Dark Spirits and Liqueurs - UK - September 2015

OVERVIEW
What you need to know
Covered in the report
EXECUTIVE SUMMARY
The market
Steady value growth masks stagnating volumes
Figure 1: Forecast of UK value sales of dark spirits and liqueurs, 2010-20
Figure 2: Forecast of UK volume sales of dark spirits and liqueurs, 2010-20
Whisky continues to dominate the market
Similar growth trends in both sales channels
Companies, brands and innovation
Diageo leads the way in both value and volume sales
The Famous Grouse further extends its dominance
Figure 3: Retail value sales of the leading dark spirit and liqueur brands in the UK, 2014/15*
Positive performances elsewhere in the category
Total category adspend nudges upwards in 2014
The consumer
60% of adults drink dark spirits/liqueurs
Figure 4: Usage of types of dark spirits, July 2015
Single malt whisky is the most likely type to be cited as a favourite
Large supermarkets dominate off-trade sales locations
Dark spirits are popular in both up- and low-tempo occasions
Figure 5: Occasions for drinking dark spirits and liqueurs, July 2015
Single malt whisky enjoys a number of positive associations
Price hinders consumers’ willingness to experiment
Figure 6: Attitudes towards dark spirits and liqueurs, July 2015
Honey and cherry can provide sweet success for spirit brands
What we think
ISSUES AND INSIGHTS
Smaller bottles can provide big opportunities
The facts
The implications
Brandy could step out from whisky’s shadow
The facts
The implications
Tapping into the growth of spirit beers/ciders and beer cocktails
The facts
The implications
Scope to boost online purchases of dark spirits and liqueurs
The facts
The implications
THE MARKET – WHAT YOU NEED TO KNOW
Price rises mask slow volume growth
Whisky continues to dominate the market
Slow volume decline in the brandy segment
Dark rums continue to grow rapidly
Liqueurs return to marginal growth
Similar growth trends in both sales channels
MARKET SIZE AND SEGMENTATION
Steady value growth masks stagnating volumes
Figure 7: Total value and volume sales of dark spirits and liqueurs, at current and constant prices, 2010-20
Figure 8: Forecast of UK value sales of dark spirits and liqueurs, 2010-20
Figure 9: Forecast of UK volume sales of dark spirits and liqueurs, 2010-20
Figure 10: Ratio of value and volume sales in the dark spirits and liqueurs market, by segment, 2015 (est)
Whisky continues to dominate the market
Figure 11: Total value and volume sales of whiskies, at current and constant prices, 2010-20
Figure 12: Forecast of UK value sales of whisky/whiskey, 2010-20
Little change in the brandy segment
Figure 13: Total value and volume sales of brandies, at current and constant prices, 2010-20
Figure 14: Forecast of UK value sales of brandy/Cognac/Armagnac, 2010-20
Dark rums continue to grow rapidly
Figure 15: Total value and volume sales of dark/golden/spiced rums, at current and constant prices, 2010-20
Figure 16: Forecast of UK value sales of dark/golden/spiced rums, 2010-20
Liqueurs return to marginal value growth
Figure 17: Total value and volume sales of liqueurs, at current and constant prices, 2010-20
Figure 18: Forecast of UK value sales of liqueurs, 2010-20
CHANNELS TO MARKET
Similar growth trends in both sales channels
Figure 19: Value and volume sales of dark spirits and liqueurs, by channel, 2013-15
MARKET DRIVERS
Alcoholic drink prices continue to rise
Figure 20: UK excise duty rates for selected alcoholic drinks, 2003-15
Figure 21: RPI indexed annual change for alcoholic drink prices versus all items except housing, 2000-14
Consumers’ financial health recovers but remains fragile
An embattled on-trade industry
UK consumers continue to cut back on alcohol
Bridging the gender divide
Figure 22: Usage of types of dark spirits and liqueurs, by gender, July 2015
Population changes could also impact the market
KEY PLAYERS – WHAT YOU NEED TO KNOW
Diageo leads the way in both value and volume sales
The Famous Grouse extends its lead
Courvoisier achieves strong growth
Captain Morgan leads dark rum
Baileys leads the liqueur segment
