Table of Contents
Overview
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- What you need to know
- Products covered in this report
Executive Summary
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- The market
- Inflation and growth in vodka and gin boost the market 2012-17
- Further inflation and mixed volume sales expected 2017-22
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- Figure 1: Total value sales of white spirits and RTDs, 2012-22
- Growth for vodka and gin in 2017, while white rum sales remain flat
- White spirits’ on-trade performances mirror those of retail in 2017
- Various factors raise costs for spirits companies
- Health organisations urge cutbacks on alcohol
- Companies and brands
- Smirnoff remains ahead on vodka, while Gordon’s loses share despite sales growth
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- Figure 2: Leading brands’ sales in the UK retail vodka market, by value, 2016/17*
- Leading and smaller brands continue to release limited editions
- Crossover brands enter the market
- Advertising spend falls to a four-year low in 2016
- Brands continue to project desirable lifestyle image in their 2017 advertising
- Smirnoff, Absolut and Bacardi all score well on fun
- The consumer
- Six in ten UK adults drink white spirits, while a third drink RTDs
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- Figure 3: Usage of white spirits, by type, October 2017
- Ageing UK population to impede growth for both segments
- Vodka enjoys varied usage, while gin is associated with relaxing at home
- Price and promotions are key influences on white spirits buying
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- Figure 4: White spirits buying factors, when buying for themselves and as a gift, October 2017
- Recommendations and gifting are key to recruiting new users
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- Figure 5: Behaviours relating to white spirits and RTDs, October 2017
- Calorie labelling per serving on-pack and on menus could appeal to health-conscious drinkers
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- Figure 6: Attitudes towards white spirits and RTDs, October 2017
- What we think
Issues and Insights
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- Friend and family recommendations are key to recruiting new users
- The facts
- The implications
- Good opportunities for premium and less sugary RTDs
- The facts
- The implications
- Tangible ethical claims have strong appeal
- The facts
- The implications
The Market – What You Need to Know
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- Inflation and growth in vodka and gin boost the market 2012-17
- Further inflation and mixed volume sales expected 2017-22
- Growth for vodka and gin in 2017, while white rum sales remain flat
- White spirits’ on-trade performances mirror those of retail in 2017
- Various factors raise costs for spirits companies
- Health organisations urge cutbacks on alcohol
Market Size and Forecast
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- Inflation and growth in vodka and gin lifts the market 2012-17
- Further inflation and mixed volume sales results expected for 2017-22
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- Figure 7: Total value and volume sales of white spirits and RTDs, 2012-22
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- Figure 8: Total value sales of white spirits and RTDs, 2012-22
- Forecast methodology
Market Segmentation
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- Vodka sales remain in modest growth throughout 2012-17
- Consumer spending cutbacks to erode vodka volume sales
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- Figure 9: Total value and volume sales of vodka, 2012-22
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- Figure 10: Total value sales of vodka, 2012-22
- Further strong volume sales growth for gin in 2017
- Premiumisation helps to push prices up in 2017
- Gin’s growth to slow 2017-22
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- Figure 11: Total value and volume sales of gin, 2012-22
- Figure 12: Total value sales of gin, 2012-22
- White rum volume sales remain flat in 2017
- White rum sales to remain flat 2017-22
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- Figure 13: Total value and volume sales of white rum, 2012-22
- Figure 14: Total value sales of white rum, 2012-22
- Tequila/Mezcal grows but remain niche 2012-17
- Fall in number of young adults to impede growth for tequila/Mezcal
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- Figure 15: Total value and volume sales of tequila/mezcal, 2012-22
- Figure 16: Total value sales of tequila/mezcal, 2012-22
- Strong NPD activity powers revival in RTDs
- Prices fall in 2017
- Ageing population and sugar concerns to hinder RTDs growth 2017-22
