As at home consumption rises, SLR speaks to industry experts on what ready to drink offers are essential and on the rise in the Off-Trade sector.
by Iain Hoey
Traditional RTDs continue to be must-stocks for licensed retailers, generating £27.4m worth of sales for Scotland’s retailers (Nielsen data), and developments in flavours and formats have helped maintain an interest in the sector. The alcohol shelves have seen notable growth of pre-mix cans and bottles of spirits and mixer, and frozen ready-made drinks. The latter is a surprise hit, accounting for big seasonal sales and proving that the category is dynamic and moving with the times.
A key demographic for RTDs are 18-24 year olds, according to SHS Drink’s research, which WKD sees as an opportunity to attract a new generation of customers, aiming to attract one million new drinkers and generate £38m of incremental sales in the category. The brand plans to drive these sales with a reinvented packaging which will be seen on Original Blue WKD, WKD Iron Brew, new WKD Berry and WKD Passion Fruit, which are all available to c-stores.
The 18-24 year olds are also the most impulsive, according to the research, which is down to the ability to plan a social gathering at the touch of a button, which makes c-stores a mission-shopping destination for last-minute alcohol purchases.
Value for money is a key sales driver in every category and RTDs are no different, with price-marked packaging signposting this for consumers. “PMPs have been one of the major growth areas within the RTD category in the impulse sector in Scotland – sales of PMPs increased around 40% both in volume and in value in 2016, and the growth is likely to continue this year,” says Amanda Grabham, Head of Brand Marketing – Alcohol at SHS drinks.
SHS shows that a large proportion of RTD drinkers drink with friends for a night in on average once a week, with most being consumed on Friday and Saturday evenings, and so Grabham urges retailers to make sure there is plenty of stock in the chillers for these peak occasions.
Mix it up for summer
“We’re definitely seeing a continuing trend for pre-mixed drinks,” says Claire Kendall, Senior Customer Category Development Manager at Diageo, highlighting its growth of 14%, higher than beer, wine and cider in the impulse category. With summer on the horizon the trend looks to continue with launch by Diageo of a full range of six £1.50 price-marked RTD cans across the Gordon’s, Smirnoff and Captain Morgan brands.
Recent research has shown that price-marked pack sales are 50% ahead of plain pack, so retailers should stock up now to cash in. Kendall emphasises the importance of keeping the lines cool. “Over 50% of alcohol purchased in a convenience store is for consumption on the same day, so conveniently packaged products are perfectly suited, particularly when stocked in the chilled area.” Diageo’s bestselling RTDs are, Gordon’s gin and tonic, Pimm’s & Lemonade and Captain Morgan & Cola.
Some 90% of RTDs are consumed within two hours of purchase, so maintaining good stocks of chilled product is critical. Retailers should focus on stocking top sellers, but where the space is available Kendall recommends that stores should increase their range, but also keep ahead of trends by trialling new products, which delivered £5m to the market in the past year (Nielsen data).