Subscriber login Close [x]
remember me
You are not logged in.

Premium spirits worth 40% more to the on-trade at Christmas

Published:  17 August, 2018

The shift to premium spirits has happened and is here to stay, opening up a multimillion pound opportunity for the UK’s bars and restaurants this festive season.

Premium vodka, Irish whiskey and gin are the major opportunities this year according to Pernod Ricard, which urged the UK’s bars and restaurants to prioritise premium spirits at a briefing in London yesterday.

Premium spirits see a 40% uplift in the on-trade at Christmas, the Absolut and Jameson maker said, with cocktails and innovation around serves and experiences likely to further leverage this trend.

“The on-trade has shifted completely to premium spirits,” said commercial director Chris Ellis. “We’ve been saying that for ten years, but it’s happening now. Our advice is not to give space and investment to mass-markets brands,” which would only squander the greater margin opportunity offered by premium spirits.

The world number two in wines and spirits said the rise in premium spirits was behind a £391m surge in Pernod Ricard spirits category (on and off-trade) over the past two years.

Vodka is the biggest opportunity, said on-trade channel director Mark Harris, who predicts the Porn Star Martini will become the biggest cocktail this Christmas.

Vodka category accounts for 30% of Christmas sales in the on-trade (CGA) – a portion of the market that Pernod Ricard is now aiming to further penetrate with Absolut.

Absolut currently has the biggest steak in the UK premium vodka category with 39% share.

Pernod Ricard is now aiming to capitalise on the opportunity represented by the on-trade with a major boost to its marketing budget.

The investment in consumer-focused campaigns and POS materials is being increased by 50% in the run up to Christmas, with the aim of helping to “translate” its strong on-trade presence to he off-trade, where premium spirits are also growing at a faster rate compared to mainstream brands.

Last Christmas, premium spirits were up 16%, compared to the overall spirits category in the UK, which saw 7% growth (Nielsen).

“We are investing in the on-trade to see results in the off-trade,” Chris Shead, off-trade channel director, told Harpers.

“It’s a great place to be right now as we’re the number one supplier to the UK’s bars and restaurants, which is where premium spirits is growing.”

On-trade channel director Mark Harris, explained to Harpers that Pernod is now focused on getting the message out to its customers that cocktails are “no longer niche”, and that dialling up innovation around serves and experiences is now key to maximising all-year round, as well as Christmas, sales.

“Cocktails are now worth more than Champagne at Christmas, worth over half a billion pounds,” he said.

The number of on-trade outlets offering cocktails has risen from a quarter to a third in two years, he added; but stressed that rationalising these trends behind the bar is also important.

“You don’t need 20 different gins,” he said. “Get the core range right, following a good, better, best structure, then layer in a few local brands.”

Above all, outlets need to offer consumers a journey.

Part of the way Pernod Ricard is aiming to achieve this is by NPD.

Of the £391m growth in spirits at the French giant in the past two years, £132 of this came from new products, including Beefeater Pink.

This flavoured strawberry variant is now available in 15,000 Sainsbury’s outlets from a standing start earlier in the year, and is part of Pernod’s push to engage and provide “Instagramable moments”.

“The experience generation is reshaping spirits,” Shead said in conversation with Harpers. “Flavour and looks are everything, from pink spirits to the craft movement in beer and cask-finished whisky.

“Flavour exploration in particular is opening opportunity for specialists independents. Retailers in this sector should play to this, using every opportunity to engage in store and once consumers have left via social media.”




Keywords: