The Nordic wine and spirits market in brief

Altia operates in the wine and spirits markets in the Nordic and Baltic countries, as well as in travel retail in the Nordics. These constitute Altia’s home market.

The wine and spirits markets in Finland, Sweden and Norway are highly regulated. The variations in regulations between these countries have an impact on national retail sales structures, advertising and pricing mechanisms.

Sales channels

In the off-trade markets in Finland, Sweden and Norway, most of the wines and spirits are sold through the state retail monopolies (Alko, Systembolaget and Vinmonopolet respectively), which form Altia’s largest sales channel.

In the monopoly markets, the grocery trade is a channel for low and non-alcoholic wines and glöggs, ready-to-drink products (RTDs), beers and ciders.

In Denmark and the Baltics, the off-trade markets mainly consist of the grocery trade. The on-trade (“HoReCa”) channel plays an important role in new product launches and provides Altia with an opportunity to promote and increase customers’ brand awareness as well as monitor and affect future consumer trends.

Travel retail, comprising the airline, sea and border trade, has traditionally been an important channel in the Nordic and Baltic region, due to price differences between countries caused by different alcohol tax levels and duty-free sales.

All consumer product sales outside Altia’s home market are defined as exports. Altia exports alcoholic beverages to approximately 30 countries, for example, Koskenkorva Vodka to Russia and the US, Larsen Cognac to China and O.P. Anderson Aquavit to the US.

Competitive landscape

Altia competes in the wine and spirits market with global, Nordic and smaller local spirits brands and wine producers and importers. Compared to the spirits market, the wine market is fragmented, as there are several smaller producers, importers and distributors.

Market size in value and volume

The value of the Nordic wine and spirits market, including Finland, Sweden, Norway and Denmark, is estimated to be EUR 12.4 billion, and the share of spirits is about 35%, and of wine about 65%. In volume terms, spirits have reached about 77.4 million litres, with vodkas and whiskies the two largest categories. The wine market volume is about 517 million litres, with red wine the single biggest category, accounting for about half of volume. (1

Market growth

During the period 2012–2018, the value of the Nordic wine and spirits market grew by 1.9%. For the period 2019–2023, the market value is estimated to grow by 3.3%.* During the period 2012–2018, the volume growth of the Nordic wine and spirits market was 0.5%. For the period 2019–2023, the market volume growth rate is estimated at 1.1%. (1

Trends that shape our business and brands

Authenticity

In an uncertain and changing world, consumers seek what they can trust.

• Connoisseurship
• Locality, provenance and heritage
• Craftsmanship

Sustainability

Consumers favour environmentally-friendly packaging. Recyclability is more important than ever.

• Ethical wellbeing
• Fairly traded
• Environmental responsibility
• Transparency

Health consciousness

There is an increasing demand for low and non-alcoholic, and lower sugar products. Natural ingredients have become more important than ever.

• Balanced life
• Clean culture movement
• Freshness and simplicity
• Natural ingredients

Premiumisation

Consumers seek quality over quantity.

• Quality all around
• Scarcity is luxury
• Premium experiences
• Unique choices

Convenience

Smaller serving sizes and ready-to-drink solutions as well as easy to serve and share.

• On-demand
• Easy access
• Convenient packaging

Sources: IWSR, Future Lab, Euromonitor

Industrial business

Altia produces grain spirit at its Koskenkorva distillery. Barley starch and feed components are produced as by-products from the distillation process. The Koskenkorva distillery is the only producer of barley starch in the world.

The Koskenkorva distillery also produces technical ethanol, based partly on the share of grain spirit that is not used in the production of alcoholic beverages. The technical ethanol from the Koskenkorva distillery is further processed into technical ethanol products at Rajamäki.

Industrial customers

Technical ethanols are used in geothermal fluids and are sold to various industries – from the pharmaceutical and healthcare to the chemical and techno-chemical industries.

Barley starch is used as a binding agent in the paper and paperboard industries, as a fermentation and freshness agent in beer production, and in other food
industry applications. A significant part of the barley starch is sold to the paper and paperboard industry.

Feed components are delivered on a continuous basis to A-Rehu Oy’s production facility, which is located in the Koskenkorva plant’s area.

Market conditions in 2019

General market demand in all industrial products in 2019 was strong, driven by the general strength of the economy. The trend in the paper and paperboard industries to
replace fossil-based binding agents with starch has increased the demand for barley starch.