London Olympics Impact On UK Economy and Global Brands

THE LoNDoN OLYMPICS
Impact on the UK Economy and Global Consumer Goods Industries
Photo by London 2012
www.euromonitor.com
FoRWARD TABLE of CoNtENtS

FoRwARD....................................................................................................................................3 DAtAgRAphic: WhAt will MAke the UK A wiNNeR?.......................................................4 UK ECONOMY & INFRASTRUCTURE........................................................................................5 VIDEO: Will the OlyMpics IMpAct the UK ecoNoMy?.................................................9 DAtAgRAphic: Does BMI hAve AN IMpAct oN A CouNtRys PeRfoRMANce.........10 CouNtRies AND CoNsuMeRs................................................................................................11 DAtAgRAphic: How DiffeReNt EcoNoMic GRoups CoMpARe.................................14 TRAVEL & TOURISM....................................................................................................................15 PoDcAst: The ReAl WiNNeRs iN the TouRisM INDustRy..............................................21 SOFT DRINKS...............................................................................................................................22 VIDEO: Will CocA-ColAs OlyMpics CAMpAigN GAiN youth iNteRest? ...............24 HEALTH & WELLNESS.................................................................................................................25 PoDcAst: OppoRtuNities foR HeAlth AND WellNess CoMpANies.........................27 ALCOHOLIC DRINKS...................................................................................................................28 CONSUMER ELECTRONICS.......................................................................................................30 CONSUMER FINANCE................................................................................................................32 RETAILING....................................................................................................................................34 VIDEO: Will RetAiliNg ChANNels iN the UK See AN INcReAse iN SAles?................36 APPAREL.......................................................................................................................................37 VIDEO: Will SpoRtsweAR See Positive GRowth Due to the OlyMpics?...............40 FRESH FOOD...............................................................................................................................41 CONSUMER FOODSERVICE......................................................................................................44 VIDEO: WhAt is McDoNAlDs PlANNiNg ONsite At the OlyMpic PARk?.................46 PACKAGING.................................................................................................................................47
yes from around the world will be on London as the 2012 Olympic Games begins. With a captive audience and great expectations
industry experts across 10 major industries along with its consumer and economy experts to discuss the Games effect on their respective industries and global brands. This brieng collates the diverse views of consumer industries all vying for the attention of the global consumer. Starting with the macroeconomic view our experts highlight expectations and limitations of the economic impact from foodservice to nance, discussing what may drive growth as a direct or indirect result of the 2012 Olympic Games. How the Games will leave its mark on these industries is yet to be seen but in the following pages our analysts share their prospects for the 2012 London Olympic Games.
looming, a popular question on the minds of marketers, brand owners, economists, media and sports enthusiasts alike, is what impact will the Games have on the economy and industry? Perspectives vary with regard to the overall impact of the Olympic Games. The London Organising Committee of the Olympic and Paralympic Games pushed for heavy investments in the citys infrastructure and VisitBritain, along with local businesses, is aiming to put their best foot forward in the hopes the Games bring a needed boost to the economy. Euromonitor International assembled its
Euromonitor International 2
DAtAGRAPHIC
What Will Make the UK a Winner?
DATAG R A PH I C CO U N T R I E S A N D CO N SU M ER S
2012 Olympics: What Will Make the UK a Winner?

GDP Matters a Lot
In 2008 7 of the Top-10 total medal winners were among the worlds 10-largest economies the UKs Rank: GDP Medals 7 in 2004 6 in 2000 7 in 1996 6 in 1992 8 Total GDP in PPP terms in Olympics year 12 17 0 0% 5% 10% GDP Per Capita in PPP terms, 4 yr CAGR leading up to host year 9 1 UK 2012 forecast USA 1996 Greece 2004 Spain 1992 South Korea 1988 China 2008 Although China won a substantial number of medals at the Beijing Olympics, in relation to 15% its population size, being home to 19.8% of the worlds population, it underperformed winning 10.4% of the medals or 0.1 medals per million inhabitants. 9 2 4
UK ECONOMY & INFRASTRUCTURE

LONDON OLYMPICS TO PROVIDE MINOR BOOST TO UK ECONOMY
HILARY WALSh AND AN HODGSON, COUNTRIES AND CONSUMERS ANALYSTS, EUROMONITOR INTERNATIONAL
opportunity for economic growth, and it will likely support moderate growth in Q3 2012. However, the probability of the Olympics lifting the UK out of the 2012 economic slowdown is slim. The Olympics historically have an ambiguous effect on economic output in host countries. Athens 2004 supported Greek real GDP growth of 4.4%. However, in 2003 the Greek economy saw real GDP growth of 5.9%. In 2000, the year of the Sydney Olympics, Australia saw growth of 3.1%, while in 1999 Australian growth stood at 4.1%, suggesting that the economic impact of the Games is usually in the build-up to the event. According to the Olympic Delivery Authority (ODA) an estimated 7 billion worth of investment was created by the development of Stratford, the area hosting the event in London and the Olympic Village. The British Hospitality Association estimates an additional 294,000 tourists will enter the UK for the Games alongside an estimated 587,000 UK residents expected to visit London for the event. Consumer spending in London is set to iincrease by 0.9% between 2011 and 2012, in US
But So Too Does Population

How Have Other Hosts Performed? Total medals won per million inhabitants host year 3 Australia 2000 frequently outperforms given its small population. It has been in the Top-10 for the last four Summer Games.
But Perhaps Most Important is the Host Nation Advantage

Comparing the GDP per Capita and Medals Won of the Most Recent Hosts
Total Medals Won 120
he timing of the 2012 Olympic Games has divided the UK. As the economy slipped back into recession in the rst quarter of
2012 and with an estimated public cost of 9.3 billion, some are questioning the value of hosting the Olympic Games. The government has hailed the Olympics as an
100
2008 BEIJING
China
80
USA Since 1988 the USA is the only country that hasnt outperformed itself while hosting the Olympics
1996 ATL ANTA
50,000
UK Real GDP Growth: %, quarter-on-quarter (q-o-q)
UK
2012 LONDON
60
2000 SYDNEY
Australia
40
South Korea
1988 SEOUL
20
1992 BARCELONA
Spain
2004 ATHENS
0 0 10,000 20,000 GDP per capita, US$ (purchasing power parity)
Greece
30,000
40,000
65
Euromonitor International
Euromonitor International predicts that although in recession in 2012 the UK will increase its total medal count. Based on a combination of total GDP, population size and host nation advantage the UK total medal count will be
Source: Euromonitor International from the Office of National Statistics, Eurostat, OECD, IMF
Note: (1) Data is seasonally adjusted. (2) Figures for March 2012-Dec 2012 are forecasts.
Sources:
Euromonitor International, www.sports-reference.com
dollar terms, almost double the country average thanks in part to a boost from the Olympics.
by displacement of traditional holidaymakers, put off by the games. The most likely sectors to benet in the UK will be retailing and tourism. Euromonitor International estimates an additional 13,000 hotel rooms were built to support the inux of tourists, while Heathrow Airport is expecting a 45% increase in passenger numbers per day over the course of the games. Output from construction in the UK declined in 2011 by 0.8% in real terms due to the weak housing market while unemployment is expected to increase to 8.6% in Q3 2012. These gures suggest that any extra jobs or investment in construction off the back of the Olympics have already taken effect. Increases in tourism into the capital will support Londons local economy. Olympic projects have helped mitigate some of the impact of the UKs construction slowdown on east London. According to the Department for Culture, Media and Sport, 30,000 people were employed during the construction of the Olympic Park.
The Olympics is expected to provide minor distraction to a faltering British economy, dragged down by Eurozone woes and austerity. Consumer expenditure, for example, in the UK overall is expected to decline by 1.9% in real terms per capita between 2011 and 2012.
while an additional 11,000 homes are to be built in the surrounding Olympic Park area. Given the size of Britains economy there is unlikely to be any major impact on aggregated gures. The impact of the Olympics is expected to be minimal on nationwide, long-term problems such as unemployment and falling construction, with London feeling the greatest positive impact through a boost in tourism and retail sales. The Games coincide with a period of major
IMPLICAtIoNS
The Olympic Games have historically had a variable impact on the host countrys economy. In November 2004, the Greek embassy in the USA estimated that the Athens Olympics cost US$11.2 billion. The Department for Culture, Media and Sports budget for the games, which covers the building of the stadium and policing the games, alone is US$14.8 billion (9.3 billion); but the estimated overall cost is much higher. Based on historical analysis of the Olympics in Greece in 2004, growth was most conspicuous in the public sector, thanks to signicant spending on public administrations such as police forces, at the expense of education and health. Wholesale and retail trade appears to have been supported by the Olympics given its slump in 2005, but hotels and restaurants grew little during the Olympic year, recovering more strongly in 2005. This may have been caused
PRoSPECtS
Britain fell back into recession at the end of Q1 2012, contracting by 0.3% in real, seasonally adjusted terms. Real GDP growth is forecast to recover in Q2 2012, followed by a peak in growth in Q3, the period of the games. Real GDP growth is expected to rise to 0.4% in Q3 then fall once again in Q4. Overall real GDP growth for 2012 is expected to be just 0.1%. According to the London Legacy Development Corporation, an estimated 12.5 billion of private and public funding was invested in the Stratford region of London, where the Olympic grounds are situated. This major development is set to support services and retail in the
uncertainty in the worlds economic outlook. Crisis in the Eurozone with danger of a Greek exit from the single currency and a faltering banking sector in Spain pose major risks to the UK. If the crisis worsens, these factors will be remembered more for their impact on the UK economy than the Olympics will.
LONDON 2012 OLYMPICS TO HAVE A LIMITED IMPACT ON UKS INFRASTRUCTURE

With only a small proportion of the 9.3 billion Olympic budget designated for infrastructure, the impact of the London 2012 Olympic Games
Gross Value Added Growth for Greece in Real Terms: 2003-2005
Source: Euromonitor International from national statistics

