Alcoholic Drinks in Turkey: Raising a Toast or Lighting the Molotov Cocktail?

Analyst Insight by Spiros Malandrakis, Senior Analyst - Alcoholic Drinks, Euromonitor International

As the much vaunted dynamism of the Turkish alcoholic drinks market is obfuscated behind a thick, toxic cloud of tear gas, the simmering tensions between the country’s opposing secular and religious identities are proving more inflammable than international manufacturers’ explosively optimistic forecasts.

Creeping religious fundamentalism, autocratic governmental attitudes, a widening generational divide and the diverging socio-political perspectives of urban and rural populations were more than enough to undermine the country’s otherwise enviable macro-economic fundamentals and favourable demographics. A sobering reminder that pragmatic analysis goes beyond top line GDP figures and investment-attracting birth rates. How did it all come down to this then?

Western Gold Rush: Lowe’s Acquires Orchard Supply Hardware to Spur Growth

Analyst Insight by Jared Koerten, Senior Analyst, Euromonitor International

Yesterday, Lowe's Companies Inc agreed to buy Orchard Supply Hardware Stores Corp for US$205 million. This agreement brings 60 of Orchard’s 91 stores under Lowe’s control and provides an option for the company to buy the remaining outlets. With an average selling area of only 4,100 sq m, Orchard Supply Hardware outlets are significantly smaller than Lowe’s traditional stores and – save two newly-opened stores in the Portland, Oregon area – are all located in California. 

Lowe’s hopes that the addition of Orchard Supply Hardware can help reverse its relatively disappointing performance in recent years. From fiscal 2010-2012, Lowe’s net sales climbed only 3.5% while its chief rival, The Home Depot Inc, grew its net sales by more than 9.9% during the same period. As the housing market in the US continues to recover after its recessionary collapse, consumers are once again looking to invest in their homes. In this environment, Lowe’s realises that it is vital to remain competitive with its larger rival in order to fully capitalise on the recovery of the US housing market. 

Tobacco: The End of Latin America as a Growth Region?

A plethora of ever harsher anti-smoking measures is on the whole causing tobacco volumes in the region to decline but this is not the whole story. On the one hand pockets of legal tobacco growth remain, benefiting from rising incomes, but on the other hand there is substantial increase in illicit sales where financial measures such as growing taxation hit home. Moreover the number of smokers continues to rise (even though penetration is down), keeping the market from a sharper pace of decline.

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New Tobacco Research - What is it Telling Us?

Analyst Insight by Zora Milenkovic, Head of Tobacco Research, Euromonitor International

Euromonitor International's latest global Tobacco market research provides the latest insight on how the Tobacco industry performed in 2012 and identifies the key prospects through to 2017. The double whammy of continued global economic uncertainty and increasing tobacco control took its toll as the industry posted a year of weak growth, in which no region experienced volume increases with the solitary exception of Asia Pacific, itself bolstered by the cigarettes behemoth that is China. World cigarettes values, normally propelled by growing unit prices and consumer uptrading, also took a battering, unprecedentedly growing by the same amount as global illicit trade volumes. With the current debate surrounding the reduced risk credentials of non-combustible products such as electronic cigarettes and their classification (pharma vs tobacco), the industry finds itself at a crossroads, pursuing cigarette alternatives whilst maintaining its cash cow.

• Worldwide, 5.8 trillion cigarettes were consumed in 2012, representing 0.19% growth on the previous year, though this was due to the effect of the world’s largest cigarettes market, China. Without China, the world witnessed a -1.7% decline in 2012 versus 2011.

• Every region in the world, save for Asia Pacific, saw falls in cigarettes volume sales in 2012 (vs 2011), a decline expected to continue to 2017, with the sole exception of Middle East & Africa, which is expected to return to growth once political turmoil stabilises.

• None of the BRIC markets registered cigarettes volume growth in 2012 (with the sole exception of China), a trend which will continue into 2017.

• World cigarette value sales grew by almost the same amount in 2012 as global illicit trade volumes – at around 2.5% each. Values decreased in three regions – Western Europe, North America and Latin America – reflecting consumer down-trading.

• Sales of premium cigarettes grew by nearly 10% globally in 2012, on the back of China’s double-digit premium growth, though this will not be sustained at the global level in the long term. For whilst China will grow its premium brands by nearly 30% over the next five years to 2017, world premium sales will register a 5% fall.

• World RYO volumes conversely grew by 6% in 2012 (vs 2011), registering growth in all regions, particularly Eastern Europe where it saw double-digit growth. Growth will continue to 2017, albeit at a declining rate.

