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Wine, Beer & Spirit

Project: Cap Mattei Corse

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Bachelor degree in International Business School Hotel & Tourism Management, VATEL.

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Submitted by Ms. Estelle Cribelle (G1492510X)

   Ms. Manon Bourbon (G1540107P)

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Submitted to Mr. Isaac

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Submitted on the 4th of June 2018

Table of Contents

1. Introduction of Cap Mattei…………………………………………3

2. Competitors ..................................................................3

3. Singapore Market…………………………………………………...4-8

4. Singapore laws……………………………………………..…………...8

5. What about cost?..........................................................9

6. Conclusion……………………………………………………………….10

7. References……………………………………………………………....11

8. Appendix…………………………………………………….….…..12-13

1. Introduction

1. Introduction

In 1872, Louis-Napoléon Mattei created an aperitif by adding to the mistelle (grape juice mutated in alcohol) about fifteen aromatic plants and cinchona (small evergreen tree) imported from the Caribbean. Cap Corse became the mythical brand of the island. Sold worldwide, but mostly in the French colonies.

The brand remains flourishing until the 1970s when it collapses. Heirs abandon the company and successive buyers fail to maintain quality. In September 2016, three young entrepreneurs in the sector, aware of the heritage value of the brand, join forces and create a new company in which they invest 6 million euros, to give a second youth to the house.

Cap Corse Mattei is usually drink chilled with a slice of lemon or orange. This aperitif can be enjoyed as a cocktail or dessert accompaniment. Like the great wines, Cap Corse improves with time. Its basic ingredients and aging in oak barrels make this aperitif a very fruity drink.

An axis obviously turned towards mixology with an expression.

Renewal of the brand for this old nectars, the Corsican aperitif has already begun a good buzz on the local and Paris because of its authenticity, its originality and its artisanal side (sacred values ​​for bartenders). And of course thanks to its 100% vintage look.

After a few months of background work, the brand has already broken records of popularity for an independent brand and forgotten in France. In total, a listing of a dozen bars and not just any: Gravity Bar, Mary Celeste, The Righteous, Sherry Butt, Pasdeloup, The Commune, The Union, Lockwood, Baths, Sofitel Porticcio ... with creations outside the box and excellent use of social networks as his master Louis Napoléon Mattei would have done so well: already more than 5,500 friends on his Facebook page, and about 2,500 followers on his Instagram. A very promising resurrection!

2. Competitors

This wine is classified as fortify wine and more precisely in the Vermouth family. Vermouth being sweet wine flavoured with bitter and tonic plants, usually between 15° and 18°.

To make a vermouth, we use a base of wine (75% minimum), usually a white wine, rather neutral, not too strong in alcohol and rather acidic. We will take this wine and mix it with sugar and grape must which is called Mistelle, then with caramel if we want to give it the red colour. We will then add alcohol to raise the alcohol level between 15 ° and 18 °. On this basis, an aromatic extract is added which is the result of the maceration of many herbs/plants.

 The principal competitor we can face of would be the others Vermouth already very well implanted such as Martini, Gocchi, Dolin, Byrrh…

 The only difference between these ones and our product, and not the least, would be noticeable by connoisseur, regular drinker of vermouth and/or bartenders, Is the base of the beverage itself. The Cap Corse, is on a 100% mistelle base then the alcohol is incorporate. The difference would be done there in order to compete with the other brands.

3. Singapore Market

Singapore is constantly growing and seeking latest trend in order to be the first. The alcoholic beverage market is not in rest; it is also increasing every year. This last year 2017, the beverage market itself made around US$920 million, and it will continue to grow yearly.

KEY FIGURES:

- 99.8 million litres of wine and spirits were imported to Singapore in 2015 for a total amount of EUR 1.72 billion.

- The consumption of wine is estimated at 10.87 million litres (2 l / hab.year). The consumption of spirits is estimated at nearly 5.8 million litres.

- 58% of wine imports and 94% of spirits imports are re-exported to other countries, particularly in Asia.

- France accounts for nearly 56% of imports by value, with an amount of EUR 969 million in 2015 (nearly 35 million litres).

- One hundred importers of wines and spirits established for more than 400 import license holders.

