White Spirits and RTDs - UK - March 2021

OVERVIEW
Key issues covered in this report
COVID-19: Market context
Economic and other assumptions
Products covered in this Report
EXECUTIVE SUMMARY
Impact of COVID-19 on white spirits and RTDs
Figure 1: Short-, medium- and long-term impact of COVID-19 on white spirits and RTDs, 11 March 2021
The market
Fall in value sales in 2020 nearly wipes out strong growth over 2015-19
Declining volume sales coupled with inflation expected for 2020-25
Figure 2: Total value sales of white spirits and RTDs, 2015-25
Gin sees the fastest growth over 2015-20, but white rum and RTDs are the star performers in 2020
Figure 3: Value sales of white spirits and RTDs, by segment, 2015 and 2020
On-trade closures send market value plummeting in 2020
No rise in spirits duties in 2021, but increased administration post-Brexit raises costs for operators
Ageing UK population will hamper category growth
Companies and brands
Leading spirits brands face increased competition
Premium launches continue in both white spirits and RTDs in 2020
Brands respond to the pandemic in their 2020 advertising
Gordon’s is the most trusted brand, while Malibu is seen as the most fun
Figure 4: Attitudes towards and usage of selected brands, December 2020
The consumer
Usage of white spirits falls in 2020 despite retail sales growth
Figure 5: Usage of white spirits, by type, October 2020
COVID-19 outbreak alters usage occasions for white spirits and RTDs
Figure 6: Behaviours relating to white spirits and RTDs, October 2020
Spirits with historical recipes and cocktail-making kits can help companies to tap into the home cocktail making trend
Figure 7: Interest in innovation in white spirits and RTDs, October 2020
Premium products have the chance to shine
Figure 8: Attitudes towards white spirits and RTDs, October 2020
A stronger health focus is needed in the category
Focus on at-home occasions will help to drive sales in 2021
Figure 9: Qualities associated with selected types of white spirits and RTDs, October 2020
ISSUES AND INSIGHTS
Innovate with healthier variants to tap into consumers’ increased health consciousness since COVID-19
Home cocktail-making trend offers good opportunities for the category
Target outdoor social occasions more strongly when marketing RTDs
THE MARKET – KEY TAKEAWAYS
Fall in value sales in 2020 nearly wipes out strong growth over 2015-19
Declining volume sales coupled with inflation expected for 2020-25
Gin sees the fastest growth over 2015-20, but white rum and RTDs are the star performers in 2020
On-trade closures send market value plummeting in 2020 
No rise in spirits duties in 2021, but increased administration post-Brexit raises costs for operators
Ageing UK population will hamper category growth 
MARKET SIZE AND FORECAST
COVID-19 outbreak hit the total value of the market, but sales should bounce back with the re-opening of the leisure sector
Figure 10: Short-, medium- and long-term impact of COVID-19 on white spirits and RTDs, 11 March 2021
Fall in value sales in 2020 nearly wipes out strong growth over 2015-19
Volume sales remain in growth in 2020 due to strong retail sales performance 
Figure 11: Total sales of white spirits and RTDs, by value and volume, 2015-25
Declining volume sales coupled with inflation expected for 2020-25
Ongoing restrictions and income squeeze to slow on-trade recovery in 2021
Income squeeze to dent off-trade sales in 2021
On-trade to regain ground in 2022, but tempered by alcohol moderation trend and continued homeworking
Ageing population to hinder volume sales for 2020-25
Inflation expected in the category over 2020-25
Figure 12: Total value sales of white spirits and RTDs, 2015-25
Figure 13: Total volume sales of white spirits and RTDs, 2015-25
Market drivers and assumptions
Figure 14: Key drivers affecting Mintel’s market forecast, 2015-2025 (prepared on 3 March 2021)
Learnings from the last recession
