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Dark Spirits and Liqueurs - UK - September 2016

“Despite the inexhaustible supply of recipes for cocktails and other drinks on the internet, the notable interest in on-pack suggestions indicates a need for brands to do more to put these ideas into the path of the shopper.”
– Emma Clifford, Senior Food and Drink Analyst

This report discusses the following key topics:

  • Giving serving suggestions more visibility in-store is needed
  • Own-label can tap into savvy shopping habits to grow its share
  • Opportunities are ripe for more hot/spicy flavour innovation in liqueurs

For the purpose of this Report, the following definitions have been used throughout:

Whisky is a spirit distilled from malted barley or other grain and typically aged in oak casks, which is produced in many parts of the world. In practice, however, the only whiskies sold in significant quantities in the UK market are those produced in Scotland, Ireland, Canada and the US. Large quantities are produced in Japan, but Japanese whisky has only a niche presence in the UK market. The spelling ‘whisky’ is sometimes restricted to Scotch, whether blended or single malt, but is used in this Report as a generic term for the category as a whole.

The most common types of US whiskey are bourbon whiskey (made from at least 51% corn [maize]), rye whiskey (made from at least 51% rye) and corn whiskey (made from a mash made up of at least 80% corn [maize]). In this Report the term bourbon is used to refer to all whiskey made in the US.

To carry the name ‘Scotch’ on a label, whisky must be distilled and matured in Scotland and conform to various regulations under The Scotch Whisky Regulations 2009 legislation.

Brandy is defined for the purposes of this Report to include only spirit produced from grape wine, but not products such as Calvados and Eau de Vie, produced from apples, pears or other fruits. Grape brandy which has been flavoured, such as cherry brandy, is classified as a liqueur. Cognac and Armagnac are prestigious brandies, produced in strictly delimited areas of France. Other grape brandies, which mostly also come from France, as well as brandies from Germany, Greece, South Africa, Spain, Italy, Australia and the US, are also included as brandies.

Dark/Golden/Spiced Rum. Rum is distilled from molasses or sugar cane juice, mainly in the Caribbean, although it is possible to produce it in almost any climate where sugar cane is planted. Official statistics make no distinction as to the colouring of rum, which may be achieved by the addition of caramel. Both the trade and consumers have, however, traditionally regarded dark and white rum as very distinct drinks. The latter is excluded from this Report. Golden rums have, again by tradition, been regarded as a sub-sector of the dark rum market by the trade, and Mintel has continued to follow this. Spiced golden rums are therefore included in this Report.

Liqueurs are an alcoholic beverage of a base spirit which has been flavoured with fruit, herbs, nuts, spices, flowers or cream. These must contain at least 2.5% sugar by weight, though in practice most have a considerably higher sugar content and many contain up to 35% of a sweetening agent. Most liqueurs contain 17-30% alcohol by volume (ABV) and some are as high as 50% ABV. This category includes cream-based liqueurs such as Baileys and Amarula and non-cream ones such as Southern Comfort, Pimm’s, Tia Maria and Jägermeister.

Most dark spirits now have a standard of 40% ABV. This has been set as a minimum strength to qualify as a whisky by the EU.

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Table of contents

  1. Overview

    • What you need to know
      • Products covered in this Report
      • Executive Summary

          • The market
            • Sales expected to rise 4% in 2016
              • Figure 1: Forecast of UK value sales of dark spirits and liqueurs, 2011-21
            • Inflation set to see volume sales stagnate
              • New alcohol guidelines draw more attention to health risks
                • Brexit is set to push up prices of imported alcohol
                  • Domestic products can benefit from the weaker pound
                    • Companies and brands
                      • The lead held by Famous Grouse slips
                        • Figure 2: Leading brands’ sales and shares in the UK retail whisky market, 2015/16*
                      • A few standout performances
                        • An NPD push for Scotch whisky
                          • Johnnie Walker will be the first Scotch whisky with nutritional labels
                            • Adspend slips to a four-year low in 2015
                              • The consumer
                                • 62% of Brits drink dark spirits/liqueurs
                                  • Figure 3: Usage of dark spirits, by type, July 2016
                                • Taste is the main sticking point – particularly for women
                                  • Figure 4: Barriers to drinking dark spirits, July 2016
                                • A challenge facing new brands and small producer
                                  • Premium varieties are the most popular
                                    • Figure 5: Preferences regarding selected attributes of dark spirits and liqueurs, July 2016
                                  • Recommendations are most likely to sway 18-24s
                                    • Trial packs can encourage experimentation
                                      • Figure 6: Dark spirit/liqueur product enticements, July 2016
                                    • Young consumers are hungry for more serving suggestions
                                      • Spicy flavours appeal to half of 18-34s
                                        • Figure 7: Attitudes towards dark spirits and liqueurs, July 2016
                                      • What we think
                                      • Issues and Insights

