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Dark Spirits and Liqueurs - UK - August 2013

Published By :

Mintel

Published Date : Aug 2013

Category :

Alcoholic Beverages

No. of Pages : 291 Pages


While modern spins on whisky are likely to be shunned for drinks such as single malt by older drinkers, producers would be unwise to ignore the growing influence of appealing to younger tastes.
Table of Content

Introduction
Definition
Other points to note
Abbreviations

Executive Summary
The market
Figure 1: Forecast of UK value sales of dark spirits and liqueurs, 2008-18
Figure 2: Forecast of UK volume sales of dark spirits and liqueurs, 2008-18
Market factors
Alcohol consumption is in decline
Rising prices are a threat to continued growth
Population changes entail threats and opportunities
Dark spirits and liqueurs are well placed to tap into many drinking occasions
Companies, brands and innovation
Figure 3: Value sales of top-selling dark spirit and liqueur brands in the off-trade, 2012/13
Flavour innovation continues to drive NPD
Adspend looks set to dip in 2013
The consumer
Figure 4: Usage of dark spirits and liqueurs, by type, June 2013
Price dictates purchasing habits of dark spirits and liqueurs
Whisky and cream liqueurs thrive at home, rums and non-creams out of home
Figure 5: Locations for drinking dark spirits and liqueurs, June 2013
Gifting is a key trend in the dark spirits market
Figure 6: Users’ attitudes towards dark spirits, June 2013
Special occasions and after dinner are key occasions for liqueurs
Figure 7: Attitudes towards liqueurs, June 2013
What we think

Issues in the Market
Where next for whiskey innovation?
How can brandy/Cognac continue to modernise?
Can dark rums balance accessibility with credibility?
What lessons could cream liqueurs take from other categories?

Trend Application
Man in the Mirror
Why Buy
Mintel Futures: Human

Internal Market Environment
Key points
Taxation on alcoholic drinks on the rise
Figure 8: UK excise duty rates for selected alcoholic drinks, 2003-13
Figure 9: Index of alcoholic drinks vs all items prices, 2006-12
Dark spirits and liqueurs are well placed to tap into a variety of occasions
Figure 10: In-home and out of home drinking occasions, April 2013
Bridging the gender divide
Figure 11: Proportion of male and female drinkers per category for dark spirits and liqueurs, June 2013
The increasing appeal of craft producers

Broader Market Environment
Key points
Consumer confidence remains low
Figure 12: Household income vs expenditure per head (£), 1997-2012
Figure 13: Consumer Confidence Index, monthly, January 2007-July 2013
Figure 14: Trends in UK per capita consumption of ‘100% alcohol’, 2006-11
Figure 15: Calorie and unit content of different types of alcoholic drinks, per typical serving
25-34-year-olds to become even more important
Figure 16: Projected trends in the age structure of the UK population, 2013-18
ABs and C2s will hold the key to market growth
Figure 17: Changes in the adult socio-economic structure of the UK population, 2013-18
Minimum pricing plans shelved for the foreseeable future

Competitive Context
Key points
Consumers cutting back on alcohol consumption
Figure 18: Value sales of selected alcoholic drink categories, 2008-12

Strengths and Weaknesses
Strengths
Weaknesses

Who’s Innovating?
Key points
Flavour innovation remains a key part of NPD in the market
Could white whiskeys be next?
Winter warmers
Innovations in packaging
Premium launches remain prevalent
International innovation

Market Size and Segment Performance
Key points
Dark spirits sales have a bright future
Figure 19: UK value and volume sales of dark spirits and liqueurs, at current and constant prices, 2008-18
Figure 20: Forecast of UK value sales of dark spirits and liqueurs, 2008-18
Figure 21: Forecast of UK volume sales of dark spirits and liqueurs, 2008-18
Forecast methodology
Segment Performance: Whisky/Whiskey
Figure 22: UK value and volume sales of whisky/whiskey, at current and constant prices, 2008-18
Figure 23: Forecast of UK value sales of whisky/whiskey, 2008-18
Segment Performance: Brandy/Cognac
Figure 24: UK value and volume sales of brandy/Cognac, at current and constant prices, 2008-18
Figure 25: Forecast of UK value sales of brandy/Cognac, 2008-18
Segment Performance: Dark/golden/spiced rum
Figure 26: UK value and volume sales of dark/golden/spiced rum, at current and constant prices, 2008-18
Figure 27: Forecast of UK value sales of dark/golden/spiced rum, 2008-18
Segment Performance: Liqueurs
Figure 28: UK value and volume sales of liqueurs, at current and constant prices, 2008-18
Figure 29: Forecast of UK value sales of liqueurs, 2008-18
The off-trade outperforms the on-trade
Figure 30: UK value sales of dark spirits and liqueurs in the on- and off-trade, 2011-13
A similar picture emerges for the on-trade