Figure 15: Growth in total value and volume sales of white spirits and RTDs, 2007-12
Forecast methodology
MARKET SEGMENTATION
Gin’s meteoric rise over 2015-20 boosted the entire category
Figure 16: Total value and volume sales of white spirits and RTDs, by segment, 2015-20
White rum gains from the at-home cocktail making trend and the hot summer
CHANNELS TO MARKET
On-trade closures send market value plunging in 2020
Figure 17: UK value and volume sales of white spirits and RTDs in the on- and off-trade, by type, 2018-20
Strong retail sales performance allows total volume sales to rise despite on-trade losses 
Long hot summer of 2020 boosts RTDs through retail
MARKET DRIVERS
Multiple factors affect white spirits prices
Spirits duty rise called off in 2020, but alcohol duties are under review
Government cancels planned rise in alcohol duties in 2021
Increased administration costs post-Brexit and exchange rates are crucial for the white spirits category
Decline in exports could drive down domestic prices
Success of Minimum Unit Pricing in Scotland prompts calls for England to follow suit
Sales decline expected in 2021 amid pressure on household incomes
Ageing population offers little support for either white spirits or RTDs
Figure 18: Usage of white spirits and RTDs, by age group, October 2020
UK government consults on nutritional labelling for alcoholic drinks
COVID-19 restrictions hit the hospitality sector hard in 2020
Growth in UK distilleries continues despite pandemic
COMPANIES AND BRANDS – KEY TAKEAWAYS
Leading spirits brands face increased competition 
Premium launches continue in both white spirits and RTDs in 2020
Brands respond to the pandemic in their 2020 advertising 
Gordon’s is the most trusted brand, while Malibu is seen as the most fun
MARKET SHARE
Smirnoff sees sales slip as competition heats up in the vodka category
Figure 19: Leading brands’ sales and shares in the UK retail vodka market, by value and volume, 2017/18-2019/20
Flavour innovation drives JJ Whitley’s meteoric rise in 2020
Own-label benefits from shoppers trading down 
Gordon’s grows sales comfortably but faces increased competition
Figure 20: Leading brands’ sales and shares in the UK retail gin market, by value and volume, 2017/18-2019/20
Bacardi reaps the rewards of white rum’s revival in 2020
Figure 21: Leading brands’ sales and shares in the UK retail white rum market, by value and volume, 2017/18-2019/20
Malibu benefits from the hot summer of 2020
Sierra benefits from growth in Tequila/mezcal, but faces increased competition
Figure 22: Leading brands’ sales and shares in the UK retail Tequila/mezcal market, by value and volume, 2017/18-2019/20
Gordon’s RTDs do not see the same success as its gins
Figure 23: Leading brands’ sales and shares in the UK retail RTD alcoholic drinks market, by value and volume, 2017/18-2019/20
WKD outperforms the wider RTDs category
LAUNCH ACTIVITY AND INNOVATION: WHITE SPIRITS
Premium spirits are well-placed to succeed
Premium spirits launches highlight their British provenance and unique ingredients
Figure 24: Examples of premium white spirits launches highlighting provenance and unique ingredients, 2020
Spirits brands innovate with environmentally-friendly packaging options
Absolut explores part-recycled and paper bottles
Bullards launches refill scheme for spirits
Figure 25: Bullards Coastal Gin – Bottle and refill pouch, 2020
Sustainable claims are rare in white spirits
Cooper King goes carbon negative
Nordic Spirits claims world first with vodka made from regeneratively farmed grain
New English vodka brand invites people to share in its tree-planting initiative
Figure 26: Examples of white spirits launches highlighting their environmental conservation efforts, 2020-21
Retail spirits launches support the hospitality sector
Figure 27: Examples of white spirits launches pledging support for the hospitality sector, 2020
One Gin expands its range
New flavoured spirits appear in an array of colours
More pink gins appear …