                                        • Giving serving suggestions more visibility in-store is needed
                                          • The facts
                                            • The implications
                                              • Own-label can tap into savvy shopping habits to grow its share
                                                • The facts
                                                  • The implications
                                                    • Opportunities are ripe for more hot/spicy flavour innovation in liqueurs
                                                      • The facts
                                                        • The implications
                                                        • The Market – What You Need to Know

                                                          • Sales expected to rise 4% in 2016
                                                            • Price rises in the on-trade
                                                              • Off-trade growth from all segments
                                                                • Inflation set to see volume sales stagnate
                                                                  • New alcohol guidelines draw more attention to health risks
                                                                    • Brexit is set to push up prices of imported alcohol
                                                                      • Domestic products can benefit from the weaker pound
                                                                      • Market Size, Segmentation and Forecast

                                                                        • Sales expected to rise 4% in 2016
                                                                          • Figure 8: Total value and volume sales of dark spirits and liqueurs, at current and constant prices, 2011-21
                                                                        • American brands are driving growth in whisky
                                                                          • Figure 9: Total value and volume sales of whiskies, at current and constant prices, 2011-21
                                                                        • A big jump in volume sales of brandies
                                                                          • Figure 10: Total value and volume sales of brandies, at current and constant prices, 2011-21
                                                                        • A slowdown for rum, but nonetheless impressive growth
                                                                          • Figure 11: Total value and volume sales of rums, at current and constant prices, 2011-21
                                                                        • Liqueurs
                                                                          • Figure 12: Total value and volume sales of liqueurs, at current and constant prices, 2011-21
                                                                        • The future
                                                                            • Figure 13: Forecast of UK value sales of dark spirits and liqueurs, 2011-21
                                                                            • Figure 14: Forecast of UK volume sales of dark spirits and liqueurs, 2011-21
                                                                          • The impact of the EU Referendum
                                                                            • Figure 15: Alternative scenarios for the dark spirits and liqueurs market, 2016-2021
                                                                            • Figure 16: Alternative scenarios for the dark spirits and liqueurs market, at current prices, 2016-21
                                                                          • No immediate impact on consumers’ finances
                                                                            • The risk of an economic slowdown and rising prices
                                                                              • The market was in a different place in 2008-09
                                                                                • Savvy habits have been retained by many
                                                                                • Channels to Market

                                                                                  • On-trade value share budges upward
                                                                                    • Figure 17: Value and volume sales of dark spirits and liqueurs, by channel, 2014-16
                                                                                    • Figure 18: Value and volume sales of dark spirits and liqueurs in the off-trade, by segment, 2014-16
                                                                                    • Figure 19: Value and volume sales of dark spirits and liqueur in the on-trade, by segment, 2014-16
                                                                                • Market Drivers

                                                                                  • New alcohol guidelines draw more attention to health risks
                                                                                    • A ‘quality over quantity’ mindset
                                                                                      • Sales of dark spirits and liqueurs rebound despite the woes of the wider alcohol market
                                                                                        • Ageing population is a challenge
                                                                                          • Some cost relief for alcohol producers
                                                                                            • Figure 20: UK excise duty rates for selected alcoholic drinks, 2004-16
                                                                                          • Brexit pushes up prices of imported alcohol
                                                                                            • Figure 21: Consumer Price Indices for all items, alcoholic beverages and spirits, January 2000-July 2016
                                                                                          • Domestic products can benefit from the weaker pound
                                                                                            • Consumer confidence and spending
                                                                                            • Companies and Brands – What You Need to Know

                                                                                              • The lead held by Famous Grouse slips
                                                                                                • Three Barrels grows its share, but Bardinet is a rising star
                                                                                                  • Baileys extends its lead
                                                                                                    • Captain Morgan extends its lead with 14% growth
                                                                                                      • An NPD push for Scotch whisky
                                                                                                        • Johnnie Walker will be the first Scotch whisky with nutritional labels
                                                                                                          • Adspend slips to a four-year low in 2015
                                                                                                          • Market Share

