White Spirits and RTDs - UK - November 2013

INTRODUCTION
Definition
Abbreviations
EXECUTIVE SUMMARY
The market
Figure 1: Forecast of UK value sales of white spirits and RTDs, 2008-18
Figure 2: Forecast of UK volume sales of white spirits and RTDs, 2008-18
Market factors
Alcohol consumption is in decline
Rising prices are a threat to continued growth
Population changes entail threats and opportunities
Dark spirits and liqueurs are well placed to tap into many drinking occasions
Companies, brands and innovation
Figure 3: Value sales of top-selling white spirit and RTD brands in the off-trade, 2012/13
Flavour innovation continues to drive NPD
White spirits adspend falls away
The consumer
Vodka remains the most popular white spirit
Figure 4: Usage of white spirits and RTDs, September 2013
Trusted brand name and value for money drive choice
White spirits thrive in the on- and off-trade
Figure 5: Locations for drinking white spirits and RTDs, September 2013
White spirits and RTDs hold very different images
Mixability is a competitive advantage for white spirits
Figure 6: Users' attitudes towards white spirits, September 2013
RTDs’ associations with younger drinkers remain entrenched
What we think
ISSUES IN THE MARKET
How can spirit brands build standout in the market?
What are the risks associated with flavour innovation?
Can tequila finally break through in the UK?
How can the RTDs market arrest its decline?
TREND APPLICATIONS
Trend: Influentials
Trend: Cool Vending
Mintel Futures: Access Anything, Anywhere
INTERNAL MARKET ENVIRONMENT
Key points
Taxation on alcoholic drinks on the rise
Figure 7: UK excise duty rates for selected alcoholic drinks, 2003-13
Figure 8: Index of alcoholic drinks versus all items prices, 2006-12
White spirits/RTDs are well placed to tap into a variety of occasions
Figure 9: In-home and out of home drinking occasions, April 2013
Bridging the gender divide
Figure 10: Usage of white spirits and RTDs by type, by gender, September 2013
Craft producers and premium appeal
BROADER MARKET ENVIRONMENT
Key points
Consumer confidence bounces back
Figure 11: Disposable income vs expenditure per head (£), 1997-2012
Figure 12: Consumer Confidence Index, monthly, January 2007-October 2013
Figure 13: Calorie and alcohol unit content of selected types of alcoholic drinks, 2013
An aging population poses issues for the white spirits/RTDs market
Figure 14: Projected trends in the age structure of the UK population, 2013-18
ABs and C2s will hold the key to growth
Figure 15: Changes in the adult socio-economic structure of the UK population, 2013-18
Minimum pricing plans remain on the backburner
COMPETITIVE CONTEXT
Key points
Consumers cutting back on alcohol consumption
Figure 16: Trends in UK per capita consumption of 100% alcohol, 2006-12
Figure 17: Value sales of selected alcoholic drink categories, 2008-12
STRENGTHS AND WEAKNESSES
Strengths
Weaknesses
WHO’S INNOVATING?