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- Figure 17: Total value and volume sales of RTDs, 2012-22
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- Figure 18: Total value sales of RTDs, 2012-22
Channels to Market
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- Higher prices in the on-trade allow it to lead on values but not volumes
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- Figure 19: UK value and volume sales of white spirits and RTDs in the on- and off-trade, by type, 2015-17
- White spirits’ on-trade performances mirror those of retail in 2017
Market Drivers
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- Inflation and increased alcohol duties raise costs for spirits companies
- UK Supreme Court approves alcohol minimum unit price
- Income squeeze threatens category growth
- Premium RTDs can benefit from an income squeeze
- A third of adults have reduced alcohol intake
- Health organisations advise measures to reduce alcohol consumption
- Ageing UK population to impede both white spirits and RTDs
- Further growth in distilleries in 2016
Companies and Brands – What You Need to Know
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- Smirnoff remains ahead on vodka, while Gordon’s loses share despite sales growth
- Leading and smaller brands continue to release limited editions
- Crossover brands enter the market
- Advertising spend falls to a four-year low in 2016
- Brands continue to project desirable lifestyle image in their 2017 advertising
- Smirnoff, Absolut and Bacardi all score well on fun
Market Share
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- Smirnoff retains its position as the leading vodka brand in retail
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- Figure 20: Leading brands’ sales and shares in the UK retail vodka market, 2014/15-2016/17
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- Figure 21: Leading distributors’ sales and shares in the UK retail vodka market, 2014/15-2016/17
- On-trade promotions boost Russian Standard
- Gordon’s remains the leading gin brand in retail
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- Figure 22: Leading brands’ sales and shares in the UK retail gin market, 2014/15-2016/17
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- Figure 23: Leading distributors’ sales and shares in the UK retail gin market, 2014/15-2016/17
- …but its lead narrows as competition heats up
- Tanqueray pushes forward
- Increased distribution helps smaller gin brands to grow
- NPD boosts own-label gin
- Bacardi’s sales slip as white rum’s lacklustre performance continues
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- Figure 24: Leading brands’ sales and share in the UK retail white rum market, 2014/15-2016/17
- Figure 25: Leading distributors’ sales and share in the UK retail white rum market, 2014/15-2016/17
- Sierra displaces Jose Cuervo as the leading tequila brand in retail
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- Figure 26: Leading brands’ sales and share in the UK retail tequila/mezcal market, 2014/15-2016/17
- Figure 27: Leading distributors’ sales and share in the UK retail tequila/mezcal market, 2014/15-2016/17
- WKD fails to benefit from the RTDs’ resurgence
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- Figure 28: Leading brands’ sales and shares in the UK retail RTDs market, 2014/15-2016/17
- Diageo RTDs do not always mirror performance of the main brands
Launch Activity and Innovation
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- Major and smaller brands continue to release limited editions
- Leading players and niche brands add seasonal flavours
- Smaller brands refer to historical events to spark consumer interest
- Limited-edition packaging used to add visual appeal and showcase ethical credentials
- Craft spirits brand unveils cask-aged gin
- Flavoured gins appear in an array of colours
- Diageo targets Millennials with pink gin
- Unusual colours provide strong differentiation
- Growth in premium own-label NPD
- Botanicals detailed to enhance premium positioning
- Crossover brands enter the market
- Beer companies expand into white spirits
- …as do wine producers
- Condiments brand unveils garlic vodka
- References to terroir used to make significance of ingredient provenance more tangible
- Belvedere unveils terroir-focused Single Estate range
- Craft distillers emphasize their unique ingredients
- Waitrose launches first gin created by customer
- Leading players build up their RTD ranges
- Craft brewers launch their own pre-mixed G&Ts
- Smaller brands and retailers release premium RTDs
- Fruit and tea flavoured RTDs flag up their quality ingredients
- Drawing inspiration from the on-trade
Advertising and Marketing Activity
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- Advertising spend falls to a four-year low in 2016
