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Christmas Drinking - UK - November 2010

  • Christmas is the perfect time for brands to attract 18-34 year-old drinkers. For example, over half (53%) of this age group who are Christmas drink buyers try something outside of their usual repertoire of drinks during the festive period.
  • Alcohol manufacturers have an opportunity to help make people good hosts. For example, six in ten stock up for when guests come around, and they can benefit from party packs, containing small bottles of a variety of spirits and wines, to satisfy all guest’s tastes.
  • Improved packaging that highlights limited editions or premium USPs such as vintage for wine or age for spirits is crucial in appealing to the 21 million adults who buy alcohol as a gift over Christmas. This is essential because these buyers include non-drinkers who lack detailed knowledge of key gifting products such as Scotch.
  • Premium brands need to find ways to appeal to bargain hunters at Christmas rather than just rely on their name and prestige, as while three-quarters of UK alcohol buyers look for bargains at Christmas, a quarter also wants more expensive drinks than usual, with there being considerable overlap between the two needs.
  • While older (55+) consumers are more likely to be better off at the moment, younger (18-34) adults still represent the most valuable target for alcohol producers at Christmas time. They are more optimistic that their finances will get better over the coming year and much more likely to see Christmas as a time for drinking in greater quantity.
  • Online is an increasingly important retail channel for alcohol at Christmas. The three in ten UK adults Mintel identifies as most likely to spend comfortably over Christmas 2010 are 8% points more likely than average to use this method, which allows them to buy in bulk more conveniently.

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Table of contents

  1. Issues in the Market

      • Definition
        • Abbreviations
        • Future Opportunities

          • Trend: Home of the senses
            • Trend: Chameleonics
            • Market in Brief

              • Christmas is filled with opportunity for alcohol brands…
                • …but such opportunity is diminishing
                  • Alcohol behaves like a buyer’s market when the opposite is true
                    • Christmas 2010 is likely to be hit by consumer caution
                    • Consumer Perceptions of Their Current Financial Status

                      • Key points
                        • Consumer confidence falters
                          • Figure 1: Quarterly trends for percentage change in GDP and consumer confidence, Q1 2005-Q3 2010
                        • Only a quarter perceive themselves to be in a healthy financial state
                            • Figure 2: How people categorise their current financial situation, September 2010
                          • A growing financial disparity between the older and younger generations
                          • Consumer Perceptions of Finances Over Christmas 2010

                            • Key points
                              • Consumers are slightly more pessimistic than optimistic
                                • Figure 3: How people predict their financial situation will change over the next six months, September 2010
                              • The poor expect to get poorer over the next six months
                                • Figure 4: How people categorise their current financial situation, by their predictions of how their financial situation will change over the next six months, September 2010
                              • The optimism of youth
                                • Figure 5: Expectations that their economic situation will get better, by gender and age, September 2010
                            • Potential Alcohol Spenders Over Christmas 2010

                              • Key points
                                • Three in ten are in a strong position to spend
                                  • Figure 6: Spending potential of consumers over Christmas 2010 based on their current financial situation and predictions of how it will change, September 2010
                                • With age comes caution
                                  • Figure 7: Potential for Christmas spending groups, indexed, by gender, age and socio-economic group, September 2010
                                • Champagne/sparkling wines are well placed to perform well in Xmas 2010
                                    • Figure 8: Drink types which those in a strong position to spend are more likely than average to drink over the Christmas period, September 2010
                                  • Online is a key medium for those who can afford to spend
                                    • Figure 9: Statements about Christmas drinking which those in a strong position to spend are more likely than the norm to agree with, September 2010
                                  • Sainsbury’s can cash in on Christmas trade
                                    • Figure 10: Potential for Christmas spending, by supermarket used for main grocery shopping, September 2010
                                • What is Driving Xmas Drinking?

