After a restricted and low-key Christmas last year, shoppers are expected to prepare for bigger and better in-home celebrations this time around, creating a big sales opportunity in the wines and spirits market.
Following the hasty curtailment of Christmas celebrations in 2020, Christmas 2021 is all set to be a huge occasion, and possibly the biggest sales season yet for the take-home drinks industry.
The ongoing pandemic has brought about a huge shift in purchasing patterns and consumer behaviour in the wines and spirits categories, and celebrating and entertaining at home is likely to remain high on the agenda as we move into the Christmas period.
Here’s SLR’s take on some of the key trends to get behind in the category in order to take full advantage of the big sales opportunities.
Xmas Trend 1 – Premium spirits
Last year, premium drinks grew by 27.4% in value in the off-trade, says Diageo.
Hannah Dawson, Head of Category Development, Off-Trade, says: “As consumers still look to create memorable experiences at home, it remains important for retailers to help them do this by ensuring a good stock of premium drinks brands. Retailers may want to consider how to respond to the rising demand for the at-home cocktail occasion, for example.”
She continues: “Last year, gin drove the biggest growth in spirits with flavoured variants making up 45.8% of total value share, therefore, offering the right choice through range is important to driving sales this Christmas.”
Retailers should also consider the importance of premium spirits as Christmas gifts, notes Dawson.
“At Christmas, malts and whiskies prove popular as they make great gifts for family and friends,” she adds. “Therefore, retailers would benefit from stocking whiskies at various price points.”
Xmas Trend 2 – Strong wine brands
The lockdowns of 2020 led to a record year for sales of wine in the take-home sector, totalling £1.8bn, according to Accolade Wines.
Tom Smith, Marketing Director – Europe, says: “With many of us having to change our Christmas plans to the reintroduction of lockdown restrictions, both food and drink categories benefitted from home-centric celebrations.
“This year looks to be more promising and bigger than ever. With many feeling like they ‘missed out’ last year, we expect there to be an increase in smaller, everyday celebrations in the run-up to the big day, with wine and sparkling playing a key role.
“What is clear is that brands remain important and are key to attracting people to the category, offering familiarity and trust. Christmas Day will see a greater emphasis on celebrating and treating. For some, that means trading up to premium options, whilst for others, it may be an extra bottle of their everyday favourite, so it’s important to remember tiering and pushing big brands alongside premium options.”
Hardys was the number one Christmas wine in 2020 and is now worth £173m, according to the company. This festive season, Hardys will continue to capitalise on its Certainty campaign both in-store and through its marketing and social campaigns, highlighting the reputation of the brand based on more than 165 years of wine making and over 9,000 global awards.
Xmas trend 3 – Mixing it up
Martin Attock, Vice President, Commercial Development at CCEP GB, says: “We know many people are planning a bigger Christmas this year. While many will embrace the return of the hospitality sector this Christmas, many at-home habits have been formed over the last 18 months which suggests more social occasions will take place in the home. This presents retailers with an opportunity to drive sales of mixers like Schweppes, the no.1 mixer brand in retail, by tapping into occasions like parties, nights at home with family and friends and also gifting.”
Xmas trend 4 – Low/no alcohol
Tom Smith, Marketing Director – Europe, at Accolade Wines predicts: “We believe there will be more of a focus on moderation. As a result, we expect the importance of no/low alcohol products to increase around Christmas, with sales projected to rise 31% by 2024.”
Within the premium spirits category, alcohol-free variants are now a key trend, according to Hannah Dawson, Head of Category Development, Off-Trade, at Diageo.
She comments: “Earlier this year we were proud to tap into the popular gin flavour profile and launch the new Gordon’s 0.0% and Tanqueray 0.0%. Crafted using the same distinct blend of quality botanicals available in Gordon’s London Dry Gin and Tanqueray London Dry Gin, we wanted both innovations to show that you don’t have to compromise on taste or experience if you choose not to consume alcohol.
“Since entering the market, Gordon’s 0.0% experienced a huge surge in demand and quickly became the top selling alcohol-free spirit in the off-trade within four weeks (Nielsen Scantrack).”
Xmas Trend 5 – Sustainability
Sustainability is going to continue to be a key issue for consumers across all categories this Christmas, and the Scotch Whisky industry revealed the progress achieved within its ambitious Sustainability Strategy as the COP26 event got underway in Glasgow.
The Scotch Whisky Association (SWA) revealed the sector has cut greenhouse gas emissions by more than 50% since 2008, while the latest data also details that 39% of all energy used by producers is obtained from non-fossil fuel sources, compared to 28% in 2018. Energy efficiency in distilleries improved by 13% since 2008 against a 2020 target of 7.6%.
Collaboration, sharing of knowledge and expertise, and harnessing innovative technologies have been key in achieving these successes, according to the SWA.
SWA Chief Executive Karen Betts said: “These are very encouraging figures to release as the Scotch Whisky industry continues on its journey to net zero. We still clearly have progress to make, but we are determined to reach our 2040 net zero target across the whole industry, not least as the future of one of Scotland’s most historic and successful industries depends on it, as do the people we employ and the communities in which we are based.”
In September the SWA become Scotland’s first trade association, and the UK’s first food and drink trade association, to be recognised as a Race to Zero partner.
As well as cutting greenhouse gas emissions, the industry has pledged to use water responsibly, ensure by 2025 all new packaging will be reusable, recyclable or compostable, and play an active role in the wider conservation and restoration of Scotland’s peatland.