Key points
The big brands innovate with flavour
Packaging innovations
RTD innovation
Other interesting launches from the UK…
…and from overseas
MARKET SIZE AND SEGMENT PERFORMANCE
Key points
The market continues to grow
Figure 18: UK value and volume sales of white spirits and RTDs, at current and constant prices, 2008-18
Figure 19: Forecast of UK value sales of white spirits and RTDs, 2008-18
Figure 20: Forecast of UK volume sales of white spirits and RTDs, 2008-18
Forecast methodology
Segment Performance: Vodka
Figure 21: UK value and volume sales of vodka, at current and constant prices, 2008-18
Figure 22: Forecast of UK value sales of vodka, 2008-18
Segment Performance: Gin
Figure 23: UK value and volume sales of gin, at current and constant prices, 2008-18
Figure 24: Forecast of UK value sales of gin, 2008-18
Segment Performance: White rum
Figure 25: UK value and volume sales of white rum, at current and constant prices, 2008-18
Figure 26: Forecast of UK value sales of white rum, 2008-18
Segment Performance: Tequila/Mezcal
Figure 27: UK value and volume sales of tequila/mezcal, at current and constant prices, 2008-18
Figure 28: Forecast of UK value sales of tequila/mezcal, 2008-18
Segment Performance: RTDs
Figure 29: UK value and volume sales of RTDs, at current and constant prices, 2008-18
Figure 30: Forecast of UK value sales of RTDs, 2008-18
CHANNELS TO MARKET
Key points
The off-trade outperforms the on-trade in white spirits
Figure 31: UK value sales of white spirits and RTDs in the on- and off-trade, by product category, 2011-13
Vodka continues to lead the way…
…while RTDs continue to struggle
Grocery multiples make further progress
Figure 32: Value sales within the off- and on-trade channels in the white spirits and RTDs market, by outlet type, 2011-13
Restaurants gain share in the on-trade
Online continues to represent a niche channel for sales
MARKET SHARE
Key points
Smirnoff consolidates its leading position
Figure 33: Value sales of top-selling white spirit and RTD brands in the off-trade, 2011/12 and 2012/13
Figure 34: Retail prices of selected vodkas, per 70cl bottle, October 2013
Gins fizz
Figure 35: Retail prices of selected gins, per 70cl bottle, October 2013
Rums hold onto their share
Figure 36: Retail prices of selected white rums, per 70cl bottle, October 2013
RTDs continue to struggle
COMPANIES AND PRODUCTS
Bacardi-Martini
Company overview and brand portfolio
Recent activity, brand communication and promotion
Brown-Forman
Company overview and portfolio
Recent activity, brand communication and promotion
Diageo
Company overview and brand portfolio
Recent activity and innovation
Brand communication and promotion
First Drinks
Company overview and portfolio
Recent activity and innovation
Brand communication and promotion
Global Brands
Company overview and portfolio
Recent activity and innovation
Brand communication and promotion
Pernod Ricard
Company overview and portfolio
Recent activity and innovation
Brand communication and promotion
Russian Standard
Company overview and portfolio
Recent activity and innovation
BRAND RESEARCH
Brand map
Figure 37: Attitudes towards and usage of brands in the white spirits sector, September 2013
Correspondence analysis
Brand attitudes
Figure 38: Attitudes, by white spirits brand, September 2013
Brand personality
Figure 39: White spirits brand personality – macro image, September 2013
Figure 40: White spirits brand personality – micro image, September 2013
Brand experience
Figure 41: White spirits brand usage, September 2013
Figure 42: Satisfaction with various white spirits brands, September 2013
Figure 43: Consideration of white spirits brands, September 2013
Figure 44: Consumer perceptions of current white spirits brand performance, September 2013
Brand index
Figure 45: White spirits brand index, September 2013
Target group analysis
Figure 46: Target groups, September 2013
Figure 47: White spirits brand usage, by target groups, September 2013
Group One – Conformists
Group Two – Simply the Best
Group Three – Shelf Stalkers
Group Four – Habitual Shoppers
Group Five – Individualists
BRAND COMMUNICATION AND PROMOTION
