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DARK SPIRITS AND LIQUEURS - UK - SEPTEMBER 2018

Published By :

Mintel

Published Date : Sep 2018

Category :

Alcoholic Beverages

No. of Pages : N/A

Friend/family recommendations and tasting sessions stand out as key means to drive dark spirits trial. Companies can incentivise recommendations through rewards such as discount vouchers and marketing messages themed around knowledge sharing. Meanwhile sampling initiatives would help to overcome the barrier of spirits’ high price discouraging experimentation among risk-averse consumers

Table of contents
OVERVIEW
What you need to know
Products covered in this report
EXECUTIVE SUMMARY
The market
Inflation and strong performances in certain segments drive growth over 2013-18
Ageing UK population to hinder dark spirits and liqueurs sales 2018-23
Figure 1: Total Value sales of dark spirits and liqueurs, 2013-23
Whisky sales remain flat in 2018, while dark rum’s rise continues
Off-trade gains at the expense of on-trade in 2018
Multiple factors affect the price of spirits
Companies and brands
The Famous Grouse loses ground in the whisky segment
Figure 2: Leading brands’ shares in the UK retail whisky market, 2017/18*
Mixed results for Diageo brands
Premium and limited edition launches continue in 2018
Liqueurs continue to explore on-trend flavours
Marginal dip in advertising spend in 2017
Baileys is the most trusted brand, while Jameson has a traditional image
The consumer
Half of UK adults drink dark spirits
Figure 3: Usage of dark spirits, by type, July 2018
Four in ten adults drink liqueurs/flavoured dark spirits
Figure 4: Usage of liqueurs and flavoured dark spirits, by type, July 2018
Scotch whisky tends to be chosen for relaxing at home, while dark rum and bourbon win for parties
Tasting sessions and recommendations are key means to drive trial
Figure 5: Prompts to try a new dark spirit, July 2018
Ingredients and ageing are seen as key for premium dark spirits/liqueurs
Figure 6: Factors seen as defining a premium dark spirit, July 2018
Opportunities for premium dark spirits/liqueurs
Less sweet-tasting liqueurs have wide appeal
Figure 7: Behaviours relating to dark spirits and liqueurs, July 2018
Winter bias in dark spirits drinking restricts usage occasions
Figure 8: Dark spirit drinkers’ behaviours, July 2018
What we think
ISSUES AND INSIGHTS
Premium products could benefit amid the alcohol moderation trends
The facts
The implications
Recommendations and sampling are key to driving dark spirits trial
The facts
The implications
Opportunities for exciting flavour innovation in liqueurs
The facts
The implications
THE MARKET – WHAT YOU NEED TO KNOW
Inflation and growth in certain segments drive growth over 2013-18
Ageing UK population to hinder dark spirits and liqueurs sales 2018-23
Figure 9: Total Value sales of dark spirits and liqueurs, 2013-23
Whisky sales remain flat in 2018, while dark rum’s rise continues
Off-trade gains at the expense of on-trade in 2018
Multiple factors affect the price of spirits
MARKET SIZE AND FORECAST
Inflation and growth in certain segments drive growth over 2013-18
Inflation and mixed volume sales results expected for 2018-23
Ageing population to hinder volume sales growth
Figure 10: Total Value and volume sales of dark spirits and liqueurs, 2013-23
Figure 11: Total Value sales of dark spirits and liqueurs, 2013-23
Forecast methodology
MARKET SEGMENTATION
Weakness of blended whisky impedes the entire segment in 2018
Inflation expected for 2018-23, though to a lesser extent than for other dark spirits
Minimal growth anticipated for whisky volume sales
Figure 12: Total Value and volume sales of whisky, 2013-23
Figure 13: Total Value sales of whisky, 2013-23
Dark rum’s meteoric rise slows in 2018
Volume sales to slow further over 2018-23
Figure 14: Total Value and volume sales of dark rum, 2013-23
Figure 15: Total Value sales of dark rum, 2013-23
Little change in brandy/Cognac/Armagnac sales in 2018
Mostly flat volume sales expected for 2018-23
Figure 16: Total value and volume sales of brandy/Cognac/Armagnac, 2013-23
Figure 17: Total Value sales of brandy/Cognac/Armagnac, 2013-23
Liqueurs’ volatile performance continues in 2018
Further volatility predicted for 2018-23
Figure 18: Total Value and volume sales of liqueurs, 2013-23
Figure 19: Total Value and volume sales of liqueurs, 2013-23
CHANNELS TO MARKET
Off-trade gains at the expense of on-trade in 2018
Figure 20: Value and volume sales of dark spirits and liqueurs, by channel, 2016-18
Mixed retail sales results for dark spirits in 2018