Note: Education and Health includes: Education, Health, Social Work and Other Community, Social, Personal Service Activities. Public Administration includes: Public Administration and Defence; Compulsory Social Security. Financial Intermediation includes: Financial Intermediation, Real Estate, Renting and Business Activities. Wholesale and Retail Trade includes: Wholesale and Retail Trade; Repair of Motor Vehicles, Motorcycles and Personal and Household Goods. Other Sectors includes: Agriculture, Hunting, Forestry and Fishing, Mining and Quarrying, Manufacturing, Electricity, Gas and Water Supply, Transport, Storage and Communications, Activities of households.
area over the longer term, which is already home to the largest urban shopping centre in Europe,
Public Non-Housing Construction Output and Annual Real Growth in Gross Value Added (GVA) from Construction in the UK: 2006-2011
Source: Euromonitor International from national statistics
Note: Public non-housing construction output does not include infrastructure construction output; Output data are seasonally adjusted and in constant prices.
on infrastructure was limited and mainly local. Although construction associated with the Games provided some respite to the ailing construction industry, this was temporary and could not make up for the losses in residential building. The UK spent 9.3 billion of public funds on the 2012 Olympics, out of which 1.7 billion was used for regeneration and infrastructure. An additional 6.5 billion was spent outside of the Olympics budget on Londons transport infrastructure, but these upgrades were planned prior to the Games and were only accelerated. The sporting venues including the scaleddown Olympics Stadium, the Aquatics Centre, the VeloPark and the Olympic Park will be the main legacy of the Games in terms of infrastructure. In terms of transport, the javelin train will continue to provide a fast connection between Londons St Pancras International and Stratford after the 2012 Olympics.
branded as having an impact on the whole UK, the infrastructure benets will be felt mostly locally: Despite the additional 13,000 hotel rooms built to support the inux of tourists. the value of this extra capacity after the Olympic Games is questionable, as tourism suffered as a result of the global slowdown in 2008-2009. According to national statistics, the number of overnight visits to London stood at an estimated 15.2 million in 2011, compared to 15.6 million in 2006. One of the biggest promises of the project was the re-generation of deprived East London. The London boroughs of Tower Hamlets, Newham and Hackney, hosting a majority of the Olympic events, were the most deprived local areas in all of England in 2010, according to the Index of Multiple Deprivation which measures deprivation across seven different aspects including income, employment and housing. According to the London Legacy Development Corporation, an estimated 12.5 billion of private and public funding was invested in the Stratford region of London in the run-up to the Games. This includes the opening in September 2011 of Europes largest shopping centre, Westeld Stratford, estimated to have created 10,000 new jobs. This will boost consumer incomes and spending in the area. Large sporting events often result in white elephants large and expensive structures with little use afterwards located in expensive and scarce urban areas. However, many London Olympic venues are intended as temporary, and after decommission or deconstruction, the Olympic quarter will be converted into a business and residential area. Following the Olympic Games, 40,000 homes will be built in the vicinity of the Olympic Park, relieving some pressures on local housing and providing further jobs to the area.
THE vALuE of tHE OLYMPICS IS QuEStIoNABLE

While investments associated with the Olympics will help reduce inequalities within the capital, regional disparities will persist. In 2011, the total annual expenditure of an average London household was 23.5% higher than that of an average UK household. The cost of the Olympics to the public has grown signicantly from the initial 4.0 billion bid made in 2005, partly due a drop in private sector funding from the anticipated 738 million to just 165 million, according to the National Audit Ofce. The bill will be passed on to consumers nationwide through higher transport costs, council tax increases and cuts in other areas of public spending. This is at a time when annual disposable income per capita fell by 3.3% in real terms between 2006 and 2011.
PRoSPECtS
The UKs construction industry will receive a further boost when the London 2012 Olympics nish, as work will begin converting the Olympic site into a business and residential area. According to plans by the London Legacy Development Corporation, this next phase of construction will take up to nearly two decades, until 2030. A much more ambitious project, unrelated to the Olympics, is the Crossrail, a new railway link for London and the South-East. Its construction will last between 2010 and 2018 and cost 16 billion. The construction phase alone is expected to generate 14,000 jobs. The work related to it has already made 2011 a record year for infrastructure output since 1980. This is needed, as the housing market will unlikely see much activity in 2012, and the UKs real GDP growth is expected to remain subdued at 0.1% year-on-year.
IMPLICAtIoNS
The London 2012 Olympics provided a temporary but much-needed boost to the UKs construction industry at a time when the housing market stagnated due to the global slowdown. The Olympic Games induced strong growth in public non-housing construction output, providing some respite to the ailing construction industry. In 2011, the construction industry accounted for 5.4% of the UKs GDP and 8.5% of total employment. However, this boost to the construction industry was only temporary, as most construction work for the Olympics was completed by July 2011. It was also insufcient to make up for the losses associated with the falling residential housing completions. Although the London 2012 Games were
VIDEO
Although the sheer number of tourists arriving in London for the Olympics will boost sales in areas like retailing and apparel, will it have any signicant impact on the economy?
FEATURING DANIEL TARLING-HUNTER, EcONOMIST AT EUROMONITOR
DAtAGRAPHIC
Does BMI Have an Impact on a Countrys Performance?
Countries and Consumers

MarketinG tHe 2012 Olympics: WHo do Consumers THink is
USA
BACkGRouND
On July the 27th, the Games will open in London. Over 17 days, thousands of elite athletes from around the world will compete for medals in a host of events ranging from athletics to shooting. They will be looking to reap the reward of years of training, discipline and sacrice. At the same time, many brands will be seeking to execute Olympic marketing strategies they hope will (after a fashion) also win gold.
2012 Olympics: Does BMI Have an Impact on a Countrys Performance?

2008 Performance: GDP per Capita vs Mean BMI vs Total Medals Won
How Different Regions of the World Compare Mean BMI (kg/sq m) 30 Belarus While ranking high in Olympic medals, Belarus punches above its weight in BMI. This is mainly caused by poor nutrition supported by such factors as sedentary lifestyles and lack of sport activities.
GoinG for Gold?

Among the reasons for increasing obesity in Latin America are greater availability of fat-saturated food, and a shift away from traditional diets[and] the move towards rising urban populations has contributed towards a less active population.
28
Mexico Chile Venezuela UK
DAPhNE KASRIEL-ALEXANDER, cONSUMERS EDITOR, EUROMONITOR INTERNATIONAL
A HEAvY RELIANCE oN SoCIAL NEtWoRkING

While social media was a factor in marketing related to the Beijing Olympics four years ago, it is set to be much more visible this time around. In an interview with the Wall Street Journal, Marc Pritchard, head of marketing at Procter & Gamble (P&G), said: Youll see some very heavy-duty digital activity for our Olympics programme We have more than 30 brands doing Olympics activities and 150 athletes. All those brands have Facebook pages, and all those athletes have Facebook pages. Then we go out, create an event, talk about it and push it out through broadcast and digital. Then we have community managers who are amplifying the discussion, engaging on Facebook, YouTube and Twitter.
Dominican Republic Colombia Brazil Argentina Ecuador
26
he Olympic Games (aka the greatest show on earth) are upon us. Just like the athletes who will be the stars of the show, market-
ers have been preparing for this event for years and are bombarding consumers with Olympicthemed campaigns, many of which are embracing innovative strategies.
Italy France France and Italy, among the worlds largest economies and Olympic powerhouses have low BMIs compared to other G7 countries. Although declining in popularity their healthy Mediterranean diets contribute, as do government campaigns with particular attention paid to child obesity.,4
24 China
CoMMERCIAL oPPoRtuNItIES
Many Olympic athletes are youthful, successful, attractive and widely admired - brands can benet greatly by being associated with them The Olympics is unique in its combination of ancient tradition and modernity, giving it a universal appeal that is unmatched by any other sporting or cultural event Overkill is an ever-present risk with Olympic marketing, which could leave consumers jaded and cynical
Japan 22 India Euromonitor Internationals Regional Classications Asia Pacic Australasia 20 0 10,000 GDP per Capita (US$ in PPP) Eastern Europe Latin America Middle East and Africa North America Western Europe
1 medal 110 medals
20,000
30,000
40,000 Total Medals Won
50,000
60,000
Quote Sources
Countries and Consumers Reports 1 Consumer Lifestyles in Belarus 2 Regional Focus: Rising Obesity Rates in Latin America 3 Consumer Lifestyles in France 4 Consumer Lifestyles in Italy
Sources:
Euromonitor International, www.sports-reference.com Euromonitor International
ADAPtING oLD MEDIA to NEW tIMES

P&G is combining increased investment in online marketing with more traditional channels like television. For example, it is running a TV ad featuring the mothers of some well-known Olympic athletes (such as Jennifer Bolt, the mother of Jamaican sprinter Usain Bolt) entitled Best Job. It claims that the spot honours everything that all moms do to help their children succeed by showcasing the amazing moms behind Olympic athletes. As well as airing on TV networks around the world, it has proven very popular on YouTube, attracting 4.6 million hits by late June 2012. It clearly touched an emotional chord with many viewers. According to one poster on the site: This touched my heart in a wonderful way. Another said: When the video ended, I went to my Mom and said thanks for everything and just cried. A third said: Is this really an advertisement? If so, its a great one. Regardless of the medium, making an emotional connection tends to be facilitated by a connection with the Olympics, where medal winners (as well as some of those who fail to make the podium) are often known to shed tears. Moreover, in the era of Tivo and time-lapse TV viewing, it highlights how consumers nd some Olympic messages signicant enough to seek out online.
the airline opened an airline-themed pop-up venue called Flight BA2012 in the trendy London suburb of Shoreditch that celebrated the best in British talent. The three-in-one venue featured an art gallery, cinema and dining room, where diners were able to sample a bold British menu created by Michelin-star chef Simon Hulstone. According to one blogger, Maybe its because I am a serious foodie, or maybe its just the envy that most of us feel when turning right instead of left when entering an aircraft, but this looks genius to me. Meanwhile, to mark the Olympics, the British Fashion Council paired nine top fashion designers with nine artists in a project entitled Britain Creates 2012: Fashion + Art Collusion. The resulting artworks, showcasing British originality, will be exhibited at Londons Victoria & Albert Museum in July.
after it was revealed that ATMs at Olympic venues were to be replaced by ones that would only accept Visa cards. Writing in the London-based Observer newspaper, journalist Heather Stewart bemoaned wall-to-wall Olympics marketing guff, plastered over hours of telly advertising, acres of billboards, and even the labels on milk bottles the Olympic dream has little to do with rippling athleticism or heroic sporting endeavour, and everything to do with ogging washing powder and sausage-andegg McMufns. According to one online poster, The Olympics is just a money making binge for corporate sponsors. Another commented: The never ending waves of branding and sponsor advertising are overwhelming and depressing. However, a third said: People enjoy the spectacle of the Olympic Games. If they didnt, then they would not watch... The commercial sponsorships make
businesses that are not ofcial sponsors are prohibited from using certain words or phrases that might relate to the Games. For example, they cannot place a sign outside their premises using the phrase London 2012 and are restricted in their use of such words as summer, medals, sponsor, silver, gold and bronze. This proscribed language is available only to ofcial sponsors, such as Samsung, Coca-Cola, Procter & Gamble and Visa. During summer 2012, the British media have carried a signicant number of stories about small businesses celebrating the Olympics being threatened with legal action. According to one online forum poster, Sports are a sideshow. Its all about marketing, while another said: This whole thing has become very ugly Time to refocus on the sport itself.
But DovE AIRCRAft GEt A MIXED RECEPtIoN

In April, British artist Tracey Emin unveiled the rst of a set of special Olympics-inspired plane designs for BA. The outside artwork of the nine Dove aircraft was designed by Brighton-based artist Pascal Anson, a protg of Emin. However, many posters on the Daily Mails internet site were unimpressed: According to one, Yuck! I dont get the Olympic connection? Looks hideous, another lamented.
OutLook
In spite of these difculties, consumer sentiment towards the Olympic Games remains overwhelmingly favourable, making it a magnet for global brands. As well as being a celebration of youthful vigour and athletic prowess, if it is managed adroitly, London 2012 will also be a showcase for sponsors that will deepen brand recognition and loyalty and ultimately boost prots.
the games possible.
THE BRAND PoLICE GEt HEAvY

Thanks to legislation passed by the British government after London was awarded the event,
UK Adspend by Media Type: 2012

US$ billions (constant 2011 prices)
BA Et AL StRIvE to tAP PAtRIotIC SPIRIt

June 2012 saw the celebration of Queen Elizabeth IIs Diamond Jubilee and British Airways (BA) is attempting to tap into the patriotic spirit this engendered in the UK in its Olympic marketing campaign. For a fortnight during April 2012,
TREAD CAREfuLLY
Allegations of cynicism and overkill are frequently made against Olympic-related marketing. This risk is highlighted by stories of brands being heavy handed about exclusivity. For example, credit card company Visa was heavily criticised
DAtAGRAPHIC
How Different Economic Groups Compare
TRAVEL & TOURISM

IMPACT OF THE LONDON 2012 OLYMPICS ON UK TOURISM
CAROLINE BREMNER, GLObAL HEAD Of TRAVEL AND TOURISM RESEARch, EUROMONITOR INTERNATIONAL
RECESSIoN, NEXt StoP DEPRESSIoN?