Key points
Adspend in the market in steady decline
Figure 48: Topline above-the-line advertising spend in the UK white spirits and RTDs market, 2010-13*
Diageo dominates adspend
Figure 49: Highest-spending companies for above-the-line advertising in the white spirits/RTD market, 2010-13
Figure 50: Highest-spending brands in above-the-line advertising in the white spirits/RTD market, 2010-13
Bacardi-Martini is the second highest advertiser in the market
Pernod Ricard cuts back on ad spend
Other campaigns of note
TV remains the preferred channel for advertisers
Figure 51: Above-the-line advertising in the white spirits/RTD market, by channel, 2010-13
CONSUMER – USAGE OF WHITE SPIRITS
Key points
Vodka remains the most popular white spirit
Figure 52: Usage of white spirits, September 2013
Figure 53: Usage of white spirits by type, by gender, age and socio-economic group, September 2013
Mixability is key for white spirits
Figure 54: Usage of white spirits neat or with a mixer, by category, September 2013
Under-35s like to mix and match
CONSUMER – USAGE OF PRE-MIXED DRINKS
Key points
42% of adults drink pre-mixes
Figure 55: Usage of pre-mixed drinks in a bottle/can, September 2013
Figure 56: Usage of any pre-mixed drink, by gender, age and socio-economic group, September 2013
Pre-mix bottles retain a marginal lead
CONSUMER – CHOICE FACTORS
Key points
Brand name and value for money are the main choice factors
Figure 57: Choice factors when buying white spirits, September 2013
Other factors can build upon these two leading considerations
CONSUMER – LOCATIONS FOR DRINKING WHITE SPIRITS AND RTDS
Key points
Despite party connotations, white spirits appeal in the off-trade
Figure 58: Typical locations for drinking white spirits and RTDs, September 2013
Vodka as popular in-home as out of home
Figure 59: Typical locations for drinking vodka, September 2013
Gin significantly more likely to be drunk out of home than in-home
Figure 60: Typical locations for drinking gin, September 2013
White rum’s popularity peaks on nights out
Figure 61: Typical locations for drinking white rum, September 2013
Tequila/Mezcal lacks off-trade presence
Figure 62: typical locations for drinking tequila/mezcal, September 2013
Pre-mixers/RTDs
Figure 63: Typical locations for drinking pre-mixers/RTDs, September 2013
CONSUMER – PERCEPTIONS OF WHITE SPIRITS AND RTDS
Key points
White spirits and RTDs hold very differing images
Figure 64: Consumer perceptions of white spirits/RTDs, September 2013
Vodka seen as a good mixer
Figure 65: Perceptions of vodka, September 2013
Gin seen as old-fashioned
Figure 66: Perceptions of gin, September 2013
White rum is seen as tasty and mixes well
Figure 67: Perceptions of white rum, September 2013
Tequila/Mezcal is associated with younger drinkers
Figure 68: Perceptions of tequila/mezcal, September 2013
Pre-mixes seen by most as drinks for young people
Figure 69: Perceptions of pre-mixed drinks/RTDs, September 2013
CONSUMER – ATTITUDES TOWARDS WHITE SPIRITS
Key points
Mixability is a competitive advantage for white spirits
Figure 70: Users' attitudes towards white spirits, September 2013
Gifting is an important occasion for white spirits
Figure 71: Users' attitudes towards premiumisation of white spirits, September 2013
Tapping into the craft boom
Mixability is an advantage for white spirits over dark ones
Figure 72: Users' attitudes towards the mixability of white spirits, September 2013
Two in five open to experimenting with white spirits
Figure 73: Users' attitudes towards the taste of white spirits, September 2013
Flavoured white spirits could boost usage
Figure 74: Users' attitudes towards flavoured white spirits, September 2013
CONSUMER – ATTITUDES TOWARDS RTDS
Key points
Associations with younger drinkers remain entrenched
Figure 75: Attitudes towards RTDs, September 2013
Many women see RTDs as party drinks and calorific
CONSUMER – TARGET GROUPS
Key points
Three target groups
Figure 76: Target groups, September 2013
Mixers (37%)
Enthusiasts (36%)
Purists (27%)
APPENDIX – MARKET SIZE AND SEGMENT PERFORMANCE
