The Nordic wine and spirits market in brief
The Nordic wine and spirits markets are large and stable. The off-trade markets in Finland, Sweden and Norway consist mainly of state retail monopolies while the off-trade markets in Denmark and Baltics mainly consist of traditional retail such as grocery stores. Local and global market trends affect Altia’s operational environment.
Our brand portfolio is well positioned to capture the growth pockets created by key market trends
In an uncertain and changing world, consumers seek what they can trust.
- Locality, provenance and heritage
Consumers favour environmentally-friendly packaging. Recyclability is more important than ever.
- Ethical wellbeing
- Fairly traded
- Environmental responsibility
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
Consumers seek quality over quantity.
- Quality all around
- Scarcity is luxury
- Premium experiences
Smaller serving sizes and ready-to-drink solutions as well as easy to serve and share.
- Easy access
- Convenient packaging
Sources: IWSR, Future Lab, Euromonitor
Nordic sales channels
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.
In the off-trade markets in Finland, Sweden and Norway, the majority of wines and spirits are sold through state retail monopolies (Alko, Systembolaget and Vinmonopolet respectively), which form Altia’s largest sales channel.
In the monopoly markets, 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 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 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 to the US.
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.
Our competitive strengths in a highly regulated market
Wide assortment and flexibility in sourcing, production and distribution enables us to respond to the tender requirements of the state retail monopolies.
We have knowledge of the state retail monopolies’ preferences in terms of assortment, local preferences as well as the upcoming market trends, and we can take part in the tenders competitively.
We have experience in operating in the highly regulated advertising environment as well as an established position and well-known brands that helps us to execute our promotional campaigns.
We operate in the large and non-cyclical Nordic wine and spirits market
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 36% and of wine about 64%. In volume terms, spirits have reached about 77.5 million litres, with vodkas and whiskies being the two largest categories. The wine market volume is about 510 million litres with red wine being the single biggest category accounting for about half of the volume.(1
The historical value development of the Nordic wine and spirits market has been stable. During the period 2012–2017, the market value grew by 1.8% compared to the volume growth rate of 0.5%. For the period 2018–2022, the value of the Nordic wine and spirits market is estimated to grow by 2.5% compared to the estimated volume growth rate of 0.3%.(1
1) Source: Euromonitor International Ltd. Alcoholic Drinks data 2018 edition (May 2018). Nordic market refers to Finland, Sweden, Norway and Denmark. Value data calculated with retail selling prices, fixed 2017 exchange rates and current prices.
Altia produces grain spirit at its Koskenkorva distillery. The share of grain spirit that is not used in the production of alcoholic beverages is processed into technical ethanol at Rajamäki. Barley starch and feed components are produced as by-products from the distillation process. These industrial products – technical ethanol, starch and feed components – are sold to industrial customers.
Technical ethanols 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. The Koskenkorva plant is the only producer of barley starch in the world.
Feed components are delivered on a continuous basis to A-Rehu Oy’s production facility which is located in close proximity of the Koskenkorva plant.
General economic conditions affect the demand for industrial products. The recent growth in the paper and paperboard industries has increased the demand for starch.