NielsenIQ, a global information services company, announced the acquisition of CGA, the definitive provider of on-premise insights. This acquisition builds on NielsenIQ’s 2009 investment in CGA and will deliver the most innovative and granular alcoholic beverage measurement and insights solution, with the single aim of helping clients achieve growth.
NielsenIQ and CGA will come together and accelerate coverage – closing client blind spots and delivering a complete view of on- and off-premise measurement.
Rachel White, MD UK & Ireland at NielsenIQ and Phil Tate, Group CEO at CGA, tell Grocery Trader how the acquisition will benefit retailers.
Why did NielsenIQ buy CGA?
RW: Lots of reasons but the main one is because our clients wanted us to. Most of our clients have been asking for a complete view of the beverage market for quite a while. That means retail and pubs and restaurants. Coverage is key now for our clients. They want to know what the consumers are buying and where they are buying it.
Together with CGA we are going to have the most granular alcohol measurement available. We will close those blind spots and deliver that view of on and off premise measurement which previously we hadn’t been able to get to.
What will be the benefits to NielsenIQ of the acquisition?
RW: For us, we will accelerate now into on-premise measurement. It gives us that complete on and off view of the beverage market, it gives us granular insights. We will be able to put CGA onto our platform too so that means clients will be able to access data from a single platform using the best of our technology to help our clients grow. We have been investing in internal coverage to enable our clients to grow and it’s a global solution too.
What will be the benefits to CGA of the acquisition?
PT: Scale. Rachel summed it up beautifully. We have got a very strong presence in the markets in which we are currently established. We are a currency for on-premise measurement there. This gives us the ability to combine our assets in those markets with NIQ’s market leading off premise service to give that total trade view. But our aspirations are and have always been global. Nielsen operate within 84 countries, they have the scale, the infrastructure and the contact base to enable is to do that. And therefore we are both ultimately giving our clients what they want, which is a truly global total trade service.
How will the acquisition benefit retailers?
RW: Just like manufacturers, retailers need that total consumer view as well. They need to know at a brand and category level what the consumption trends are. This will help them identify the new innovations, new understandings of health and wellness trends. They want data across all the markets, they are also operating on a wholesale level.
How much is the alcoholic beverage market worth and is the market in growth?
PT: This is a really important market. Globally we are talking about a 1.6 trillion dollar marketplace that’s growing at 7%. It’s a massively fragmented marketplace but it is complexly interdependent as well. So therefore people absolutely have to be able to understand what is going on in each channel and how those dynamics pull together. The on premise and away from home market represents an absolutely significant portion of our core consumption. 58% of beer, 48% of spirits and 23% of wine were sold in the on premise in 2021. This reiterates why this union makes so much sense. This is the first time this will all be pulled together under one ownership umbrella into one delivery platform. So this is going to help people make more informed and more strategic decisions.
What trends are driving the market?
PT: This is where it reiterates the combination of the two channels. There is a close link. If you understand both, you get the full story. For example, 57% of consumers try drinks for the first time when they are in on premise. What we are seeing post-Covid is that people have missed the on premise more than they were this time last year. They are trying those brands in the on premise that are getting that emotional connection with that product. Therefore 76% of them are likely to repurchase that brand when at home.
We are seeing more of a cost of living influence now than we are a Covid influence. What that means is when people are coming out they are desperate for experiences. They are desperate for something that they couldn’t have at home. Therefore we are seeing people engage in serves and in different kinds of products which are not things that they could have at home, which is why we are seeing cocktails and spirits spike in sales at the moment.
We are seeing people almost polarised. 63% of consumers are looking to trade up for that perceived better quality drink. That comes back to the on premise being their affordable luxury. But we are also seeing some people stick to that entry level price point. But entry level doesn’t mean budget and it doesn’t mean cheap. They expect every day high quality, even at those entry level price points. These are the trends of that polarisation, experience and serve that are going to be really important over the next 12 months.
What effect will the cost of living crisis have on alcohol?
RW: You have got to also remember that if we look at total growth, alcohol is still outperforming pre-Covid 2019 levels. We see that when we look at the off trade. When shoppers are cost conscious, you get this polarisation. We are seeing super premium growth and a core value products growth. It is the premium element that is getting squeezed. During inflation you see that even more. So we expect that trend to continue as we go through these months of high inflation.
Do you have anything else to add?
RW: We are super excited about this acquisition and looking forward to getting this up and running and live everywhere and scaling it globally.
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