                                                                                                            • The lead held by Famous Grouse slips
                                                                                                              • Jack Daniel’s is the star performer
                                                                                                                • Competition heats up from own-label
                                                                                                                  • Figure 22: Leading brands’ sales and shares in the UK retail whisky market, 2014/15- 2015/16
                                                                                                                  • Figure 23: Leading manufacturers’ sales and shares in the UK retail whisky market, 2014/15- 2015/16
                                                                                                                • Three Barrels grows its share, but Bardinet is a rising star
                                                                                                                  • Rémy Martin holds its own
                                                                                                                    • Own-label on a downward trajectory
                                                                                                                      • Figure 24: Leading brands’ sales and shares in the UK retail brandy/Cognac market, 2014/15- 2015/16
                                                                                                                    • Baileys extends its lead in liqueur
                                                                                                                      • Disaronno leapfrogs Pimm’s into third position
                                                                                                                        • Figure 25: Leading brands’ sales and shares in the UK retail liqueur market, 2014/15- 2015/16
                                                                                                                        • Figure 26: Leading manufacturers’ sales and shares in the UK retail liqueur market, 2014/15- 2015/16
                                                                                                                      • Captain Morgan extends its lead with 14% growth
                                                                                                                        • Figure 27: Leading brands’ sales and shares in the UK retail rum market, 2014/15- 2015/16
                                                                                                                    • Launch Activity and Innovation

                                                                                                                      • An NPD push for Scotch whisky
                                                                                                                        • More adventurous NPD in the Scotch whisky market
                                                                                                                          • Premiumised packaging for the Famous Grouse range
                                                                                                                            • Diageo brings back Johnnie Walker Green Label to drive growth in Scotch
                                                                                                                              • Johnnie Walker will be the first Scotch whisky with nutritional labels
                                                                                                                                • Compass Box campaign promotes greater transparency
                                                                                                                                  • A premiumisation drive from mainstream brands
                                                                                                                                    • Haig Club diversifies to appeal to a younger audience
                                                                                                                                      • Packaging redesigns keep brands contemporary
                                                                                                                                        • An effort to educate and make whisky less intimidating…
                                                                                                                                          • Grants reveals the impact of alchemy in its trio of whiskies
                                                                                                                                            • A restructure from Jameson aims to help shoppers navigate
                                                                                                                                              • …while The Glenlivet puts whisky drinkers to the test
                                                                                                                                                • Limited edition packaging designs continue to drive NPD
                                                                                                                                                  • Marking events
                                                                                                                                                    • Highlighting people
                                                                                                                                                      • Tie-ups with fashion
                                                                                                                                                        • Liqueurs
                                                                                                                                                          • Jägermeister looks to distance itself from the Jägerbomb
                                                                                                                                                            • Mr Black has built its brand around cold brew coffee
                                                                                                                                                              • Baileys launches new dairy-free Almande variant
                                                                                                                                                              • Advertising and Marketing Activity

                                                                                                                                                                • Adspend slips to a four-year low in 2015
                                                                                                                                                                  • Figure 28: Total above-the line, online display and direct mail advertising expenditure on dark spirits and liqueurs, by category, 2012-16
                                                                                                                                                                • Baileys take pole position in adspend
                                                                                                                                                                  • Figure 29: Top 15 highest-spending brands in the dark spirits and liqueurs category, above-the line, online display and direct mail advertising, 2012-16
                                                                                                                                                                • A push to show a different side of the Jägermeister brand
                                                                                                                                                                  • Jack Daniel's celebrated its 150th anniversary with a global scavenger hunt
                                                                                                                                                                    • The first global campaign for Johnnie Walker
                                                                                                                                                                      • Glenfiddich turns to virtual reality
                                                                                                                                                                        • Major campaign for Captain Morgan in 2016
                                                                                                                                                                          • Honest opinions are welcomed in Laphroaig’s campaign
                                                                                                                                                                            • More advertisers turn to the widescreen
                                                                                                                                                                              • Figure 30: Share of total above-the line, online display and direct mail advertising expenditure on dark spirits and liqueurs, by channel, 2012-16
                                                                                                                                                                            • Nielsen Ad Intel coverage
                                                                                                                                                                            • Brand Research