The pace of economic deterioration in the Eurozone has picked up speed in 2012, hijacking growth prospects around the world from the US and China to the UK. The Eurozone could soon face a break-up of its existing structure - a Greece exit or the break-up of the Economic Monetary Union, so-called Eurogeddon. The UK entered a double-dip as it contends with the worst recession since the 1930s. The country is weighed down by front-loaded austerity measures, with income inequality and unemployment rising, further exacerbated by weak European demand for UK exports. The troubles being faced by its European neighbours are not good news either for travel and tourism, seeing as European countries accounted for 73% of international arrivals in 2011. London is a mature destination and welcomed a record 15 million visitors in 2011, ranking it among the top three cities in the world after Hong Kong and Singapore, according to Euromonitor Internationals Top City Destination Ranking.
2012 Olympics: How Different Economic Groups Compare

Olympic Performance Has Not Kept Pace with Economic Growth For All 19882008
Comparing the GDP per Capita and Medals Won, Olympic years Total Medals 120 China USA Russia Germany (19922008) High Count G7 The USA remains in a class of its own with its high medal count and high GDP per capita. In the 1980s, Germany competed with the USA both in GDP per capita and medals. However, since competing as a unied team in 1992, Germany has failed to keep pace in GDP per capita growth while it won half as many medals in 2008 as it had in 1988 (as West Germany). But in elding its smallest team since 1990, Germanys slide may continue in 2012. BRIC The BRIC countries are the least concentrated. China and Russia enjoy low to moderate GDP per capita as they consistently win high medal counts. However India and Brazil, with their similar economic positions remain mired near the low end of the medal spectrumthough Brazil has seen recent improvement in its medal count. Future-7 As a set of emerging markets, the Future-7 has a lot of catching up to do in both GDP per capita and Olympic performance. Turkey and Argentina stand out for improvements in both GDP per capita and medal counts. Vietnam is not charted because of only two total medals won (2000 and 2008).
Moderate Count
he nal countdown to the 2012 London Olympic and Paralympic Games has begun. Euromonitor International investi-
gates the impact and legacy that the Games will have on London, already a leading global destination, and the UK overall. The event will reach a 4.5 billion global audience, which will help raise awareness, boost intention to travel and encourage visits from both old and new visitors.
0 0 Low GDP per Capita (US$ in PPP) Moderate High 50,000
Low Count
G7 in Detail 19882008 (excl. USA)

Moderate Medal Counts and High GDP per Capita United Kingdom 60 France 60 Germany 60 Italy 60
Japan 60
Canada 60
Destination London: Visitor Numbers 2011
10,000
40,000
10,000
40,000
10,000
40,000
10,000
40,000
10,000
40,000
10,000
40,000
Future-7 in Detail 19882008 (excl. Vietnam)

Low Medal Counts and Moderate GDP per Capita Turkey 10 Argentina 10 Indonesia 10 Mexico 10 Egypt (200408) 10 S. Africa (19922008) 10
Source: Euromonitor International

0 20,000
20,000
20,000
20,000
20,000
20,000
Sources:
Euromonitor International, www.sports-reference.com Euromonitor International
THREE REASoNS to BE CHEERfuL

Despite on-going austerity, the UK has much to celebrate. VisitBritain, the national tourism board, distilled the essence of Brand Britain into three words - timeless, genuine, dynamic - to reect the countrys history, heritage and multi-cultural society. Armed with a marketing budget of 100 million over four years thanks to its partnership with the travel and tourism industry, VisitBritain aims to generate 1 billion worth of PR to bring in four million additional visitors over 2011-2015.
the Netherlands, which also benet from strong air, rail and sea links. Strong growth is forecast from the US and Australia - both enjoying favourable exchange rates to the pound - driven by friends, relatives and avid sports fans. However, in many cases, cultural and business tourists will be put off from travelling to the UK this year due to rising prices. China and India are earmarked as priority target countries by the national tourism board. However, Euromonitor Internationals ndings suggest these nations are not big Olympic fans, and will prefer to travel to London and the UK outside the Games. In 2012, 430,000 Indians and 130,000 Chinese are expected to visit the UK. Despite Brazil hosting the 2014 Olympics, Brazilian travel to the UK will be minimal in 2012, at 120,000 trips.
UK Arrivals: Top 10 Source Markets 2011/2012
PoISoNED CHALICE oR HoLY GRAIL

The Olympic Games is regarded as one of the pinnacles of the Golden Decade of Sport which kicked off in 2010. However, the Olympic Games are also regarded as highly controversial, with many industry stakeholders divided about the benets and threats of holding such a high-prole mega event. Inbound operators, represented by the European Tour Operators Association (ETOA) and UKinbound, have been vocal regarding the negative impact witnessed by their members affected by the displacement factor, which occurs when traditional source markets steer clear of the host city for fear of exorbitant prices, travel chaos, security threats and punitive booking terms.
DoMEStIC vISItoRS to SAvE tHE DAY

Euromonitor International expects 330,000 international visitors to attend the Olympic Games. Domestic visitors account for 68% of the eight million Olympic tickets sold, and hence will dominate visitor numbers. For 2012 as a whole, Euromonitor International predicts that domestic tourism growth to the capital will be 8%, topping 12 million domestic trips. Fortunately, the Games extend beyond Londons boundaries, with football taking place in Glasgow, Newcastle, Manchester and Coventry, sailing in Weymouth and cycling on the South Downs. Euromonitor International predicts that the feel-good factor will boost domestic tourism nationwide, with a 5% uplift expected for the UK overall in 2012. Growth will subside following the event, although with recessionary pressures on household budgets still apparent, the domestic market will remain positive over the mid-term.
London vs UK Domestic Tourism Performance 2011-2016
BAtoN foR GRoWtH

Our expectations are positive for 2012 as a whole, with an anticipated increase of 2% in international arrivals to the UK, accounting for a displacement factor of 15%. The majority of growth is likely to derive from European neighbours with a passion for sports, such as France, Germany and
FIRSt SoCIAL MEDIA GAMES

London 2012 claims to be the rst social media Games, seeing as Beijing 2008 was before social media was fully integrated into the marketing activities of companies and national tourism boards. With such a large PR budget and a host of new technologies at its disposal, from gamication to apps and super-bloggers, there is a vast opportunity for London & Partners to maximise the global television audience, with sources putting the amount at 4.5 billion people. If the media response to the Royal Wedding and the Queens Diamond Jubilee on Twitter is anything to go by, then the Olympics should have the desired effect of generating global publicity. Brandwatch reported the Jubilee generated 1.2 million mentions compared to the Royal Weddings 900,000, recorded over their respective 4-day periods.
per available room, rebounding quickly after the global economic crisis. PWC forecasts occupancy in London could reach as high as 83.4% in 2012, with an average daily room rate of 135 leading to a RevPAR of 114. The Olympics take place during Londons peak season, so the capitals hoteliers are poised for a busy summer. Securing hotel rooms was an integral part of the bid to win the Olympics, and over the past year the London Organising Committee of the Olympic and Paralympic Games (LOCOG) released further rooms back to the market, easing the pressure on pricing. Pipeline development has been strong and will reach its peak in 2013 with demand and supply diverging in 2013, as the former subsides and the latter continues to expand. The post-event slump will be a major challenge to overcome and will weigh down average daily room rates. London being a mature market has beneted from the increased investment in its hotel supply, with the major chains refreshing and diversifying their brands, leading to greater consumer choice. A major coup for the city was the launch of the luxury lifestyle brand W Hotel from Starwood in Leicester Square. Other luxury launches of note included the InterContinental Westminster, the
Corinthia Hotel, 45 Park Lane and the St Pancras Renaissance Hotel. The luxury wave of openings continues apace, including hard-hitting luxury brands like Bulgari (2012), ME London by Melia Hotels (2012), Shangri-La (2013) and Edition (2013) amongst others. The luxury segment also received a welcome boost from the refurbishment of its grande dame hotels, such as The Savoy. The focus of luxury development, however, remains Central London. The budget chains also took up the expansion challenge, with Travelodge (15 outlets to date) and Premier Inn (22 outlets) battling it out for dominance. Budget chains ventured close to the Olympic Park, but only a few new outlets were opened, such as London Stratford Premier Inn, opposite the new Westeld Stratford City shopping centre. IHG also opened its mid-priced Holiday Inn brand within Westeld, along with its extended stay brand (4-star), Staybridge Suites. As of June 2012, there still remains capacity in the market. Thomas Cook, the ofcial travel retailer of the Games, reported that 25% of its Olympic packages (tickets, hotel and transport) were unsold with six weeks to go. This may lead
to some last-minute discounting as the booking window shrinks.
THREAtS AND CHALLENGES Go HAND IN HAND

Mega events all come with associated threats and challenges, from infrastructure and transport to security. One of the main threats facing London 2012 is the risk of travel chaos at the UKs main hub, Heathrow Airport, already operating near capacity and dealing with 68 million passengers a year. From excessive queues to baggage delays, the airport is expected to see demand rise by over 40% on key travel dates. This could well be the Achilles heel of the Games. A potential terrorist attack is concern for security services. Much publicity was made of the ground to air missiles installed on local residents accommodation to act as a deterrent to terrorism. A are up of the August 2011 riots may happen in ash areas but is unlikely to spread. In terms of revenues generated by visitors, a weak euro following the on-going Eurozone crisis will undermine demand from key European source markets such as the Netherlands, France
NEW LEASE of LIfE foR LoNDoN HotELS

