Table of Contents
Executive Summary
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- The market
- Inflation and innovation fuel growth in white spirits
- Value and volume growth set to slow
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- Figure 1: Forecast total value sales of white spirits and RTDs, 2014-24
- On-trade suffers as consumers seek better value at home
- Low/no alcohol trend represents threat and opportunity
- Companies and brands
- Stiff competition sees Smirnoff value sales decline
- Gordon’s feels the squeeze from crowded gin category
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- Figure 2: Leading brands’ value shares in the UK retail gin market, 2018/19*
- White spirit brands leverage low/no alcohol trend
- RTD repositions as more sophisticated choice
- Advertising spend rises 36%
- Gordon’s champions traditional, while Hendrick’s retains exclusivity
- The consumer
- Gin has overtaken vodka to become the most popular white spirit
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- Figure 3: Types of white spirits drunk in the last six months, by serve, September 2019
- Majority still reach for mixers to make white spirits palatable
- Flavoured spirts resonate strongly
- Canned RTDs are attracting new demographics
- RTD brands could challenge beers and wine at the dinner table
- A third would pay more for eco-credentials
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- Figure 4: Attributes seen as worth paying more for in white spirits, September 2019
- Explore naturalness in RTDs
- Low/no alcohol white spirits are attractive to those looking to cut back
- What we think
Issues and Insights
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- Harness uniqueness to create premium spirits
- The facts
- The implications
- Leverage low/no alcohol trend as an opportunity
- The facts
- The implications
- Canned format can reinvigorate RTDs
- The facts
- The implications
The Market – What You Need to Know
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- Inflation and innovation fuel growth in white spirits
- Value and volume growth set to slow
- Falling prices slow gin boom
- On-trade suffers as consumers seek better value at home
- Low/no alcohol trend represents threat and opportunity
Market Size and Forecast
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- Inflation and innovation drive value and volume growth
- Ongoing uncertainty set to inhibit value and volume sales further
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- Figure 5: Total value and volume sales of white spirits and RTDs, 2014-24
- Figure 6: Forecast total value sales of white spirits and RTDs, 2014-24
- Figure 7: Forecast total volume sales of white spirits and RTDs, 2014-24
- Forecast methodology
Market Segmentation
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- Falling average prices slow meteoric growth of gin
- Vodka continues modest growth
- Higher prices drive growth in white rum
- On-trade keeps tequila/mezcal afloat
- RTDs continue recovery
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- Figure 8: Total value sales of white spirits and RTDs, by segment, 2014-19
Channels to Market
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- On-trade volumes slump as UK drinkers stay home
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- Figure 9: UK value and volume sales of white spirits and RTDs in the on- and off-trade, by type, 2017-19
- Gin performs strongly in both the on- and off-trade
- Vodka struggles in the on-trade
- On-trade pushes up prices in white rum
- Off-trade leads when it comes to RTDs
Market Drivers
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- Multiple factors affect spirits prices
- UK remains one of the highest taxing countries for spirits worldwide
- Conservatives pledge to review alcohol duties
- No-deal Brexit could see relaxation of duty-free policies
- Politics remains a major source of uncertainty for spirits
- Wage growth pulls ahead of inflation
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- Figure 10: CPI vs average weekly earnings, 2013-19
- Minimum Unit Pricing saw alcohol sales hit 25-year low in Scotland.
