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White Spirits and RTDs - UK - December 2014

Published By :

Mintel

Published Date : Dec 2014

Category :

Alcoholic Beverages

No. of Pages : 103 Pages

The continued decline in volume sales of bottled RTDs makes a complete overhaul of the segment a necessity for the segment A shift to premium bottle designs coupled with a focus on more adult orientated flavours would be a good starting point.
Table of Content

Introduction

Definition
Abbreviations

Executive Summary

The market
Figure 1: Forecast UK value sales of white spirits and RTDs, 2009-19
Market factors
Changes in the UK’s age structure bring challenges and opportunities
Overall alcohol intake falls
Spirits duty frozen in 2014 Budget
Companies, brands and innovation
Innovation
Market share
Figure 2: Value share of top-selling white spirit and RTD brands in the off-trade, 2014*
Brand Communication and Promotion
The consumer
Vodka remains the most popular white spirit
Figure 3: Usage of white spirits by type, September 2014
Quality of ingredients is key for brands targeting the premium tier
Figure 4: Important factors in defining a premium white spirit, September 2014
Sophisticated flavours can help attract older drinkers to flavoured vodka
Figure 5: Attitudes towards white spirits, September 2014
‘Craft’ is undefined and misunderstood, and holds little appeal to many
Figure 6: Attitudes towards craft white spirits, September 2014
Flavoured ciders are taking the place of alcopops
Figure 7: Attitudes towards pre-mixed drinks in cans or bottles, September 2014
What we think

Issues in the Market

Bottled RTDs need a complete overhaul
The facts
The implications
Operators continue to market ‘craft’ spirits, despite little consumer understanding
The facts
The implications
The removal of the tax escalator set to boost white spirit volume sales
The facts
The implications

Trend Application

Prove it
Slow It All Down
Locavore

Market Drivers

Key points
Changes in age structure will bring challenges and opportunities
Figure 8: Trends in the age structure of the UK population, 2009-14 and 2014-19
Overall alcohol consumption continues to fall
Figure 9: Trends in UK per capita consumption of 100% alcohol, 2009-13
2014 Budget sees the tax escalator removed
Figure 10: HM Treasury estimated changes in volume consumption of alcohol, 2014/15-2018/19

Strengths and Weaknesses

Strengths
Weaknesses

Who’s Innovating?

Key points
Big brands opting for natural over novelty when it comes to flavour
Brands opt for hybrid spirits to attract new users
Aged expressions are popping up in tequila, gin and rum

Market Size and Segment Performance

Key points
Value sales grew by 4.5% in 2014 while volumes remained stagnant
Figure 11: UK value and volume sales of white spirits and RTDs, 2009-19
Figure 12: Forecast UK value sales of white spirits and RTDs, 2009-19
Figure 13: Forecast UK volume sales of white spirits and RTDs, 2009-19
Figure 14: UK value sales of white spirits and RTDs in the on- and off-trade, by product category, 2012-14
Figure 15: UK volume sales of white spirits and RTDs in the on- and off-trade, by product category, 2012-14
Vodka remains the leading segment by some distance
Figure 16: UK value and volume sales of white spirits and RTDs, at current and constant prices, 2009-19
Figure 17: Forecast UK value sales of vodka, 2009-19
Figure 18: Forecast UK volume sales of vodka, 2009-19
Gin category continues to prosper
Figure 19: UK value and volume sales of gin, at current and constant prices, 2009-19
Figure 20: Forecast UK value sales of gin, 2009-19
Figure 21: Forecast UK volume sales of gin, 2009-19
White rum sales set to be surpassed by dark/golden/spiced rum in 2015
Figure 22: UK value and volume sales of white rum, at current and constant prices, 2009-19
Figure 23: Forecast UK value sales of white rum, 2009-19
Figure 24: Forecast UK volume sales of white rum, 2009-19
RTDs see further decline
Figure 25: UK value and volume sales of RTDs, at current and constant prices, 2009-19
Figure 26: Forecast UK value sales of RTDs, 2009-19
Figure 27: Forecast UK volume sales of RTDs, 2009-19
Tequila set for further growth
Figure 28: UK value and volume sales of RTDs, at current and constant prices, 2009-19
Figure 29: Forecast UK value sales of Tequila, 2009-19
Figure 30: Forecast UK volume sales of Tequila, 2009-19
Forecast methodology

Market Share

Key points
Russian Standard’s ascent continues as Smirnoff cements lead
Figure 31: Value sales of top-selling white spirit and RTD brands* in the off-trade 2012/13 and 2013/14
Bombay Sapphire, Tanqueray and Hendrick’s perform strongly in gin
Bacardi and Malibu both see their share decline marginally

