Table of Contents
Introduction
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- Definition
- Abbreviations
Executive Summary
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- The market
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- Figure 1: UK value sales and forecast for dark spirits, 2006-16
- Companies, brands and innovation
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- Figure 2: Market share of the dark spirit’s brands, by value sales in the off-trade, 2010
- The consumer
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- Figure 3: Perceptions of drinkers of malt whisky, bourbon/Tennessee whiskey and Armagnac/Cognac, June 2011
- What we think
Issues in the Market
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- Given its many advantages why isn’t malt whisky performing better than it is?
- How can bourbon/Tennessee whiskey grow in the UK market?
- Is it worthwhile Cognac/Armagnac investing further in the UK market given the opportunities in developing economies?
- How can dark spirits leverage the trend for mixing drinks?
Future Opportunities
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- Experience is all
- Premiumisation and Indulgence
Internal Market Environment
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- Key points
- Increasing importance of the off-trade to spirits
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- Figure 4: Trends in drinking alcohol, by venue, 2006-10
- Younger people more likely to party at home
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- Figure 5: Occasions for drinking alcohol at home, 18-24-year-olds versus all drinkers, May 2011
- More generally, targeting in-home is about mealtimes and relaxation
- The challenge of de-seasonalisation
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- Figure 6: Weekly value sales of dark spirits and total spirits in the UK off-trade, May 2010-April 2011
- Premiumisation is key for spirits
- Provenance and ensuring quality is key for older consumers…
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- Figure 7: Index of agreement with lifestyle statements about paying extra for quality and British provenance, by gender, age group and social grade, 2010
- … while more overt status motivates younger consumers
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- Figure 8: Index of agreement with lifestyle statements about status/quality, by gender, age group and social grade, 2010
- Taxation creates an uneven playing field for spirits
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- Figure 9: Latest excise duty, by major alcohol category, August 2011
Broader Market Environment
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- Key points
- Consumer incomes become increasingly squeezed…
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- Figure 10: Change in average weekly earnings compared to inflation in the UK, January 2005-April 2011*
- Baby boomers are a key source of income
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- Figure 11: How respondents would describe their financial situation, by age group, May 2011
- Figure 12: Forecast of adult population trends, by age group, 2006-16
- ABC1 population is on the rise
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- Figure 13: Forecast adult population trends, by socio-economic group, 2006-16
Competitive Context
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- Key points
- Hard times for the UK alcohol market
- Spirits fare reasonably well compared to wine and lager
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- Figure 14: Trends in drink types consumed in the past 12 months, 2006-10
- Only vodka outdoes dark and golden rum within the spirits category
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- Figure 15: Changes in penetration of different spirits, 2006-10
Strengths and Weaknesses in the Market
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- Strengths
- Weaknesses
Who’s Innovating?
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- Key points
- US import introduces flavoured variant to the UK whiskies market
- Kraken aims to take dark rum upmarket
Market Size and Forecast
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- Key points
- Dark spirits market continues its slow decline
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- Figure 16: Volume and value sales and forecast for total dark spirits, 2006-16
- Whiskies will suffer a tough 2011 but things will improve thereafter
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- Figure 17: Volume and value sales and forecast for whiskies, 2006-16
- Figure 18: UK value sales/forecast for whiskies, 2006-16
- Brandy goes into a steep decline
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- Figure 19: Volume and value sales and forecast for brandy, 2006-16
- Figure 20: Value sales/forecast for brandy, 2006-16
- Cognac and Armagnac increasingly eye profitable overseas markets
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- Figure 21: Volume and value sales and forecast for Cognac/Armagnac, 2006-16
- Figure 22: Value sales/forecast for Cognac/Armagnac, 2006-16
- Rum hits gold
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- Figure 23: Volume and value sales and forecast for dark and golden rum, 2006-16
- Figure 24: Value sales/forecast for dark and golden rum, 2006-16
- Forecast methodology
Market Segmentation
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- Key points
- Rum sees double-digit growth in the on-trade
- Whiskies become more reliant on declining off-trade volume sales
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- Figure 25: Volume sales in the on- and off-trade, by dark spirits category, 2009-11
- Figure 26: Value sales in the on- and off-trade, by dark spirits category, 2009-11
- A disappointing performance for malt as imports grows share
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- Figure 27: Whisky volume and value sales within the off-trade, by sub-category, 2010-11
Market Share