Market Share
Key points
The Famous Grouse jumps to the top of the pile in whisky
Figure 31: Value sales of top-selling whisky brands in the off-trade, 2011/12-2012/13
Figure 32: Retail prices of selected whiskies, per 70cl bottle, July 2013
Maxxium’s success built on The Famous Grouse
Figure 33: Market share of whisky producers in the off-trade, 2012/13 (52 w/e 28 April 2013)
Own-label leads in the brandy/Cognac market
Figure 34: Value sales of top-selling brandy/Cognac brands in the off-trade, 2011/12-2012/13
Figure 35: Retail prices of selected brandy/Cognac, per 70cl bottle, July 2013
Own-label, Maxxium and First Drinks account for 83% of brandy/Cognac sales
Figure 36: Market share of brandy/Cognac producers in the off-trade, 2012/13 (52 w/e 28 April 2013)
The dark rum market continues to show be a haven for brands
Figure 37: Value sales of top-selling dark rum brands in the off-trade, 2011/12-2012/3
Figure 38: Retail prices of selected dark/golden/spiced rum, per 70cl/1l bottle, July 2013
Diageo dominates the dark rum market
Figure 39: Market share of dark/golden/spiced rum producers in the off-trade, 2012/13 (w/e 28 April 2013)
Are Baileys fortunes turning sour?
Figure 40: Value sales for top-selling liqueur brands in the off-trade, 2011/12-2012/13
Figure 41: Retail prices of selected dark/golden/spiced rum, per 50cl/70cl bottle, July 2013
Diageo claims the greatest share of sales in the liqueur category
Figure 42: Market share of liqueur producers in the off-trade, 2012/13 (52 w/e 28 April 2013)

Channels to Market
Key points
Grocery multiples make further progress
Figure 43: Value sales within the off- and on-trade channels in the dark spirits and liqueurs market, 2011-13
Restaurants gain share in the on-trade
Online continues to represent a niche channel for sales

Companies and Products
Brown-Forman/Bacardi-Martini
Company overview
Product range
Recent activity and innovation
Brand communication and promotion
Diageo
Company overview
Product range
Recent activity and innovation
Brand communication and promotion
First Drinks
Company overview
Product range
Recent activity and innovation
Brand communication and promotion
LVMH
Company overview
Product range
Recent activity and innovation
Brand communication and promotion
Maxxium
Company overview
Product range
Recent activity and innovation
Brand communication and promotion
Pernod Ricard
Company overview
Product range
Recent activity and innovation
Brand communication and promotion

Brand Research
Brand map
Figure 44: Attitudes towards and usage of brands in the dark spirits & liqueurs sector, May 2013
Correspondence analysis
Brand attitudes
Figure 45: Attitudes, by dark spirits & liqueurs brand, May 2013
Brand personality
Figure 46: Dark spirits & liqueurs brand personality – macro image, May 2013
Figure 47: Dark spirits & liqueurs brand personality – micro image, May 2013
Brand experience
Figure 48: Dark spirits & liqueurs brand usage, May 2013
Figure 49: Satisfaction with various dark spirits & liqueurs brands, May 2013
Figure 50: Consideration of dark spirits & liqueurs brands, May 2013
Figure 51: Consumer perceptions of current dark spirits & liqueurs brand performance, May 2013
Figure 52: Dark spirits & liqueurs brand recommendation – Net Promoter Score, May 2013
Brand index
Figure 53: Dark spirits & liqueurs brand index, May 2013
Figure 54: Dark spirits & liqueurs brand index vs. recommendation, May 2013
Target group analysis
Figure 55: Target groups, May 2013
Figure 56: Dark spirits & liqueurs brand usage, by target groups, May 2013
Group One – Conformists
Group Two – Simply the Best
Group Three – Shelf Stalkers
Group Four – Habitual Shoppers
Group Five – Individualists