Blended whisky sales slip
Single malt bounces back
Imported whisky continues to benefit from the Americana trend
Dark rum sees further, though slowing, sales growth
Figure 21: Value and volume sales of dark spirits and liqueurs in the off-trade, by segment, 2016-18
On-trade sales of dark spirits mirror those of off-trade….
….while liqueurs perform differently
Figure 22: Value and volume sales of dark spirits and liqueurs in the on-trade, by segment, 2016-18
MARKET DRIVERS
Multiple factors affect the price of spirits
Freeze on alcohol duties eases pressure on manufacturers
Scotland introduces minimum unit pricing for alcohol
Exchange rates remain pivotal for dark spirits
Barley shortage has implications for whisky
Income squeeze in 2017 hinders dark spirits
Public health concerns affect spirits and liqueurs
A third have cut back on alcohol for health reasons
Sugar concerns serve as a barrier to liqueurs
Ageing population of the UK offers little support for spirits or liqueurs
Figure 23: Usage of dark spirits and liqueurs, by age group, July 2018
COMPANIES AND BRANDS – WHAT YOU NEED TO KNOW
The Famous Grouse loses ground in the whisky segment
Mixed results for Diageo brands
Premium and limited edition launches continue in 2018
Liqueurs continue to explore on-trend flavours
Marginal dip in advertising spend in 2017
Baileys is the most trusted brand, while Jameson has a traditional image
MARKET SHARE
Famous Grouse loses ground as blended whisky brands struggle
Figure 24: Leading brands’ sales and shares in the UK retail whisky market, 2015/16-2017/18
Figure 25: Leading distributors’ sales and shares in the UK retail whisky market, 2015/16-2017/18
Strong advertising support boosts Jameson
Jack Daniel’s and Jim Beam continue to benefit from the Americana trend
Captain Morgan sees further growth as dark rum’s success continues
Figure 26: Leading brands’ sales and shares in the UK retail dark/golden/spiced rum market, 2015/16-2016/17
Figure 27: Leading distributors’ sales and shares in the UK retail dark/golden/spiced rum market, 2015/16-2016/17
Authenticity focus boosts Havana Club
Halewood acquires Dead Man’s Fingers
Own-label loses ground in brandy/Cognac/Armagnac
Courvoisier capitalises on the premiumisation trend
Figure 28: Leading brands’ sales and shares in the UK retail brandy/Cognac/Armagnac market, 2015/16-2016/17
Figure 29: Leading distributors’ sales and shares in the UK retail brandy/Cognac/Armagnac market, 2015/16-2016/17
Baileys extends its lead in liqueurs
Summer weather fails to boost Pimm’s as competition heats up in gin liqueurs
Figure 30: Leading brands’ sales and shares in the UK retail liqueurs market, 2015/16-2017/18
Figure 31: Leading distributors’ sales and shares in the UK retail liqueurs market, 2015/16-2017/18
LAUNCH ACTIVITY AND INNOVATION
Premium spirits launches continue
Leading rum brands launch premium variants
Jura focuses on ageing and barrel types
Courvoisier launches Amazon-exclusive variant
Fettercairn relaunches with a 50-year-old whisky
Figure 32: Examples of premium dark spirits, 2018
Leading spirits companies pick up craft cues in packaging redesigns
Companies continue to release limited editions
High Commissioner focuses on its history with Heritage edition
Scotch whisky brand encourages people to decorate their own bottles
Rum brand puts the focus on its backstory
Other selected limited edition launches
Figure 33: Examples of limited edition dark spirits, 2018
Leading brands unveil limited edition packaging
Figure 34: Example of a dark spirit with limited-edition packaging design
Targeting the spring and summer months with seasonal editions
Figure 35: Examples of spring/summer-themed dark spirits and liqueurs, 2018
Whisky brands emphasize affordability
Whyte & Mackay describes 50cl version as response to Minimum Unit Pricing
Figure 36: Example of dark spirit with focus on affordability, 2018
New whiskies highlight sweet taste to attract younger consumers
Figure 37: Example of whisky positioned as an entry-level product, 2018
References to sweet taste could help to overcome taste objections
Liqueurs continue to explore on-trend flavours
Greenall’s gin extends into liqueurs
Figure 38: Examples of liqueurs in on-trend flavours, 2017-18
Baileys Almande goes on general release
Figure 39: Baileys’ dairy-free variant, 2018
Companies explore unconventional barrel types
Jameson adds whisky finished in craft IPA barrels to Caskmates range
Glenfiddich expands its Experimental range
Craft distillery collaborates with Royal Navy Museum on navy strength rum
Martell celebrates its historical ties with the US with bourbon cask expression