• Sales of cigars and smokeless tobacco both saw volume declines of around 3% in 2012, affected by a combination of poor economic performance and declines in its major markets.

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Free Report Excerpt: Innovation in Decorative Paint

Factors such as health and wellness, the environment, convenience, nostalgia and technology are playing an increasingly important role in the global home paint market. Many emerging market consumers now have more money to spend and are becoming increasingly urbanised and Westernised in their tastes, while the impact of the “Great Recession” lingers on in many developed economies, where value for money is a priority for many.

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Melanin and Peptides Create a Buzz in Sun Care but Skin Care Looks Brighter

Analyst Insight by Anais Mirval, Analyst - Ingredients, Euromonitor International

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Up until now, peptides have been essentially used to provide firming and anti-wrinkle properties in anti-agers. However, they are now spreading beyond their core facial care market. Indeed, the sun care industry is thriving after regulatory modifications have led to ingredient innovation in sun protection, with Melanin Activating Peptides (MAPs) now gaining momentum in self-tanning thanks to their efficacy. However, ingredients manufacturers could increase their sales by promoting their use in multi-functional skin care products.

WWDC 2013: No Game Changers

Analyst Insight by Mykola Golovko, Analyst - Consumer Electronics, Euromonitor International

Of all the products unveiled at the Apple Worldwide Developers Conference (WWDC) 2013, iOS7 and iTunes radio were the most important ones for the company’s future. iOS 7 runs on the company’s popular iPhone and iPad product lines and its new, minimalistic design was well received by developers. Aside from cosmetic changes the software also gained functions like Control Centre which allows users to manage settings and currently running applications from a single menu. Critically important is that iOS 7 now allows applications to run a wider range of functions in the background, bringing multitasking capabilities to Apple’s mobile devices. To the dismay of many widgets, cross-application data sharing, and ground-breaking features not available on competing platforms were not part of the update.

The launch of the subscription-based music service iTunes Radio was long anticipated as services like Pandora continued to gain popularity threatening the iTunes downloads revenue stream. With a large install base, and content library iTunes Radio should be able to effectively compete with existing offerings at launch. However, iTunes Radio offers no incentives or enhancements for consumers to switch from third-party cross-platform services like Pandora en masse which will limit is financial impact for Apple Inc.

iOS 7 and iTunes Radio bring Apple Inc’s feature set closer to that of competing platforms and services, but offer no functions that could have a measurable impact on device sales or the competitive landscape in tablets and smartphones.

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Tax in the Spotlight

 

 

 

 

 

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Global attention has turned to tax, tax efficiency and tax evasion in recent months and predictably tax is also one of the main focuses of the upcoming G8 discussions in Northern Ireland. In a globalised world, countries compete against each other to attract big business and the tax environment is an important factor in this. It is a subject that has also come under the consumer spotlight – Amazon, Starbucks and Google are just a few examples of companies that have come under the public eye as a result of their tax planning. The backlash against companies who are perceived not to “pay their fair share” is likely to continue and many large companies are reviewing their tax planning as a result.

Analyst Pulse Survey: Personal Style Shapes Apparel Shopping

Analyst Insight by Lisa Holmes, Survey Analyst, Euromonitor International

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Abstract

Euromonitor asked about 250 analysts in 80+ countries about their personal style and shopping habits in order to better understand how consumers shop for clothes.

Three distinct types of consumers emerged, each with its own unique style influences, clothing needs, and shopping practices: the Practical Purchaser, the Fit Fanatic, and the Stylish Shopper.

Airbnb.com Redux: Legislative Issues

Analyst Insight by Michelle Grant, Travel and Tourism Research Manager, Euromonitor International

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In my previous article, I highlighted that Airbnb.com’s growth has garnered the attention of local governments and raised many legislative issues. In this second part of the extended series, I will review the various issues surrounding Airbnb.com and vacation rentals.

Airbnb.com decides to fight in New York City…

On 22 May 2013, a judge in New York City fined a man US$2,400 for breaking a New York City law that prohibits renting apartments out for less than 30 days unless the tenant is living there at the same time. This law was passed in 2010. The man, Nigel Warren, rented his room out to a traveller through Airbnb.com. New York City has issues with building owners converting their buildings, zoned for residential use, into illegal hotels (and posting advertisements on Airbnb.com, Expedia.com), which reduces residential supply and drives up rents. Although Airbnb.com was used in this particular case for the booking, other hosts finding renters through other websites are subject to the same law, so the vacation rental industry is watching this development carefully.