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Spirits and Champagne market in the UK

First Drinks has published its second annual Market Report which looks at the spirits and Champagne categories in the UK. The report looks at current trends and dynamics which impact the UK's on- and off-trade. It focuses on category and brand performance and key growth drivers, and also highlights the continued roles of premium brands.

The report finds that tough economic times are still impacting heavily on the UK drinks market. Consumers are reacting in one of two ways – trading up and buying less, or trading down and buying more. Quality is also a key factor for consumers – value across all price points is increasingly important to shoppers. Provenance is also increasingly important: there has been a revival of interest in craft, tradition, heritage and provenance. The importance of an authentic story in building brands is becoming more and more important.

Consumers are increasingly experimenting with taste and flavours, particularly in the on-trade. Interest in cocktails is also growing, with cocktail consumption set to grow by over 10% in the next two years. According to the report, 76% of on-trade outlets report equal or increased cocktail sales year on year.

Meanwhile, online shopping has taken off faster in the UK than anywhere in Europe with 26% penetration, with the report urging retailers to embrace this opportunity. Gifting also remains crucial for the off-trade – spirits currently account for one in three of all alcohol gift purchases.

The convenience channel is also growing; it is predicted to grow by more than £10bn in the next four years. The report points out that rising fuel costs mean that consumers are shopping locally to save money.

The report also highlights that major events and special occasions have meant that retailers have seen uplifts in profit of around 20%. This is important for all areas of the trade and it is crucial to get the timing right on key activations throughout the year.

The impact of policy and regulations on promotions continue to affect the trade. Maintaining accessibility will be central to continued growth. Along with the increase in the average unit price, growth in small spirits packs such as 35cl and 50cl has been witnessed.

First Drinks is the leading supplier of premium spirits in the UK and is recognised as having a portfolio of iconic and authentic brands. Commenting on the launch, First Drinks managing director Chris Mason says: "In a marketplace which appears to be polarising between the high end and the lower end of the market, we remain totally committed to building premium brands – this is at the heart of our ethos. It is essential that we fully understand current trends and adapt to the needs of shoppers and consumers in this ever-changing market. This is something the First Drinks Category Management team do exceptionally well, providing retailers with impartial advice on merchandising and innovative solutions to drive sustainable growth for all spirits categories."

by S. C.
21 july 2012, World News > Europe

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