                                                                                                                                                                                • What you need to know
                                                                                                                                                                                  • Brand map
                                                                                                                                                                                    • Figure 31: Attitudes towards and usage of selected brands, July 2016
                                                                                                                                                                                  • Key brand metrics
                                                                                                                                                                                    • Figure 32: Key metrics for selected brands, July 2016
                                                                                                                                                                                  • Brand attitudes: Baileys stands out as the most trusted and reputable brand
                                                                                                                                                                                    • Figure 33: Attitudes, by brand, July 2016
                                                                                                                                                                                  • Brand personality: Jägermeister and Pimm’s are perceived as most fun and vibrant
                                                                                                                                                                                    • Figure 34: Brand personality – Macro image, July 2016
                                                                                                                                                                                  • Aside from a masculine image, Jim Beam and Captain Morgan struggle to differentiate
                                                                                                                                                                                    • Figure 35: Brand personality – Micro image, July 2016
                                                                                                                                                                                  • Brand analysis
                                                                                                                                                                                    • Baileys
                                                                                                                                                                                      • Figure 36: User profile of Baileys, July 2016
                                                                                                                                                                                    • Disaronno
                                                                                                                                                                                        • Figure 37: User profile of Disaronno, July 2016
                                                                                                                                                                                      • Pimm’s
                                                                                                                                                                                          • Figure 38: User profile of Pimm’s, July 2016
                                                                                                                                                                                        • Captain Morgan
                                                                                                                                                                                          • Figure 39: User profile of Captain Morgan, July 2016
                                                                                                                                                                                        • Jim Beam
                                                                                                                                                                                          • Figure 40: User profile of Jim Beam, July 2016
                                                                                                                                                                                        • Southern Comfort
                                                                                                                                                                                          • Figure 41: User profile of Southern Comfort, July 2016
                                                                                                                                                                                        • Jägermeister
                                                                                                                                                                                            • Figure 42: User profile of Jägermeister, July 2016
                                                                                                                                                                                        • The Consumer – What You Need to Know

                                                                                                                                                                                          • 62% of Brits drink dark spirits/liqueurs
                                                                                                                                                                                            • Dark spirits preferred by men, while women more likely to drink liqueurs
                                                                                                                                                                                              • Taste is the main sticking point – particularly for women
                                                                                                                                                                                                • Recommendations are most likely to sway 18-24s
                                                                                                                                                                                                  • Trial packs can encourage experimentation
                                                                                                                                                                                                    • A challenge facing new brands and small producers
                                                                                                                                                                                                      • Premium varieties are the most popular
                                                                                                                                                                                                        • Young consumers are hungry for more serving suggestions
                                                                                                                                                                                                          • Spicy flavours appeal to half of 18-34s
                                                                                                                                                                                                          • Usage of Dark Spirits and Liqueurs

                                                                                                                                                                                                            • 62% of Brits drink dark spirits/liqueurs
                                                                                                                                                                                                              • Men are the core users of dark spirits
                                                                                                                                                                                                                • Notable differences in the preferences of the older and younger generation
                                                                                                                                                                                                                  • Figure 43: Usage of dark spirits, by type, July 2016
                                                                                                                                                                                                                • Only single malt whisky is most commonly drunk neat
                                                                                                                                                                                                                  • Figure 44: Ways of drinking dark spirits, by type, July 2016
                                                                                                                                                                                                                • Women are the core drinkers of liqueurs
                                                                                                                                                                                                                  • Figure 45: Usage of liqueurs and flavoured dark spirits, by type, July 2016
                                                                                                                                                                                                                • Cream liqueurs typically enjoyed without a mixer
                                                                                                                                                                                                                  • Figure 46: Ways of drinking liqueurs and flavoured dark spirits, by type, July 2016
                                                                                                                                                                                                                • 18-24s have the widest repertoires
                                                                                                                                                                                                                  • Figure 47: Repertoire of usage of dark spirits and liqueurs, July 2016
                                                                                                                                                                                                              • Barriers to Drinking Dark Spirits

                                                                                                                                                                                                                • Taste is the main sticking point – particularly for women
                                                                                                                                                                                                                  • A need to disrupt taste perceptions among non-likers of dark spirits
                                                                                                                                                                                                                    • Figure 48: Barriers to drinking dark spirits, July 2016
                                                                                                                                                                                                                  • One in seven non-drinkers simply doesn’t think to have dark spirits
                                                                                                                                                                                                                  • Dark Spirit and Liqueur Preferences

                                                                                                                                                                                                                    • The nation is divided in their preference for brands versus own-label
                                                                                                                                                                                                                      • Aldi and Lidl are a beacon for own-label
                                                                                                                                                                                                                        • A challenge facing new brands and small producer
                                                                                                                                                                                                                          • Premium varieties are the most popular
                                                                                                                                                                                                                            • Figure 49: Preferences regarding selected attributes of dark spirits and liqueurs, July 2016
                                                                                                                                                                                                                          • Older consumers have the strongest allegiance to UK producers
                                                                                                                                                                                                                            • Transparent packaging is preferred
                                                                                                                                                                                                                            • Product Enticement

