Cheers to a positive end to 2020!

gin and tonic

It’s been a year of highs and lows but whether shoppers are celebrating or commiserating this Christmas, they’ll be doing so with some Christmas drinks. SLR takes a look at what they might be looking for…


Let’s face it, 2020 has been a shocker. But with a vaccine on the way and Christmas just around the corner, there’s a good chance that many shoppers in Scotland will be planning to cut loose a little this festive period. The purse strings might get loosened a little and with the convenience channel more popular than ever and MUP ensuring the supermarkets can’t undercut local retailers, there’s every chance that this could be a bumper sales period on the drinks front.

To help retailers focus on where shoppers might be encouraged to spend a bit more this Christmas, we have highlighted a number of key trends and sales and profit opportunities…

Gifting

The old Christmas favourite, gifting is a massive opportunity because nobody wants to be seen to be offering value brands as gifts, do they? Premium all the way.

“There is a real opportunity for the local retailing channel in last couple of weeks before Christmas to become a destination for key festive categories such as whiskey and wine,” says Chris Shead, Pernod Ricard UK (PRUK) Off-Trade Channel Director.

Independent research by PRUK identified gifting as amongst the main reasons for spirit purchases at Christmas, with 48% of people buying alcohol as a gift last year. Gin, Vodka, Irish Whiskey and Wine have always been important categories at Christmas, however, growth has accelerated in these sectors in 2020 and are the four key categories that have seen exponential growth, particularly during the lockdown period.

When it comes to gifting, premium brands play the lead role and space should be allocated to key categories that are in growth, displaying both a core range as well as flavoured variants, particularly as flavoured Gin is the No.1 value contributor in impulse [Nielsen, Mar 2020].

Hannah Dawson, Head of Category Development, Off-Trade at Diageo agrees: “People naturally gravitate towards products they know and trust for great quality and taste. Especially as people are currently spending less time in stores, there is less time to browse fixtures – therefore it’s all the more important to ensure retailers that the drinks range includes a number of popular brands to aid instore navigation and help guarantee sales.”

Spirits

As highlighted above, PRUK is encouraging retailers to focus on four key categories including Gin, Vodka and Irish Whiskey. Why? Gin has continued double-digit growth for the past 12 weeks and is growing faster the nearer Christmas comes, Vodka is the second biggest value contributor in Total Spirits after flavoured gin and Irish Whiskey is the second fastest growing category behind Gin.

PRUK’s Shead advises retailers that Beefeater gin is a must-stock (growing +63.6% in value) while Plymouth is also back in growth in the off-trade (+19.9% by value) with MALFY a great addition to any flavoured gin range.

As for vodka, Absolut holds the majority of Premium+ vodka category sales in the off trade (56% share) and is growing at 27.4%.

Meanwhile, Jameson is the UK’s number one Irish Whiskey brand and is seeing a significant performance in the off-trade (+25.1% by value) and growing three times faster than the Total Whisky category (+7.1%).

Hannah Dawson of Diageo broadly echoes those sentiments: “Gin is driving the biggest growth in spirits with flavoured variants making up 45.8% of total value share MAT. Gordon’s SKUs in particular currently occupy the top eight spots in the impulse channel. Cross-merchandising spirits with premium mixers can also inspire customers to try something new.”

Dawson highlights luxury vodka Cîroc as a key tool in unlocking the big night in occasion this Christmas: “The big night in occasion will be key and Cîroc’s share of total vodka sales typically spikes during Christmas as it is known as a spirit for shared consumption. There’s an opportunity to showcase premium and super premium ranges on shelf this festive season as people look to treat themselves. Flavours are a key driver of brand appeal and differentiation among all Cîroc buyers in the convenience sector.”

Seltzers and RTDs

A newish sub-category that could spring to life this Christmas is hard seltzers, with major brands like White Claw, Budweiser and Smirnoff and helping grow the category. Another entrant into the hard seltzer fest is beer giant Molson Coors.

Andrew Lawrence, Sales & Operations Director for Scotland at Molson Coors, says: “Hard seltzers are low-calorie alcoholic sparkling water drinks often infused with fruit, which come in ready-to-drink formats. They can help retailers to appeal to more health-conscious shoppers, meeting the demand for lighter alcohol options without compromising on taste. Having been a huge hit with consumers to date, it’s an exciting segment of the market and is certainly one to watch moving forward.

“The hard seltzer market is in a period of significant growth in the US, where sales topped more than $1.5bn in retail last year and saw growth of 215%. While it’s still early days in Europe, we’re expecting the hard seltzer category to follow a similar pattern to the US, and it presents a strong growth opportunity for Scottish retailers moving forward.”

Molson Coors has gotten in on the act thanks to a partnership with Miami Cocktail Company to roll-out its range of award-winning, hand-crafted organic cocktails in stores in Scotland and across the UK.

The brand fulfils consumer demands for less calories and more natural ingredients that are increasingly becoming key drivers of purchasing decisions. “We expect it to be a popular choice with Scottish shoppers looking to enjoy cocktails at home and on-the-go as we move into 2021,” says Lawrence.

The company also announced an exclusive distribution partnership with Bodega Bay earlier this year which saw the launch in the UK of the California-inspired brand made with natural ingredients and containing just 72 calories, with no added sugar, artificial flavourings or colours. Variants include Elderflower, Lemon & Mint and Apple, Ginger & Acai Berry.

Echo Falls also launched its first ever Rosé Seltzers in August to appeal to consumers looking to moderate their alcohol consumption and to capitalise on the category’s continued growth.