                                  • Key points
                                    • Drinking extra at Christmas is the norm…
                                      • Figure 11: The average spend on total alcohol in Q4 over the past ten years (2000-09), at constant 2006 prices, November 2010
                                    • …but attitudes are changing…
                                      • Figure 12: Attitudes towards alcohol spending over Christmas 2010, September 2010
                                    • …meaning Christmas alcohol sales are seeing diminishing returns
                                        • Figure 13: Trends for Q4 spend as a proportion of total annual spend for the alcohol, food and non-alcoholic drinks markets, at constant 2006 prices, 2000-09
                                      • 18-34s are the most laissez faire about Xmas drinking
                                        • Figure 14: Net difference in agreement with selected Christmas drinking statements, by age, September 2010
                                      • Uplift in sales is stimulated by an aggressive pricing strategy…
                                        • Figure 15: Annual percentage change in the Consumer Price Index for alcohol compared to all goods, January 2007-September 2010
                                        • Figure 16: Trends for Retail Price Index (RPI) monthly percentage change in December for alcohol compared to all goods (excluding housing), 2005-09
                                      • …but, how much footfall discounting drives is questionable
                                        • Consumers have been trained to buy alcohol on discount
                                        • The Impact of Marketing and Innovation on Xmas Drinking

                                          • Key points
                                            • Significantly increased brand spend…
                                              • Figure 17: Trends for uplift in above-the-line advertising spend in November/December for the total alcohol category, 2006-09*
                                            • …but declining share of voice
                                              • Figure 18: Trends for alcohol above-the-line advertising spend in November/December as a proportion of all UK advertising spend, 2006-09*
                                            • Niche seasonal drinks target Christmas period
                                              • Scotch whisky dominates the gift market
                                                • Other spirits slower to capitalise on this opportunity
                                                • How Alcohol Purchasing Habits Shift Over Xmas

                                                  • Key points
                                                    • Christmas attracts buyers from outside the market
                                                      • Figure 19: Proportion who normally purchased alcohol at Christmas for in-home consumption, September 2010
                                                      • Figure 20: Drink buyers over the Christmas period compared to the proportion of UK drinkers, September
                                                    • Specific seasonal drinks see a sharp sales uplift
                                                      • Figure 21: Alcohol types normally purchased at Christmas for in-home consumption, September 2010
                                                    • Cider is struggling to convert its success into seasonal sales
                                                      • There is more opportunity to try new drinks…
                                                        • …due to more drinking opportunities combined with a shift in mindset
                                                          • A big opportunity for sherry over Christmas 2010
                                                            • Purchasing becomes as much about others as yourself
                                                              • Stocking up not just for Xmas but the rest of the year!
                                                              • Actual Consumer Expenditure on Xmas Drinking

                                                                • Key points
                                                                  • Christmas drives double-digit sales of alcohol
                                                                    • Off-trade is the big winner
                                                                      • Figure 22: Trends for total UK alcohol expenditure, by on-trade and off-trade, Q1 2007-Q4 2009
                                                                    • A key time for spirits
                                                                      • Figure 23: Average sales uplift in Q4 compared to the average quarter sales for the major alcohol categories, by on- and off-trade, 2007-09
                                                                    • In real terms, sales of alcohol have fallen dramatically
                                                                      • Figure 24: Annual percentage growth of total UK alcohol spend in Q4 and share of total of total yearly alcohol spend, in constant (2006) prices
                                                                  • Targeting Christmas Drinkers Attitudinally

                                                                    • Key points
                                                                      • There are five distinct attitudinal groups
                                                                        • Figure 25: Attitudinal groups for Christmas drinking, September 2010
                                                                      • An Excuse To Party (29%)
                                                                        • What are their Christmas drinking/buying habits?
                                                                          • Who are they?
                                                                            • Targeting potential for Christmas 2010
                                                                              • Big Spenders (22%)
                                                                                • What are their Christmas drinking/buying habits?
                                                                                  • Who are they?
                                                                                    • Targeting potential for Christmas 2010
                                                                                      • No Change in Drinking Habits (17%)
                                                                                        • What are their Christmas drinking/buying habits?
                                                                                          • Who are they?
                                                                                            • Targeting potential for Christmas 2010
                                                                                              • Low Budget (16%)
                                                                                                • What are their Christmas drinking/buying habits?
                                                                                                  • Who are they?
                                                                                                    • Targeting potential for Christmas 2010
                                                                                                      • At the Right Price (16%)
                                                                                                        • What are their Christmas drinking/buying habits?
                                                                                                          • Who are they?
                                                                                                            • Targeting potential for Christmas 2010
                                                                                                            • Appendix – Consumer Perceptions of Their Current Financial Status

