Bright future ahead for own brand alcoholic drinks

Dave Rigby at Alcohol Solutions explains how the relaxing of Covid-19-related lockdown measures is fuelling the reinvention of own brand alcohol drinks

Dave Rigby Acohol Solutions

The relaxing of pandemic lockdown measures has created something of a perfect storm that is driving innovation in own brand alcohol retail.

Since the UK on-trade reopened, along with a rise in staycations over summer months, the British public are spending the money they’ve saved during lockdowns. Varying estimates suggest Britons have amassed hundreds of billions of pounds in their bank accounts, with pent-up demand benefitting out-of-home eating and drinking.

According to Barclaycard, sales in pubs and bars rose by 40 per cent in June this year. However, as people started to spend more on going out, they spent less in the off-trade. Kantar data showed that take-home sales of alcohol were down by 3 per cent for the four weeks to mid-July. This was despite the period covering most of Euro 2020 – a major sporting event that usually drives a sales spike.

Consumers missed out on many festive celebrations and Christmas socials last year because of lockdown. As Barclaycard’s data illustrates, consumers want to make the most of every occasion this year, and there are no signs yet of this trend abating. 

Additionally, the night-time economy has only just reopened in full and is likely to hold appeal amongst people who have missed out during the past 18 months. The government is also backing a much-needed hospitality strategy to help the sector continue its recovery from the pandemic. This may offer added support to encourage consumer spend on out-of-home eating and drinking. 

These factors are creating a perfect storm, which risks making it even more competitive for take-home alcohol sales. In our experience of conversations and briefs from customers, this is something supermarkets are already aware of and addressing. They are doing so by innovating in own brand alcohol, both in terms of flavour creation and premiumisation. 

Multiples are looking at how they can create a point of difference in the alcohol aisles by offering consumers drinks they can’t necessarily buy in bars, as well as enhancing at-home serves. Own brand ranges create the opportunity to do this, whilst also giving a supermarket a competitive edge amongst its peers. If they offer popular, desirable brands that shoppers can’t buy in other stores, they increase their chances of winning the battle for harder-fought sales. 

Innovation and premiumisation in own brand ranges, especially alcohol, is also increasingly disruptive – a trend set by the likes of Aldi and Lidl. The own label category has long been considered by consumers as the lower-cost, and perhaps, lower-quality alternative to big brands. Shoppers don’t usually look to own brand to be surprised and delighted. This is changing and we’re seeing own label products evolve to become brands, which encourage footfall and spend.

This trend of innovation could drive the continued reinvention of supermarket ready-to-drink products (RTDs). Canned cocktails have evolved in recent years to enable consumers to easily open and pour bar-quality drinks at home, at a fraction of the cost of what they would spend going out. 

We are also likely to see innovation in the premiumisation of own brand flavoured liqueurs. This category is still establishing itself and the time is ripe for it to gather pace. Liqueurs appeal to a growing consumer base that favours lower-alcohol serves and are traditionally a sales hit during the autumn and winter months, particularly around Christmas. We can expect to see supermarkets experimenting with indulgent wintery and festive flavours that offer consumers something unique: think apple pie, gingerbread and even Christmas pudding. 

If flavoured own brand liqueurs prove a festive hit, it could lead to further innovation in this category next year. Lighter, fruity liquids are often popular in the summer months and are ideal for at-home occasions, as they can be easily mixed to create both simple serves and cocktails. 

Own brand alcohol is also likely to see continued growth in the gin category, with the launch of more flavoured gins that are distilled using autumn berries and fruits. Beyond this, we can also expect to see fast growth in flavoured own brand rum-based spirits. The popularity of the spirit has grown in recent years and the normalisation of flavoured gins has created new opportunity for the broader rum category. Consumers are much more willing to experiment with different tastes and choose bottles beyond the original and 'spiced' variants of rum. 

Only time will truly show how own brand alcohol retail develops in the coming months and what reinvention and innovation we will see in the alcohol aisles. One thing is for sure – amidst competition and uncertainty, supermarkets won’t stand still, and the category will continue to evolve beyond the low-priced, value connotations of own label. New flavours, seasonal ingredients and premium tastes are an effective way to achieving this.

19 November 2021