- The excise duty on imports of spirits in Singapore is SGD 88 per litre of pure alcohol.

Singapore enjoys a central position in Asia, particularly in ASEAN, and benefits from the economic growth of the region. With a population that the Singaporean government wants to raise to 6.9 million in 2030 and has a strong purchasing power, local consumption of wines and spirits will continue to grow in the coming years in Singapore (average annual growth rate) + 5% over the last 6 years).

Evolution of wine and spirits consumption in Singapore, by volume in 2015

In 2015, the total amount of wine imports amounted to nearly EUR 472 million, down 0.24% on the previous year.

The market leader, France dominates the wine market by volume and value, with a total of 14.2 million litres for a total of 340 million EUR. Australia (18%), Italy (8%), and the United States (8%) are closely behind with 34% market share in volume and value.

Bordeaux wines dominate the market (41% in volume and 62% in value), followed by Burgundy wines (8% of PDM in volume and 19% of PDM in value). The presence of wines from other regions is still limited in the market. Of the 100,600 HL French sparkling wines exported to Singapore, Champagne represents 96.6% of volumes. The presence of Crémants de Loire reached 11 HL in 2015, an increase of 367% in volume compared to 2014 (3 HL in 2013) and 300% in value.

THE RESTAURANTS / HOTELERS / BAR-CLUB MANAGERS

There are more than 6,700 establishments (including 2,480 restaurants of all kitchens, 570 bars and about sixty clubs) on the island. Currently, a hundred or so Western restaurants, including those located in the lively neighbourhoods of Clarke Quay, Robertson Quay, Marina, are seeing their consumption of wines and spirits increase.

The CHR and the world of the night plays a leading role in the consumption of wines and spirits. The large number of visitors makes CHR an important market for the wine and spirits sector in Singapore (70% for wines and spirits). On the other hand, the French restaurants (about 50 restaurants), Spanish, Italian, Cuban, American .... that are there, propose wines corresponding to their country of origin, in addition to the French wines.

Customers side

The population growth has been accompanied by a remarkable improvement in the standard of living, the average income per capita now exceeding that of France (56 400 USD, GDP per capita per year 2015), whereas it represented only than half 40 years ago. The distribution of the Singaporean population by ethnicity and religion is roughly identical to that of 1990 and shows a real mosaic.

Expatriates form an estimated community of more than 300,000 people where the Japanese, British, Australians and Americans dominate (they should not be neglected given their particularly high purchasing power). There are more than 12,000 French expatriates living on the island.

Singapore is also home to many tourists. Often in transit for a few days maximum, they are nevertheless very numerous and constitute a market not to be discarded. Singapore received 15.2 million visitors in 2015, the majority from Southeast Asia and China, who spent more than 23.6 billion SGD (around 14 billion EUR) in 2015 (according to the Singapore Tourism Board or STB). With the opening of the two resorts (Marina Bay Sands and Resort World Sentosa) in 2010, the STB expects 17 million visitors by 2017.

Per capita consumption of wine and spirits remains low and still has room for improvement (it is estimated at 2 litres / inhabitant / year). The main consumers are the Chinese (74% of the population). Indians (9.2% of the population) are good customers of high-end wines and spirits. Singapore also has a sizeable proportion of Muslims (13.4%), with little or no alcoholic beverages.

Connoisseurs, who are also more and more numerous, will often remain faithful to Whiskeys, a legacy of British tutelage, and to Cognacs, as well as French grands crus, who still enjoy an excellent reputation and sell themselves in a number of countries. growing signs, thus facilitating visibility for the consumer.

Given the maturity of the Singaporean wine and spirits market, this market is becoming increasingly specialized, opening up growth prospects for niche wines through better educated consumers. Price, quality and availability (product choice) remain paramount criteria in the purchase decision.

Evolution of habits

Consumers, more sophisticated, well educated and highly connected (digital consumer) have changed the landscape of local consumption: more time spent searching for brands before making a purchase. Their high incomes lead them to look for high-end products for which they are willing to pay extra for the availability and creativity of the products (originality of the container and recipe, individualized offers, taste experiences, etc. ...).

