In a bid to help wine and spirits brands navigate the impact of the coronavirus on their business, market analyst IWSR is launching its Coronavirus Risk Assessment Model (CRAM), a tool designed to leverage data and local market knowledge to quantify and forecast the impact of the virus on the global market.
In the drinks sector, it’s not just Corona that has been in the headlines as a result of the coronavirus. With several tradeshows cancelled or postponed and a growing roster of companies expecting their sales and profits to take a hit—Diageo has announced that its profits could be dented by up to £200m in 2020, while Pernod-Ricard has lowered its profit forecast, anticipating a “severe” impact from the virus in its third quarter—industry players are weighing up the impact of a very real threat, while having very little to no visibility.
“In this rapidly evolving situation, the IWSR Coronavirus Risk Assessment Model will give industry leaders the clarity needed to confidently respond to a serious event with global implications,” commented IWSR CEO Mark Meek. The firm will work with brand owners, financial institutions, retailers and industry agencies, leveraging the footprint of its global analysts and their network of more than 1,600 local industry contacts.
Launching in the second quarter of 2020, CRAM will be updated on a quarterly basis. The tool will include scenario forecasts for the short, medium, and long term. It will initially cover China, South Korea, Italy and the global travel-retail market, with other markets added if required.
According to Meek, early reports suggest that the revenue and profit impact to the industry will be in the billions of dollars. “Initial signs are that global travel retail and on-premise sales in China have suffered a severe downturn, and that other affected regions, such as Northern Italy and South Korea, are starting to see a similar impact.” He added that e-commerce, however, is seeing an uptick as a consequence. Watch this space.