- Health concerns pose threat to high ABV spirits
- Awareness of link between alcohol and poor health continues to grow
- A third of UK adults looking to cut back on booze
- Low/no alcohol trend creates opportunities for lower ABV RTDs
- Ageing population could hamper white spirit sales
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- Figure 11: Change in age structure of the UK population, 2014-19 and 2019-24
Companies and Brands – What You Need to Know
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- Stiff competition sees Smirnoff value sales decline
- Gordon’s feels the squeeze from crowded gin category
- White spirit brands leverage low/no alcohol trend
- RTD repositions as more sophisticated choice
- Advertising spend rises 36%
- Gordon’s champions traditional, while Hendrick’s retains exclusivity
Market Share
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- Value sales decline at Smirnoff in face of stiff competition
- Influx of innovation threatens to oust smaller vodka players
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- Figure 12: Leading brands’ sales and shares in the UK retail vodka market, 2016/17-2018/19
- Gordon’s continues growth but feels the pressure
- Whitley Neil and Beefeater experience meteoric growth
- Premium own label gin makes its mark
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- Figure 13: Leading brands’ sales and shares in the UK retail gin market, 2016/17-2018/19
- Bacardi reverses decline in white rum
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- Figure 14: Leading brands’ sales and shares in the UK retail white rum market, 2016/17-2018/19
- Own label fuels growth in tequila
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- Figure 15: Leading brands’ sales and shares in the UK retail tequila/mezcal market, 2016/17-2018/19
- WKD loses market leader spot to Gordon’s
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- Figure 16: Leading brands’ sales and shares in the UK retail RTDs market, 2016/17-2018/19
Launch Activity and Innovation
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- The trend for low- and no-alcohol spirits continues
- Lidl challenges premium players with alcohol-free botanical craft spirit
- Seedlip ventures into mocktails
- GinISH adds appeal with sugar-free recipe
- Punchy Drinks creates alcohol-free tequila
- Clean Liquor adds a dash of celebrity to alcohol-free
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- Figure 17: Examples of new launches of low- and non-alcoholic spirits, 2019
- On-trade responds to alcohol-free trend
- Asda trials ‘Low and No’ fixtures in stores
- Ethically- and environmentally-conscious spirits and RTDs on the rise
- Rock Rose launches gin in recyclable pouch
- Basil Blush Vodka Spritz switches to local ingredients
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- Figure 18: Examples of ethical and environmentally-friendly claims in new launches in white spirits and RTDs, 2019
- Nelson’s Gin Distillery achieves recognition for taking production off grid
- Vodka takes inspiration from gin with flavour
- Smirnoff launches Fruit Infusions
- Black Cow Vodka opts for sustainable strawberries
- Vodka brands trial more adventurous flavours and ingredients
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- Figure 19: Examples of new launches of flavoured vodkas, 2019
- Sparkles and shimmer add new level to colour innovation in gins
- Amazon set to increase competition in own label
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- Figure 20: Amazon’s launch of own-label gin, 2019
- …while other UK multiples are tapping into seasonal novelty
- RTD launches look to cater to a more sophisticated palate
- Bacardi launches adult alcopop Breezer
- Thomas Tipple looks to recreate cocktail hour at home
- Funkin’ Nitro infuses RTDs with nitrogen
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- Figure 21: Examples of new RTD launches catering for a more sophisticated palate, 2019
Advertising and Marketing Activity
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- Advertising spend on white spirits and RTDs up significantly in 2019
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- Figure 22: Total above the line, online display and direct mail advertising expenditure on white spirits* and RTDs, 2015-2019
- Bacardi’s ad spend surpasses Diageo in 2019
- Bombay Sapphire aims to spark more creative consumption
- Bacardi Rum seeks to secure young fans with ‘Do What Moves You’ campaign
- Patron Tequila uses Day of the Dead to encourage use in cocktails
- Diageo normalises advertising budget after 2017 spike
- Smirnoff Infusions launches with plans to reach 94% of UK adults
- Infamous marks first global campaign for Smirnoff Original
- Ketel-One encourages ‘thoughtful’ drinking
- Pernod Ricard on track to double advertising spend in 2019
- Beefeater creates themed campaigns for flavoured gin launch
- Malibu Rum targets Millennials with ‘snackable’ content
- William Grant & Sons continues to boost spend behind Hendrick’s Gin
- Quintessential Brands Group supports Greenall’s
- Gin boom prompts craft brands to prioritise marketing spend
- Lidl flags up improved white spirits offer
- RTD brands push a more premium positioning
- Nielsen Ad Intel coverage
Brand Research
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- Brand map
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- Figure 23: Attitudes towards and usage of selected brands, November 2019
- Key brand metrics
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- Figure 24: Key metrics for selected brands, November 2019
- Brand attitudes: Gordon’s the most trusted brand
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- Figure 25: Attitudes, by brand, November 2019
- Brand personality: Smirnoff most accessible brand
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- Figure 26: Brand personality – macro image, November 2019
- Gordon’s is traditional, while Hendrick’s is sophisticated
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- Figure 27: Brand personality – micro image, November 2019
- Brand analysis
- Absolut bridges income divide
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- Figure 28: User profile of Absolut, November 2019