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- Key points
- Price dictates success of whisky brands
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- Figure 28: Market share of the top ten dark spirit’s value sales within the off-trade, 2008-10
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- Figure 29: Prices of top selling 70 cl whiskies* in the off-trade, August 2011
- Morgan’s Spiced helps grow the rum category
Companies and Products
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- Key points
- Beam Global
- Brown-Forman
- Diageo
- First Drinks Brands
- Gruppo Campari
- LVMH
- Maxxium
- Pernod Ricard
Brand Research
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- Brand map
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- Figure 30: Attitudes towards and usage of dark spirits brands, June 2011
- Brand attitudes
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- Figure 31: Attitudes by dark spirits brand, June 2011
- Brand personality
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- Figure 32: Dark spirits brand personality – macro image, June 2011
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- Figure 33: Dark spirits brand personality – micro image, June 2011
- Correspondence analysis
- Brand experience
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- Figure 34: Dark spirit brand usage, June 2011
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- Figure 35: % Satisfaction with various dark spirits brands, June 2011
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- Figure 36: Consideration of dark spirits brands, June 2011
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- Figure 37: Consumer perceptions of current dark spirit brand performance, June 2011
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- Figure 38: Dark spirit brand recommendation – Net Promoter Score, June 2011
- Brand index
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- Figure 39: dark spirit brand index, June 2011
- Figure 40: dark spirit brand index vs. recommendation, June 2011
- Target group analysis
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- Figure 41: Target groups, June 2011
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- Figure 42: Dark spirit brand usage, by target groups, June 2011
- Group One – The Conformists
- Group Two – Simply the Best
- Group Three – Shelf Stalkers
- Group Four – Habitual Shoppers
- Group Five – The Individualists
Channels to Market
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- Key points
- Pubs/bars still account for more revenue than multiples – just
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- Figure 43: Value sales within the off- and on-trade channels for the total dark spirits market, 2009-11
- Multiples go from strength to strength
- The rise of online alcohol purchasing
Brand Communication and Promotion
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- Key points
- Low spend is a sign of lack of brand investment
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- Figure 44: Topline advertising spend for total dark spirits, 2006-11*
- Jack Daniel’s drives above-the-line spend in the sector
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- Figure 45: Share of above the line advertising spend by the top spending dark spirits brands between 2008-11*
Consumer Usage of Dark Spirits
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- Key points
- A nation divided on the merits of dark spirits
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- Figure 46: Consumption of dark spirits in the past year, June 2011
- Mixing means attracting younger drinkers and women…
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- Figure 47: Drinkers of dark spirits as part of a mixed drink (ie cocktail, long-serve or RTD), by gender and age group, June 2011
- … explaining why some dark spirits are succeeding – and others are not
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- Figure 48: How dark spirits are consumed, June 2011
- Jack Daniel’s is driving whisky usage among younger age groups
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- Figure 49: Whiskies usage in the past year, by gender, age and socio-economic group, June 2011
- Malt is for men
- US whiskey’s appeal to new, younger drinkers is benefiting total sector
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- Figure 50: Crossover of usage of whiskies, June 2011
- US whiskey attracts the most loyalty
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- Figure 51: Index of solus usage of whiskies, June 2011
- Blended whisky relies on high volume consumption of the over-55s
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- Figure 52: measures consumed per month for different dark spirits, by age group, 2010
- Young drinkers are drinking rum in much greater volume than US whiskey
- Cognac and brandy are relying too much on the over-55s
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- Figure 53: Index of usage of rum, brandy and Cognac, by gender, age and socio-economic group, June 2011
Consumer – Attitudes Towards Drinking Dark Spirits
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- Key points
- Dark spirits are drunk by half the nation…
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- Figure 54: Attitudes towards drinkers’ favourite dark spirits, June 2011
- … but lack obvious regular drinking occasions
- Encouraging mixing among the young and the female
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- Figure 55: Agreement with attitude ‘I can only drink my favourite dark spirits with a mixer’, by gender and age group, June 2011
- Peers are the key influencers for 18-24-year-old dark spirit drinkers
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- Figure 56: Index of who introduced drinkers to their favourite dark spirits, by age group, June 2011
Consumer – Perceptions of Dark Spirits
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- Key points
- With its many strengths, why is malt whisky not performing better?
