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Dark Spirits and Liqueurs - UK - September 2017

“Drinking with mixers and gifting are key entry points for dark spirits. Mixed drink recipe suggestions are therefore a crucial means to draw in new users, while promotions around young adults’ rites of passage would better enable companies to harness the power of gifting as an introduction to dark spirits.”
- Alice Baker, Research Analyst

This report will look at the following areas:

  • Recipe suggestions can help companies to harness the power of mixers
  • Brands need to make flavour differences more tangible to shoppers
  • Consumer interest in products with ethical aspects suggests untapped opportunities

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Table of contents

  1. Overview

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

          • The market
            • Inflation and success of certain segments drive market growth in 2012-17
              • Weakened household incomes to erode volume sales over 2017-22
                • Figure 1: Total value sales of dark spirits and liqueurs, 2012-22
              • Volume sales declines for whisky, while rum’s momentum to stall
                • Inflation expected for all parts of the market
                  • Health organisations urge measures to reduce alcohol consumption
                    • Companies and brands
                      • The Famous Grouse regains ground as other blended whiskies struggle
                        • Figure 2: Leading brands’ shares in the UK retail whisky market, by value, 2016/17*
                      • Captain Morgan strengthens its hold over the rum market
                        • Further growth in limited editions and premium variants in 2016-17
                          • Glenfiddich innovates with barrel type
                            • Advertising spend falls in 2016
                              • Lifestyle focus in both spirit and liqueur advertising in 2016/17
                                • Baileys is the most trusted brand, while Jack Daniel’s is the most widely seen as cool
                                  • The consumer
                                    • Half of UK adults drink dark spirits
                                      • Figure 3: Usage of dark spirits, by type, July 2017
                                    • Ageing UK population to hinder growth
                                      • Dark spirits’ high price underpins brand loyalty
                                        • Figure 4: Dark spirits buying factors, July 2017
                                      • Promotions are more compelling than low price for dark spirits buyers
                                        • Drinking with mixers is a key entry point for dark spirits
                                          • Figure 5: Behaviours relating to dark spirits/liqueurs, July 2017
                                        • Gifting provides another key entry point
                                          • Ethical aspects have strong appeal
                                            • Figure 6: Attitudes towards dark spirits/liqueurs, July 2017
                                          • Sugar concerns limit the appeal of liqueurs
                                            • What we think
                                            • Issues and Insights

                                              • Recipe suggestions can help companies to harness the power of mixers
                                                • The facts
                                                  • The implications
                                                    • Brands need to make flavour differences more tangible to shoppers
                                                      • The facts
                                                        • The implications
                                                          • Consumer interest in products with ethical aspects suggests untapped opportunities
                                                            • The facts
                                                              • The implications
                                                              • The Market – What You Need to Know

                                                                • Inflation and success of certain segments drive market growth 2012-17
                                                                  • Weakened household incomes to erode volume sales over 2017-22
                                                                    • Volume sales declines for whisky, while rum’s momentum to stall
                                                                      • Inflation expected for all parts of the market
                                                                        • Health organisations urge measures to reduce alcohol consumption
                                                                        • Market Size and Forecast

                                                                          • Inflation and success of certain segments drive market growth 2012-17
                                                                            • Weakened household incomes to erode volume sales over 2017-22
                                                                              • Inflation expected for the market
                                                                                • Figure 7: Total value and volume sales of dark spirits and liqueurs, 2012-22
                                                                                • Figure 8: Total value sales of dark spirits and liqueurs, 2012-22
                                                                            • Market Segmentation

