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Dark Spirits and Liqueurs - UK - October 2014

Published By :

Mintel

Published Date : Nov 2014

Category :

Alcoholic Beverages

No. of Pages : 107 Pages


While whisky brands seek to make themselves more accessible to a wider pool of users through encouraging mixability and flavoured expressions, operators in the rum category are seeking to carve out a place at the premium and super premium tiers with aged expressions
Table of Content

Introduction
Definition
Abbreviations

Executive Summary
The market
Figure 1: Forecast of UK value sales of dark spirits and liqueurs, 2009-19
Figure 2: Forecast of UK volume sales of dark spirits and liqueurs, 2009-19
Market factors
Overall alcohol consumption fell again in 2013
The removal of the tax escalator is expected to result in moderate increases in alcohol consumed
Rising consumer confidence is expected to benefit premium dark spirits and liqueurs
Changing populations brings good and bad news
Companies, brands and innovation
Figure 3: Value sales of top-selling brands in the off-trade, 2013/14*
Age statements and flavour variants are key features of the innovation landscape
Advertising spend returned to 2011 levels in 2013 following a drop in 2012
The consumer
Figure 4: Usage of dark spirits and liqueurs, June 2014
Recommendation is the most potent driver of choice
Figure 5: Reasons for choosing one dark spirit/liqueur over another, June 2014
Perceived lack of refreshment remains a challenge for dark spirits
Figure 6: Attitudes towards dark spirits and liqueurs, June 2014
Interest in making cocktails from scratch at home is significant
Figure 7: Further attitudes towards dark spirits and liqueurs, June 2014
Blended whisky faces a challenge to prevent further loss of share
Figure 8: Qualities associated with blended Scotch whisky, single malt whisky and other whisky or bourbon, June 2014
What we think

Issues in the Market
Premium sipping rums offer further scope to grow the rum category
The facts
The implications
Flavoured dark spirits and liqueurs continue to be a focus of NPD
The facts
The implications
While whisky brands opt for no age statements, rum embraces aged expressions
The facts
The implications

Trend Application
Guiding Choice
Collective Intelligence
Many Mes

Market Drivers
Key points
The number of 18-24s in the UK is in decline
Figure 9: Trends in the age structure of the UK population, 2009-14 and 2014-19
Rising consumer confidence is expected to benefit premium dark spirits and liqueurs
Figure 10: Consumers’ financial health index, January 2009-June 2014
Overall alcohol consumption fell in 2013, but is expected to rise
Figure 11: Trends in UK per capita consumption of 100% alcohol, 2009-13
Figure 12: HM Treasury estimated changes in volume consumption of alcohol over 2014/15-2018/19 following changes to alcohol duty in Budget 2014, April 2014
Declining whisky stocks may lead to further no-age-statement introductions

Strengths and Weaknesses
Strengths
Weaknesses

Who’s Innovating?
Key points
No-age-statement whiskies are a feature of recent NPD activity
Operators look to different casks for a more varied flavour profile
Scotch brands launch ‘spirit drinks’ to tap into interest in flavours
Cinnamon-flavoured varieties are increasing in number
Hybrid spirits offer opportunities to attract new users
Brands take different approaches to customisation and personalisation

Market Size and Segment Performance
Key points
Dark spirits and liqueurs market set to surpass £5.6 billion by 2019
Figure 13: UK value and volume sales of dark spirits and liqueurs, at current and constant prices, 2009-19
Figure 14: Forecast of UK value sales of dark spirits and liqueurs, 2009-19
Figure 15: Forecast of UK volume sales of dark spirits and liqueurs, 2009-19
Forecast methodology
Segment performance: Whisky/Whiskey
Figure 16: UK value and volume sales of whisky/whiskey, at current and constant prices, 2009-19
Figure 17: Forecast of UK value sales of whisky/whiskey, 2009-19
Segment performance: Brandy/Cognac/Armagnac
Figure 18: UK value and volume sales of brandy/Cognac/Armagnac, at current and constant prices, 2009-19
Figure 19: Forecast of UK value sales of brandy/Cognac/Armagnac, 2009-19
Segment Performance: Dark/Golden/Spiced Rum
Figure 20: UK value and volume sales of dark/golden/spiced rum, at current and constant prices, 2009-19
Figure 21: Forecast of UK value sales of dark/golden/spiced rum, 2009-19
Segment Performance: Liqueurs
Figure 22: UK value and volume sales of liqueurs, at current and constant prices, 2009-19
Figure 23: Forecast of UK value sales of liqueurs, 2009-19
The on-trade still accounts for 55% of value sales
Figure 24: UK value and volume sales of dark spirits and liqueurs in the on- and off-trade, 2012-14