Low and No

With alcohol-free drinks now definitely a ‘thing’ in convenience, sales of low and no alcohol products have consistently grown and the category is now taken seriously in many stores.

Again, Molson Coors has been working hard in the category, as Lawrence explains: “We recently expanded our low and no alcohol portfolio with the launch of Doom Bar Zero, the UK’s first widely available 0.0% ABV amber ale. It retains a similar flavour profile and stays true to the style of the successful Doom Bar brand while achieving 0.0% alcohol – significantly more difficult to brew than 0.5%.

“Bavaria 0.0% continues to be a popular choice while our Cobra Zero also lets consumers enjoy the much-loved taste of Cobra without any alcohol. Our Rekorderlig Alcohol-Free Strawberry & Lime cider provides an option for those looking for different flavours, with light fruity notes making it a perfect choice for those with a sweeter tooth.

“We recommend creating a distinct low and no alcohol section as part of retailers’ existing alcohol range, so that they are easy to find and will catch the eye of beer and cider fans who are looking for something different. It is also important to have a good selection of chilled no and low alcohol options that shoppers can pick up and enjoy straight away.”

Since launching four years ago, Diageo’s Seedlip brand has earned a loyal following due to its commitment to offering the highest quality non-alcoholic options to consumers. The Seedlip range is now poured in the top 50 bars in the world and is performing well in the off-trade too.

Accolade Wines launched Echo Falls Botanicals in May 2020 to cater to the current consumer trend in botanicals, driven primarily by Gen-Z and Millennial audiences. Research has shown that 73% of No/Low drinkers buy wine and, at 5.5% ABV, so Echo Falls Botanicals caters to the consumer demand for fruitier and sweeter wine styles with a lower ABV intake. Served in a 750ml/75cl bottle, the line is available in two contemporary flavours: Melon & Mint and Raspberry & Lavender.

Wine

According to PRUK’s Chris Shead: “Wine momentum is building as more consumers enjoyed wine at home, as opposed to in pubs and bars, during the Covid-19 crisis and the off-trade has seen +12.5% value growth and +8.9% volume growth. PRUK is ramping up investment in this category and can claim the #1 red wine and #2 white wine in the UK with Campo Viejo and Brancott Estate respectively, making these must-stock brands this Christmas.”

For Accolade Wines’ Head of Category and Insight – Europe, Norbert Jozsa, this Christmas will also see sustainability become a much more important issue for shoppers, and thus retailers. He says: “Sustainability is a key focus for us, and this year we announced that our core branded portfolio – including Hardys, Mud House, Jam Shed, Banrock Station, Echo Falls and Kumala – has been certified carbon neutral, with the aim to complete 100% portfolio neutrality by the end of 2020.

“We know that there is demand from shoppers for greener products, with 62% of consumers saying they want to buy from sustainable brands, and the wine category is no different.”

Beer

Among the most critical element to get right in the beer category this Christmas is pack sizes, as Diageo’s Dawson highlights: “Pack sizes are a hugely important factor to consider, especially in the beer category. Recent data has demonstrated that bigger pack sizes are driving growth in the beer category, with value sales of 12- and 10-packs up by 13% and 9% over the last six months. It will be important to stock a variety of pack formats that lend themselves to a range of occasions, such as gifting and stocking up for the ‘at-home occasion’ – this will also encourage customers to increase basket size and provide them with more choice.”

Soft drinks and mixers

Offering a strong soft drinks and mixers range over Christmas will, of course, be vital to help drive basket spend and footfall, particularly in the last few days before the big day. Amy Burgess, Senior Trade Communications Manager at Coca-Cola European Partners (CCEP), says: “A whopping £6.2bn went through grocers’ tills in the final two weeks before Christmas in 2019, demonstrating what a huge opportunity the Christmas top-up is to retailers. We expect this trend to continue again this year, with 72% of shoppers planning to do their shopping in the final two weeks before Christmas in 2020, and nearly two-thirds intending to pop to the shops between 20th and 23rd of December.”

Mixers and adult soft drinks will be particularly important, says Burgess, and retailers should be ready to capitalise on these last-minute sales opportunities by ensuring they are well-stocked with sharing pack formats of best-selling lines like the Coca-Cola range and Schweppes Mixers. “It’s also worth focussing on chilled soft drinks for shoppers looking to enjoy their soft drinks straight away,” she adds.

She also flags up Appletiser as a great non-alcoholic option to offer to customers and highlighting its uesfuleness as a mocktail base.

Meanwhile, Matt Gouldsmith, Channel Director, Wholesale at Suntory Beverage & Food GB&I, suggests Ribena as a great brand to help grow sales this Christmas: “Ribena’s heritage and brand equity – as the fourth most popular beverage brand in the UK – is well placed to help Scottish retailers drive sales this festive season with the introduction of new sparkling drinks.”

Ribena Sparkling is now available in two flavours across three formats. Ribena Sparkling Blackcurrant comes in 500ml, 2L and 6x330ml multipack cans, while Ribena Sparkling Raspberry is available in 500ml and 2L formats.

Flavoured carbonates have seen amazing growth of 7.1% recently, and they also have one of the highest penetrations of any soft drink category at 81%. Four out of five of those buyers consume flavoured carbs at least once a week.

Gouldsmith says in-home occasions for carbonated soft drinks grew 40% during the first national Covid-19 lockdown period as shoppers embraced more ‘drink later’ drinks, meaning there’s a real opportunity for the right brand to drive excitement for shoppers as they spend time indoors with their families through this winter season and more so at Christmas.”

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