The new generation is individualistic and researches, making purchases, excitement, inspiration and compensation for an intense and stressful working life. Making purchasing decisions based on its specific needs, this generation explores more niche and brand products. With a high penetration rate of smartphones (90%), these consumers have changed their mode of intervention and expect to be able to shop both online and offline, easily and transparently.

The legal age for drinking alcoholic beverages in Singapore is 18 years, determined by the government, however, alcohol consumption for minors is allowed within the family.

Thus, women consume more and more wine in the city-state and are also fond of rosé wine and sparkling wine, which was so far very little prized. It is also observed that the casual consumer will be easily seduced by Australian and New Zealand wines. Indeed, the grape varieties of this region are mainly vineyards of Pinot Noir or Syrah, which enjoy a reputation gained largely thanks to French wines, the prices of Australian wines of these varieties remaining very affordable.

In Singapore, consumers are increasingly seeking to achieve the best association between wine and food: Wine & Food Pairing, advises consumers on the type of wine that is best served, according to the dishes on Table.

Lastly, we note the strong increase of websites offering advice on the association between a wine and a dish, thus demystifying the complexity of weddings and allowing more and more neophyte consumers to offer wine at the table and to no longer be limited to the aperitif.

It is estimated that a volume growth rate of 11.4% of the still wine segment in Singapore is expected by 2018 for a total volume of 10.8 million litres. It is especially red wines that weigh in the balance with an estimated growth rate of 12.7% by 2018, for a total volume of 7.5 million litres.

Nowadays, the Internet influences almost every aspect of a consumer's buying decision. Many Singaporeans first turn to the Web to search, evaluate products and locate places to get them. Price wars are no longer only between local retailers; they are globalized. As a result, a simple online presence is no longer enough. In the current business environment, it has become essential to have a structured, proactive and adapted multiplatform strategy. Those who react quickly to adapt their business model and embrace these changes can make the most of this new reality.

Educate professionals and consumers?

As the market is very competitive, whether for wines or spirits, it is important to step up communication / promotion actions to make the French offer more accessible to consumers. We would be able to defend the position of our products and increase our market share.

Educate professionals and consumers by organizing fun tasting events to communicate the reputation of French vineyards and spirits producers, and raise their awareness about the specificities of the products concerned. It is indeed very important to taste the products before selling them.

Communicate about the authenticity of production in contact with consumers: history, soils, landscapes, villages, production process, habit and consumption framework, explain the supply on the shelf.

4. Singapore laws

Labelling:

Labelling requirements are not binding. The labels must include the following information in English:

• minimum net quantity in metric units,

• name and address of the importer or producer,

• native country.

Import license

Import operations are restricted to licensed importers (liquor license) issued by the Customs Department.

Any commercial enterprise registered in Singapore may be an importer of alcoholic beverages provided that it fulfils the conditions set by IE Singapore (International Business Singapore).

There is no limit on the quantities imported.

Since 1 April 2003, in order to improve traceability, all importers of processed food products, including alcoholic beverages, must be registered with the FCD (Food Control Department) within the AVA (Agri-food & Veterinary Authority), otherwise his license applications will be rejected.

This registration must be done online via the Online Business Licensing Service (OBLS).

Taxation system

Wines and spirits are not subject to customs duties but to excise duties, based on alcohol content and no longer on volume: SGD 88 per litre of pure alcohol for wines and spirits, revised tax as of February 24, 2014. This taxation system is much more penalizing for wines and spirits compared to beers, which are taxed at only SGD 48 per litre of alcohol.

This may explain the preponderance of beer consumption in Singapore, compared to wines and spirits:

- 30 litres / inhabitants / year for beer,

- against 2.56 litres / inhabitants / year for wines and spirits.

5. What about cost?

Excise duty: 88$ and GST 7%

Importer: Altusing Corporation PTE. LTD

Margin 30%

6. Conclusion

As we evaluate the market in Singapore and competitors, the Cap Mattei Corse can be a successful product due to its originality, packaging, history and so on. Even if the market is very competitive in term of French wines, a good marketing needs to be done in order to evaluate the product.  