Figure 77: Best and worst case forecasts for the white spirits and RTDs market, by value, 2013-18
Figure 78: Best and worst case forecasts for the white spirits and RTDs market, by volume, 2013-18
Figure 79: Best and worst case forecasts for the vodka market, by value, 2013-18
Figure 80: Best and worst case forecasts for the vodka market, by volume, 2013-18
Figure 81: Forecast for volume sales of vodka, 2008-18
Figure 82: Best and worst case forecasts for the gin market, by value, 2013-18
Figure 83: Best and worst case forecasts for the gin market, by volume, 2013-18
Figure 84: Forecast for volume sales of gin, 2008-18
Figure 85: Best and worst case forecasts for the white rum market, by value, 2013-18
Figure 86: Best and worst case forecasts for the white rum market, by volume, 2013-18
Figure 87: Forecast for volume sales of white rum, 2008-18
Figure 88: Best and worst case forecasts for the tequila market, by value, 2013-18
Figure 89: Best and worst case forecasts for the tequila market, by volume, 2013-18
Figure 90: Forecast for volume sales of tequila, 2008-18
Figure 91: Best and worst case forecasts for the RTDs market, by value, 2013-18
Figure 92: Best and worst case forecasts for the RTDs market, by volume, 2013-18
Figure 93: Forecast for volume sales of RTDs, 2008-18
APPENDIX – CHANNELS TO MARKET
Figure 94: UK volume sales of white spirits and RTDs in the on- and off-trade, 2011-13
APPENDIX – BRAND RESEARCH
Figure 95: Brand usage, September 2013
Figure 96: Brand commitment, September 2013
Figure 97: Brand momentum, September 2013
Figure 98: Brand diversity, September 2013
Figure 99: Brand satisfaction, September 2013
Figure 100: Brand attitude, September 2013
Figure 101: Brand image – macro image, September 2013
Figure 102: Brand image – micro image, September 2013
Figure 103: Target groups by demographics, September 2013
Figure 104: Psychographic segmentation, by target groups, September 2013
Figure 105: Brand usage, by target groups, September 2013
Brand index
Figure 106: Brand index, September 2013
APPENDIX – CONSUMER – USAGE OF WHITE SPIRITS
Figure 107: Usage of white spirits, by type, by serve, September 2013
Figure 108: Usage of vodka, by demographics, September 2013
Figure 109: Usage of gin, by demographics, September 2013
Figure 110: Usage of white rum, by demographics, September 2013
Figure 111: Usage of tequila/mezcal, by demographics, September 2013
Figure 112: Usage of white spirits, by most popular choice factors when buying white spirits, September 2013
Figure 113: Usage of white spirits, by next most popular choice factors when buying white spirits, September 2013
Repertoire
Figure 114: Repertoire of usage of white spirits, September 2013
Figure 115: Repertoire of usage of white spirits, by demographics, September 2013
Figure 116: Usage of white spirits, by repertoire of usage of any white spirits, September 2013
APPENDIX – CONSUMER – USAGE OF PRE-MIXED DRINKS
Figure 117: Usage of pre-mixed drinks in a bottle/can, September 2013
Figure 118: Usage of any pre-mixed drinks (net), by demographics, September 2013
Figure 119: Usage of pre-mixed drinks in a bottle, by demographics, September 2013
Figure 120: Usage of pre-mixed drinks in a can, by demographics, September 2013
APPENDIX – CONSUMER – CHOICE FACTORS
Figure 121: Purchase of white spirits in the past six months, September 2013
Figure 122: Purchase of white spirits in the past six months, by demographics, September 2013
Figure 123: Choice factors when buying white spirits, September 2013
Figure 124: Most popular choice factors when buying white spirits, by demographics, September 2013
Figure 125: Next most popular choice factors when buying white spirits, by demographics, September 2013
Figure 126: Choice factors when buying white spirits, by usage of vodka, September 2013
Figure 127: Choice factors when buying white spirits, by usage of gin, September 2013
Figure 128: Choice factors when buying white spirits, by usage of white rum, September 2013
Figure 129: Choice factors when buying white spirits, by usage of tequila/mezcal, September 2013
APPENDIX – CONSUMER – LOCATIONS FOR DRINKING WHITE SPIRITS AND RTDS
