the year before).

Meanwhile, there has been a fall in the number of those expecting to reduce their marketing budgets - 5.5%, versus just over 8% in 2016. Those expecting little or no change are up slightly at 42.7% (41.4% in 2017).

20. What will be your most important marketing channels in 2018?

Source: just-drinks Confidence Survey, Dec 2017

Responses to this question are likely to have changed most over the past decade or so. The marketing channels of the past – for instance, cinema/movie theatres, out-of-home (eg billboards) – have almost vanished from the collective radar of drinks marketing departments, while the digital world continues to grow in both significance and influence.

In terms of number of mentions, social media broke through the 80% barrier this year, garnering mentions from 81.4% of respondents (up on the last two years), a country mile ahead of the next most popular category, digital (excluding mobile) at just under 47%.

Somewhat more traditional channels occupied the next most popular spots: Experiential (mentioned by 39.8% of respondents) and trade/B2B at 38.9%. Print advertising now ranks below mobile marketing, but ahead of below-the-line and broadcast media.

21. Which aspects of sustainability will grow in importance for your company in 2018?

Source: just-drinks Confidence Survey, Dec 2017

A fragmented question elicits a fragmented response. This area of operation for the global drinks industry has become increasingly significant in the past few years, encompassing everything from packaging and waste to consumer health and community involvement.

Waste and recycling emerged as the most referenced issues in our responses this year, narrowly ahead of packaging. But, a broad range of environmental issues are competing for the attention of companies, including water usage, sustainable sourcing and supply chain concerns, consumer health, energy usage and carbon footprint.

22. Overall, do you expect 2018 to be a better or worse year for your company than 2017 was?

Source: just-drinks Confidence Survey, Dec 2017

This is always the big question in the survey. Boil down all the individual issues and concerns, and what do you get? Something better than 2017 – or something worse?

The result is positive - but, not by much. Some 62% of our respondents are predicting a better year in 2018, but that figure is barely up on the 2017 result of 61.7% – and it's still well down on the 67.2% number recorded in 2016.

However, levels of pessimism have fallen too. Only 6.2% of those surveyed expect a worse year in 2018, well down on last year's figure of 11.8%, with the numbers expecting little or no change standing at 31.9%, well up on the past two years.

Perhaps, this sums up the general conclusions to be drawn from this year's confidence survey: Some evidence of rising optimism in the drinks industry, but any improvement is fragile at best – and might perhaps be better characterised as declining pessimism.

For the full results of this year's confidence survey, click here