London is the envy of the rest of the UK, with its high occupancy rates and RevPAR, or revenue
London Hotel Outlets by Star Rating 2011
Leading London Airports: 2011
and Germany. However, this will mostly affect lastminute visitors, whereas most sports fans booked in advance to secure accommodation at a more reasonable price.
and attraction in the form of the Olympic Park itself. When the park reopens in 2013, it will be called the Queen Elizabeth Park and is expected to receive 9 million visitors per year. It will also be the home of 5 world-class sports stadia, which will boost Londons mega-event host credentials. Amongst the winners are Londons hoteliers in the short term as they gear up for enhanced demand in their peak season, having witnessed a long overdue refresh of hotel brand supply. The transportation network will benet from the investment to date and improved international connections from St Pancras, with Deutsche Bahn set to launch London-Frankfurt in 2013. The government has also backed ground-breaking plans for developing the national high speed rail network, with the rst stage of High Speed 2 (HS2) from London to Birmingham due to start in 2015. The countrys airport policy is also back on the agenda, with a possible U-turn by the government on a third runway at Heathrow after the next election. The local London boroughs and their communities will be the ultimate winners, seeing as regeneration was at the heart of the original bid. The Olympic Park Legacy Company points to the creation of 12,000 jobs after the Games and 3,000 homes including affordable housing. The legacy has a wide range of targets from sports participation, biodiversity, and waste management to healthy living. With international connections, it is up to businesses, hoteliers and travel operators to keep investing in the area so that they can put East London on the map, offering visitors the chance to experience the real East End for themselves.
Podcast
TouRISM LEGACY foR tHE UK

Regardless of the nal numbers for the London 2012 Games or full 2012, the most important tourism legacy for Britain is raising brand awareness in a positive way, boosting potential visitors desire to travel to the UK and ultimately visitor numbers. The target of four million additional visitors over four years is ambitious, especially in the face of a fracturing Eurozone and appreciating sterling. Nevertheless, keeping the momentum going will be critical to ensuring the tourism legacy is achieved. VisitScotland, for example, has highlighted nine major events including the Glasgow 2014 Commonwealth Games to ensure the opportunity presented by the Olympics endures. Euromonitor International estimates the rate of inbound tourism growth will slow post-event, recording a CAGR of 1.4%, which amounts to an increment of 1.6 million over 2011-2015. This scenario is the best case, and the impact on inbound tourism following the worst case scenario of an EMU break-up would require this assessment to be revised downwards signicantly.
egardless of the nal numbers for the London 2012 Games, it will be important for the tourism industry to leave a posi-
tive image of the UK in visitors minds for potential future trips. Caroline Bremner, global head of travel and tourism research, states that the real winners in the tourism industry could be the small boroughs. As international tourists arrive to Stratford International station, its up to businesses and hoteliers to keep investing in that area so that they can help put East London on the map.
So HoW WILL 2012 BE REMEMBERED?

Most events are remembered for putting on a big show, for example, Beijings opening ceremony in the Birds nest or Sydneys Millennium Games; or negatively for failure to meet construction deadlines such as Athens. It remains to be seen how impactful Danny Boyles opening ceremony will be for London 2012, but it will announce to the world that London has a new destination
SOFT DRINKS
COCA COLAS SPONSORSHIP SHOWS GLOBAL VISION, UNDERSCORES BRAND DOMINANCE
JONAS FELIcIANO, BEVERAGES ANALYST, EUROMONITOR INTERNATIONAL
with the Olympics since 1928, when the beverage companys freighter transported the US Olympic team to Amsterdam, along with 1,000 cases of Coca-Cola. The company has agreed to partner with the games through 2020; a deal that extends TCCCs support of the games to 92 straight years. While the company has been present at all the summer and winter games held between 1928 and 2012, Coca-Cola has truly left its mark on the Olympic experience starting in 1996 when the games were hosted in Atlanta. In Atlanta, Coca-Cola was a key sponsor as the company welcomed the world to its hometown. In an effort to enhance the experience for all visitors, TCCC created venues such as Coca-Cola Olympic City theme park, Coca-Cola Refreshment Plaza, the Coca-Cola Olympic Salute to Folk Art Exhibit, and the Coca-Cola Ofcial Olympic Games Pin Trading Centres. Since these games, TCCC has made it a habit to sponsor public venues in Olympic cities. For the 2000 Sydney games, CocaCola hosted simultaneous live big-screen presentations of the opening ceremonies across Sydney, Melbourne, Brisbane, Adelaide and Perth. In 2004, TCCC invited Greek youths in Athens to partake in daily television and radio programming sharing their experiences about the games. And for the 2008 Beijing games, Coca-Cola hosted various special events for fans in Beijing and co-host cities, with two special Coca-Cola Shuang Zones where consumers could partake in local concerts, telecasts of the games, pin collecting, interactive games, and nightly parties featuring local artists. While all these events held similar themes of showcasing local culture, fostering global communication, and providing diversion for the thousands of fans in attendance, Coca-Cola beneted not only from pervasive branding across all venues, but from exclusive rights as the only nonalcoholic beverage provider for all athletes and
attendees. The London 2012 games will also bear CocaColas unique imprint. TCCCs campaign centres on the theme of Move to the Beat and features an urban artwork painted by a collective of internationally acclaimed young artists to create The Beat Wall. The artwork lies in the shadow of the Olympic Stadium in London and the campaign has launched in 11 countries across Europe, supported by television, radio, internet, and social media advertising. The overall theme of the campaign is designed to bring teens closer to the Olympic Games and to the sport in general by engaging them through a fusion of two global teen passions - sport and music. The culmination of the campaign is the global launch of a theme song featuring producer Mark Ronson and singer Katy B, and using sounds from ve international athletes participating in their sport as part of the beat. The Move the Beat campaign is just one of many initiatives undertaken by TCCC (others including traditional pin trading sites and sponsorship of the torch relay), but it also represents Coca-Colas ambition to combine various media to create a unifying blend of music and sport that targets the key youth demographic. But one thing sorely lacking from Coca-Colas plans is how such a campaign promotes its beverages outside of showcasing its signature logo on everything it touches.
branding in a developing nation as a large reason that Coca-Cola witnessed its off-trade volume share increase from 15.1% in 2007 to 15.8% in 2008 to an all-time high of 16.3% in 2009. But unlike China, the United Kingdom represents a mature market, well versed in the various offerings of Coca-Cola. Increased branding exposure through television, radio, print, and social media marketing may do little to improve market share when nothing new is truly being showcased to consumers. As such, TCCC has already seen their shares grow stagnant in the United Kingdom, with 20.5% of off-trade volume share in 2010 and 20.4% share in 2011. This is not to say that Coca-Colas campaign is without merit. In fact, many applaud TCCC for its continued focus on global community rather than explicit beverage marketing during the games. But, if the company has taken great pains to craft a campaign that targets global youth and features the drawing power of English celebrities, the launch of a new product or even rebranding of an old one would do well to seize upon the excitement surrounding the Olympics. Furthermore, the companys exclusive beverage rights provides it with an ideal chance to test a new sports drink or coconut water blend by a diverse and captive consumer base seeking hydration. Regardless, in a market where its brand is already #1 and is easily recognised locally and internationally, Coca-Cola has missed on an opportunity to revitalise its brand; and instead just reminds consumers of its ubiquity.
opportunity to unveil new products to the world. For 84 years, The Coca-Cola Company (TCCC) has been involved with the Olympics in some capacity. The 2012 London games present yet another venue where Coke will be highly visible as the events exclusive non-alcoholic drink vendor, as well as present a platform for the company demonstrating its commitment toward social responsibility and environmental sustainability. However, with a captive audience, exclusive beverage rights, and the world tuned in, the company seems focused on reinforcing the brands global dominance rather than positioning its participation with the event to have an immediate and measurable impact on sales.
s Coca Cola prepares to place their distinctive stamp on another Olympic experience, the beverage giant misses an
OLYMPIC GAMES AS AN oPPoRtuNItY to GRoW BRAND SHARE BY LAuNCHING NEW PRoDuCtS

When Coca-Cola sponsored the 2008 Beijing games, it participated in a yearlong campaign featuring Chinese athletes with inspirational messages of Chinese tradition, heritage and good sportsmanship. Many attribute such strong
CoCA CoLA CREAtES A uNIQuE EXPERIENCE At tHE OLYMPIC GAMES

The Coca Cola Company has been involved
VIDEO
Will Coca-Colas Olympics campaign Move to the Beat gain the interest of youth culture worldwide?
HEALTH & WELLNESS

THE 2012 OLYMPICS: FOCUS ON PERFORMANCE HYDRATION
BY EwA HUDSON, GLObAL HEAD Of HEALTh AND WELLNESS, EUROMONITOR INTERNATIONAL
HIGH-tECH SPoRtS BEvERAGES

Sports drinks are the rst, and most obvious category on which the London Olympics will have a major impact. These products already enjoy worldwide mass-market popularity, particularly among young men. Euromonitor Internationals soft drinks statistics show that global off-trade volumes rose by 28% over the 2006-2011 period to exceed 15 billion litres in 2011. In per capita consumption terms, the US led with 21.1 litres, followed by Denmark with 14.9 litres and Japan with 13.6 litres. The UK, host of the 2012 Olympics, registered just 9.8 litres in 2011, demonstrating that there remains plenty of growth potential. Coca-Cola is an ofcial sponsor of the Games. Therefore, its Powerade sports drinks brand, the events ofcial sports drink, is set to benet hugely. The company has recruited a stable of high-prole athletes as ambassadors, including Shefeld-born Jessica Ennis, the current European Heptathlon Champion and Spaniard Javier Gmez Noya, winner of the 2008 and 2010 World Triathlon Championship titles. Coca-Cola advocates the stance that anyone exercising at high intensity for more than 30 minutes, or for more than 60 minutes at any intensity, is at risk of performance-stiing dehydration. This would also apply, for instance, to anyone involved in school sports as well as occasional gym goers. Water, as the company points out, has substandard rehydration properties for three reasons - it does not contain adequate levels of minerals and carbohydrates, it shuts down the thirst receptors and it does not possess the performance benets of a sports drink. Powerade is the worlds second-ranking sports drinks brand, commanding a 14% offtrade volume share in 2011 behind Gatorades (PepsiCo) leading 46%. In the UK, Powerade also
FEATURING JONAS FELIcIANO, BEVERAGES INDUSTRY RESEARch ANALYST AT EUROMONITOR
he London Olympic Games are about to kick off. All eyes are on the worlds top-class sportsmen and women, whose steeled
bodies will be performing to their peak ability, not only because of incessant training but also owing to the athletes customised dietary regimes. Optimum hydration is a major cornerstone, particularly for endurance athletes, and the days when everyday healthy drinks such as water and orange juice were deemed sufcient are long gone. Sports science has established that the mere replacement of lost uid is not sufcient and that carbohydrates and minerals are also needed to maintain performance levels. Medal-laden athletes are an inspiration to the world. Their consumption habits have a wellknown knock-on effect on average consumers who may only be sporadically active but who choose to consume sports-oriented products on aspirational grounds and/or because they are fashionable.
ranks second with a 14% share, trailing behind GlaxoSmithKlines Lucozade with its impressive 56% volume share. As the London Olympics ofcial sports drink, Powerade is likely to enjoy a boost to both its sales and its share. However, the sports drinks category as a whole stands to benet, especially as it now also has regulatory endorsement on its side. After a lengthy assessment process, in May 2012 the European Food Safety Authority (EFSA) nally published its full list of 222 permitted health claims for food and beverage products in the Ofcial Journal of the European Union. Sports drinks can now make the legal and ofcial claim that carbohydrate-electrolyte solutions enhance the absorption of water during physical exercise and also that they contribute to the maintenance of endurance performance during prolonged endurance exercise.
One of the most exciting types of superfruit juice to emerge in recent years is coconut water, long a staple juice item in Brazil where it accounts for 69% of the 100% juice category in off-trade volume terms. Coconut water is now rapidly gaining popularity in other geographies, a trend amplied by major players increasing focus on the newcomer. Coconut water, extracted from unripe (green) coconuts, is packed full of electrolytes such as potassium, magnesium, calcium and phosphorus, affording it a naturally isotonic composition. Presenting a natural antithesis to conventional sports drinks, which are often perceived to be chemically formulated an image augmented by their often lurid colours coconut water drinks have the potential to pull in a whole new audience, including health-conscious women who may previously have spurned sports drinks and instead relied on water and juice for their rehydration needs. Examples of sports drink-positioned coconut water products include Zico, marketed with the tagline Natures Sports Drink, ONE Active and Jinga Sport (Transworld Beverages Inc). CocaCola acquired a majority stake in Californianbased Zico Beverages in April 2012 while PepsiCo holds a majority stake in ONE Natural Experience, another Californian-based enterprise. The 2012 Olympics provide a perfect platform for showcasing coconut water beverages, and coconut water makers have already garnered the support of star athletes. US Olympic gold medallist sprinter LaShawn Merritt became a ONE Coconut Water spokesperson in May 2012 to promote the drinks health and nutritional benets in advertising campaigns and social media.
BotH BIG AND SMALL fISH StAND to BENEfIt

