Thirst for spirit knowledge grows


Interest in brands’ heritage and authenticity on rise, report says

DO you tell your customers where the beef on your menu comes from? Or promote the fact that the seafood is locally-sourced?
It’s no secret consumers are becoming more interested in the origins of the food on their plate.
And it seems their thirst for knowledge is just as pronounced when it comes to premium spirits.
In its inaugural Market Report, published last week, First Drinks, the distributor behind Sailor Jerry, Hendrick’s, Grant’s and Monkey Shoulder, concludes that premium brands are no longer just about an “extroverted bling culture”.
“People are a lot more brand savvy – heritage and authenticity are increasingly important when it comes to drinks, in line with food,” First Drinks marketing director Una McCullough told SLTN.
“Consumers are definitely feeling the pinch – they’re going out less but they are spending more.
“In return, they’re looking for heritage, authenticity, quality and value.
“I think the premium brands and ‘premiumisation’ trends will continue; consumers are looking for that feel-good occasion.”
Consumers’ changing relationship with spirits is highlighted in the First Drinks report, which suggests premium spirits are performing strongly in the UK’s pubs, clubs, restaurants and hotels.
The on-trade spirits market is said to be worth £4.3 billion, up 3% on last year. Based on data from CGA Strategy, for the year to March 19, the report suggests premium spirits – up 11% in the year to March 19 to £234m – accounted for much of the growth.
The overall volume of spirits sold in pubs and clubs remained flat, while value rose 3% to £3.5bn.
Hotels and restaurants also saw a 3% rise in the value of spirits sold to £758m, with volumes up 2%.
Vodka continues to dominate the landscape in the on-trade, according to the report, with a 35% volume share and accounting for 34% of the value of spirits sold, although sales remained relatively flat with volume down 1% and value down 2%.
Premium vodka brands are said to have delivered a strong performance as bars have added ‘trade-up’ options to the gantry.
Gin delivered a similar performance at the bar, with the volume of spirit sold remaining flat and value down 2%.
But it’s golden rum and flavoured vodka that are considered the star spirits performers.
Flavoured vodka saw sales volumes in the GB on-trade rocket 112%, while value soared 103% to £73m.
The volume of golden rum sold in the on-trade was up 19%, while sales values climbed 24% to £136m.
More than 45,000 outlets now stock golden rum – 4000 more than a year ago, concludes the report, which cites the spirit’s mixability with ginger beer as a major factor behind the growth.
In fact, First Drinks reckons mixability is key to driving growth across most spirits categories.
It said there has been “significant growth” in cocktails as bars seek to offer “more sophisticated” drinks menus. And McCullough predicts the growth will continue.
“Offering quality serves, like Hendrick’s and tonic with cucumber, is key; it’s important to give consumers something they can’t get at home,” she said. “Consumers can buy a Mojito off the shelf in a supermarket so the on-trade must make sure they’re offering a super tasty Mojito so consumers feel they’re getting value.
“It’s all about quality of serve.
“Operators need to give people a reason to go out.

Premium points
• The on-trade total spirits market is worth £4.3bn, up 3% on last year.
• Premium spirits are worth £234m in the on-trade, up 11%.
• Spirits sales in pubs and clubs are worth over £3.5bn, up 3%; sales of spirits in hotels and restaurants are valued at more than £758m, up 3%.
• Vodka remains the biggest-selling spirit in the on-trade, with a 35% volume share.

Source: First Drinks Market Report 2011

“Events like the Royal Wedding this year and the Olympics and Diamond Jubilee holiday next year also represent great opportunities for the on-trade to really drive sales of premium spirits and cocktails. I think the whole thing around events and giving people reasons to go out and celebrate is becoming increasingly important.
“The on-trade is absolutely key for us and it’s important we tie ourselves together going forward. We spend £55 million on our brands in the UK and we’re directing more of that to the on-trade. We all have to take a long term view of building premium brands.
“Are we post recession? Probably not. But it’s not all doom and gloom.”