2015 was an encouraging year for Spirits manufacturers with supermarket sales growing significantly – value sales grew five percent in the 12 weeks to 15 August 2015 compared to the same period in 2014 (Nielsen).
During this 12 week period, gin and vodka grew by nine and four percent respectively. Nielsen attributed these results to increased sales of major brands – Bombay Sapphire, Gordon’s, Russian Standard and Smirnoff – compared to the year before.
The festive season also proved profitable for the category – spirits sales increased by £20 million (nine percent) in the two weeks to 2 January 2016 compared to the same period last year (IRI).
Range changes in the Spirits category
Every year Spirits manufacturers invest in New Product Development (NPD) to reflect trends and ever-changing consumer tastes.
Brand View has reviewed the new listings and delistings of spirits in 2015 in Asda, Morrisons, Ocado, Sainsbury’s, Tesco and Waitrose.
In 2015 there were 390 new listings and 239 delistings – all Spirit varieties had more new listings than delistings.
As well as increased sales, the Gin category experienced the greatest percentage growth with 38 new listings, compared to only 12 delistings. It was closely followed by the Rum category which had 52 new listings compared to 18 delistings.
The Whisky category had the most new listings with 150 products, almost triple that of the Rum category. The majority of the new whisky listings were of the Single Malt Scotch variety – this included replacement products such as The Glenlivet Founder’s Reserve, which replaced The Glenlivet 12 Year Old Whisky. There was also a significant number of new listings of flavoured American Whiskies, such as the Jim Beam Apple 70cl and the Jack Daniel’s Honey Tennessee Whisky 1L.
New listings by month
In August there were 73 new listings – the greatest number of any month in 2015. Whisky and Vodka categories had the greatest number of new listings in this month with 34 and 10 respectively. The Rugby World Cup, which started in September 2015, is likely a contributing factor to this increase in new listings, as well as retailers beginning to get their Spirits ranges ready for Christmas.
The second greatest number of new listings was in October as retailers added new products ahead of Christmas. There were 52 new listings in June, 42.3 percent of these were in the Whisky category, the majority of which were potentially listed in preparation for Father’s Day on 21 June 2015.
Some 38.7 percent of new listings (151 products) had an introductory price of between £10 and £19.99. Brandy, rum and vodka all had the greatest number of new listings in this price range – this included the listing of the Absolut Cherrys Vodka, Captain Morgan White Rum and Three Barrels Honey Brandy.
Whisky had the greatest number of new listings in the £30 – £39.99 price range – six more listings than the £10 – £19.99 price range. The majority of listings in the initial price range were 70cl Single Malt Whiskies from distilleries such as The Glenlivet, Penderyn and Talisker. The new whisky listings in the £10 – £19.99 were largely flavoured American Whiskies and the smaller 35cl Single Malt Whiskies.
Cognac had the most new listings in the price range above £60 – there were six new listings. A cognac listing, the Hennessy XO Cognac 70cl, was the most expensive new listing of 2015 at £135, listed in Waitrose from July.
Brand View has reviewed the promotional activity in the six retailers for the five major Spirits varieties – brandy, gin, rum, vodka and whisky over the last two years.
Both in 2014 and 2015, December saw the greatest percentage range on promotion for all spirits varieties, as retailers started to promote for Christmas. The percentage of range on promotion was greater in December 2014 than in December 2015. While the number of promotions was similar in both years, the total number of spirits listings was greater in December 2015 leading to a lower percentage of range on promotion.
Brandy and whisky saw a noticeable increase in the number of promotions at the start of June in both years, as retailers began their Father’s Day promotions.
Gin had the fourth lowest average percentage of its range on promotion in 2015 with 21.9 percent. The number of gin promotions fell during the summer months of June, July and August from a peak in May. This meant gin had a lower average percentage of its range on promotion during these three months than rum, vodka and whisky.
Spirits in 2016
Vodka consumption in the UK is set to fall by four percent in 2016, while global vodka sales are predicted to increase 1.56 percent (The Spirits Business). In the US, ‘craft’ vodka is expected to continue to take market share from mainstream brands and this trend could cross over to the UK. If so, small American producers, such as Tito’s Handmade Vodka, and British producers, such as Chase Distillery, could mount a challenge to the major brands.
Euromonitor predicts that gin volume sales will rise by 11.8 percent in the next five years. In 2016 flavoured gins are expected to spark further category growth. UK shoppers can currently buy a small variety of flavoured gins, such as earl grey or raspberry. The popularity of other gin varieties, such as strawberry gin in Spain, could convince retailers to stock new flavour varieties in the UK.
Rum and bourbon are predicted to see strong growth in the UK next year with sales increasing by 3 and 9 percent respectively. This growth will be largely down to the increased use of these spirits in cocktails, with consumers predicted to create more ambitious drinks at home (The Spirits Business).
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