Brand Communication and Promotion
Key points
Adspend in the dark spirits and liqueurs market plateaus
Figure 57: Total adspend for dark spirits and liqueurs, 2009-13
Figure 58: Top 10 brands in the dark spirits and liqueurs category, by adspend, 2009-12
Figure 59: Top 10 brands’ shares of ad spend in the dark spirits and liqueurs category, 2009-12
Liqueurs and whisky dominate adspend
Figure 60: Total adspend for dark spirits and liqueurs, by category 2009-12
Focus on Whisky/Whiskey
Focus on dark/golden/spiced rum
Focus on brandy/Cognac
Focus on Liqueurs
Multi-product advertising

Consumer – Usage of Dark Spirits and Liqueurs
Key points
Liqueurs lead the way in terms of user numbers
Figure 61: Usage of dark spirits and liqueurs, June 2013
Figure 62: How dark spirits and liqueurs are drunk, June 2013
Non-cream-based liqueurs have a particularly strong appeal to younger drinkers
47% of adults drink whisky
Brandies are drunk by just under a third of adults
Dark/golden/spiced rum nudges ahead of brandy
Summary of how usage of dark spirits/liqueurs differs by gender
Figure 63: Proportion of male and female drinkers per category for dark spirits and liqueurs, June 2013
Who are the non-users?
Repertoires of more than three types of spirits/liqueurs are prevalent among users
Figure 64: Repertoire of usage of dark spirits and liqueurs, June 2013

Consumer – Choice Factors
Key points
Price is comfortably the most important choice factor for whisky
Figure 65: Choice factors for whisky/whiskey, June 2013
Brandy/Cognac/Armagnac echoes whisky for choice factors
Figure 66: Choice factors for brandy/Cognac/Armagnac, June 2013
Mixability rises up the ranks of importance for dark rums
Figure 67: Choice factors for dark/golden/spiced rum, June 2013
Liqueur purchasing driven by price…and little else
Figure 68: Choice factors for liqueurs, June 2013

Consumer – Locations for Drinking Dark Spirits & Liqueurs
Key points
Whisky and cream-based liqueurs are most popular in-home
Figure 69: Locations for drinking dark spirits and liqueurs, June 2013
Brandy sees equal use in and out of home
Dark rums and non-cream liqueurs see comfortably higher on-trade than off-trade usage
Pubs remains the most popular out-of-home locations for dark spirits
Figure 70: Locations for drinking dark spirits out of home, June 2013
Liqueurs hold less appeal in pubs
Figure 71: Locations for drinking liqueurs out of home, June 2013

Consumer – Attitudes Towards Dark Spirits
Key points
Gifting is important to the dark spirits market
Figure 72: Users’ attitudes towards dark spirits, June 2013
Figure 73: Dark spirits use in the on- and off-trade, by gender and age group, April 2013
Notable interest in newness and developing understanding of dark spirits
Tapping into mixability
Dark spirits such as brandy and golden rum are appealing across age groups

Consumer – Attitudes Towards Flavoured Dark Spirits
Key points
Flavoured dark spirits only garner niche interest
Figure 74: Attitudes towards flavoured dark spirits, June 2013
Dichotomy at the heart of flavouring spirits
Brand awareness can support interest in flavour innovation
Flavoured variants lack associations with fun

Consumer – Attitudes Towards Liqueurs
Key points
Liqueurs are reliant on seasonal and post-dinner drinking
Figure 75: Attitudes towards liqueurs, June 2013
Liqueurs enjoy strong connotations with indulgence
Liqueurs and mixability
Only a quarter of users don’t think liqueurs mix well
Liqueurs carry party associations among younger users
Liqueurs for men?

