Premium spirits brands ‘must offer more’

Thriftiness is the new norm, and the pressure is on for spirits brands to offer consumers more, emotionally or functionally, in order to get them to spend more, a market report has found.

Premium spirits brands are being urged to offer something for consumers to emotionally invest in (Photo: Wiki)

The recession has left an indelible mark on spirits consumers’ spending habits, as people are now only willing to trade up to brands to which feel they have a connection.

That is the view of this year’s William Grant & Sons Market Report, which looked closely at the state of the spirits sector in the UK, from changing consumer spending habits to category sales figures.

“Value is much more than just value for money; it is now measured as the value that the brand, product or service can provide the consumer,” the report said.

Gary Keogh, marketing director of William Grant & Sons UK, urged premium brands to take note of this trend and apply it to their marketing efforts. He said, “The market is more polarised than ever and it’s premium brands that can really take advantage of this trend.”

Highlighting the importance in consumers’ minds of forming “relationships with brands”, Keogh said that companies and brand who take the “longer, more sustainable view” will thrive.

On regional variation and the lasting effects of the global recession, Keogh added, “Growing confidence is being led by London and the South East in particular. But while the recession begins to fade it has left a lasting legacy in the form of consumer habits.

“Conscious choice-making about where to, and where not to spend disposable income is here to stay – thriftiness has become not only habitual but celebrated.  This is conscious spending, not cost-cutting across the board.”

Spirits has had a strong performance this year, the report revealed, growing almost twice as fast as the overall alcohol market, up 2.5%. The value of premium spirits has grown by 14.1% in a year, which is five times more than the total spirits market.

As the drinks business has reported recently, the number of food-led outlets in Britain is growing at a steady rate, up 4.9% in 2014, compared to drink-led outlets which decline at -3.8%.

As much as 70% of all on-trade outlets opening in London in 2014 were food-led, as city centres in particular take advantage of the growth in eating out occasions, the report found.

In the off-trade, the largest categories within the spirits sector are blended whisky and vodka, accounting for almost half of value sales. The fastest growing categories within spirits are flavoured/spiced rum, up 23.9%, and American whiskey, up 15.9%.

Another key finding of the report was that online retailing in Britain is now worth over £100bn, growing by 14%, with one in four people British people shopping online at least once a week.