UK spirits market is "more polarised than ever" says new William Grant & Sons report

The branded spirits market is "more polarised than ever" and offers big opportunities for premium brands, according to the latest business report from William Grant & Sons UK, formerly know as First Drinks.

"The market is more polarised than ever and it is premium brands which can really take advantage of this trend. Value can mean many things from functional benefits to packaging and personality," said Gary Keogh, marketing director of William Grant & Sons UK.

Its report suggests consumers' perception of value and what it means to them is changing, particularly for premium products. Long gone are the days of value being defined by price alone, it states.

"The growth of scarce and desirable products is growing in popularity as consumers are being exposed to more and more choice. Other forms of scarcity are emerging in importance such as access to unusual experiences and knowledge. Seeking out something that is limited or unique in the way it is crafted, is increasingly common. This remains especially relevant for premium brands in the drinks sector," according to the report.

Chris Mason, managing director of William Grant & Sons UK, added: "As this report concludes, premium brands are extremely well placed to benefit from the trends the market is experiencing. This is why building premium brands that consumers desire is core to our business.  It is these higher-end spirits which can offer more in terms of value, to appeal to the consumer.  In the year ahead we aim to work even more closely with our customers to deliver premium experiences - be they online, in-store or in outlet.

The on-trade may have to cope with a decrease in the frequency in which people go out, but when they do their spend is going up, particularly among spirits. Spirits are the second largest drinks category in the on-trade, accounting for 18% of value sales. Premium sprits in the on-trade are up 13.7% by value in a category that is worth, in the on-trade, £5.4 billion up 5.1%. The report claims that 79% of drinkers consider spirits while drinking out.

William Grant & Sons UK On-trade spirit figures

In the off- trade, people are slower to adopting change, however people are willing to pay more if the category is perceived to be premium. According to the report, "shoppers will pay above expectations for categories viewed as more premium such as malt whisky and Cognac." Still consumers are still driven by promotional sales in the off-trade;  "90% of shoppers will visit the main spirits aisle after seeing promotion shelves to validate their decision and ensure they are getting value for money."

William Grant & Sons UK Off- trade spirit figures

Malt whisky and golden rums, both considered more premium products, have done exceedingly well  in both the on and off-trade.  Malt whisky grew 22% by value in the on-trade and 6% in the off-trade, according to William Grant & Sons figures.  Equally golden rum grew 8% by value and 6.1% by volume in the on-trade, and 15.5% by value and 12.4% by volume in the off-trade.

Gifting

The report looked at the gifting opportunity for spirits:

• 68% of Scotch malt whisky shoppers are purchasing the category as a gift
• 73% of people have purchased an alcohol gift in the past year - of these, 51% of shoppers have bought spirits as a gift
• 40% of spirits gifts are Scotch whisky
• 29% of total spirits category value sales are purchased with the intention of gifting, estimated to be worth over £1bn per annum
• When purchasing gifts, shoppers are willing to trade up by an average of 11% versus their standard purchase

Global luxury wine and spirits as a whole is now a £45 billion business, says the report with the high-end on and off-trade channels becoming increasingly important for premium spirits.

* For more information on the report go to a special page set up by William Grant & Sons. 

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