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- Figure 29: Total above-the line, online display and direct mail advertising expenditure on white spirits^ and RTDs (sorted by 2016), 2013-17
- Diageo continues two-pronged focus on inclusivity and enjoyment
- Smirnoff airs its latest ‘we’re open’ advert
- ‘Choose Love’ campaign supports the LGBT community
- Gordon’s continues to push the treat aspects
- Gordon’s Facebook competition lays clues for followers
- Multiple brands promoted in link-up with Amazon
- Bacardi positions Grey Goose as ideal gift in Christmas advert
- New Bacardi campaign celebrates the carnival
- Pernod Ricard supports its rum brands
- Malibu projects aspirational ‘perfect summer’ image
- Havana Club looks to drive associations with Cuban lifestyles
- Smaller brands highlight their differences from the mainstream on social media
- Hendrick’s focuses on cucumbers and praises unconventionality
- Chase Distillery highlights its family-owned credentials and in-house production
- Nielsen Ad Intel coverage
Brand Research
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- Brand map
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- Figure 30: Attitudes towards and usage of selected brands, November 2017
- Key brand metrics
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- Figure 31: Key metrics for selected brands, November 2017
- Brand attitudes: Smirnoff and Gordon’s have the strongest quality associations
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- Figure 32: Attitudes, by brand, November 2017
- Brand personality: Smirnoff and Bacardi are the most widely seen as accessible
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- Figure 33: Brand personality – Macro image, November 2017
- Gordon’s is the most widely seen as traditional
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- Figure 34: Brand personality – Micro image, November 2017
- Brand analysis
- Absolut is widely seen as fun, and has something of a cool image
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- Figure 35: User profile of Absolut, November 2017
- Smirnoff is the most trusted brand
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- Figure 36: User profile of Smirnoff, November 2017
- Gordon’s is associated with tradition and quality
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- Figure 37: User profile of Gordon’s, November 2017
- Russian Standard performs well on purity and authenticity compared with other brands
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- Figure 38: User profile of Russian Standard, November 2017
- Sipsmith’s craft positioning boosts sophisticated image
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- Figure 39: User profile of Sipsmith, November 2017
- Bacardi scores well on fun
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- Figure 40: User profile of Bacardi, November 2017
- Over-45s are most inclined to recommend Greenall’s
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- Figure 41: User profile of Greenall’s, November 2017
The Consumer – What You Need to Know
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- Six in ten UK adults drink white spirits, while a third drink RTDs
- Ageing UK population to impede growth for both segments
- Vodka enjoys varied usage, while gin is associated with relaxing at home
- Price and promotions are key influences on white spirits buying
- Recommendations and gifting are key to recruiting new users
- Calorie labelling per serving on-pack and on menus could appeal to health-conscious drinkers
Usage of White Spirits and RTDs
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- Six in ten UK adults drink white spirits
- No gender bias in white spirits
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- Figure 42: Usage of white spirits, by type, October 2017
- Ageing UK population is a threat to white spirits
- Younger drinkers have the most varied repertoires
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- Figure 43: Repertoire of white spirit types drunk, October 2017
- Few people drink white spirits neat
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- Figure 44: Drinking of different serves of white spirits, (nets), October 2017
- Drinking with a mixer leads for all types except tequila/Mezcal
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- Figure 45: Drinking of different serves of white spirits, by type, October 2017
- A third of adults drink pre-mixed drinks
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- Figure 46: Usage of RTDs, by format, October 2017
- Ageing population will also affect RTDs
Usage Occasions for Selected Types of White Spirits
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- Vodka enjoys varied usage both at home and out-of-home
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- Figure 47: Usage occasions for selected types of white spirits, October 2017
- Gin tends to be chosen for relaxing at home