                                                                              • Whisky grows value and volume sales 2012-17
                                                                                • Consumer spending cutbacks to erode whisky volume sales
                                                                                  • Dominance of UK-sourced products to curb the effects of inflation
                                                                                    • … but Scotch whisky export boost could lead to higher domestic prices
                                                                                      • Figure 9: Total value and volume sales of whisky, 2012-22
                                                                                      • Figure 10: Total value sales of whisky, 2012-22
                                                                                    • Rum to struggle to sustain its earlier momentum
                                                                                      • Import-led inflation to continue to push up values
                                                                                        • Figure 11: Total value and volume sales of dark/golden/spiced rum, 2012-22
                                                                                        • Figure 12: Total value sales of dark/golden/spiced rum, 2012-22
                                                                                      • Brandy’s 2016 bounce is the exception to otherwise weak performance
                                                                                        • Rising prices to drive up brandy values on flat volumes
                                                                                          • Figure 13: Total value and volume sales of brandy/Cognac/Armagnac, 2012-22
                                                                                          • Figure 14: Total value sales of brandy/Cognac/Armagnac, 2012-22
                                                                                        • Liqueurs see mainly flat volume sales 2012-17
                                                                                          • Liqueurs to see rising prices on flat volumes
                                                                                            • Figure 15: Total value and volume sales of liqueurs, 2012-22
                                                                                          • Forecast methodology
                                                                                          • Channels to Market

                                                                                            • Higher prices in the on-trade allows it to lead on values but not volumes
                                                                                              • Inflation rises faster in the on-trade 2017
                                                                                                • Figure 16: Value and volume sales of dark spirits and liqueurs, by channel, 2015-17
                                                                                              • Retail sales of imported whisky and dark rum continue to rise
                                                                                                • Malt whisky’s sales growth stalled as reduced supply drives up prices
                                                                                                  • Figure 17: Value and volume sales of dark spirits and liqueurs in the off-trade, by segment, 2015-17
                                                                                                  • Figure 18: Value and volume sales of dark spirits and liqueurs in the on-trade, by segment, 2015-17
                                                                                              • Market Drivers

                                                                                                • Wider economic and political issues impact the market
                                                                                                  • Exchange rate-led inflation affects some segments more strongly than others
                                                                                                    • Other factors push up costs
                                                                                                      • Income squeeze leaves the category vulnerable to cutbacks and switching
                                                                                                        • A third of adults have reduced alcohol intake
                                                                                                          • Health organisations urge measures to reduce alcohol consumption
                                                                                                            • Ageing population to impede both dark spirits and liqueurs
                                                                                                            • Companies and Brands – What You Need to Know

                                                                                                              • The Famous Grouse regains ground as other blended whiskies struggle
                                                                                                                • Captain Morgan strengthens its hold over the rum market
                                                                                                                  • Further growth in limited editions and premium variants in 2016-17
                                                                                                                    • Glenfiddich innovates with barrel type
                                                                                                                      • Advertising spend falls in 2016
                                                                                                                        • Lifestyle focus in both spirit and liqueur advertising in 2016/17
                                                                                                                          • Baileys is the most trusted brand, while Jack Daniel’s is the most widely seen as cool
                                                                                                                          • Market Share

                                                                                                                            • The Famous Grouse regains ground as other blended whiskies struggle
                                                                                                                              • Jack Daniel’s continues to benefit from the Americana trend
                                                                                                                                • Trend also gives a leg-up to Jim Beam
                                                                                                                                  • Figure 19: Leading brands’ sales and shares in the UK retail whisky market, 2014/15-2016/17
                                                                                                                                  • Figure 20: Leading distributors’ sales and shares in the UK retail whisky market, 2014/15-2016/17
                                                                                                                                • Captain Morgan strengthens its hold in buoyant rum market
                                                                                                                                  • NPD helps own-label to grow in rum
                                                                                                                                    • Figure 21: Leading brands’ sales and shares in the UK retail dark/golden/spiced rum market, 2014/15-2016/17
                                                                                                                                    • Figure 22: Leading distributors’ sales and shares in the UK retail dark/golden/spiced rum market, 2014/15-2016/17
                                                                                                                                  • Own-label loses ground in brandy
                                                                                                                                    • Three Barrels piggybacks on the tonic trend
                                                                                                                                      • Figure 23: Leading brands’ sales and shares in the UK retail brandy/cognac market, 2014/15-2016/17
                                                                                                                                      • Figure 24: Leading distributors’ sales and shares in the UK brandy/cognac market, 2014/15-2016/17
                                                                                                                                    • Baileys’ focus on its treat aspects helps it to retain its lead
                                                                                                                                      • Pimm’s loses out from lacklustre summer of 2016
                                                                                                                                        • Southern Comfort rebrands under new owners
                                                                                                                                          • Figure 25: Leading brands’ sales and shares in the UK retail liqueur market, 2014/15-2016/17
                                                                                                                                          • Figure 26: Leading distributors’ sales and shares in the UK retail liqueur market, 2014/15-2016/17
                                                                                                                                      • Launch Activity and Innovation

