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Online shopping spirits growth opportunity

Premiumisation has been a real driver of value and volume growth for the UK spirits industry, according to a market report by First Drinks, a leading supplier of premium spirits in the UK. 

The First Drinks Market Report 2011, which takes an in-depth look at the UK spirits and Champagne categories, highlights the continued role of premium brands (outperforming the market, across both the on and off-trade), the importance of innovation, insight and working closely with customers .

Over the past five years there has been a switch in consumption from the on-premise to the take home experience – the off-trade now accounts for 80% of spirit volume sales, the report notes. But while consumers are going out less, they are spending more when they do go out – hence the arrival of the Weekend Millionaire.

Other key findings in the report inlude:

• the spend on cocktails remains key with a 36% increase in outlets selling cocktails
• spirits have had a higher share of weekend sales than any other category in the past year
• the impact of special occasions will continue to be crucial for the on-trade as evidenced by the Royal Wedding where sales increased by 13%
• Innovation of the spirits category will play a key role in the future, particularly the development of ready to drink (RTDs) and smaller size formats
• smaller bottle formats have made premium spirits more accessible to consumers
• beer, wine and spirits gifting, valued at £572m, is an area which needs to be exploited more by the off-trade – malt whisky, cognac and vodka are the main gifting categories, and
• online shopping for spirits is a real growth opportunity for retailers.  Just 36% of online shoppers buy beer, wine and spirits compared to 89% in the general population

Chris Mason, MD of First Drinks comments: “The First Drinks Market Report represents a significant step change for the First Drinks business.  The report is a demonstration of our authority in the market and extensive understanding of the sectors we operate in.  As one of the major spirit brand building companies in the UK and a significant player within premium spirits, we believe that we are well qualified to give our take on the key trends and dynamics within the market and how we believe the categories will develop and evolve over the next year or so.

“Despite this report being published during a very challenging time for the economy, it clearly demonstrates the continued importance of premiumisation, best practice and working closely with customers.  If these key trends are pursued, we can ensure the exciting evolution of the drinks industry.”

The launch of the First Drinks Market Report comes in a year that the company announced a £55m investment package for its portfolio.  First Drinks is a significant player within premium spirits (number one in the segment of £20 and above in the off-trade), particularly prominent for malt, cognac and premium white spirits. The company has also moved up to the number two spirits supplier to the grocery channel, with a 9.5% share of the market.  Overall, the company is outperforming the UK market and growing in all trade channels including the on-trade and impulse sectors.

First Drinks’ portfolio includes the William Grant & Sons brands as well as the Rémy Cointreau portfolio (Rémy Martin, Cointreau, Piper-Heidsieck, Charles Heidsieck, Mount Gay and Passoã), Russian Standard and Illva: Disaronno and Tia Maria.

The data in the First Drinks Market Report has been supplied by leading market analysts.  Off-trade data relates to Nielsen data to 14 May 2011 and on-trade data is taken from CGA Strategy data to 19 March 2011.




1 July 2011 - Felicity Murray