Market Share
Key points
The Famous Grouse retains its lead in whisky
Figure 25: Value sales of top-selling whisky brands in the off-trade, 2012/13 and 2013/14
Figure 26: Retail prices of selected whiskies, per 70cl bottle, October 2014
Figure 27: Market share of whisky producers in the off-trade, 2013/14 (52 w/e 24 May 2014)
Little advertising investment by brandy brands sees own-label dominate
Figure 28: Value sales of top-selling brandy/Cognac/Armagnac brands in the off-trade, 2012/13 and 2013/14
Figure 29: Retail prices of selected brandy/Cognac, per 70cl bottle, October 2014
Figure 30: Market share of brandy/Cognac/Armagnac in the off-trade, 2013/14 (52 w/e 24 May 2014)
Dark rum’s impressive performance continues
Figure 31: Value sales of top-selling rum brands in the off-trade, 2012/13 and 2013/14
Figure 32: Retail prices of selected dark/golden/spiced rum, per 70cl bottle, October 2014
Figure 33: Market share of dark/golden/spiced rum producers in the off-trade, 2013/14 (w/e 24 May 2014)
Non-cream liqueur brands driving growth
Figure 34: Value sales for top-selling liqueur brands in the off-trade, 2012/13 and 2013/14
Figure 35: Retail prices of selected liqueurs, per 70cl bottle, October 2014
Figure 36: Market share of liqueur producers in the off-trade, 2013/14 (52 w/e 24 May 2014)

Companies and Products
Bacardi Brown-Forman Brands (BBFB)
Company overview
Product Range
Product innovation
Recent activity and promotion
Diageo
Company overview
Product Range
Product innovation
Recent activity and promotion
William Grant & Sons Distillers
Company overview
Product Range
Product innovation
Recent activity and promotion
LVMH
Company Overview
Product Range
Recent Activity
Maxxium
Company Overview
Product Range
Product innovation
Recent activity and promotion
Pernod Ricard
Company Overview
Product Range
Recent Activity

Brand Advertising and Perceptions
Key points
Total adspend returned to 2011 levels following a drop of 6% in 2012
Figure 37: Adspend for dark spirits and liqueurs, by category, 2011-14
Liqueurs and whisky continue to receive the most advertising support
Jack Daniel’s remains top spender in whisky/whiskey
Southern Comfort and Jägermeister boost liqueurs
Captain Morgan holds the fort for dark/golden/spiced rum
Figure 38: Top 10 brands in the dark spirits and liqueurs category, by adspend, 2011-14
Figure 39: Top 10 brands’ shares of adspend in the dark spirits and liqueurs category, 2011-14

Brand Research
Brand map
Figure 40: Attitudes towards and usage of brands in the dark spirits and liqueurs sector, August 2014
Correspondence analysis
Brand attitudes
Figure 41: Attitudes, by dark spirits and liqueurs brand, August 2014
Brand personality
Figure 42: Dark spirits and liqueurs brand personality – macro image, August 2014
Figure 43: Dark spirits and liqueurs brand personality – micro image, August 2014
Brand experience
Figure 44: Dark spirits and liqueurs brand usage, August 2014
Figure 45: Satisfaction with various dark spirits and liqueurs brands, August 2014
Figure 46: Consideration of dark spirits and liqueurs brands, August 2014
Brand recommendation
Figure 47: Recommendation of selected dark spirits and liqueurs brands, August 2014

The Consumer – Usage
Key points
Dark spirits and liqueurs are losing drinkers
Figure 48: Usage of dark spirits and liqueurs, June 2014
Whisky is succeeding in attracting younger drinkers
Few whisky drinkers only drink single malt
Usage of flavoured whisky among women remains low

The Consumer – Choice Factors
Key points
Recommendation is the most potent driver of choice
Figure 49: Reasons for choosing one dark spirit/liqueur over another, June 2014
Diageo and Bacardi amongst those pushing super-premium rums
The pre-mixed drinks segment should look to craft beer and cider for cues
New flavours continue to be a key choice factor

The Consumer – Attitudes towards Dark Spirits and Liqueurs
Key points
An image as less refreshing remains a challenge for dark spirits
Figure 50: Attitudes towards dark spirits and liqueurs, June 2014
Interest in mixers that suit the spirit
Irish whiskey and Spanish brandy have room for growth

The Consumer – Further Attitudes towards Dark Spirits and Liqueurs
Key points
There is a gap in the market for a premium blended whisky
Figure 51: Further attitudes towards dark spirits and liqueurs, June 2014
Interest in making cocktails at home is high
Jägermeister’s position as a shot is under threat

The Consumer – Qualities Associated with Dark Spirits and Liqueurs
Key points
Blended whisky faces a challenge to prevent further loss of share
Figure 52: Qualities associated with blended Scotch whisky, single malt whisky and other whisky or bourbon, June 2014
Blended whisky begins to embrace mixability and the ‘spirit drink’
Brands seek to address single malt’s lack of approachability

Appendix – Market Size and Segment Performance
Figure 53: Best and worst case forecasts for the dark spirits and liqueurs market, by value, 2014-19
Figure 54: Best and worst case forecasts for the dark spirits and liqueurs market, by volume, 2014-19
Figure 55: Best and worst case forecasts for the whisky/whiskey market, by value, 2014-19
Figure 56: Best and worst case forecasts for the whisky/whiskey market, by volume, 2014-19
Figure 57: Best and worst case forecasts for the brandy/Cognac/Armagnac market, by value, 2014-19
Figure 58: Best and worst case forecasts for the brandy/Cognac/Armagnac market, by volume, 2014-19
Figure 59: Best and worst case forecasts for the dark/golden/spiced rum market, by value, 2014-19
Figure 60: Best and worst case forecasts for the dark/golden/spiced rum market, by volume, 2014-19
Figure 61: Best and worst case forecasts for the liqueurs market, by value, 2014-19
Figure 62: Best and worst case forecasts for the liqueurs market, by volume, 2014-19

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