Figure 40: Example of dark spirit matured in unusual barrel type, 2018
Historical references used to project image of authenticity
Niche brands draw inspiration from various historical eras
The dark spirits return
Johnnie Walker extends its Ghost & Rare series
Figure 41: Examples of dark spirits with historical references, 2017-18
Major and smaller brands link with music
Own-label cream liqueurs offer competition for Bailey’s
Figure 42: Examples of own-label cream-based liqueurs, 2017
ADVERTISING AND MARKETING ACTIVITY
Marginal dip in advertising spend in 2017
Figure 43: Total above-the line, online display and direct mail advertising expenditure on dark spirits^ and liqueurs (sorted by 2017), 2014-18
Diageo remains the leading advertiser in 2017
Captain Morgan continues its focus on enjoyment
Personalised bottles promoted as a way for people to celebrate friendship
Haig Club encourages responsible drinking
Baileys looks to build associations with glamourous lifestyles
Baileys Almande adverts bring the indulgence theme to dairy-free
Pernod Ricard rises to second largest advertiser
Jameson promotes mixed serve for St Patrick’s Day…
…and introduces new Caskmates IPA
The Glenlivet presented as the definitive whisky
Leading whisky brands focus on their heritage and craftsmanship
Johnnie Walker lays open its production methods
Jack Daniels highlights its willingness to make the extra effort
Jim Beam emphasizes longer ageing
Maker’s Mark unveils its first UK campaign for 10 years
Various dark spirits brands promote meal pairings
Disaronno looks to build associations with glamorous lifestyles
Johnnie Walker and Glenfiddich bring a personalised aspect to whisky
Other selected campaigns
Tullamore Dew links blending whiskies with cultural diversity
Jägermeister draws on German mythology for Halloween campaign
…and continues its live music events
The Kraken releases spoof news report for April Fool’s Day
Bunnahabhain puts the focus on its local area
Nielsen Ad Intel coverage
BRAND RESEARCH
Brand map
Figure 44: Attitudes towards and usage of selected brands, June 2018
Key brand metrics
Figure 45: Key metrics for selected brands, June 2018
Brand attitudes: Baileys and Captain Morgan are the most trusted brands
Figure 46: Attitudes, by brand, June 2018
Brand personality: Baileys and Jägermeister score well on the fun factor
Figure 47: Brand personality – macro image, June 2018
Baileys is the most widely seen as delicious
Figure 48: Brand personality – micro image, June 2018
Brand analysis
Baileys is the most trusted brand
Figure 49: User profile of Baileys, June 2018
Chambord has something of a premium image
Figure 50: User profile of Chambord, June 2018
Jameson is associated with tradition and authenticity
Figure 51: User profile of Jameson, June 2018
Captain Morgan scores well on the fun factor
Figure 52: User profile of Captain Morgan, June 2018
Jim Beam has some associations with authenticity
Figure 53: User profile of Jim Beam, June 2018
Jägermeister is seen as fun and (somewhat) cool
Figure 54: User profile of Jägermeister, June 2018
Whyte & Mackay has a traditional image
Figure 55: User profile of Whyte & Mackay, June 2018
THE CONSUMER – WHAT YOU NEED TO KNOW
Half of UK adults drink dark spirits
Four in ten adults drink liqueurs/flavoured dark spirits
Scotch whisky tends to be chosen for relaxing at home, while dark rum and bourbon win for parties
Tasting sessions and recommendations are key means to drive trial
Ingredients and ageing are seen as key for premium dark spirits/liqueurs
Opportunities for premium dark spirits/liqueurs
Less sweet-tasting liqueurs have wide appeal
Winter bias in dark spirits drinking restricts usage occasions
USAGE OF DARK SPIRITS AND LIQUEURS
Half of adults drink dark spirits
Figure 56: Usage of dark spirits, by type, July 2018
Ageing population to hinder dark spirits
Men and the financially secure are higher users of dark spirits
A quarter drink three or more dark spirits types
Figure 57: Repertoire of dark spirit types drunk, July 2018
Single malt is as likely to be drunk with a mixer as other whisky types
People who feel knowledgeable about whisky are more likely to drink it neat
Figure 58: Ways of drinking dark spirits, by type, July 2018
Few drink dark spirits as part of a cocktail
Under-35s are particularly likely to drink cocktails and mixed drinks
On-pack recipes have prompted a third of drinkers to make mixed drinks/cocktails
Four in ten adults drink liqueurs/flavoured dark spirits
Figure 59: Usage of liqueurs and flavoured dark spirits, by type, July 2018