… and are joined by pink rums
Figure 28: Examples of pink gins and rums, 2020
Leading brands release citrus flavours
Figure 29: Gordon’s Sicilian Lemon Distilled Gin, 2020
Shimmering gin adds visual flair
Figure 30: Asda Extra Special Cola Cube Gin, 2020
Seasonal launches continue
JJ Whitley launches watermelon flavour for summer
Lone Wolf marks Cinco de Mayo 2020 with Cactus &amp; Lime Gin
Figure 31: Lone Wolf Cactus & Lime Gin
Winter flavours can help to encourage more year-round usage of white spirits
Figure 32: International examples of white spirits launches with winter flavours, 2020
Figure 33: One Gin Sage & Apple Premium London Dry Gin, 2020
Lower-ABV ‘gin’ highlights its low calorie status
Figure 34: Loca-Lab Minus 33 spirit drinks range
Anno Spirits launches “world’s strongest gin”
McQueen uses AR bottle labels to engage consumers amid COVID-19 restrictions
LAUNCH ACTIVITY AND INNOVATION: RTDS
Further NPD activity in premium RTDs in 2020
Leading and niche brands look to recreate the bar experience with RTD cocktails
Figure 35: Examples of premium RTDs promoted as allowing users to recreate the bar experience at home, 2020
All Shook Up highlights juice content and innovates with bag-in-box format 
Aldi launch should appeal to those with a less sweet tooth
Figure 36: Examples of premium RTDs launches with an emphasis on ingredients, 2020
WKD offers “grown-up flavours” and “cocktail perfection” with new MIXD range
Spirits brands launch RTD versions
Figure 37: Examples of new RTD launches by white spirits brands, 2020
RTDs could do more to target the winter months
Figure 38: Examples of RTDs launches with winter flavours, 2020
Leading alcoholic drinks brands release hard seltzers 
Figure 39: Examples of hard seltzers launches, 2020
White Claw expands its range
Opportunities for more hard seltzers with a craft positioning
Manchester Drinks puts a particular focus on health
Served looks to appeal on both health and ethical grounds
Figure 40: Further examples of hard seltzers launches, 2020-21
Lidl launch marks a rare example of an own-label hard seltzer 
Figure 41: Lidl Nordic Wolf Cherry & Cranberry Hard Seltzer, 2020
LAUNCH ACTIVITY AND INNOVATION: LOW AND NO ALCOHOL
Non-alcoholic spirits alternatives enter the mainstream 
Gordon’s launches zero-alcohol variant
Pink variants aim for a craft positioning 
Figure 42: Examples of pink non-alcoholic spirits alternatives, 2020
Smaller British brands highlight their ethical sourcing
Figure 43: Examples of non-alcoholic spirits alternatives with a strong emphasis on ethical sourcing, 2020
Newcomer brand claims to be “both premium and accessible in terms of price point”
Non-alcoholic RTDs look to build a sophisticated image
Agua de Madre brings kefir trend into the RTDs sphere
Figure 44: Examples of low-/non-alcoholic RTDs, 2020
ADVERTISING AND MARKETING ACTIVITY
Advertising spend falls in 2020
Diageo leads on spending 
Figure 45: Total above-the line, online display and direct mail advertising expenditure on white spirits^ and RTDs, 2019-20 (sorted by 2020)
Gordon’s looks to associate its Lemon variant with glamorous Italian lifestyles
Figure 46: Instagram post by Gordon’s promoting its Sicilian Lemon variant, September 2020
Interactive social media campaign for Gordon’s 0.0% looks to tap into the power of user recommendations
Whitley Neill focuses on expertise and provenance in Christmas campaign …
… and partners with Michelin-starred chef on food pairings
Influencers give details of their ‘gin rituals’
Bacardi highlights how fun is possible even under stay-at-home orders
Craft Gin Club pushes the excitement and anticipation of monthly gin deliveries
Absolut focuses on creativity and anticipates post-pandemic reunions
WKD branches out with cocktail recipes and meal pairing suggestions
Targeting students on Freshers’ Week
Selected responses to the COVID-19 restrictions
Gordon’s runs virtual pub quizzes in partnership with YouTube.
