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Diageo aims to unlock growth in spirits category

Published:  23 July, 2008

Leading drinks company Diageo GB is looking to raise its spirits after research revealed the "potential to unlock major growth within the UK spirits category".

Diageo GB claims many millions of pounds could be added to the value of the spirits category through a five-point blue print it has produced.

The research identifies five defined drivers that will attract new consumers by giving the trade guidance on the best ways to promote spirits.The initiative will also underpin how Diageo GB markets its brands in future.

Russell Jones, Director of Category Development at Diageo GB, said: "'Raise Your Spirits' is our blueprint for growing the spirits category in Great Britain (GB).

"Total consumer spend on spirits is already 6bn, but there is still a massive opportunity for growth. It's a profitable category and as a company that is fortunate enough to possess some of the world's greatest spirit brands, we are in a great place to share our insight with the trade.

Promoting spirits

"We're confident that if all involved in the selling of spirits put the five drivers at the core of how they merchandise and promote spirits, the reward will be significant," he said.

The five platforms for growth:

1. Build everyday relevance: By increasing the number of occasions that consumers are enjoying spirit and mixer drinks, 110m of incremental profit can be unlocked from the category. Building everyday relevance aims to promote spirits as a great-tasting drinks option for informal occasions, and will be highlighted through a 3m above-the-line category communications campaign as well as cross-brand and category promotions.

This year Baileys Irish Cream, a brand that in the past has predominantly been associated with Christmas, extended its advertising to Easter and Mother's Day, highlighting further occasions and times when it can be enjoyed.

2. "Confident mixing" focuses on providing consumers with easy solutions to make their favourite spirit and mixer, and could add as much as 105m incremental profit to the spirits category.

Diageo GB advises retailers to merchandise the ingredients of a spirit and mixer serve together, such as putting vodka next to cola and cranberry, so shoppers can easily grab both whilst in the aisle. This can be further extended to include garnishes and ice.

3. Seasonality: The opportunity for spirits is to use their versatility to better tap into this existing consumer behaviour. Last Christmas for example, Diageo GB supported retailers with merchandising solutions across the beer, wine and spirits aisles focused around the occasion. Consumer research from previous Christmas periods has shown that the BWS aisles in the past have lacked a 'Christmas' feel.

Diageo GB's category research has shown that there is an opportunity to further extend seasonality through the year, with an incremental 50m value that could be added to the spirits category.

This May, Diageo GB announced its multi-million pound 'Refreshing Tastes for Summer Days' campaign, which will run throughout summer across a selection of spirit brands including Smirnoff vodka and Gordon's gin and includes menu collarettes containing a guide to summer drinks.

4. Regulars buy better: Diageo GB's recommendation for segments such as blended whisky and brandy occasions is to educate those who regularly purchase spirits about the value available from quality brands, trade them up to more premium options and encourage them to try something different to their usual drinks repertoire.

"We believe there is a 200m opportunity for incremental sales within the spirits category through encouraging consumers to trade up," said Jones. "It seems counter intuitive that those consumers who purchase spirits most frequently tend to spend less each time than those buying spirits less frequently!"

5. 365 gifting: Whilst consumers can find gift-packs at Christmas and Father's Day, Diageo GB's focus on gifting will now look at year-round gifting occasions. These will provide consumers with the option of choosing well-packaged spirits for everyday opportunities such as a farewell or thank you gift for a work colleague, or the last minute dash to a birthday dinner.

Target markets

"The five platforms for growth are aimed at different target markets and touch different brands across the spirits category - not just our brands.

"This gives retailers greater flexibility at implementation level. Our sales team will be working with customers to define which occasions are more predominant with their outlets' core customer base and how to capitalise on the spirits opportunity to unlock further growth," he said.