Premium shift boosts dark spirits’ fortunes

Dark spirits are enjoying a resurgence in popularity in the UK on-trade, driven by an ongoing trend towards more premium products.

Writing in November’s edition of the drinks business, Kylie Poole of UK on-trade data specialist CGA Strategy reported: “The category is currently performing ahead of total spirits with a near-level trend of -0.1% decline over the latest MAT (data to 4 April 2012), compared to that of total spirits, which is down -0.4%.

“In contrast”, she noted, “white spirits are seeing declines of -3.8% compared to a year ago.”

Suggesting that this relatively strong performance from the dark spirits category within the UK on-trade forms part of a wider “premiumisation trend”, Poole noted: “Dark spirits value outperforms volume with +10.1% growth.”

Among the chief beneficiaries of this premium shift, she highlighted single malt whisky, which is leading the category with volume growth of 19.8%.

“Consumers’ desire for heritage and provenance is ideal for this category, which, coupled with increased levels of education from bar staff to guide consumers through its complexity, is helping to drive volume sales”, Poole outlined.

With imported whiskies, blends and Cognac also riding on this trend, she observed: “Johnnie Walker Black Label is leading the growth in blends but smaller brands such as The Black Grouse and Monkey Shoulder are also showing a strong performance as licensees look to capitalise on trade-ups.

“Imported whisky growth is driven by the ongoing popularity of premium bourbons. The glamorous effect of cult TV shows such as Mad Men and a wider nostalgia trend have seen more consumers jump on the bourbon bandwagon.”

Turning to the decline seen within the white spirits category, Poole noted that its “fortunes are intertwined with the big players.” She illustrated this with the example of Smirnoff Red, “which saw a volume decrease of -7.1%, as sales are cannibalised both within the category by premium brands, and outside the category by liqueurs and specialities.

“Consumers are looking for something different from their on-trade experience,” Poole concluded.

This view is backed up by the white spirit brands and sub-categories that have been enjoying more positive figures. “Premium and super-premium vodka especially continues to see growth as consumers look to treat-spend on nights out, she observed. “A particular winner here is Grey Goose, which has seen +17% volume growth.”

There was also good news for premium gin sales, which experienced volume growth of +5.9%. Analysing this performance, Poole remarked: “Once seen as being for ‘parents’, the gin category has opened up to a younger demographic thanks to quirky, trendy brands such as Hendrick’s and Sipsmith.”

Turning to the rum category, she once more highlighted an alignment with the fortunes of its biggest brands. “Although still in decline, Bacardi Superior and the white rum category as a whole are seeing a much improved performance as they capitalise on the cocktail trend,” Poole commented.

She highlighted the findings of the recent CGA Cocktail Report, which named the Mojito as the UK’s most popular cocktail. “As this trend continues to flourish, it is expected that white rum’s performance will continue to improve”, concluded Poole.