More women than men drink liqueurs…
…but flavoured dark spirits are more likely to be drunk by men
Ageing population will also hinder liqueurs
Cream-based liqueurs are the most likely to be drunk neat
Figure 60: Ways of drinking liqueurs/flavoured dark spirits, by type, July 2018
USAGE OCCASIONS FOR SELECTED TYPES OF DARK SPIRITS
Scotch whisky is the most likely to be chosen for relaxing at home
One in five under-35s drink Scotch whisky in nightclubs
Suggestions on menus would encourage out-of-home usage of Scotch whisky
Figure 61: Usage occasions for selected types of dark spirits, July 2018
Scope to encourage more dark spirits meal pairings
Dark rum and bourbon are the most likely to be chosen for parties
PROMPTS TO TRY A NEW DARK SPIRIT
Tasting sessions and recommendations are key means to drive trial
Figure 62: Prompts to try a new dark spirit, July 2018
Tasting opportunities should help to overcome many consumers’ risk-averse approach
Various options for tasting sessions in both the off- and on-trade
Friend/family recommendations trump those from drinks professionals
Various options to incentivise recommendations
Few people report being swayed by advertising
FACTORS SEEN AS DEFINING A PREMIUM DARK SPIRIT/LIQUEUR
Ingredients and ageing seen as key to a premium dark spirit/liqueur
Focus on ingredient varieties would help to build a quality image
Figure 63: Factors seen as defining a premium dark spirit, July 2018
Marketing underpins premium associations around longer ageing
People knowledgeable about whisky especially likely to prioritise ageing
Need for companies to explain the importance of barrel types
BEHAVIOURS RELATING TO DARK SPIRITS AND LIQUEURS
Opportunities for premium spirits to benefit from moderation trends
Own-label should be as well-placed to benefit as brands
Figure 64: Behaviours relating to dark spirits and liqueurs, July 2018
Further information on dark spirits is wanted by many
Subscription services would speak to consumer desire for information
Four in ten users are influenced by provenance information
Further details on sourcing would give differentiation and build trust
Figure 65: Example of dark spirit highlighting provenance, 2018
Liqueurs in on-trend flavours have wide appeal
Strong interest in less sweet-tasting liqueurs
Vegetable flavours would appeal to the interest both in on-trend flavours and in less sweet-tasting products
Figure 66: International examples of liqueurs with vegetable flavours, 2016-18
DARK SPIRIT DRINKERS’ BEHAVIOURS
Majority of drinkers say that they know the difference between whiskies
Concerns about blended whisky are highest among people who know the difference between whisky types
Figure 67: Dark spirit drinkers’ behaviours, July 2018
Winter bias in dark spirits drinking restricts usage occasions
Promoting use in seasonal cocktails could help to encourage year-round drinking
APPENDIX – DATA SOURCES, ABBREVIATIONS AND SUPPORTING INFORMATION
Abbreviations
Consumer research methodology
APPENDIX – MARKET SIZE AND FORECAST
Forecast methodology
Figure 68: Forecast of UK sales of dark spirits and liqueurs, by value, best- and worst-case, 2018-23
Figure 69: Forecast of UK sales of dark spirits and liqueurs, by volume, best- and worst-case, 2018-23
Figure 70: Forecast of UK sales of whisky, by value, best- and worst-case, 2018-23
Figure 71: Forecast of UK sales of whisky, by volume, best- and worst-case, 2018-23
Figure 72: Forecast of UK sales of dark rum, by value, best- and worst-case, 2018-23
Figure 73: Forecast of UK sales of dark rum, by volume, best- and worst-case, 2018-23
Figure 74: Forecast of UK sales of brandy/Cognac/Armagnac, by value, Best- and worst-case, 2018-23
Figure 75: Forecast of UK sales of brandy/Cognac/Armagnac, by volume, Best- and worst-case, 2018-23
Figure 76: Forecast of UK sales of liqueurs, by value, best- and worst-case, 2018-23
Figure 77: Forecast of UK sales of liqueurs, by volume, best- and worst-case, 2018-23
Figure 78: Total volume sales of dark spirits and liqueurs, 2013-23
Figure 79: Total volume sales of whisky, 2013-23
Figure 80: Total volume sales of dark rum, 2013-23
Figure 81: Total volume sales of brandy/Cognac/Armagnac, 2013-23
Figure 82: Total volume sales of liqueurs, 2013-23
APPENDIX –ADVERTISING AND MARKETING ACTIVITY
Figure 83: Total above-the line, online display and direct mail advertising expenditure on dark spirits^ and liqueurs (sorted by top three advertisers in 2017), 2014-18
APPENDIX – USAGE OF DARK SPIRITS AND LIQUEURS
Figure 84: Ways of drinking dark spirits (nets), July 2018

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