Companies and Products

Bacardi-Martini
Company overview and brand portfolio
Recent activity, brand communication and promotion
Brown-Forman
Company overview and brand portfolio
Recent activity, brand communication and promotion
Diageo
Company overview and brand portfolio
Recent activity, brand communication and promotion
William Grant & Sons
Company overview and brand portfolio
Recent activity, brand communication and promotion
Pernod Ricard
Company overview and brand portfolio
Recent activity, brand communication and promotion

Brand Communication and Promotion

Key points
Pernod Ricard cutbacks severely impact total market adspend
Figure 32: Topline above-the-line advertising spend in the UK white spirits and RTDs market, 2011-14
Diageo continues to invest heavily in its brands
Figure 33: Highest-spending companies for above-the-line advertising in the white spirits/RTD market, 2011-14
Figure 34: Highest-spending brands in above-the-line advertising in the white spirits/RTDs market, 2011-14
Bacardi-Martini advertising spend falls by almost half in 2013
Belvedere launches its first cinema campaign

Brand Research

Brand map
Figure 35: Attitudes towards and usage of brands in the white spirits sector, September 2014
Correspondence analysis
Brand attitudes
Figure 36: Attitudes, by white spirits brand, September 2014
Brand personality
Figure 37: White spirits brand personality – macro image, September 2014
Figure 38: White spirits brand personality – micro image, September 2014
Brand experience
Figure 39: White spirits brand usage, September 2014
Figure 40: Satisfaction with various white spirits brands, September 2014
Figure 41: Consideration of white spirits brands, September 2014
Brand recommendation
Figure 42: Recommendation of selected white spirits brands, September 2014

The Consumer – Usage of White Spirits

Key points
Vodka remains the nation’s favourite white spirit
Figure 43: Usage of white spirits, September 2014
Premium brands could focus on promoting neat drink
Figure 44: Usage of white spirits neat, with a mixer, or as part of a cocktail, by category, September 2014
Just over a third of adults drink pre-mixes
Figure 45: Usage of pre-mixed drinks in a bottle/can, September 2014

The Consumer – Attitudes towards Premium White Spirits

Key points
Quality of ingredients is key for brands targeting the premium tier
Figure 46: Important factors in defining a premium white spirit, September 2014
Specific country or region of origin matters to only 23% of drinkers
Taste and traditional production methods appeal to older drinkers

The Consumer – General Attitudes towards White Spirits

Key points
Older consumers more likely to be loyal to their favourite white spirit
Figure 47: Attitudes towards white spirits, September 2014
Sophisticated flavours can help attract older drinkers to flavoured vodka
Tequila’s shot reputation is preventing increased usage among 18-24s

The Consumer – Attitudes towards Craft White Spirits

Key points
‘Craft’ is undefined and misunderstood, but this is irrelevant to many
Figure 48: Attitudes towards craft white spirits, September 2014
Brands should focus on production methods and ingredients before ‘craft’
Transparency of ownership matters

The Consumer – Attitudes towards RTDs

Key points
Flavoured ciders are taking the place of alcopops
Figure 49: Attitudes towards pre-mixed drinks in cans or bottles, September 2014
RTDs are failing to win over consumers on value and convenience
Quality is not an issue for most

Appendix – Market Size and Forecast

Figure 50: Best and worst case forecasts for the white spirits and RTDs market, by value, 2014-19
Figure 51: Best and worst case forecasts for the white spirits and RTDs market, by volume, 2014-19
Figure 52: Best and worst case forecasts for the vodka market, by value, 2014-19
Figure 53: Best and worst case forecasts for the vodka market, by volume, 2014-19
Figure 54: Best and worst case forecasts for the white rum market, by value, 2014-19
Figure 55: Best and worst case forecasts for the white rum market, by volume, 2014-19
Figure 56: Best and worst case forecasts for the gin market, by value, 2014-19
Figure 57: Best and worst case forecasts for the gin market, by volume, 2014-19
Figure 58: Best and worst case forecasts for the tequila market, by value, 2014-19
Figure 59: Best and worst case forecasts for the tequila market, by volume, 2014-19
Figure 60: Best and worst case forecasts for the RTD market, by value, 2014-19
Figure 61: Best and worst case forecasts for the RTD market, by volume, 2014-19

Appendix – Market Share

Figure 62: Value sales of top-selling vodka brands in the off-trade 2012/13 and 2013/14
Figure 63: Value sales of top-selling gin brands in the off-trade 2012/13 and 2013/14
Figure 64: Value sales of top-selling RTD brands in the off-trade 2012/13 and 2013/14
Figure 65: Volume sales of top-selling white spirit and RTD brands in the off-trade 2012/13 and 2013/14
Figure 66: Volume sales of top-selling vodka brands in the off-trade 2012/13 and 2013/14

Appendix – Prices of white spirits and RTDs

Figure 67: Retail prices of selected vodkas, per 70cl bottle, December 2014
Figure 68: Retail prices of selected gins, per 70cl bottle, December 2014

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