Besides boosting the fortunes of major sports drinks brands and pushing newcomers like coconut water into the mass-market spotlight, an Olympic event can also serve the smaller players. The Olympic Games are viewed by millions of youth, including those that aspire to become the elite athletes of the future. Eventually, many serious sportsmen and women will nd themselves drawn to look beyond mass-market brands, opting instead for products made by niche companies founded and run by individuals who are passionate sportspeople themselves. One such example
is UK-based TORQ Ltd which prides itself on its exclusively British-made, high-quality ingredient products, sold via the Internet and independent retailers. To keep its products including TORQ Energy and TORQ Recovery sports drinks affordable, the company chooses powdered formats. Unlike mass-market brands, for which major sporting events like the Olympics are likely to bring an instant surge in sales, promising niche companies revenues grow much more slowly. The most successful brands have the potential to develop into big brands, buoyed by the coming of age of each new sporting generation.
MovING oN toNAtuRAL HYDRAtIoN!

One of the most pervasive health and wellness trends globally is consumers enduring quest to seek out naturally healthy products. Euromonitor Internationals health and wellness data shows that in 2010 40% of health and wellness-positioned products were marketed as naturally healthy in the 32 markets where Euromonitor carries out health and wellness research. For comparison, organic products accounted for just under a 5% share, and the fortied/functional category, which includes sports drinks, 32%. Naturally healthy fruit/vegetable juice claimed one quarter of naturally healthy beverage sales. This includes the superfruit juice category, which registered a dynamic 62% increase in value over the 2005-2010 period to reach retail value sales of almost US$3 billion in 2010.
Podcast
ass market consumers will no doubt be inspired by watching physically t athletes at the top of their game,
and the health and wellness industry must take advantage of this. Ewa Hudson, head of health and wellness research at Euromonitor, states that the games are a perfect opportunity for health and wellness companies to advertise products, in spite of the fact that the largest Olympic sponsors are sugary soft drinks and greasy fast food.
ALCOHOLIC DRINKS
ALCOHOLIC DRINKS IN THE UK: GREAT OLYMPIC EXPECTATIONS?
SPIROS MALANDRAKIS, SENIOR ALcOhOLIc DRINKS ANALYST, EUROMONITOR INTERNATIONAL
current double-dipping malaise is actually pretty low. An increase in the inux of tourists into the capital will merely support Londons local economy, barely making a dent in the disappointing employment and growth gures outside of the capital. At the same time, large numbers of potential visitors and residents will be temporarily forced out of the city over the summer due to pricing, congestion and concerns over available accommodations. Olympic projects might have helped mitigate some of the impact of the UKs construction slowdown in East London, but any extra jobs or investment off the back of the Olympics have already taken effect. The momentary, and largely localised, boost is already zzling out. With unemployment still high, further austerity measures yet to be fully implemented, real disposable incomes trapped in a downward spiral and the mother of all black swan events being hatched in neighbouring Europe, a signicant boost to alcoholic drinks growth rates in the UK would be welcomed, but unlikely.
High levels of saturation and maturity, record and mounting taxation barriers, creeping neoprohibitionist rhetoric along with the widening gap between the squeezed on-trade and a losing supermarket channel, have become so endemic that reversing them would take far more than a month-long celebration in a couple of key cities across the country. Annualised, nationwide growth rates can at best be marginally impacted by short-lived, regionally-focused events. The underlying trends always persevere. The examples of both the World Cup in South Africa in 2010 and the 2004 Olympic Games in Athens are prime examples. Top-line volume growth in both countries was within the uninspiring range of historic growth. Signicant jumps in consumption spectacularly failed to materialise, with mere decimal points worth of discrepancies in respective yearly growth rates only making it harder to condently attribute them to the events themselves. Anecdotal evidence does point towards certain areas that could potentially prove lucrative, if not immediately. While Greece completely failed to capitalise on the Olympic media spotlight to promote locally produced varietals (only to ironically embrace wine exports in the midst of its current on-going collapse), South African wines did witness a signicant increase in shipments to a number of markets after the World Cup, most notably Brazil. Even if such a surge proves to be short-lived, it could be used as a template for beleaguered British alcoholic drinks companies that need all the help they can get. Identifying quintessentially British offerings and jumping on the already crammed Olympic bandwagon might sound obvious and secondary to the London-centric Olympic fever its anything but that.
Scotch, Pimms, gin and even the much-mocked but rapidly improving English sparkling wines can focus on quirkiness, heritage, eccentricity and signature history to reach out to billions around the globe. While major brands can enjoy an obvious advantage in this respect, niche producers, craft brewers and micro-distillers can also make the most of the beaming Olympic halo to raise their prole and boost exports over the short to medium term. Beyond that sliver of hope, the alcoholic drinks industry in the UK should start managing expectations and battening down the hatches. The clouds gathering over continental Europe could, after all, prove much more detrimental than the odd seasonal downpour.
hispers of massive gains for the domestic alcoholic drinks industry have been circulating for a while and
an implicit allusion to the potential reversal of the chronic declines plaguing alcoholic drinks sales in the country will soon dominate the headlines. Nevertheless, and while a short-lived and localised boost for certain industry categories is not entirely out of the question, the fundamental indicators, historic lessons and brewing pan-European macroeconomic storm suggest otherwise.
Scotch, Pimms, gin and even the much-mocked but rapidly improving English sparkling wines can focus on quirkiness, heritage, eccentricity and signature history to reach out to billions around the globe
READY, SEt AND Not GoING ANYWHERE

In order to rationally assess the situation beyond the bunting and national pride-driven analysis, one has to take a step back and begin with the less than jubilant economic backdrop. The government in a role reminiscent of alcoholic drinks companies themselves fervently supporting the hype - has hailed the Olympic Games as a unique opportunity for economic growth. While the Games do look likely to provide moderate support in Q3 2012, the probability of the Olympics single-handedly lifting the UK out of its
BREAkING ALL tHE WRoNG kINDS of RECoRDS

According to Euromonitor International, overall alcoholic drinks volumes in the UK are actually set to register an underwhelming 2% total decline in 2012. This would indeed represent an improvement on the dismal 5% decline posted in 2011; although it could easily be attributed to the gradual attening of the negative curve following years of consistent and strong declines. After all, the gloomy macroeconomic palette provides merely half the dark hues completing the bleak landscape of the UKs alcoholic drinks industry. The nishing touches are decidedly industry specic.
CONSUMER ELECTRONICS
3D Enabled Televisions Fall Flat
WEE TEK LOO, GLObAL HEAD Of CONSUMER ELEcTRONIcS RESEARch, EUROMONITOR INTERNATIONAL
company leading by a whisker in 2011. Critically for Samsung, its mobile business generates more than double the revenue of the division which manages its television portfolio. Based on Samsungs rst quarter 2012 nancial results, operating prot for Samsungs IT and Mobile (IM) division was 18% while its television division accounted for only 5% of its sales revenue. Strong smartphone sales are a reection of a consumer move towards mobility, with the popularity of smartphones started by Apples iPhone in 2007. Telcos are leveraging interest in sports events by offering apps featuring real-time results and analysis. Video streaming of sporting events is also available for smartphone users as usage of smartphones during the day is much higher due to televisions being the screen of choice when consumers are at home.
2012 in the top ve medalled countries at the previous Beijing Olympics also shows a lack of interest in 3D Olympics. Surprisingly, one in three LCD televisions sold in China will support 3D but these strong sales are the result of a push by state regulators and Chinese manufacturers. A prime example of the (lack of) interest in a 3D is reected in the free broadcast of 3D events offered by content operators like BSkyB.
Despite the lack of a signicant rise in electronic sales as a result of the London Olympics, the sporting event does serve to showcase available new technology.
GAME oN!
Despite the lack of a signicant rise in electronic sales as a result of the London Olympics, the sporting event does serve to showcase available new technology. The Olympics is also a great platform for marketing and allows companies to strengthen and gain exposure to global audiences. For example, Samsung and Visa are offering athletes and triallists sponsored by Samsung and Visa, Samsungs new device, the Galaxy SIII, enabled with Visas mobile payment application, payWave. Athletes will conduct live demonstrations of the devices to the public at the Olympics. Technological updates are being introduced so quickly that products are being replaced by newer versions within a year. Manufacturers have been pushing out cheaper and improved models and major events like the Olympics and FIFA World Cup are no longer a stimulus for consumers to purchase new products in preparation for the event. Nonetheless, these sporting events provide exposure to worldwide audiences and act as a platform to test out new technologies on a large scale and with consumers and athletes from
he
Olympic
motto
Faster,
Higher,
Stronger resonates with consumers insatiable appetite for electronic products
to sport faster and more powerful processors, a longer battery life and higher and lower price points with each new model launch. However, the connection between the two ends there. With no new technology or products in 2011 and 2012, the impact of the London Olympics on sales of electronic products is set to be minimal.
LoSER - 3D-ENABLED tELEvISIoNS