- Focus on cocktails could open up more a more varied range of occasions
- Tequila/Mezcal does better for out-of-home than at-home occasions
- On-trade recommendations should prove powerful in recruiting new users
- Few drink any type of white spirit with a meal
- Link-ups with retailers are a means to promote meal pairings
White Spirits Buying Factors
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- Price and promotions exert a significant influence
- Price is less compelling for the gifting occasion
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- Figure 48: White spirits buying factors, when buying for themselves and as a gift, October 2017
- White spirits’ high price underpins brand loyalty
- Brand loyalty is lower for white spirits than dark spirits
- Gin should be best-placed to tap into consumer interest in flavour
- Going well with mixers influences a quarter of buyers
- Recipe suggestions and in-store positioning can showcase mixability
- Combined packs with mixers could enhance the appeal of mixability when gifting
Behaviours Relating to White Spirits and RTDs
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- Recommendations are key to recruiting new users
- Discounts and ‘shared wisdom’ messages could act as incentives
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- Figure 49: Behaviours relating to white spirits and RTDs, October 2017
- Influence of bartenders offers scope for trading users up
- Spirits companies look to unlock the power of professional recommendations
- Gifting is a key entry point for white spirits
- Gin producers could push the ‘shared moment’ angle
- Visual appeal enhances the gifting potential
- Consumer concerns around sugar in RTDs pose a challenge and an opportunity
- Smaller brands launch lower-sugar RTDs in 2017
- On-pack charity pledges have wide appeal
- Smaller players lead the way on charity link-ups
Attitudes towards White Spirits and RTDs
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- On-pack calorie labelling per serving could appeal to health-conscious drinkers
- Calorie labels on drinks menus can boost white spirits’ appeal in the on-trade
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- Figure 50: Attitudes towards white spirits and RTDs, October 2017
- Strong interest in premium RTDs
- Cocktails have a weak image for convenience
- Subscription schemes could speak to consumer desire for convenience
Appendix – Data Sources, Abbreviations and Supporting Information
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- Abbreviations
- Consumer research methodology
Appendix – Market Size and Forecast
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- Figure 51: Total volume sales of white spirits and RTDs, 2012-22
- Figure 52: Forecast of UK sales of white spirits and RTDs, by value, best- and worst-case, 2017-22
- Figure 53: Forecast of UK sales of white spirits and RTDs, by volume, best- and worst-case, 2017-22
- Figure 54: Total volume sales of vodka, 2012-22
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- Figure 55: Forecast of UK sales of vodka, by value, best- and worst-case, 2017-22
- Figure 56: Forecast of UK sales of vodka, by volume, best- and worst-case, 2017-22
- Figure 57: Total volume sales of gin, 2012-22
- Figure 58: Forecast of UK sales of gin, by value, best- and worst-case, 2017-22
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- Figure 59: Forecast of UK sales of gin, by volume, best- and worst-case, 2017-22
- Figure 60: Total volume sales of white rum, 2012-22
- Figure 61: Forecast of UK sales of white rum, by value, best- and worst-case, 2017-22
- Figure 62: Forecast of UK sales of white rum, by volume, best- and worst-case, 2017-22
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- Figure 63: Total volume sales of tequila/Mezcal, 2012-22
- Figure 64: Forecast of UK sales of tequila/Mezcal, by value, best- and worst-case, 2017-22
- Figure 65: Forecast of UK sales of tequila/Mezcal, by volume, best- and worst-case, 2017-22
- Figure 66: Total volume sales of RTDs, 2012-22
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- Figure 67: Forecast of UK sales of RTDs, by value, best- and worst-case, 2017-22
- Figure 68: Forecast of UK sales of RTDs, by volume, best- and worst-case, 2017-22
- Forecast methodology
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Appendix – Advertising and Marketing Activity
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- Figure 69: Total above-the line, online display and direct mail advertising expenditure on white spirits^ and RTDs, by top 3 advertisers (sorted by 2016), 2013-17
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Appendix – Usage of White Spirits and RTDs
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- Figure 70: Usage of flavoured white spirits, by type, October 2017
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