Bombay Sapphire focuses on creativity in Christmas campaign
Figure 47: Facebook post by Bombay Sapphire as part of its ‘12 Days of Creativity’ campaign, December 2020
Grey Goose provides cocktail delivery service
Hendrick’s makes a tongue-in-cheek response to the home exercise trend
Nielsen Ad Intel coverage
BRAND RESEARCH
Figure 48: Attitudes towards and usage of selected brands, December 2020
Key brand metrics
Figure 49: Key metrics for selected brands, December 2020
Brand attitudes: Gordon’s is the most trusted brand
Figure 50: Attitudes, by brand, December 2020
Brand personality: Malibu scores highest on the fun factor
Figure 51: Brand personality – macro image, December 2020
Gordon’s has the strongest image as traditional
Figure 52: Brand personality – micro image, December 2020
Brand analysis
Hendrick’s has a sophisticated and stylish image
Figure 53: User profile of Hendrick’s, December 2020
Gordon’s traditional image helps it to be the most trusted brand 
Figure 54: User profile of Gordon’s, December 2020
Smirnoff is seen as accessible and high quality
Figure 55: User profile of Smirnoff, December 2020
Absolut enjoys high user satisfaction, and is seen as (somewhat) pure
Figure 56: User profile of Absolut, December 2020
Bacardi scores well on accessibility and fun
Figure 57: User profile of Bacardi, December 2020
Malibu’s focus on beach holidays boosts its reputation for fun
Figure 58: User profile of Malibu, December 2020
WKD is especially favoured by under-35s
Figure 59: User profile of WKD, December 2020
THE CONSUMER – KEY TAKEAWAYS
Usage of white spirits falls in 2020 despite retail sales growth
COVID-19 outbreak alters usage occasions for white spirits and RTDs
Spirits with historical recipes and cocktail-making kits can help companies to tap into the home cocktail-making trend
Premium products have the chance to shine
A stronger health focus is needed in the category
Focus on at-home occasions to drive sales in 2021
IMPACT OF COVID-19 ON CONSUMER BEHAVIOUR
First lockdown boosts at-home drinking …
… but sales decline is likely in 2021 as people cut back on discretionary spending
Under-35s feel the pandemic’s economic impact most keenly
Figure 60: Those reporting that they or someone else in their household had lost their job or been furloughed as a result of the COVID-19 outbreak, by age group, surveyed 10-19 November 2020
Consumer wariness of bars/restaurants will slow on-trade recovery
Consumers’ renewed health focus will boost the alcohol moderation trend
Good opportunities for healthier variants
Shoppers’ efforts to minimise time spent in-store gives the advantage to familiar brands
Growth in online retail offers multiple opportunities
Four in 10 users are more interested in supporting small British brands since the outbreak
Shops should promote local brands to tap into the localism trend
Figure 61: Outdoor advertisement by London Borough of Wandsworth encouraging people to shop locally in order to support their community, 2020
Focus on sustainability to capitalise on consumers’ increased environmental awareness 
USAGE OF WHITE SPIRITS AND RTDS
Usage of white spirits falls in 2020
Figure 62: Usage of white spirits, by type, October 2020
Ageing UK population offers little support to white spirits
Drinking with a single mixer leads for all types of white spirits apart from Tequila/mezcal 
Figure 63: Drinking of different serves of white spirits, by type, October 2020
Usage of flavoured white spirits also falls in 2020
Figure 64: Usage of flavoured white spirits, by type, October 2020
A third of adults drink RTD alcoholic drinks 
Figure 65: Usage of RTDs, by type, October 2020
INTEREST IN INNOVATION IN WHITE SPIRITS AND RTDS
White spirits and RTDs with historical recipes spark interest
Figure 66: Interest in innovation in white spirits and RTDs, October 2020
Scope for expansion in white spirits with a strong historical focus 
Figure 67: Examples of white spirits with on-pack references to history, 2018-21
History offers a rich seam of inspiration for RTDs
Figure 68: International inspiration: Pampelonne Sparkling Wine Cocktails French 75, 2019
Potential for link-ups between spirits and premium soft drinks brands on retro RTDs
Offer recipe suggestions to tap into the homemade cocktails trend
Link up with TV/film streaming services to create immersive experiences
Cocktail-making kits appeal particularly to under-25s