While lms like Avatar and Titanic are raking in millions in box ofce sales, the same cannot be said for 3D-enabled televisions, which were rst mass produced commercially in 2009. Manufacturers were banking on 3D-enabled televisions to revive declining digital television margins but consumers have failed to share their bullish optimism. A look at the sales of 3D-enabled LCD televisions in
WINNER - SMARtPHoNES
Smartphones are the current hottest products, with Samsung Corp and Apple Corp competing for supremacy and the Cupertino-based
LCD Televisions by Screen Type - 2012
different countries in one single location.
CONSUMER FINANCE
OLYMPICS WILL BE A SHOWCASE FOR CONTACTLESS CARD AND MOBILE PAYMENTS
MIchELLE EVANS, CONSUMER FINANcE ANALYST, EUROMONITOR INTERNATIONAL
contactless further by introducing the technology across its network, enabling passengers to pay for fares by tapping their contactless-enabled MasterCard or Visa card against the Oyster card reader. The original plan was to implement the wave-and-pay technology on all 8,000 buses by the Olympics. However, this rollout has since been scaled back to only a select number of buses receiving the upgrade before the games. The authority plans to introduce the technology on the remaining buses by the end of 2012 and continue the rollout to the trains thereafter. In addition to Ts efforts, there have been many other initiatives in the UK aimed at broadening the use of contactless cards since London was awarded the games back in 2005. Barclays, for instance, launched the rst contactless debit card in the UK in 2007, only to be followed by Halifax and the Bank of Scotland. The real boost came in 2009 when other major banks started to issue in large numbers credit and debit cards offering contactless capabilities in addition to their traditional chip-and-PIN function. As a result, the number of contactless cards in circulation in 2011 increased to 20 million, equivalent to 8% of the total number of cards in circulation in the UK, according to the latest gures from Euromonitor International. Visa Europe estimates the number of Visa-branded contactless cards in circulation will increase by 50% in 2012.
NFC MoBILE PAYMENtS tAkE CENtER StAGE At tHE OLYMPICS

Smartphone manufacturers and card networks are also pushing mobile payments, which would essentially enable contactless payments on an NFC-compatible phone. A rise of smartphones coupled with a number of companies making investments is pushing this movement forward across the world. A widespread contactless payment system is a natural precursor to mobile payments since mobile can piggyback off the same terminals. In 2007, T and O2 conducted a mobile payment trial incorporating the same contactless capabilities of the Oyster card. Though the trial was declared a success, full implementation of mobile phone payments technology stalled. T said that industry changes to switch the secure element from the phone to the SIM has slowed the read speed down to above the cut-off point the mass transit agency requires for high volume usage. So far, the most popular NFC mobile payment commercial launch to-date in the UK is QuickTap from mobile operator, Orange, and card issuer, Barclaycard. With Quick Tap you can pay for items up to 15 just by touching a Quick Tapenabled smartphone against a contactless reader at over 50,000 retail outlets. Barclaycard expects there will be more than 150,000 contactless terminals installed by the end of 2012.
payment services sponsor and the only card network accepted at Olympic venues. Only cash or Visa credit, debit and prepaid cards can be used to purchase Olympic tickets, ofcial game merchandise and food and beverages in the venue at the approximately 3,000 contactless-enabled POS devices Visa installed across the venues. Visa also will install eight ATMs within the footprint of the games. In the run up to the Olympics, Visa, Samsung Electronics Co. and Lloyds TSB announced their own mobile payments app, which allow consumers to make NFC contactless payments by simply waving their NFC-enabled phone at one of the more than 140,000 contactless terminals around the UK. Purchases above 20 will require a passcode. Consumers also will be able to check their transaction history and account balance through the app. Visa and Samsung are providing their Olympic-sponsored athletes with a special edition Samsung Galaxy S III handset equipped with Visas payWave NFC contactless payments app while also releasing a similar version of the phone to the public this summer. The Olympics are the perfect stage to introduce developments in payment methods as it is a mega event attended by millions. At this point, though, the contactless card and mobile payment methods are an interesting, attractive but marginal proposition. If the Visa-Samsung initiative is a success and avoids any major tech or fraud slip ups, it could be a major PR coup for Visa as it seeks to introduce the world to contactless card and mobile payments. Contactless payments in London may not be ubiquitous by the Olympics, but the effort to prepare the city for the world stage has certainly accelerated the migration. Given the pace of development in recent years, there is no reason to think the transition to contactless wont continue in the UK thanks to the Olympic push.
less games. Although neither contactless cards nor mobile payments will reach mass adoption by the time the torch is lit, the level of investment by major players like Visa could give the contactless movement the momentum it needs long after the games conclude.
isa Inc., one of the main sponsors of the 2012 London Summer Olympic Games, aspires to make it the rst-ever contact-
TRANSIt AutHoRItY LEADS PuSH INto CoNtACtLESS CARDS PAYMENtS

Contactless cards have been a prominent feature of the UK payment landscape since 2003, when Transport for London (TfL) introduced the Oyster prepaid card to pay for travel on the transit network, which includes buses, the underground train system and trains serving the greater London area. Since its launch, T has issued 43 million cards. In October 2010, T said it wanted to take
Visa Europe estimates the number of Visa-branded contactless cards in circulation will increase by 50% in 2012
VISA MAkES MoSt of SPoNSoRSHIP AGREEMENt

Visa is leveraging its Olympic sponsorship to showcase cashless payment methods like prepaid cards, contactless payments and mobile technologies. Visa, which has been a worldwide sponsor of the Olympic Games since 1986, is the exclusive
RETAILING
THE LONDON OLYMPICS: HOW IT WILL AFFECT UK RETAILING
LAMINE LAhOUASNIA, RETAIL ANALYST, EUROMONITOR INTERNATIONAL
are a relatively quiet period for the majority of retailers. School holidays and the lure of foreign beaches mean that July and August are peak travelling months for outbound UK tourists and most retailers notice a dip in sales during this period. Exceptions to this rule, however, do exist. For home and garden specialist retailers, the summer months are vital for the sale of seasonal items such as barbecues and outdoor furniture. Grocery retailers such as Asda and Tesco have also attempted to capitalise on this trend by widening their seasonal product mix for the quieter summer months.
worlds Olympic fans will certainly consider a trip to London in July, other tourists could be deterred by the expected rise in hotel prices. This so-called tourist displacement is exactly what happened during the 2008 Beijing Olympic Games, and China actually recorded a surprise drop in tourist numbers between 2007 and 2008. Regardless of the extent to which tourist numbers will change, the tourists attending the Olympic Games are likely to have higher disposable incomes and will be keen to grab souvenirs of the occasion. This will, to some degree, lead to opportunities for all retailers, although only those located geographically close to tourist venues are realistically likely to benet. In response to concerns that the UK would appear closed for business on Sundays, the government has temporarily suspended the Sunday trading law which prohibits retail stores over 280 square metres from opening for longer than six hours on a Sunday. This suspension is set to run from 27 July until the end of the Paralympic Games in September and is likely to lead to a minor rise in sales for larger stores.
TELECoMMutING AND tHE LoNDoN EXoDuS EXPECtED to offSEt ANY RISE IN touRISt NuMBERS
Whilst a rise in inbound tourist expenditure has the potential to boost UK retail sales, there are two factors which have the potential to reduce turnover for retailers. Concerned that a major inux of tourists would cause major delays on public transport, many companies with ofces in Central London have allowed employees to telecommute during the Olympic period. This could lead to hundreds of thousands of workers avoiding London altogether as they work from home. In addition, many Londoners have made plans to deliberately avoid the city during the Olympic Games. This could result in an exodus of UK consumers leaving London and possibly the UK, leading to further declines in retail spending. Convenience stores and other retailers located in non-tourist areas of London are likely to see sales drop if this turns out to be the case.
ith all the hype behind the London 2012 Olympics, retailers are expecting a short-term boost to the normally
quiet summer period. However, the reality is that only a minority of retailers will see any noticeable impact on their sales gures as a rise in the number of outbound Londoners is likely to offset any major increase in sales generated by inbound Olympic tourists.
WILL tHE UK SEE AN INfLuX of touRIStS of OLYMPIC PRoPoRtIoNS?

Whilst the International Olympic Committee, politicians and sponsors are all talking up the impact and importance of the Olympics, several organisations are questioning the extent to which tourist numbers will rise. VisitBritain, Britains tourist authority, announced in December 2011 that the Olympic Games will not drive a signicant boost in UK visitor numbers. Whilst many of the
SEASoNALItY IN UK REtAILING
For all but a few channels, the summer months
John Lewis: Weekly Sales, 2010-2012
Seasonal Breakdown of Holiday Trips Taken by UK Consumers, 2006 vs 2011
Source: Euromonitor International, Travel and Tourism
Source: John Lewis Plc.
PICkING A WINNING REtAILER foR tHE OLYMPICS

Overall, the inuence of the Olympics on retail sales is expected to be a zero-sum game with relatively little real impact on annual sales gures. Many Londoners are expected to either be in exile in a foreign land or in their leafy suburbs. Consequently, many channels dependent on passing commuter trade are expected to be negatively impacted for the duration of the Olympic Games. This is likely to affect convenience stores and independent small grocers which are reliant on impulse purchases from time-poor commuters.
The winning channels are expected to be those which will directly benet from rises in tourist trafc. As a result, the gold and silver medals are likely to go to duty-free retailers and department stores, respectively, which will benet from a rise in non-European tourist trafc. Inbound Russian, Arab and Chinese consumers are likely to outspend other nationalities in per capita terms in these channels.
APPAREL
LONDON OLYMPIC GAMES OFFER GOLDEN OPPORTUNITY TO SPORTSWEAR MANUFACTURERS
MAGDALENA KONDEj, GLObAL HEAD Of APPAREL RESEARch, EUROMONITOR INTERNATIONAL
key to gaining an edge over rivals.
ADIDAS SHELLS out to BE AN offICIAL SPoNSoR

Adidas, the worlds second largest sportswear manufacturer, has given itself an early advantage, signing up as an ofcial Olympic partner in a deal that reportedly cost 100 million. As part of the deal, adidas will be kitting out Team GB athletes with ofcial tracksuits designed by Stella McCartney as well as dressing the 70,000 Olympic volunteers. The company is also supplying clothing to those participating and helping out at the Games. As its ofcial clothing licensee, it will sell Olympic-themed and branded clothes through its own stores and third-party retailers. In addition, Stella McCartney designed a premium capsule range, which hit stores in May 2011. Adidas has stated its intention to use the Games as a springboard to overtake its arch-rival Nike as the biggest sportswear company in the UK. Nike currently accounts for 0.9% of the total UK apparel market, compared to adidas 0.5%. In terms of footwear alone, Nike accounts for a 4% share and adidas 2%.
VIDEO
Will retailing channels in the United Kingdom see a slight increase in sales during the Olympics?
FEATURING LAMINE LAhOUASNIA, RETAILING ANALYST AT EUROMONITOR
ummer 2012 brings the Olympic Games to London and with it an opportunity for sporting apparel manufacturers to strike gold.
Athletes from 205 countries will be participating during the 19 days of Olympic competition. The combination of so many countries taking part, global improvements in communication and the events taking place over a prolonged period mean viewing gures for the event will be extremely high - the eyes of the world will be watching, and for a signicant period of time. For any brand involved with the Olympic Games, this type of global exposure is the stuff of dreams, but for sportswear manufacturers in particular the stakes are even higher. For the worlds top three sports apparel and footwear manufacturers, Nike, adidas and Puma which will all be represented at the Games to varying degrees the Olympics offer an incredible opportunity to boost their market presence around the globe. Sportswear manufacturers are lining up to make the most of the event, and the companies various marketing activities will be
NIkE MAkES ItS CAMPAIGN CouNt

