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More segmentation around Christmas needed as trading up accelerates

Published:  27 August, 2019

Pernod Ricard is encouraging retailers and on-trade operators to think about Christmas in a series of moments and occasions that run throughout October, November and December, with different opportunities at different points through the three-month period.

Christmas can no longer be thought of as a “12-week block”, representatives of the French company said, but a series of accelerating opportunities that can be used in order to encourage consumers to trade up.

This begins with “pantry-loading” and stocking up in mid-October, and runs through the beginning of gifting purchasing season in mid-November, all the way to Christmas Day and New Year, where premium products really come into their own.

Pernod Ricard also identified new occasions such as “popping in” – where people start to make casual visits to friends and family armed with bottle of wine, and increasingly, gin.

“Christmas doesn’t work the same all the way through the Christmas period,” Chris Ellis, commercial director, Pernod Ricard UK, said at its Christmas briefing last Thursday. “Towards Black Friday at the end of November, that’s when it's important to think about how to get gifting right. Then, once Christmas parties start on December 1, which are really important for the on-trade, we’re seeing an occasion developing around ‘popping-in’. This isn’t necessarily a gift, but something that’s part of the overall occasion.”

As people become “increasingly convivial from Christmas parties and gifting purchasing which begins around mid-November”, how retailers and on-trade operators tailor their offering around “building occasions” is really important, Ellis added – with increasingly significance placed on gin.

“Research shows that this year, 44% of consumers would give gin as a gift. That’s a big difference to a few years ago when gin wasn’t a gifting option – that was more whisky,” he said.

The view on segmentation is part of an over all message to the trade on keeping premium wheelhouses well-stocked, as consumers become increasingly inclined to spend more for “better-tasting drinks” drinks during the last quarter of the year.

According to Pernod Ricard’s on-trade channel director, James Bremner, average price rises begin to really kick in with Christmas parties from December 1 onwards, through to Mad Friday (the last Friday before Christmas) when cocktails come to the fore.

Even typically off-trade focused occasions like Black Friday can throw up opportunities for bars and restaurants.

“Although Black Friday is very much an off-trade play, last year we saw Be At One offering free cloakroom space for consumers’ shopping bags, which is a real example of an operator thinking about how to [firstly] capture footfall, then ‘how do I trade them up through the experience?’” he said.

This feeds directly into Pernod Ricard’s objectives for making Christmas 2019 better than 2018, which is all about getting consumers to “come into my venue, come back, stay for longer and spend more”.

“Coming back is about giving them a great experience and making sure the touch points are right – great drinks and convivial moments that mean they leave having had a different experience, and premium products that allow them to have best quality experience available,” Bremner said.

“Over a third of consumers are willing to pay more to get a better quality drink at Christmas, and 43% consider themselves to spend more on drinking out during the festive period than the rest of the year. If the offer is right, we can absolutely capture more value during that time,” he concluded.

Top photo shows Max Warner, brand ambassador, Havana Club Iconica Collection