- Hendrick’s retains air of exclusivity
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- Figure 29: User profile of Hendrick’s, November 2019
- Whitley Neill viewed as both stylish and special
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- Figure 30: User profile of Whitley Neill, November 2019
- Gordon’s achieves demographic inclusivity
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- Figure 31: User profile of Gordon’s, November 2019
- Smirnoff most likely to be considered a favourite
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- Figure 32: User profile of Smirnoff, November 2019
- Bacardi retains high satisfaction levels
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- Figure 33: User profile of Bacardi, November 2019
- Glen’s Vodka offers value
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- Figure 34: User profile of Glen’s Vodka, November 2019
The Consumer – What You Need to Know
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- Gin has overtaken vodka to become the most popular white spirit
- Majority of consumers use mixers to make white spirits palatable
- A third would pay more for eco-credentials
- Explore natural low sugar recipes in RTDs
- Use RTD format to appeal to low/no alcohol trend
Usage of White Spirits
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- Gin has overtaken vodka to become the most popular white spirit
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- Figure 35: Types of white spirits drunk in the last six months, by serve, September 2019
- Gin resonates across all ages – but young consumers lead
- Premiumisation of gin and vodka hasn’t prompted consumers to try neat
- Flavoured spirts resonate strongly
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- Figure 36: Types of flavoured white spirits drunk in the last six months, September 2019
Types of RTDs Drunk and Locations
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- Canned RTDs are attracting new demographics – including women
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- Figure 37: Types of RTDs drunk in the last six months, September 2019
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- Figure 38: Types of RTDs drunk in the last six months, by types of RTDs drunk in the last six months, September 2019
- RTD brands could challenge beers and wine at the dinner table
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- Figure 39: Locations for drinking RTDs in the last six months, September 2019
Attributes Worth Paying More For
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- Consumers demand a more proactive approach to sustainability
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- Figure 40: Attributes seen as worth paying more for in white spirits, September 2019
- Pair trend for craft spirits with sustainability
- Appetite for sustainability strong among tequila/mezcal drinkers
- Unique ingredients offer a way to stand out
- Avoid artificiality or sweeteners
- Blur the lines in white spirits
- Provenance can add a new dimension to premium white spirits
- Source local ingredients
Behaviours Related to White Spirits and RTDs
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- Make more of naturalness in white spirits
- Half of consumers are put off by artificial ingredients
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- Figure 41: Behaviours related to white spirits and RTDs, September 2019
- Make more of ‘free from’ claims
- Flavoured variants could raise added concerns about artificiality
- Encourage experimentation in RTD mixers
- UK drinkers are stuck in a rut with RTD mixers
- Collaborate to create new but familiar combinations
- Plug new flavours with strategic promotions
- Target winter drinking occasions
- Create clearer tiers in white spirits
- Take inspiration from tiers in dark spirit brands
- Draw distinctions with rare ingredients or number of filtrations
Attitudes Towards White Spirits and RTDs
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- Low/no alcohol white spirits are attractive to those looking to cut back
- Opportunity to position low/no alcohol white spirits as alternative to soft drinks
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- Figure 42: Attitudes towards white spirits and RTDs, 2019
- …but perceptions persist that white spirits are high ABV
- Demand for lower ABV options could complement RTD format
- Avoid overly sweet RTD mixers
- Half feel most RTDs are too sweet
- Flag up low sugar in flavoured variants
- Provide nutritional breakdowns on pack
Appendix – Data Sources, Abbreviations and Supporting Information
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- Abbreviations
- Consumer research methodology
Appendix – Market Size and Forecast
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- Forecast methodology
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- Figure 43: Best- and worst-case forecast of total UK value sales of white spirits and RTDs, 2019-24
- Figure 44: Best- and worst-case forecast of total UK volume sales of white spirits and RTDs, 2019-24
Appendix – Market Share
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- Figure 45: Leading distributors’ sales and shares in the UK retail vodka market, 2016/17-2018/19
- Figure 46: Leading distributors’ sales and shares in the UK retail gin market, 2016/17-2018/19
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- Figure 47: Leading distributors’ sales and shares in the UK retail white rum market, 2016/17-2018/19
- Figure 48: Leading distributors’ sales and shares in the UK retail tequila/mezcal market, 2016/17-2018/19
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- Figure 49: Leading distributors’ sales and shares in the UK retail RTDs market, 2016/17-2018/19
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Appendix – Launch Activity and Innovation
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- Figure 50: Claims in new product launches in the UK retail white spirits and RTDs market*, 2015-19
- Figure 51: Proportion of new launches in white spirits and RTDs* making ethical & environmental claims, 2015-19
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