Good opportunities for own-label
Cocktail kit delivery services would harness the growth in online retail …
… and could help the on-trade to recoup some of its lost sales
Alcoholic iced coffee RTDs are an untapped opportunity 
Figure 70: International examples of drinks blending coffee with alcohol, 2017-20
BEHAVIOURS RELATING TO WHITE SPIRITS AND RTDS
Outdoor socialising was a major purchase driver for RTDs in 2020
Figure 71: Behaviours relating to white spirits and RTDs, October 2020
Brands use social media and on-pack serving suggestions to encourage use at picnics
Figure 72: Instagram post by Gordon’s promoting its RTDs as being good for picnics, August 2020
Figure 73: Examples of RTDs promoted on-pack as being good for picnics, 2020
Opportunities for RTDS to continue to benefit from the picnic trend in 2021
‘Picnic meal deals’ and in-store positioning can help to drive sales
Promote low/no-alcohol RTDs as a better-for-you option 
Home cocktail-making trend offers opportunities for white spirits
Figure 74: Those reporting new or changed cocktail making habits since the COVID-19 outbreak, by age group, October 2020
Offer recipe suggestions in-store and through online retail to drive purchase
Figure 75: La Fée absinthe bottle with fold-out recipe booklet, 2020
Vary recipes by season to maintain consumer engagement
Group cocktail components together in-store as a further incentive
Harness the power of social media to drive consumer excitement
Money concerns serve to limit experimentation within the category
Promote different serves as a low-cost way to experiment 
Craft brands must push the message that value is more than just price
Miniature bottles can appeal both on value and health grounds
Call out the number of servings per bottle to boost value-for-money image
Figure 76: Inspiration from other categories: Nescafé Gold Blend outlines the number of servings per pack, 2020
ATTITUDES TOWARDS WHITE SPIRITS AND RTDS
Premium spirits and RTDs have the chance to shine
Figure 77: Attitudes towards white spirits and RTDs, October 2020
London bars offer cocktail delivery services during the lockdowns
Figure 78: Instagram post by Nightjar promoting its Speakeasy at Home service, November 2020
Opportunities for cocktail delivery services remain even once venues re-open
Need to educate consumers on white spirits’ zero-sugar status
A quarter of adults see non-alcoholic versions of white spirits as more interesting than standard soft drinks
Focus on celebrating everyday achievements to drive usage frequency
Use in-store promotions to boost non-alcoholic spirits
Figure 79: Display at Sainsbury’s Fulham Wharf promoting its range of alcohol alternatives, 2021
QUALITIES ASSOCIATED WITH SELECTED TYPES OF WHITE SPIRITS AND RTDS
Gin is the most widely seen as relaxing
Figure 80: Qualities associated with selected types of white spirits and RTDs, October 2020
Promote tea-based cocktails to strengthen emotional associations 
Focus on small-scale at-home celebrations to drive sales in 2021
Few see any type of white spirit or RTDs as versatile
Highlight the variety of possible serves to boost versatile image
Meal pairing suggestions would help to drive usage
APPENDIX – DATA SOURCES, ABBREVIATIONS AND SUPPORTING INFORMATION
Abbreviations
Consumer research methodology
APPENDIX – MARKET SHARE 
Figure 81: Leading brand owners’ sales and shares in the UK retail vodka market, by value and volume, 2017/18-2019/20
Figure 82: Leading brand owners’ sales and shares in the UK retail gin market, by value and volume, 2017/18-2019/20
Figure 83: Leading brand owners’ sales and shares in the UK retail white rum market, by value and volume, 2017/18-2019/20
Figure 84: Leading brand owners’ sales and shares in the UK retail tequila/mezcal market, by value and volume, 2017/18-2019/20
Figure 85: Leading brand owners’ sales and shares in the UK retail RTD alcoholic drinks market, by value and volume, 2017/18-2019/20
APPENDIX – LAUNCH ACTIVITY AND INNOVATION
Figure 86: New product launches in the UK retail white spirits and RTDs market, by top 20 claims, 2016-20 (sorted by 2020)
APPENDIX – ADVERTISING AND MARKETING ACTIVITY
Figure 87: Total above-the line, online display and direct mail advertising expenditure on white spirits^ and RTDs, 2019-20, by top five advertisers
APPENDIX – USAGE OF WHITE SPIRITS AND RTDS
Figure 88: Usage of flavoured white spirits (any), by age group, October 2020