Consumer – Target Groups
Key points
Four Target Groups
Figure 76: Target groups for dark spirits, June 2013
Disengaged (28%)
Price-driven (27%)
Connoisseurs (23%)
Enthusiasts (22%)

Appendix – Market Size and Segment Performance
Figure 77: Best and worst case forecasts for the dark spirits and liqueurs market, by value, 2013-18
Figure 78: Best and worst case forecasts for the dark spirits and liqueurs market, by volume, 2013-18
Figure 79: Best and worst case forecasts for the whisky/whiskey market, by value, 2013-18
Figure 80: Best and worst case forecasts for the whisky/whiskey market, by volume, 2013-18
Figure 81: Forecast for volume sales of whisky/whiskey, 2008-18
Figure 82: Best and worst case forecasts for the brandy/Cognac market, by value, 2013-18
Figure 83: Best and worst case forecasts for the brandy/Cognac market, by volume, 2013-18
Figure 84: Forecast for volume sales of brandy/Cognac, 2008-18
Figure 85: Best and worst case forecasts for the dark/golden/spiced rum market, by value, 2013-18
Figure 86: Best and worst case forecasts for the dark/golden/spiced rum market, by volume, 2013-18
Figure 87: Forecast for volume sales of dark/golden/spiced rum, 2008-18
Figure 88: Best and worst case forecasts for the liqueurs market, by value, 2013-18
Figure 89: Best and worst case forecasts for the liqueurs market, by volume, 2013-18
Figure 90: Forecast for volume sales of liqueurs, 2008-18
Segment Performance (Volume)
Figure 91: UK volume sales of dark spirits and liqueurs in the on- and off-trade, 2011-13

Appendix – Brand Communication and Promotion
Figure 92: Adspend on whisky/whiskey, by company, 2009-13
Figure 93: Adspend on whisky/whiskey, by brand, 2009-13
Figure 94: Adspend on dark/golden/spiced rum, by company, 2009-13
Figure 95: Adspend on dark/golden/spiced rum, by brand, 2009-13
Figure 96: Adspend on brandy/Cognac, by company, 2009-13
Figure 97: Adspend on brandy/Cognac, by company, 2009-13
Figure 98: Adspend on liqueurs, by company, 2009-13
Figure 99: Adspend on liqueurs, by brand, 2009-13

Appendix – Brand Research
Figure 100: Brand usage, May 2013
Figure 101: Brand commitment, May 2013
Figure 102: Brand momentum, May 2013
Figure 103: Brand diversity, May 2013
Figure 104: Brand satisfaction, May 2013
Figure 105: Brand recommendation, May 2013
Figure 106: Brand attitude, May 2013
Figure 107: Brand image – macro image, May 2013
Figure 108: Brand image – micro image, May 2013
Figure 109: Profile of target groups, by demographics, May 2013
Figure 110: Psychographic segmentation by target groups, May 2013
Figure 111: Brand usage, by target groups, May 2013
Brand index
Figure 112: Brand index, May 2013

Appendix – Consumer – Usage of Dark Spirits and Liqueurs
Figure 113: Usage of dark spirits and liqueurs, June 2013
Figure 114: Usage of single malt whisky (eg Glenfiddich), by demographics, June 2013
Figure 115: Usage of blended scotch whisky (eg Bell’s, Famous Grouse), by demographics, June 2013
Figure 116: Usage of other whiskey or bourbon (eg Maker’s Mark, Jack Daniel’s, Jameson), by demographics, June 2013
Figure 117: Usage of brandy (eg Three Barrels) excluding brandy liqueurs (eg cherry/apricot), by demographics, June 2013
Figure 118: Usage of Cognac/Armagnac (eg Courvoisier, Janneau), by demographics, June 2013
Figure 119: Usage of dark/golden/spiced rum (eg Captain Morgan, Bacardi Gold, Sailor Jerry’s), by demographics, June 2013
Figure 120: Usage of cream-based liqueur (eg Baileys, Kahlua), by demographics, June 2013
Figure 121: Usage of non-cream-based liqueur (eg Disaronno, Pimm’s, Jägermeister), by demographics, June 2013
Figure 122: Usage of any flavoured dark spirit (eg Jack Daniel’s and honey, Red Stag cherry), by demographics, June 2013
Figure 123: Usage of any dark spirit or liqueur as a part of a pre-mixed dark spirit (eg Jack Daniel’s and cola can), by demographics, June 2013
Figure 124: Repertoire of usage of dark spirits and liqueurs, June 2013
Figure 125: Repertoire of usage of dark spirits and liqueurs, by demographics, June 2013
Figure 126: Usage of dark spirits and liqueurs, by repertoire of usage of dark spirits and liqueurs, June 2013

