Speaking at the company’s annual winter briefing in London, Diageo executives said the festive period represents a big opportunity for licensees to boost spirits sales and highlighted the firm’s own strategies to help the trade grow revenues this winter.
Faith Holland, head of on-trade category development at Diageo, said the spirits category had the highest uplift in on-trade sales last Christmas and that licensees could expect similar results this year.
“Certainly spirits is the category that shows the greatest uplift over the Christmas period, and if you think about total drink sales, over half of all additional drinks sold at Christmas last year were spirit-based drinks,” said Holland.
Part of the increased opportunity for spirits sales over Christmas could be down to consumers broadening their drinks “repertoire”, according to Diageo. Holland said consumers are “more likely to buy from lots of different categories”.
“Christmas is a great time to convert those undecided customers into a profitable category like spirits,” she said.
And Diageo reckons there is more that can be done in outlets to promote spirits, highlighting a survey by data firm CGA which found only 7% of consumers recalled seeing promotional drinks materials on a night out.
Holland suggested operators use menus, “particularly food menus at this time of year”, blackboards and bar displays “to really show their customers what they’ve got to offer at this time of year”.
“Customers are prepared to spend a little bit more and are looking for new and different experiences,” said Holland.
Operators looking to make the most of the festive period could also benefit from tailoring their offer over the season by promoting the right drinks for the right occasion, according to Diageo.
Christmas is a great time to convert those undecided customers into spirits.
Holland highlighted four “key dates” for operators to capitalise on: ‘Black Friday’ (the last Friday before Christmas), Christmas Eve, Christmas Day and New Year’s Eve.
Black Friday, which Diageo views as a “big night out, Christmas party occasion” could present an opportunity to sell more cocktails while Christmas Day was described as a “food-led occasion”, opening up the opportunity to promote pre and post-dinner drinks.
The festive period also offers publicans the opportunity to mix up the serves they offer, with Holland suggesting they experiment with seasonal garnishes and glassware.
In addition to pushing spirits as a whole this Christmas, Diageo highlighted premium serves in particular as a profit driver for publicans over the festive period.
The firm, which defines premium spirits as those priced at 10% above the market leader in a category, claimed that over one in five spirits sold over the festive period was premium compared with an average of one in six for the rest of the year.
“We see that [trend] across all the sub categories of spirits,” said Holland.
For Diageo, premium spirits are for life, not just for Christmas; and Nick Temperley, head of Diageo’s Reserve Brands, has targeted a 20% share of the business for the premium portfolio, up from the “12 to 13%” that it has at the moment.
In the drive to boost this portfolio, which includes brands such as Tanqueray No. Ten, Ron Zacapa rum and Ciroc vodka, Temperley is advocating a partnership approach between the firm and the trade.
“If we continue to work with our bartender community these are the kind of [premium] products people will go to,” he said.