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- Figure 57: Personality traits used to describe drinkers of whiskies and Armagnac/Cognac, June 2011
- Malt whisky needs to inject more personality in its brands
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- Figure 58: Perceptions of drinkers of malt whisky, bourbon/Tennessee whiskey and Armagnac/Cognac, June 2011
- Accessibility is the watchword
- Cognac/Armagnac can capitalise on younger people’s status anxiety
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- Figure 59: Index of perceptions of Armagnac/Cognac drinkers being stylish and sophisticated, by age group, June 2011
Appendix – Internal Market Environment
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- Figure 60: Agreement with selected lifestyle statements, by demographics, 2010
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Appendix – Brand Communication
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- Figure 61: Ad spend on dark spirits by highest spending advertisers, 2008-11
- Figure 62: Ad spend on dark spirits by highest spending brands, 2008-11
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Appendix – Brand Research
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- Figure 63: Brand usage, June 2011
- Figure 64: Brand commitment, June 2011
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- Figure 65: Brand momentum, June 2011
- Figure 66: Brand diversity, June 2011
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- Figure 67: Brand satisfaction, June 2011
- Figure 68: Brand recommendation, June 2011
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- Figure 69: Brand attitude, June 2011
- Figure 70: Brand image – macro image, June 2011
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- Figure 71: Brand image – micro image, June 2011
- Figure 72: Profile target groups, by demographics, June 2011
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- Figure 73: Psychographic segmentation, by target group, June 2011
- Figure 74: Brand usage, by target group, June 2011
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- Figure 75: Brand index, June 2011
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Appendix – Consumer Usage
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- Figure 76: Most popular types of dark spirits consumed in the past year, by demographics, June 2011
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- Figure 77: Next most popular types of dark spirits consumed in the past year, by demographics, June 2011
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- Figure 78: Other types of dark spirits consumed in the past year, by demographics, June 2011
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- Figure 79: Consumption of malt, blended and bourbon/Tennessee whisky in the past year, by demographics, June 2011
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- Figure 80: Most popular ways in which dark spirits are consumed, by demographics, June 2011
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- Figure 81: Next most popular ways in which dark spirits are consumed, by demographics, June 2011
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- Figure 82: Type of mix (neat), by demographics, June 2011
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- Figure 83: Type of mix (cola), by demographics, June 2011
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- Figure 84: Type of mix (with any other mixer), by demographics, June 2011
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Appendix – Consumer Attitudes Towards Dark Spirits
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- Figure 85: Statements about dark spirits, June 2011
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Appendix – Consumer Perceptions of Dark Spirits
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- Figure 86: Most popular personality traits used to describe drinkers of Bourbon/Tennessee whiskey, by demographics, June 2011
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- Figure 87: Next most popular personality traits used to describe drinkers of Bourbon/Tennessee whiskey, by demographics, June 2011
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- Figure 88: Other personality traits used to describe drinkers of Bourbon/Tennessee whiskey, by demographics, June 2011
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- Figure 89: Most popular personality traits used to describe drinkers of malt whisky, by demographics, June 2011
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- Figure 90: Next most popular personality traits used to describe drinkers of malt whisky, by demographics, June 2011
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- Figure 91: Other personality traits used to describe drinkers of malt whisky, by demographics, June 2011
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- Figure 92: Most popular personality traits used to describe drinkers of Armagnac/Cognac, by demographics, June 2011
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- Figure 93: Next most popular personality traits used to describe drinkers of Armagnac/Cognac, by demographics, June 2011
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- Figure 94: Other personality traits used to describe drinkers of Armagnac/Cognac, by demographics, June 2011
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