Total category adspend nudges upwards in 2014
MARKET SHARE
Diageo leads the way in both value and volume sales
Figure 23: Leading manufacturers’ shares of dark spirit and liqueur sales in the UK off-trade, 2014/15*
The Famous Grouse further extends its lead in whisky
Figure 24: Retail value sales of the leading whisky brands in the UK, 2012/13-2014/15
Figure 25: Retail prices of selected whisky brands (70cl bottles), July 2015
Whyte & Mackay and Teacher’s also enjoy strong performances
Courvoisier achieves strong growth
Figure 26: Retail value sales of the leading brandy/Cognac brands in the UK, 2012/13-2014/15
Figure 27: Retail prices of selected brandy/Cognac brands (70cl bottles), July 2015
Captain Morgan drives growth in the dark rum category
Figure 28: Retail value sales of the leading dark/golden/spiced rum brands in the UK, 2012/13-2014/15
Figure 29: Retail prices of selected dark/golden/spiced rum brands (70cl bottles), July 2015
Jack Daniel’s honey boosts liqueur sales
Figure 30: Retail value sales of the leading liqueur brands in the UK, 2012/13-2014/15
Figure 31: Retail prices of selected liqueur brands (70cl bottles), July 2015
BRAND COMMUNICATION AND PROMOTION
Total category adspend nudges upwards in 2014
Figure 32: Recorded above-the-line, online display and direct mail total advertising expenditure on dark spirits and liqueurs, by category, 2012-15
BBFB leads the way in category adspend
Figure 33: Top 15 highest-spending brands in the dark spirits and liqueurs category, 2012-15
Diageo invests in its leading brand
Other selected campaigns
TV remains the most popular channel for advertisers
Figure 34: Channels for advertising in the dark spirits and liqueurs category, 2012-15
LAUNCH ACTIVITY AND INNOVATION
NPD in whisky/whiskey
The market leaders continue to innovate
Johnnie Walker looks to offer a multisensory experience…
…while Glenfiddich launches a new website
New Scotch whiskies target younger drinkers
Packaging revamps look to drive standout
NPD in brandy/Cognac/Armagnac
NPD in dark/golden/spiced rum
NPD in liqueurs
Pimm’s looks to new flavours
BRAND RESEARCH
What you need to know
Brand map
Figure 35: Attitudes towards and usage of selected dark spirit and liqueur brands, July 2015
Key brand metrics
Figure 36: Key metrics for selected brands, July 2015
Brand attitudes: The Famous Grouse scores strongly on trust and reputation
Figure 37: Attitudes, by brand, July 2015
Brand personality: Jack Daniel’s and Southern Comfort are seen as vibrant and fun
Figure 38: Brand personality – Macro image, July 2015
Dark spirit and liqueur brands struggle for differentiation at the micro level
Figure 39: Brand personality – Micro image, July 2015
Brand analysis
Jack Daniel’s (JD)
Figure 40: User profile of Jack Daniel’s, July 2015
Jameson
Figure 41: User profile of Jameson, July 2015
The Famous Grouse
Figure 42: User profile of The Famous Grouse, July 2015
Jim Beam
Figure 43: User profile of Jim Beam, July 2015
Southern Comfort
Figure 44: User profile of Southern Comfort, July 2015
Grant’s
Figure 45: User profile of Grant’s, July 2015
Bell’s
Figure 46: User profile of Bell’s, July 2015
THE CONSUMER – WHAT YOU NEED TO KNOW
60% of adults drink dark spirits/liqueurs
Single malt whisky is the most likely type to be cited as a favourite
Large supermarkets dominate off-trade sales locations
Dark spirits are popular in both up- and low-tempo occasions
Single malt whisky enjoys a number of positive associations
Price hinders consumers’ willingness to experiment
Honey and cherry can provide sweet success for spirit brands
USAGE OF DARK SPIRITS AND LIQUEURS
60% of adults drink dark spirits/liqueurs
Figure 47: Usage of dark spirits, by type, July 2015
Single malt is the most popular whisky to drink neat
Figure 48: Ways of drinking types of dark spirits, July 2015
Brandy drunk by a quarter of adults
Dark/golden/spiced rum thriving on its mixability
Liqueurs are drunk by three in 10 adults
Figure 49: Usage of liqueurs and flavoured dark spirits, by type, July 2015
Figure 50: Ways of drinking types of liqueurs and flavoured dark spirits, July 2015