7. References

Global Datacom. 2018. Global Data Plc. [Online]. [4 June 2018]. Available from: https://www.globaldata.com/premiumization-opportunities-abound-singapore-wine-market-says-globaldata/

Thedrinksbusinesscom. 2018. Thedrinksbusinesscom. [Online]. [4 June 2018]. Available from: https://www.thedrinksbusiness.com/2018/05/premium-wine-sector-set-to-drive-singapore-wine-market/

Singstatgovsg. 2018. Singstatgovsg. [Online]. [4 June 2018]. Available from: https://www.singstat.gov.sg/publications/industry/-/media/files/publications/industry/mrsmar18.pdf

Singstatgovsg. 2018. Base. [Online]. [4 June 2018]. Available from: https://www.singstat.gov.sg/modules/infographics/population

Singstatgovsg. 2018. Singstatgovsg. [Online]. [4 June 2018]. Available from: https://www.singstat.gov.sg/-/media/files/publications/society/ssnmar09-pg12-16.pdf

Alcoholrehabcom. 2018. Alcoholrehabcom. [Online]. [4 June 2018]. Available from: http://alcoholrehab.com/alcoholism/alcoholism-in-singapore/

Tradingeconomicscom. 2018. Tradingeconomicscom. [Online]. [4 June 2018]. Available from: https://tradingeconomics.com

Wineaustraliacom. 2018. Wineaustraliacom. [Online]. [4 June 2018]. Available from: https://www.wineaustralia.com/news/market-bulletin/issue-90

Winexinsg. 2018. Wine Xin. [Online]. [4 June 2018]. Available from: https://www.winexin.sg/2018/02/27/sustainability-next-wine-jargon/

Feechacom. 2018. Feechacom. [Online]. [4 June 2018]. Available from: http://www.feecha.com/single/6652914189729792

8. Appendix

STRENGTHS OF THE FRENCH OFFER

WEAKNESSES OF THE FRENCH OFFER

Ø A diversified and upmarket offering with traditional niche products that can appeal to increasingly connoisseur and affluent consumers.

Ø Elitist image: difficult products for new consumers. Certain French products (wines in particular) are not adapted to the expectations of the young people in particular, in terms of taste, packaging, etc.

Ø Renowned French products considered prestigious. Strong image associated with luxury and qualitative reference.

Ø Lack of support and commercial follow-up from French operators.

Ø Wine: image of "healthy product" and strong influence of "French paradox" on consumption.

Ø Limited companies may be discouraged by the SEO fee system in Singapore.

Ø Tax system: excise duty according to the degree of alcohol (and not ad valorem) which penalizes cheap products.

Ø Price of the offer in French wines much higher than those of the wines of the New World.

OPPORTUNITIES OF THE ECONOMIC CONTEXT

THREATS OF THE ECONOMIC CONTEXT

Ø Strong recovery in economic growth since 2009, increase in consumer purchasing power.

Ø Strong competition from Whiskey in the spirits market (big marketing efforts of whiskey houses in Asia).

Ø Re-exports: Singapore is a hub in Asia, strong influences on the region → strategic market.

Ø Competition of New World wines on entry and mid-range: loss of market share in the mid-range → diversification of Australian and Argentinian wines better positioned; The rise of Italian, New Zealander and Chilean wines, fashionable at the moment.

Ø Low tariffs, compared to other ASEAN markets.

Ø Conjoncture makes it impossible the lucrative trade of French wines as commodities. The costs of referencing and dereferencing pose a serious problem for companies seeking to introduce their products to the market.

Ø Rising power of the telecom network and online shopping (opportunity for E-commerce of wines and spirits)

ØBrand management: predominance of brands strongly supported by major promotional and advertising campaigns. In this context, products of less well-known brands and new products can hardly penetrate the market.

Ø Deepening the knowledge of wine by new consumers, leading to a shift in consumption towards high-end wines, of better quality: upscale, well-off clientele.

Ø Need support for marketing: Distributors tend to reference new products only if they have marketing support from their agent.

Ø The sophistication of Singapore's customer base leaves a door open for niche wines and spirits.

Ø Positioning our products in an increasingly price-sensitive market, even for luxury goods, as Singaporeans are always looking for the best deal. As a result, starting prices are a determining factor when importers place their orders.

Ø Opening of 2 casinos in February and April 2010 → opening of very high-end restaurants, combined with a revival of easy tourism (opportunities for wines, Champagne and high-end spirits).

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