Appendix – Consumer – Choice Factors
Figure 127: Choice factors for dark spirits/liqueurs, June 2013
Figure 128: Most popular choice factors for whisky/whiskey (including flavoured), by demographics, June 2013
Figure 129: Next most popular choice factors for whisky/whiskey (including flavoured), by demographics, June 2013
Figure 130: Most popular choice factors for dark/golden/spiced rum, by demographics, June 2013
Figure 131: Next most popular choice factors for dark/golden/spiced rum, by demographics, June 2013
Figure 132: Most popular choice factors for brandy/Cognac/Armagnac, by demographics, June 2013
Figure 133: Next most popular choice factors for brandy/Cognac/Armagnac, by demographics, June 2013
Figure 134: Most popular choice factors for liqueurs, by demographics, June 2013
Figure 135: Next most popular choice factors for liqueurs, by demographics, June 2013

Appendix – Consumer – Locations for Drinking Dark Spirits & Liqueurs
Figure 136: Locations for drinking dark spirits and liqueurs, June 2013
Figure 137: Usage of whisky/whiskey (including flavouring) by location, by demographics, June 2013
Figure 138: Usage of brandy/Cognac/Armagnac by location, by demographics, June 2013
Figure 139: Usage of dark/golden/spiced rum by location, by demographics, June 2013
Figure 140: Usage of any cream liqueur by location, by demographics, June 2013
Figure 141: Usage of any non-cream liqueur by location, by demographics, June 2013

Appendix – Consumer – Attitudes Towards Dark Spirits
Figure 142: Users’ attitudes towards dark spirits, June 2013
Figure 143: Agreement with the statements ‘I like to try dark spirits which I have never had before’ and ‘I am interested in dark spirits in a customised bottle (ie unique name/number)’, by demographics, June 2013
Figure 144: Agreement with the statements ‘I would like to learn more about dark spirits’ and ‘I would be more likely to try dark spirits if they came in smaller bottles (eg 50 cl or less)’, by demographics, June 2013
Figure 145: Agreement with the statements ‘I am more likely to drink dark spirits at home than in pubs/bars’ and ‘Brandy/Cognac are drinks for older people’, by demographics, June 2013
Figure 146: Agreement with the statements ‘Dark/golden/spiced rum is a drink for younger people’ and ‘I prefer to drink dark spirits from smaller brands rather than those from large companies’, by demographics, June 2013
Figure 147: Agreement with the statements ‘I prefer premium brands when buying dark spirits’ and ‘Dark spirits make a good gift’, by demographics, June 2013
Figure 148: Agreement with the statements ‘Dark spirits are less suitable to use as a mixer/in cocktails than white spirits’ and ‘Dark spirits are becoming too expensive for me to buy often’, by demographics, June 2013

Appendix – Consumer – Attitudes Towards Flavoured Dark Spirits
Figure 149: Attitudes towards added flavours in dark spirits/liqueurs, June 2013
Figure 150: Attitudes towards added flavours in dark spirits/liqueurs, by demographics, June 2013
Figure 151: Attitudes towards added flavours in dark spirits/liqueurs, by demographics, June 2013 (continued)

Appendix – Consumer – Attitudes Towards Liqueurs
Figure 152: Users’ attitudes Towards Liqueurs, June 2013
Figure 153: Most popular attitudes towards liqueurs, by demographics, June 2013
Figure 154: Next most popular attitudes towards liqueurs, by demographics, June 2013

Appendix – Consumer – Target Groups
Figure 155: Target groups, by demographics, June 2013
Figure 156: Usage of dark spirits and liqueurs, by target groups, June 2013
Figure 157: Choice factors for whisky/whiskey (including flavoured), by target groups, June 2013
Figure 158: Choice factors for dark/golden/spiced rum, by target groups, June 2013
Figure 159: Choice factors for brandy/Cognac/Armagnac, by target groups, June 2013
Figure 160: Choice factors for liqueurs, by target groups, June 2013
Figure 161: Users’ attitudes towards dark spirits, by target groups, June 2013

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