Table of Contents
Executive Summary
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- Market factors
- Drink prices continue to rise
- Financial health remains rocky for many
- Population changes pose threats and opportunities
- Companies and brands: Innovation
- The consumer
- Premium and standard drinks are equally popular in most categories
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- Figure 1: Purchase of alcoholic drinks, December 2014
- Perceptions of premium drinks are mixed
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- Figure 2: Alcoholic drinks’ premium associations, by category, December 2014
- Consumers have rational expectations of spend on premium drinks
- Flavour leads the way when defining premium alcoholic drinks
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- Figure 3: Qualities seen to define premium alcoholic drinks (any ranking 1-5), December 2014
- Widespread distrust of premium drinks’ credentials
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- Figure 4: Attitudes towards premium alcoholic drinks, December 2014
- What we think
Issues and Insights
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- Moving beyond generic ‘premium’ claims
- The facts
- The implications
- Boosting premium associations in lighter drink categories
- The facts
- The implications
- Utilising promotions to drive volume sales
- The facts
- The implications
- Encouraging trading up in financially challenging times
- The facts
- The implications
Trend Application
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- Make it Mine
- Minimize Me
- Collective Intelligence
Market Drivers
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- Key points
- Alcoholic drink prices continue to rise
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- Figure 5: RPI indexed annual change for alcoholic drink prices versus all items except housing, 2000-14
- Figure 6: UK excise duty rates for selected alcoholic drinks, 2003-14
- Financial health recovers but remains fragile
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- Figure 7: Trends in how consumers describe their financial situation, December 2009-December 2014
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- Figure 8: Trends in consumer sentiment for the coming year, December 2014
- UK consumers have continued to cut back on alcohol
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- Figure 9: Trends in UK per capita consumption of 100% alcohol, 2007-13
- Figure 10: HM Treasury estimated changes in volume consumption of alcohol over 2014/15-2018/19 following changes to alcohol duty in Budget 2014, April 2014
- An ageing population could pose a threat to premium drinks
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- Figure 11: Projected trends in the age structure of the UK population, 2014-19
Strengths and Weaknesses
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- Strengths
- Weaknesses
Who’s Innovating?
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- Key points
- Selected premium NPD activity
- Beer
- Cider
- Wines
- Spirits/Liqueurs
The Consumer – Purchase of Alcoholic Drinks
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- Key points
- Premium and standard drinks are equally popular in most categories
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- Figure 12: Purchase of alcoholic drinks, by category, December 2014
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- Figure 13: Purchase of premium alcoholic drinks, by category, by gender, December 2014
- Still/fortified wines fare poorly at the premium tier
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- Figure 14: Purchase of premium alcoholic drinks in the past year as a share of overall purchase within category, December 2014
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- Figure 15: Purchase of premium alcoholic drinks as a proportion of category purchases, by gender, December 2014
- Dark spirits perform strongly at the premium tier
- 57% of adults buy premium drinks
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- Figure 16: Repertoire for purchase of standard/economy and premium alcoholic drinks, December 2014
The Consumer – Perceptions of Premium Alcoholic Drinks
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- Key points
- Summary of perceptions of premium alcoholic drinks
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- Figure 17: Alcoholic drinks’ premium associations, by category, December 2014
- Lager is seen most widely as the most premium type of beer
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- Figure 18: Beer types seen as most premium, December 2014
- Fruit-flavoured is seen most widely as premium cider
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- Figure 19: Cider types seen as most premium, December 2014
- Still wine falls behind sparkling on premium image
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- Figure 20: Wine types seen as most premium, December 2014
- Red leaves white and rosé behind on premium image in still wine…
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- Figure 21: Still wine types seen as most premium, December 2014
- …while Champagne still dominates in sparkling
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- Figure 22: Sparkling wine types seen as most premium, December 2014
- Prosecco enjoys a premium image within the sparkling segment
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- Figure 23: Sparkling wine types seen as most premium, December 2014
- White spirits have an image problem
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- Figure 24: Spirit and liqueur types seen as most premium, December 2014
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- Figure 25: White spirits types seen as most premium, December 2014
- Cream liqueurs edge out non-cream ones in premium connotations
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- Figure 26: Liqueur types seen as most premium, December 2014
- Brandy/Cognac leads the way in perceptions of dark spirits
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- Figure 27: Dark spirits types seen as most premium, December 2014
The Consumer – Spending on Premium Alcoholic Drinks
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- Key points
- Consumers have realistic expectations of premium prices
- Users are prepared to spend almost £2.50 on premium beer and cider
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- Figure 28: Amount consumers are prepared to spend on premium beer and cider (500ml bottle), December 2014
- A third of still wine buyers are prepared to spend more than £10
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- Figure 29: Amount consumers are prepared to spend on premium still wine (750ml bottle), December 2014
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- Figure 30: Estimated share of the price of bottles of wine which is accountable to ‘wine quality’
- 36% of sparkling wine/Champagne buyers are prepared to break the £25 mark
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- Figure 31: Amount consumers are prepared to spend on premium sparkling wine/Champagne (750ml bottle), December 2014
- A quarter of spirit buyers prepared to spend £25 or more
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- Figure 32: Amount consumers are prepared to spend on premium spirits (700ml bottle), December 2014
The Consumer – Qualities Associated with Premium Alcoholic Drinks
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- Key points
- Flavour leads the way when defining premium alcoholic drinks
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- Figure 33: Qualities seen to define premium alcoholic drinks (any ranking 1-5), December 2014
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- Figure 34: Qualities seen to define premium alcoholic drinks (ranking 1), December 2014
- Heritage and ageing are additional levers for premiumisation
- Other cues only garner limited response
The Consumer – Attitudes towards Premium Alcoholic Drinks
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- Key points
- Widespread distrust of premium drinks’ credentials
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- Figure 35: Attitudes towards premium alcoholic drinks, December 2014
- Gifting and special occasions are important for premium drinks
- Cost and premium alcoholic drinks
- Encouraging consumers to pay more
The Consumer – Target Groups
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- Key points
- Four target groups
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- Figure 36: Target groups, December 2014
- Traditionalists (26%)
- Disengaged (30%)
- Connoisseurs (23%)
- Enthusiasts (21%)
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