                                                                                                                • Figure 26: Current financial status of consumers, by demographics, September 2010
                                                                                                                • Figure 27: Attitudes towards financial situation over the next six months, by current financial status of consumers, September 2010
                                                                                                                • Figure 28: Potential for Christmas spending, by current financial status of consumers, September 2010
                                                                                                                • Figure 29: Attitudes towards alcohol spending over Christmas 2010, by current financial status of consumers, September 2010
                                                                                                                • Figure 30: Alcohol types normally purchased at Christmas for in-home consumption, by current financial status of consumers, September 2010
                                                                                                            • Appendix – Consumer Perceptions of Finances Over Christmas 2010

                                                                                                                • Figure 31: Attitudes towards financial situation over the next six months, by demographics, September 2010
                                                                                                            • Appendix – Potential Alcohol Spenders Over Christmas 2010

                                                                                                                • Figure 32: Potential for Christmas spending, by demographics, September 2010
                                                                                                                • Figure 33: Attitudes towards alcohol spending over Christmas 2010, by potential for Christmas spending, September 2010
                                                                                                                • Figure 34: Alcohol types normally purchased at Christmas for in-home consumption, by potential for Christmas spending, September 2010
                                                                                                            • Appendix – What is Driving Xmas Drinking?

                                                                                                                • Figure 35: Attitudes towards alcohol spending over Christmas 2010, by demographics, September 2010
                                                                                                                • Figure 36: Attitudes towards alcohol spending over Christmas 2010, by demographics, September 2010
                                                                                                                • Figure 37: Attitudes towards alcohol spending over Christmas 2010, by demographics, September 2010
                                                                                                                • Figure 38: Attitudes towards alcohol spending over Christmas 2010, by demographics, September 2010
                                                                                                                • Figure 39: Attitudes towards alcohol spending over Christmas 2010, by demographics, September 2010
                                                                                                                • Figure 40: Attitudes towards alcohol spending over Christmas 2010, by demographics, September 2010
                                                                                                                • Figure 41: Attitudes towards alcohol spending over Christmas 2010, by demographics, September 2010
                                                                                                                • Figure 42: Attitudes towards alcohol spending over Christmas 2010, by demographics, September 2010
                                                                                                                • Figure 43: Attitudes towards alcohol spending over Christmas 2010, by demographics, September 2010
                                                                                                                • Figure 44: Attitudes towards alcohol spending over Christmas 2010, by demographics, September 2010
                                                                                                                • Figure 45: Attitudes towards alcohol spending over Christmas 2010, by demographics, September 2010
                                                                                                            • Appendix – Actual Consumer Expenditure on Xmas Drinking

                                                                                                                • Figure 46: Trends for off-trade expenditure, by major drinks category, Q1 2007-Q4 2009
                                                                                                                • Figure 47: Trends for on-trade expenditure, by major drinks category, Q1 2007-Q4 2009
                                                                                                            • Appendix – Targeting Christmas Drinkers Attitudinally

                                                                                                                • Figure 48: Agreement with statements on Christmas drinking, by attitudinal groups, September 2010
                                                                                                                • Figure 49: Attitudinal groups, by demographics, September 2010
                                                                                                                • Figure 50: Potential for Christmas spending, by attitudinal groups, September 2010
                                                                                                                • Figure 51: Attitudes towards financial situation over the next six months, by attitudinal groups, September 2010

                                                                                                            Companies Covered

                                                                                                            • Aspall
                                                                                                            • British Market Research Bureau (BMRB)
                                                                                                            • Co-operative Group
                                                                                                            • Diageo UK
                                                                                                            • Gfk NOP
                                                                                                            • J. Sainsbury
                                                                                                            • Kantar Media
                                                                                                            • Majestic Wine Warehouse Ltd
                                                                                                            • Tesco Plc

                                                                                                            Christmas Drinking - UK - November 2010

                                                                                                            US $2,648.76 (Excl.Tax)