35% of adults drink three or more types of dark spirits/liqueurs
Figure 51: Repertoire of usage of dark spirits and liqueurs, July 2015
PREFERENCES OF DARK SPIRITS AND LIQUEURS
Single malt whisky is the most likely type to be cited as a favourite
Figure 52: Dark spirits/liqueurs ranked ‘favourite’ among users of each type of drink, July 2015
Cream-based liqueurs are also a favourite type of many users
Non-cream liqueurs struggle to become favourites
Brandies and dark rums appear to be repertoire drinks, not favourites
PURCHASING LOCATIONS AND WILLINGNESS TO SPEND ON DARK SPIRITS
Large supermarkets dominate off-trade sales
Figure 53: Off-trade locations for buying dark spirits and liqueurs, July 2015
Specialists and online channel remain niche
Gifting can be an effective means of encouraging trading up
Figure 54: Willingness to spend on premium dark spirits and liqueurs, per bottle, July 2015
OCCASIONS FOR CONSUMPTION
Dark spirits are popular in both up- and low-tempo occasions…
Figure 55: Occasions for drinking dark spirits and liqueurs, July 2015
…but less so as part of nights out
PERCEPTIONS OF DARK SPIRITS
Single malt whisky enjoys a number of positive associations
Figure 56: Perceptions of dark spirits, July 2015
Blended whisky is seen most widely as value for money
Bourbon winning the battle for younger drinkers
Brandy and dark rums fail to instigate many strong responses
ATTITUDES TOWARDS DARK SPIRITS AND LIQUEURS
Price hinders consumers’ willingness to experiment
Figure 57: Attitudes towards dark spirits and liqueurs, July 2015
Many women prefer white spirits
Price is more important than brand for many drinkers
Craft drinks appeal to two in five
Flavour innovation proves divisive
Interest in NPD and alcohol units driven by younger drinkers
INTEREST IN FLAVOURED DARK SPIRITS AND LIQUEURS
Honey and cherry can provide sweet success for spirit brands
Figure 58: Interest in flavours of dark spirits and liqueurs, July 2015
A number of other flavours interest a quarter of these drinkers
Lesser used flavours are reflected in less interest
TARGET GROUPS
Figure 59: Target groups for dark spirits and liqueurs, July 2015
Price-conscious (28%)
Enthusiasts (35%)
Disengaged (37%)
APPENDIX – DATA SOURCES AND ABBREVIATIONS
Data sources
Abbreviations
Fan chart forecast
APPENDIX – MARKET SIZE AND SEGMENTATION
Figure 60: Best- and worst-case forecasts for the total dark spirits and liqueurs market, by value, 2015-20
Figure 61: Best- and worst-case forecasts for the total dark spirits and liqueurs market, by volume, 2015-20
Figure 62: Best- and worst-case forecasts for the whisky market, by value, 2015-20
Figure 63: Best- and worst-case forecasts for the whisky market, by volume, 2015-20
Figure 64: Forecast of UK volume sales of whisky/whiskey, 2010-20
Figure 65: Best- and worst-case forecasts for the brandy/Cognac/Armagnac market, by value, 2015-20
Figure 66: Best- and worst-case forecasts for the brandy/Cognac/Armagnac market, by volume, 2015-20
Figure 67: Forecast of UK volume sales of brandy/Cognac/Armagnac, 2010-20
Figure 68: Best- and worst-case forecasts for the dark/golden/spiced rum market, by value, 2015-20
Figure 69: Best- and worst-case forecasts for the dark/golden/spiced rum market, by volume, 2015-20
Figure 70: Forecast of UK volume sales of dark/golden/spiced rum, 2010-20
Figure 71: Best- and worst-case forecasts for the liqueurs market, by value, 2015-20
Figure 72: Best- and worst-case forecasts for the liqueurs market, by volume, 2015-20
Figure 73: Forecast of UK volume sales of liqueurs, 2010-20
APPENDIX – MARKET SHARE
Figure 74: Leading manufacturers’ shares of dark spirit and liqueur sales in the UK off-trade, 2014/15*
Figure 75: Retail volume sales of the leading whisky brands in the UK, 2012/13-2014/15
Figure 76: Retail volume sales of the leading brandy/Cognac brands in the UK, 2012/13-2014/15
Figure 77: Retail volume sales of the leading dark/golden/spiced rum brands in the UK, 2012/13-2014/15
Figure 78: Retail volume sales of the leading liqueur brands in the UK, 2012/13-2014/15