                                                                                                                                                                                                                              • Recommendations are most likely to sway 18-24s
                                                                                                                                                                                                                                • Trial packs can encourage experimentation
                                                                                                                                                                                                                                  • Figure 50: Dark spirit/liqueur product enticements, July 2016
                                                                                                                                                                                                                                • Free gifts attract over a quarter of under-35s.
                                                                                                                                                                                                                                • Attitudes towards Dark Spirits and Liqueurs

                                                                                                                                                                                                                                  • Young consumers are hungry for more serving suggestions
                                                                                                                                                                                                                                    • Figure 51: Attitudes towards dark spirits and liqueurs, July 2016
                                                                                                                                                                                                                                  • Spicy flavours appeal to half of 18-34s
                                                                                                                                                                                                                                    • One in three men would be prepared to pay more for craft dark spirits
                                                                                                                                                                                                                                      • Scope for even large producers to tap into the popularity of ‘craft’ spirits
                                                                                                                                                                                                                                        • Exclusivity chimes with two fifths of under-35s
                                                                                                                                                                                                                                        • Appendix – Data Sources, Abbreviations and Supporting Information

                                                                                                                                                                                                                                            • Abbreviations
                                                                                                                                                                                                                                              • Forecast methodology
                                                                                                                                                                                                                                                • Consumer research methodology
                                                                                                                                                                                                                                                • Appendix – Market Size and Forecast

                                                                                                                                                                                                                                                    • Figure 52: Best- and worst-case forecasts for the total dark spirits and liqueurs market, by value, 2016-21
                                                                                                                                                                                                                                                    • Figure 53: Best- and worst-case forecasts for the total dark spirits and liqueurs market, by volume, 2016-21
                                                                                                                                                                                                                                                    • Figure 54: Best- and worst-case forecasts for the whisky market, by value, 2016-21
                                                                                                                                                                                                                                                    • Figure 55: Best- and worst-case forecasts for the whisky market, by volume, 2016-21
                                                                                                                                                                                                                                                    • Figure 56: Forecast of UK value sales of whisky/whiskey, 2011-21
                                                                                                                                                                                                                                                    • Figure 57: Forecast of UK volume sales of whisky/whiskey, 2011-21
                                                                                                                                                                                                                                                    • Figure 58: Best- and worst-case forecasts for the brandy market, by value, 2016-21
                                                                                                                                                                                                                                                    • Figure 59: Best- and worst-case forecasts for the brandy market, by volume, 2016-21
                                                                                                                                                                                                                                                    • Figure 60: Forecast of UK value sales of brandy, 2011-21
                                                                                                                                                                                                                                                    • Figure 61: Forecast of UK volume sales of brandy, 2011-21
                                                                                                                                                                                                                                                    • Figure 62: Best- and worst-case forecasts for the rum market, by value, 2016-21
                                                                                                                                                                                                                                                    • Figure 63: Best- and worst-case forecasts for the rum market, by volume, 2016-21
                                                                                                                                                                                                                                                    • Figure 64: Forecast of UK volume sales of rum, 2011-21
                                                                                                                                                                                                                                                    • Figure 65: Forecast of UK volume sales of rum, 2011-21
                                                                                                                                                                                                                                                    • Figure 66: Best- and worst-case forecasts for the liqueurs market, by value, 2016-21
                                                                                                                                                                                                                                                    • Figure 67: Best- and worst-case forecasts for the liqueurs market, by volume, 2016-21
                                                                                                                                                                                                                                                    • Figure 68: Forecast of UK value sales of liqueurs, 2011-21
                                                                                                                                                                                                                                                    • Figure 69: Forecast of UK volume sales of liqueurs, 2011-21
                                                                                                                                                                                                                                                • Appendix – Market Share

                                                                                                                                                                                                                                                    • Figure 70: Leading manufacturers’ sales and shares in the UK retail brandy/Cognac market, 2014/15- 2015/16
                                                                                                                                                                                                                                                    • Figure 71: Leading manufacturers’ sales and shares in the UK retail rum market, 2014/15- 2015/16

                                                                                                                                                                                                                                                Companies Covered

                                                                                                                                                                                                                                                To learn more about the companies covered in this report please contact us.

                                                                                                                                                                                                                                                Dark Spirits and Liqueurs - UK - September 2016

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