Distribution Trends in Soft Drinks: On-Premise vs Off-Premise Dynamics & Forecasts to 2015 Latvia

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					SPECIAL REPORTS
Distribution Trends in Soft
Drinks: On-Premise vs Off-
Premise Dynamics &
Forecasts to 2015

LATVIA
A Special Focus Report from Canadean
December 2010




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                                                                                   Liquid Intelligence
                  Distribution Trends in Soft Drinks                                                                                        Latvia



Contents
Distribution Trends in Soft Drinks: On-Premise vs Off-Premise Dynamics & Forecasts to
2015 .................................................................................................................................................. 2
   Distribution Trends .................................................................................................................................... 2
   Market Valuation/Pricing ............................................................................................................................ 2
     Soft Drinks On-Premise vs Off-Premise – Volume, 2006-2010F (% Growth) ........................................... 3
     Soft Drinks On-Premise vs Off-Premise – Value, 2006-2010F (% Growth) .............................................. 3
     Soft Drinks on-Premise vs Off-Premise – Volume & Value, 2006-2010F (M Litres/Local Currency) ........ 4
     Soft Drinks On-Premise vs Off-Premise by Category, 2009 vs 2010F (% Growth).................................. 4
     Soft Drinks On-Premise vs Off-Premise, 2009-2015F (% Growth) .......................................................... 5
     Soft Drinks On-Premise vs Off-Premise, 2009, 2010F & 2015F (% Share) ............................................. 5
     Soft Drinks On-Premise vs Off-Premise Average Price Per Litre by Category, 2010F (Local Currency) .. 6
Soft Drinks Product Definitions ..................................................................................................... 7
Glossary ..........................................................................................................................................14
Forecast Methodology...................................................................................................................16




                                                                                                                 Soft Drinks Service/Dec-2010              1
             Latvia                                        Distribution Trends in Soft Drinks


    Distribution Trends in Soft Drinks: On-Premise vs Off-Premise
                    Dynamics & Forecasts to 2015


Distribution Trends

Traditional retail outlets and Horeca suffer most

The very tough economic situation in Latvia benefited the modern distribution channel, which saw its share of
soft drinks grow, while on-premise sales fell by almost 30%. In the off-premise channel, sales through traditional
retail outlets also fell by almost 30%. In the on-premise channel, cheaper outlets such as quick service
restaurants did better than higher-end eating, drinking and accommodation outlets, with the decline in spending
power the main driver of these trends.

The market in Latvia is characterised by a large number of hard/soft discount stores and smaller supermarkets.

Maxima and Rimi are largest retailers

Off-premise distribution is dominated by two chains: Maxima and Rimi. Lithuanian-owned Maxima is the largest
retailer in Latvia and trades from 127 outlets and three sizes of stores, Maxima X (the smallest), Maxima XX and
Maxima XXX (mostly hypermarkets). Rimi, in second place, operates from 31 supermarkets, 14 Rimi
hypermarkets and 56 Supernetto hard discount stores.


Market Valuation/Pricing

Extensive discounting kept lid on prices

In 2009, a small rise in list prices took place due to the increase in excise duty effective from 1 January 2009, as
well as an increase in VAT. However, extensive short-term discounting meant that prices paid did not increase
significantly. Share gains for cheaper brands, including Private Labels, also helped keep a lid on average prices.

In the energy drinks market, the price competition was the most visible, as international brands with premium
prices cut their prices by more than economy brands to narrow the
				
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