Of course, the worlds leading sportswear manufacturer, Nike, is not going to let adidas steal its share that easily, or let the Games go by without also bidding for gold. While not an ofcial sponsor of the Olympics, Nike is kitting out the Russian, Chinese, US and German squads. It also has individual deals with many athletes who are expected to be medal winners. In February 2012, Nike unveiled its Nike Pro TurboSpeed suit. The hightech second skin will be worn by Nike-sponsored
sprinters at the Games, and is sure to make headlines because of its futuristic look. In January 2012, Nike launched its Make it Count campaign. Perhaps in a bid to steal adidas thunder as Team GB sponsor, the campaign features a number of British athletes, all Nikesponsored, such as cyclist Mark Cavendish. While no mention of the Olympics is made in the advertisements, the theme of the campaign and the decision to use UK athletes only means consumers do not need to make too much of a leap in linking the campaign with the Games. In addition, Nike has opened a large store in Londons Westeld shopping centre just next to the Olympic site, which many ticket holders to the main stadium will pass.
or, most importantly, on the podium. There are a host of potential medal-winning athletes not limited to just Team GB that both adidas and Nike believe should be wearing their footwear on the podium. A spot on the podium is, of course, the ultimate validation of a companys credentials in sportswear. There is speculation that should the row remain unresolved medal winners might take to the podium barefoot to avoid contractual troubles with either sponsor which would certainly make headlines and would not cast either Nike or adidas in a particularly sportsman-like light.
in Berlin in 2009. In 2010, Puma renewed Bolts sponsorship to last until 2013 and launched the Bolt Collection, a range of clothing, footwear and accessories that the sprinter helped develop. Puma says Bolts most recent contract is by far the largest ever given to a track and eld athlete, positioning him as a top earner in the world of sport. For the 2012 Olympics, as well as holding on to one of the current Games most famous faces, Puma has also recruited Cedella Marley, Bob Marleys eldest daughter, to design the Jamaican teams uniform. This is a savvy move as her association opens the brand up to a wider audience than just sports enthusiasts, and the Olympics is an ideal platform for this kind of brand expansion.
ideal world for Nike, adidas or Puma, consumers watching the Games at home from the comfort of their sofa will be wearing the same brand as the athletes competing. Sportswears big three have already put in the legwork in terms of how they are approaching their Olympic Games campaign. Only time will tell which will take gold, silver and bronze.
In February 2012, Nike unveiled its Nike Pro TurboSpeed suit. The hightech second skin will be worn by Nike-sponsored sprinters at the Games, and is sure to make headlines
Puma says Bolts most recent contract is by far the largest ever given to a track and eld athlete, positioning him as a top earner in the world of sport.
PuMA QuICk off tHE MARk to SIGN BoLt

Outside the footwear row engulng Nike and adidas, Puma, the worlds third largest sportswear manufacturer, has put itself in a prime posithe podium. Although, like Nike, it is not an ofcial sponsor of the Olympics, it may
VASt PotENtIAL foR EXPANDING CoNSuMER BASE

Despite the fact that, unlike large football tournaments, the Olympics does not inspire fans to buy replica shirts, there is no doubt the potential gains for sports brands linked to the Olympics are vast. Perhaps more so than any other sporting event the world over; the sense of occasion as well as the vast scope of disciplines at the Olympics serve to bring in a much wider cross section of society as an audience. While sportswear manufacturers of course want the attention of actual athletes, tness enthusiasts and year-round sports fans, the Olympics is the sort of event that attracts many viewers for whom watching sport is not normally a pastime, and even less so playing it. This opens brands associated with the Olympics up to a much larger consumer group than they might ordinarily reach. Couple this with the growing trend of wearing branded sportswear in everyday life as casual wear and the potential to drive sales through the exposure provided by the Olympics is vast. In an
FIRSt GAMES RoW CENtRES oN footWEAR

Of course, Nike is just one of many sportswear manufacturers to sponsor individual athletes, a practice which is well-established. However,
because of its futuristic look. tion for at least one spot on
this has brought about the rst conict between sportswear sponsors of the Games and reects the erce corporate rivalry that runs through most sporting events. While athletes are allowed to wear whichever footwear they prefer while competing, as it is deemed technical equipment, potential podium footwear is proving a bone of contention. UK newspaper The Daily Telegraph recently reported athletes sponsored by Nike will be in breach of contract if they are forced to wear Team GBs ofcial adidas footwear out and about
well wind up in the spotlight through its sponsorship of the worlds fastest man and 100m gold medal favourite Usain Bolt, and his Jamaican teammates. Bolt famously highlighted his Puma shoes after breaking world records at the Beijing Olympics. Puma signed Bolt when he was 16 in 2003, and has reaped the benets of his performances and popularity, especially since he won three gold medals at the Beijing Olympics and took the 100m world record at the World Championships
VIDEO
Will sportswear see positive growth due to the Olympics in 2012?
FRESH FOOD
CLENBUTEROL IN MEAT A PERSISTENT PROBLEM
ANASTASIA ALIEVA, HEAD Of FRESh FOOD RESEARch AT EUROMONITOR INTERNATIONAL
The 2012 London Olympics are moments away but amid the build-up of global excitement over world-class athletes competing at their best, darker kinds of news reports have started doing the rounds again. For example, Clenbuterol contamination of beef and pork is one of the topics which regularly resurfaces in the wake of every big sporting event.
fat-loss-muscle-gain effect, clenbuterol is seriously damaging to the health of humans and animals in a number of ways. Clenbuterols unpleasant side effects include muscle cramps, rampant increases in blood pressure, irregular heartbeat, shakiness, headaches, breathing difculties, nausea and fever. If abused for longer time periods, it can cause lasting damage to the heart and lungs. Secondary metabolites of clenbuterol, which are produced by animals when their systems start to break down the drug, and which can be more toxic than the original drug, are temporarily stored in the body tissues (especially the liver), and for humans ingesting their meat and organs, it can produce highly unpleasant symptoms. There are numerous examples of this type of food poisoning all over the world. China, where the drug is commonly known as lean meat powder, regularly features on the incidence list, but it is not the only major offender.
FEATURING MAGDALENA KONDEj, GLObAL HEAD Of APPAREL RESEARch, EUROMONITOR INTERNATIONAL
ILLEGAL But vERY tEMPtING

Clenbuterol is a beta-agonist drug used to treat asthma in humans in many countries. It also has a variety of veterinary uses, such as bronchodilation in horses and relaxing the uterus in cattle, helping them to give birth. Apart from its therapeutic properties, clenbuterol also prompts the body to bulk up on muscle mass while at the same time burning off fat reserves. Not surprisingly, this makes it a highly sought-after drug for bodybuilders and desperate dieters as well as the livestock industry, which is under pressure to produce leaner animals in as short a time span as possible. The use of clenbuterol for these purposes, however, is banned virtually everywhere, and there are very good reasons for this. At the dosages required to exert its dramatic
A tHREAt to CHINAS OLYMPIC DREAM

Needless to say, the World Anti-Doping Agency (WADA) and other sports governing bodies feature clenbuterol on their banned substances blacklists, and they routinely test for its presence in urine samples. Unfortunately for some unwitting athletes, even tiny amounts of this drug show up in such tests, and the consumption of tainted meat can produce a positive result. The Chinese authorities are well aware of the problem and in the spring of 2012 media reports started to appear about Chinas athletes not being permitted to consume pork, beef or lamb outside their tightly controlled training facilities in the run-up to the London games in order to avoid being inadvertently accused of foul play. When eating out, they are obliged to stick to
chicken, soy and sh to meet their protein needs. According to one (albeit unconrmed) source, over half the meat products on sale in Beijing are believed to be contaminated with clenbuterol. In July 2011, during the 14th FINA World Aquatics Championships, international athletes arriving in China were duly alerted to the risks and dissuaded from consuming beef and pork during their stay in the country. Following the discovery a subsidiary of Shuanghui Group, Chinas largest meat company, had sourced clenbuterol-contaminated pork for its meat products, Chinas Ministry of Agriculture embarked on a crackdown on illegal pig feed additives in April 2011. Four months later around 900 arrests had been made, many resulting in lengthy prison sentences, and copious quantities of clenbuterol were seized. In conjunction with the crackdown, in October 2011 the Chinese State Food and Drug Administration made big news of the fact it had banned clenbuterol tablets intended for human patients, although how exactly this measure would curb the underground manufacture of clenbuterol and its illegal addition to animal feed is far from clear. China is not the only country where clenbuterol abuse is rampant in the livestock industry. Mexico is another well-known problem spot. In the summer of 2011, 109 players competing in the Under 17 football World Cup in Mexico tested positive for clenbuterol. After some deliberation, both the WADA and the International Football Federation (FIFA), in the face of overwhelming evidence, accepted the high probability that Mexicos contaminated food supply was to blame for the test results, and none of the players were disqualied. In many other slightly more dubious instances, however, athletes have not been so lucky. Ruined careers and frequent food poisoning Research in the area is also lacking. For example, the long-term health consequences of frequent consumption of clenbuterol-tainted meat and, in particular, its impact on vulnerable population groups such as children and the elderly, remain unknown. In China and Mexico, where clenbuterol abuse in the livestock industry remains endemic, the long-term risks to public health may be signicant, but much more scientic investigation is needed to establish this. outbreaks among athletes attributed to clenbuterol may make occasional headline news, but, unlike food-borne illness caused virulent pathogens such as E. coli, campylobacter and salmonella, the ingestion of clenbuterol-contaminated meat does not usually result in fatalities, and maybe for this reason food safety agencies around the world are not as consistent as they ought to be with regard to tackling the problem.
Despite existing regulations and frequent
Beef and veal volume sales in China rose by 27% over the 2006-2011 review period, and are predicted to rise by a further 31% over 2011-2016
government crackdowns in many countries, the problem is unlikely to disappear any time soon. Demand for meat in emerging economies is high. Euromonitor Internationals fresh food data shows beef and veal volume sales in China rose by 27% over the 2006-2011 review period, and are predicted to rise by a further 31% over the 2011-2016 forecast period. Not only are emerging economies hungry for affordable meat, they are also acquiring the Western taste for lean cuts instead of the more traditionally favoured well-marbled pieces with plenty of fat and avour. In addition, muscle weighs more than fat, providing added incentive for unscrupulous producers to resort to clenbuterol to up their prot margins. Against this backdrop, it is hard to see how the situation could possibly show any sudden sign of improvement unless surveillance systems are put into place to ensure effective as well as constant monitoring, rather than relying on government raid tactics in response to yet another high-prole incident. Retailers may also need to shoulder a greater chunk of responsibility in protecting their customers. There is some hope that as emerging economies retail environments continue on their path to modernisation, improved supply chain monitoring will kick in and, as a result, the penetration of clenbuterol-adulterated meat in the food supply will eventually decline.
PuBLIC HEALtH IMPACt StILL uNCERtAIN
CONSUMER FOODSERVICE
THE OUTLET AS a MAIN EVENT: MCDONALDS MASSIVE OLYMPIC POPUP A POWERFUL FORCE FOR BRANDING
MIchAEL SchAEfER, GLObAL HEAD Of CONSUMER FOODSERVIcE, EUROMONITOR INTERNATIONAL
outlets intimately connected with the experience of the games. In an increasingly crowded global competitive environment, where differentiation remains the coin of the realm, a truly memorable in-store experience is what every major chain now seeks. With its massive Olympic Park presence, McDonalds has the chance to create a unique experience from the ground up, controlling every aspect of consumer interaction, with none of the compromises inherent to a permanent outletnot simply a pop-up outlet, but a real event.
a new product in a way no television advertisement or coupon campaign could hope to match. The aim of the massive London Olympics project is similarwhile McDonalds spends more on traditional advertising than any other fast food chain on Earth, there is no substitute for face-toface interaction with consumers. This is especially true in an age when consumers are increasingly bombarded with advertisements and promotions from all angles, at nearly every time of dayon our phones, on our computers, and on seemingly every inch of available public space. To break through all of this, something more is needed not simply an Olympics-branded promotion, or even a particularly ambitious television spot, but an actual experience, one which will stay with consumers long after the games, one crafted from start to nish to drive the brand forward. At two stories tall, with early concept drawings revealing a wood exterior interspersed with vast portraits of McDonalds products and consumers, the main outlet is set to stand out against the Olympic stadium standing just 200 metres away. Built primarily out of recycled materials, and with employees likely drawn from around the world, the full effect is a far more visceral, more concrete expression of McDonalds as a brand than could ever be achieved with traditional advertising.
Cup or the European Football Championships and even these can only produce a one-month bump in sales, and then often only in specic areas. Instead, the Olympic Games and other international events offer a rare chance to present a brand, and more importantly a service model, to a uniquely multinational group of consumers, amidst a time and experience few of them are likely to ever forget. That said, there can be only one exclusive caterer at the Olympics complex, and based on past history, that caterer is likely to be McDonalds for the foreseeable future. But the lessons are there for all to seethe Olympics outlets provide a striking example of a chain taking full control of the experience, from location, to stafng, to architecturein a way that the majority of chains have only just begun to explore. This is the next frontier in foodservice branding, everywhere in the world making the outlet, everything the consumer can see, and hear, and touch, as integral to the brand as products, logos, promotions, or advertising. In a world where advertising overload is the norm, opportunities to connect with consumers on a basic level are eeting, making the in-outlet experiencewhether at the Olympic Stadium or at a lonely outlet along a motorwayabsolutely vital.
ENtER tHE outLEt, ENtER tHE BRAND

