Subscriber login Close [x]
remember me
You are not logged in.

Premium brands on top, finds First Drinks Market Report

Published:  19 July, 2013

Premium drinks brands are outperforming the rest of the sector, according to the third Market Report published by First Drinks.

It reveals that premium brands are up up 18%, compared with only 2% growth for total alcohol sales.

The report is further evidence that despite the recession and continued hard economic times, consumers are looking for quality drinking experiences both in the on and off-trade. There are still great opportunities for companies and drinks brands that really understand consumers and shoppers.
Key trends in the report include:

? Changed values and perceptions as a result of austerity - A prolonged recession has forced a change in spending habits. People are placing more importance on experiences rather than possessions and premium brands are well placed to deliver the kind of high-quality experiences people are looking for

? Greater desire and search for quality brands - Consumers have become hugely skilled at hunting out quality brands and experiences at affordable prices. This has been helped by discount voucher websites with an estimated two-thirds of people using them in the past 12 months when eating out

? The spirit for nostalgia - In times of recession, people tend to look back with a sense of nostalgia. The trend for rediscovering old skills and craftsmanship continues to grow, with particular emphasis on recreating drinks from the early 1900s and Prohibition era. Speakeasy-style dive bars serving classic cocktails that have stood the test of time are also becoming popular across the country

? Impact of e-commerce and social media - Mobile technology has opened up new opportunities for brands to engage with their consumers. Now 78% of consumers share their experiences via social media so brands need to understand how this disrupts the traditional path to recommendation and harness the power of word of mouth. This offers great opportunities for BWS brands

? The changing on-trade environment - Going out is one of the biggest cut-back areas. However, when people do go out they want a quality experience, with 51% looking for new products and services. Nearly half (47%) also look for novelty and fun, with many bars now appreciating the need to be innovative with their serves and menus

? The growth of the café bar - Café bars continue to grow in popularity due to their chameleon offering which appeals to a wide consumer base

? The perfect serve - The continued growth in cocktails has created a thirst for unique serves, creative innovation and consumer experimentation. As a result, drinkers have increasingly high expectations and quality has never been more important

? The changing off-trade retail environment - With the multiples all price matching and being increasingly competitive, more emphasis has had to be placed on the in-store shopping experience. The duty escalator also continues to encourage brand owners to introduce smaller formats to deliver spirits at an affordable price point

? Gifting is a key focus for the spirits category with one in three purchases being a gift; alcohol gifting is now estimated to be worth £572 million

? Prestige - An influx of foreign wealth, particularly in London, has presented a tremendous boost to the high-end off-trade market. These shoppers appear to have a seemingly insatiable demand for aged whiskies and Cognacs, with specialist shops reporting significant sales growth

? Convenience - With £10 billion predicted growth over the next five years, convenience continues to grow as an important trading channel. Spirits penetration within convenience is low, so the opportunity for growth is significant. Fractionals, seasonal events, versatility, gifting solutions and premium growth are identified as the key drivers in convenience

? Multi-channel retailing - Traditional big-store retailing is evolving to meet the changing needs of shoppers. Convenience stores, discounters, online and mobile have all been added to the repertoire of today's shopper and this move is known as multi-channel retailing. The winning retailers will be those that take the multi-channel approach connecting with their shoppers across multiple touch points
Premium spirits key facts:
? Two-thirds of consumers are willing to pay more for a unique serve
? 67% of spirit drinkers agree that spirits are one of life's luxuries
? Premium spirits are worth £475 million in the on-trade, up 25%
? Premium spirits are worth £221 million in the off-trade, up 4%
? The key premium spirits categories are malt whisky, Cognac and premium gin.

Chris Mason, managing director for First Drinks Brands, said: "We are delighted to be launching our third annual market report. As the recession continues to play out, it is important to have an in-depth understanding of consumers and shoppers, their changing habits and how they are adapting. As such, premium suppliers like ourselves need to work hand in hand with on and off-trade retailers to ensure we are delivering tailor-made, creative solutions to satisfy consumers."

He added: "With our portfolio of premium brands, our dedicated team of industry specialists across category management, customer and brand marketing, and specialist customer sales forces, we are in a great position to work with our customers to deliver sustainable value growth."

Keywords: