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Aug 28, 2018

Alcohol sales in the pink

by Mary Anne FitzGerald - Client Services Director

Alcohol sales in the pink

The football season has kicked off once again after a tumultuous tournament in Russia and whilst football didn't come home this summer, booze certainly has and some alcohol brands at least, have a lot to celebrate. The excitement of the World Cup coupled with an ongoing heat wave has triggered massive sales spikes for beer, cider and perry. For the week of 30 June, when England played Panama, unit sales of beer rose by a cool 47.1% year on year, with an even more chilled (60.7%) rise for cider & perry.

Two reports published in July take a wider view of the mixed fortunes the alcohol sector. Britain’s 100 Biggest Alcohol Brands, published annually by The Grocer, uses Nielsen ScanTrack data to track off-trade sales*. This year’s key news is that we are drinking less but prepared to pay more for the pleasure. Consumption of the top 100 brands is down 14.8 million litres but we are forking out £349m more on our favourite tipples than last year, bringing sales of the top 100 to £9,420m.

Stella Artois is still in the top slot with value sales of £514.8m due in no small measure to its relentless and consistent pursuit of premium credentials to erode its mainstream perception. Reaping the rewards of its clear focus on football, Budweiser has overtaken Fosters to take the number three position, with spin-off brands Bud Light and alcohol free Prohibition Brew pulling in £30.5m extra, taking the brand’s total to £418.4m. This also means that AB InBev owns the top two selling beers and has even more need to differentiate their offerings.

Meanwhile, at the craft end of the beer spectrum and number 40 in the hit parade, Brewdog’s sales are up a brazen 83% to £72.2m.

The relative losers are mainstream and value brands, partly due to the premiumisation of consumer tastes, but also because of trading issues with retailers. The slump in sales of Bulmers (75) down £19.5m, Hardys (7), down £20.9m and Fosters (4) down £47.9m) are cases in point here.

So what’s the recipe for a successful alcohol brand. Diversification, innovation and NPD certainly play a key role, especially if this involves cider. Carling (5) for example has grown 8.7% largely due to its cider variants with Apple Cider being joined by Black Fruits Cider in March 2017. A similar story for Smirnoff (2), which would have shown a decline were it not for the £14.1m sales of its ciders which were originally launched in 2016. And the 2017 launch of Jack Daniels Tennessee Cider has already added £4.5m of the brand’s £24m value growth.

Much has been written about the rise of craft gin with questions raised about when the bubble may burst. Not any time soon according to William Grant. Its annual Market Report, also published this month, underlines the ongoing strength of the UK gin boom revealing that the category accounted for two thirds of all spirits sales growth in the past year. No surprise then that there are now 300 gin distilleries in the UK, twice the number in 2013.

But it’s not just the new posh kids on the block making their presence felt. Greenalls (61) ‘The Great British Spirit since 1761’ saw sales increase by £10.5m. But it’s Gordons (6), first produced in 1769, which is the biggest winner of all, gaining a massive £63.4m in off trade value sales. The standard variant flying off the shelves to the tune of £22m extra sales and the launch of Gordons Premium Pink last summer has been stratospheric. Not the first pink gin to come to market, but the first mainstream one with any significant scale.

So a toast to Diageo for, in the words of William Grant, the biggest and most successful spirits NPD of the last decade. Needless to say, other manufacturers have been swift to follow suit and it looks like the future for gin is not just bright it’s bright pink!

*MAT sales to 24th April 2018. Reproduced with kind permission from Nielsen.

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