McDonalds is no stranger to the temporary outlet conceptthe company enjoyed a similar arrangement for the 2008 Summer Olympics in Beijing, pouring an estimated US$80 million into the construction of four temporary restaurants, the largest with 1,105 seats, while over 1,400 employees from across 36 countries were hand-picked to staff the massive Olympics complex. Likewise, in Japan the company used a series of innovative no-brand outlets to launch its Quarter Pounder burger in 2008. Combining a stark, red and black color scheme with bold Quarter Pounder branding, the latter offered a unique example of the outlet as a pure branding tool, with full emphasis placed on the product at hand. While the concept was combined with a vigorous traditional marketing campaign, it offered customers the chance to truly experience
W
2012 the brand.
ith a 30,000 square foot pop-up outlet forming the centrepiece of its presence at the upcoming London Games,
Olympic
McDonalds continues to tap into one of the most important trends in global foodservice: the outlet as With the exclusive catering contract in the Olympic Park, McDonalds stands to reap signicant short term sales benetsthe company expects to sell 1.75 million meals at the four outlets in the Olympic Park during
The bump in sales is almost irrelevant compared with the branding boost brought by four highly-visible, unique outlets intimately connected with the experience of the games
GEttING tHE DEtAILS RIGHt

This is really where the true value of the Olympics experience lies for major foodservice operators. While the Games will surely produce a one-off boost to sales in parts of London, this will likely be mitigated in other parts by residents staying home to avoid trafc and crowds. On a global level, the impact of the Games is expected to be relatively muted compared with other global sporting events, such as the World
The next frontier in foodservice branding, everywhere in the world making the outlet, everything the consumer can see, and hear, and touch...
the month of the games. Yet the bump in sales is almost irrelevant compared with the branding boost brought by four highly-visible, unique
VIDEO
What is McDonalds planning onsite at the Olympic Park? How are smaller operators taking advantage of the inux of domestic and international visitors?
PACKAGING
THE OLYMPIC GAMES: PACKAGING LIKE NO OTHER
KARINE DUSSIMON SENIOR PAcKAGING ANALYST, EUROMONITOR INTERNATIONAL
plastic featuring the Union Jack, while leading confectionery brand M&Ms (Mars Inc.) released a limited edition variant of its iconic chocolatecoated bagged selines/softlines in red, white and blue colours. Even alcoholic drinks packaging is jumping on the Olympics bandwagon, with Beefeater gin offering a special printed design on its 350ml and 700ml glass bottles. Printing is not the only area of packaging innovation with regard to the Olympics. Some food and beverage producers have sought to re-shape their packaging in order to help reinforce the heritage message. In the dairy category, Shaken Udder is not the rst brand to be promoting its dairy-only avoured milk drinks at large UK outdoor events. With the upcoming London 2012 festival, the high-end range of drinks is emphasising its British origins, going beyond simply featuring the British ag on its labelling. Its 330ml PET bottle has been re-designed by PET manufacturer Graham Packaging to resemble a traditional metallic milk churn, whilst also being embossed for a greater tactile experience. The new PET bottle also allows for reduced raw material usage and energy consumption as it is lightweight. The marketing opportunities offered by the 2012 Olympic Games are also being seized outside the UK. Unsurprisingly, Coca-Cola has launched an Olympic limited edition of its Coke beverage cans as well as its fridge multipack, all printed with modern representations of US Olympic athletes.
FEATURING MIchAEL SchAEfER, GLObAL HEAD Of CONSUMER FOODSERVIcE RESEARch, EUROMONITOR INTERNATIONAL
owners have been preparing for the opportunities that this celebrated international sports competition brings. And there are a few key trends shaping this summer like no other, and not just in the UK.
wave of events is sweeping the UK this summer, headlined by the London 2012 Olympic Games. Packagers and brand
RALLYING tHE BRItISH WItH HERItAGE PACkAGING

As the season started with the celebration of the Queens Diamond Jubilee in early June in the UK, along with the Euro 2012 Football Championship and the Wimbledon tennis tournament, many brand owners have chosen to focus on British identity and national pride when designing their seasonal consumer goods products, with a particular emphasis on the printed pack. This mainly impacts the food and beverage industry, where confectionery, bakery, dairy, but also soft and even alcoholic drinks are seeing new pack developments using colours emblematic of the Union Jack ag. The brand Soreen, for instance, launched a version of its fruited malt loaf packaged in exible
CHAMPIoNING tHE ENvIRoNMENt

The Olympic Committees commitment to sustainability also has particular weight in the packaging industry and, in principle, the timing should be excellent for brand owners and packagers to
efciently communicate their environmental credentials. Coca-Cola has, for example, taken this opportunity to talk about its objective to recycle 80 million of its PET bottles during the course of the event. Additionally, all non-reusable and non-recyclable packaging used within the Olympic Park is required to be compostable, making for a heightened demand for slightly higher priced, exible plastic packed crisps and confectionery packs as well as fruit/vegetable juice and dairy-based drinks offered in liquid cartons. This requirement forms part of an Olympic agreement between the National Non-Food Crops Centre (NNFCC) and the London Organising Committee of the Olympic and Paralympic Games (LOCOG).
Although packaging demand in the retail channel will be positively impacted by the Olympics, its largest gains in London will be derived from the foodservice channel as fast food packaging, sandwich boxes and drinks containers constitute the bulk of non-recyclable and non-reusable packaging volumes. After the Olympics, companies committed to reducing packaging weight and energy consumption will see cuts in operational costs and gain a stronger environmental image among consumers. Once again, food and beverage categories typically related to snacking and outdoor consumption will no doubt be the prime areas where packaging will make most advances.
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THE LoNDoN OLYMPICS

Impact on the UK Economy and Global Consumer Goods Industries

Photo by London 2012

FoRWARD TABLE of CoNtENtS

2012 Olympics: What Will Make the UK a Winner?

UK ECONOMY & INFRASTRUCTURE

But So Too Does Population

But Perhaps Most Important is the Host Nation Advantage

1996 ATL ANTA

UK Real GDP Growth: %, quarter-on-quarter (q-o-q)

0 0 10,000 20,000 GDP per capita, US$ (purchasing power parity)

Euromonitor International, www.sports-reference.com

LONDON 2012 OLYMPICS TO HAVE A LIMITED IMPACT ON UKS INFRASTRUCTURE

Gross Value Added Growth for Greece in Real Terms: 2003-2005

Source: Euromonitor International from national statistics

Source: Euromonitor International from national statistics

THE vALuE of tHE OLYMPICS IS QuEStIoNABLE

FEATURING DANIEL TARLING-HUNTER, EcONOMIST AT EUROMONITOR

Countries and Consumers

2012 Olympics: Does BMI Have an Impact on a Countrys Performance?

GoinG for Gold?

Mexico Chile Venezuela UK

DAPhNE KASRIEL-ALEXANDER, cONSUMERS EDITOR, EUROMONITOR INTERNATIONAL

A HEAvY RELIANCE oN SoCIAL NEtWoRkING

Dominican Republic Colombia Brazil Argentina Ecuador

40,000 Total Medals Won

Euromonitor International, www.sports-reference.com Euromonitor International

ADAPtING oLD MEDIA to NEW tIMES

But DovE AIRCRAft GEt A MIXED RECEPtIoN

the games possible.

THE BRAND PoLICE GEt HEAvY

UK Adspend by Media Type: 2012

BA Et AL StRIvE to tAP PAtRIotIC SPIRIt

TRAVEL & TOURISM

RECESSIoN, NEXt StoP DEPRESSIoN?

2012 Olympics: How Different Economic Groups Compare

0 0 Low GDP per Capita (US$ in PPP) Moderate High 50,000

G7 in Detail 19882008 (excl. USA)

Destination London: Visitor Numbers 2011

Future-7 in Detail 19882008 (excl. Vietnam)

Source: Euromonitor International

Euromonitor International, www.sports-reference.com Euromonitor International

THREE REASoNS to BE CHEERfuL

UK Arrivals: Top 10 Source Markets 2011/2012

Source: Euromonitor International

PoISoNED CHALICE oR HoLY GRAIL

DoMEStIC vISItoRS to SAvE tHE DAY

London vs UK Domestic Tourism Performance 2011-2016

BAtoN foR GRoWtH

Source: Euromonitor International

FIRSt SoCIAL MEDIA GAMES

to some last-minute discounting as the booking window shrinks.

THREAtS AND CHALLENGES Go HAND IN HAND

NEW LEASE of LIfE foR LoNDoN HotELS

London Hotel Outlets by Star Rating 2011

Leading London Airports: 2011

Source: Euromonitor International

Source: Euromonitor International

TouRISM LEGACY foR tHE UK

So HoW WILL 2012 BE REMEMBERED?

OLYMPIC GAMES AS AN oPPoRtuNItY to GRoW BRAND SHARE BY LAuNCHING NEW PRoDuCtS

CoCA CoLA CREAtES A uNIQuE EXPERIENCE At tHE OLYMPIC GAMES