Figure 130: Typical locations for drinking white spirits and RTDs, September 2013
Figure 131: Typical locations for drinking vodka, by demographics, September 2013
Figure 132: Typical locations for drinking gin, by demographics, September 2013
Figure 133: Typical locations for drinking white rum, by demographics, September 2013
Figure 134: Typical locations for drinking white tequila/mezcal, by demographics, September 2013
Figure 135: Typical locations for drinking any pre-mixed drink, by demographics, September 2013
Figure 136: Typical locations for drinking white spirits and RTDs, by demographics, September 2013
APPENDIX – CONSUMER – PERCEPTIONS OF WHITE SPIRITS AND RTDS
Figure 137: Perceptions of white spirits, September 2013
Figure 138: Perceptions of white spirits, September 2013
Figure 139: Perceptions of white spirits/RTDs, September 2013
Figure 140: Most popular perceptions of vodka, by demographics, September 2013
Figure 141: Next most popular perceptions of vodka, by demographics, September 2013
Figure 142: Most popular perceptions of gin, by demographics, September 2013
Figure 143: Next most popular perceptions of gin, by demographics, September 2013
Figure 144: Most popular perceptions of white rum, by demographics, September 2013
Figure 145: Next most popular perceptions of white rum, by demographics, September 2013
Figure 146: Most popular perceptions of tequila/mezcal, by demographics, September 2013
Figure 147: Next most popular perceptions of tequila/mezcal, by demographics, September 2013
Figure 148: Most popular perceptions of pre-mixed drinks, by demographics, September 2013
Figure 149: Next most popular perceptions of pre-mixed drinks, by demographics, September 2013
APPENDIX – CONSUMER – ATTITUDES TOWARDS WHITE SPIRITS
Figure 150: Users' attitudes towards white spirits, September 2013
Figure 151: Agreement with the statements ‘Bottles of white spirits make a good gift' and ‘White spirits make a good drink to have as a shot', by demographics, September 2013
Figure 152: Agreement with the statements ‘White spirits are better for mixing than dark spirits such as whisky and dark rum' and ‘It’s worth paying more for premium brands of white spirits’, by demographics, September 2013
Figure 153: Agreement with the statements ‘I like to try white spirits which I have never drunk before' and ‘Own-label white spirits taste as good as branded ones’, by demographics, September 2013
Figure 154: Agreement with the statements ‘I am prepared to pay more for white spirits which have taken longer to produce’ and ‘I am more likely to drink white spirits if they have an added flavour’, by demographics, September 2013
Figure 155: Agreement with the statements ‘White spirits from small/craft distillers are more appealing than large brands’ and ‘White spirits with added flavours are of lower quality compared to those without extra flavouring’, by demographics, September 2013
Figure 156: Agreement with the statements ‘I am prepared to pay more for white spirits with added flavours than unflavoured ones’ and ‘Limited editions of white spirits are more appealing to me than those which are always available', by demographics, September 2013
APPENDIX – CONSUMER – ATTITUDES TOWARDS RTDS
Figure 157: Attitudes towards RTDs, September 2013
Figure 158: RTD and white spirit users' attitudes towards RTDs, September 2013
Figure 159: Most popular RTD and white spirit users' attitudes towards RTDs, by demographics, September 2013
Figure 160: Next most popular RTD and white spirit users' attitudes towards RTDs, by demographics, September 2013
APPENDIX – CONSUMER – TARGET GROUPS
Figure 161: Target groups, September 2013
Figure 162: Target groups, by demographics, September 2013
Figure 163: Usage of white spirits, by target groups, September 2013
Figure 164: Choice factors when buying white spirits, by target groups, September 2013
Figure 165: Locations for drinking white spirits and RTDs, by target groups, September 2013
Figure 166: Perceptions of white spirits, by target groups, September 2013
Figure 167: Users' attitudes towards white spirits, by target groups, September 2013