                                                                                                                                        • Companies continue to release limited editions
                                                                                                                                          • Major and niche brands add new editions
                                                                                                                                            • Premium launches continue
                                                                                                                                              • Jägermeister looks to refresh brand image with new premium variant
                                                                                                                                                • Diageo expands the Haig Club range to go more mainstream
                                                                                                                                                  • Historical references used to give an authentic image
                                                                                                                                                    • Glenfiddich innovates with barrel type
                                                                                                                                                      • Whisky launches turn to iceberg water to imply purity
                                                                                                                                                        • Liqueurs turn to on-trend flavours
                                                                                                                                                          • Baileys adds a new seasonal variant
                                                                                                                                                          • Advertising and Marketing Activity

                                                                                                                                                            • Advertising spend falls in 2016
                                                                                                                                                              • Figure 27: Total above-the line, online display and direct mail advertising expenditure on dark spirits and liqueurs, by leading advertisers (sorted by 2016), 2013-2017
                                                                                                                                                            • Diageo remains the leading advertiser despite reduced spending
                                                                                                                                                              • Baileys pushes treat aspects in female-orientated campaign
                                                                                                                                                                • Baileys highlights different usage occasions to create a versatile image
                                                                                                                                                                  • Captain Morgan continues to urge fans to ‘live like the Captain’
                                                                                                                                                                    • Jack Daniel’s puts the spotlight on its hometown’s residents
                                                                                                                                                                      • Events used to drive home associations with American lifestyles
                                                                                                                                                                        • Famous Grouse focuses on taste and balance
                                                                                                                                                                          • Personalised bottles used to tap into gifting occasions
                                                                                                                                                                            • Explaining the maturation process
                                                                                                                                                                              • Whisky brands praise unconventionality
                                                                                                                                                                                • Haig Club aims to widen whisky’s appeal
                                                                                                                                                                                  • Glenfiddich celebrates creativity
                                                                                                                                                                                    • Chambord puts the focus on fun
                                                                                                                                                                                      • Sampling opportunities used to further promote cocktail use
                                                                                                                                                                                        • Nielsen Ad Intel coverage
                                                                                                                                                                                        • Brand Research

                                                                                                                                                                                            • Brand map
                                                                                                                                                                                              • Figure 28: Attitudes towards and usage of selected brands, August 2017
                                                                                                                                                                                            • Key brand metrics
                                                                                                                                                                                              • Figure 29: Key metrics for selected brands, August 2017
                                                                                                                                                                                            • Brand attitudes: Baileys and Jack Daniel’s are the brands people are most proud to be associated with
                                                                                                                                                                                              • Figure 30: Attitudes, by brand, August 2017
                                                                                                                                                                                            • Brand personality: Jack Daniel’s is most widely seen as fun and vibrant
                                                                                                                                                                                              • Figure 31: Brand personality – Macro image, August 2017
                                                                                                                                                                                            • Glenfiddich and Famous Grouse are the most widely seen as traditional
                                                                                                                                                                                              • Figure 32: Brand personality – Micro image, August 2017
                                                                                                                                                                                            • Brand analysis
                                                                                                                                                                                              • Jack Daniel’s scores well on the fun factor
                                                                                                                                                                                                • Figure 33: User profile of Jack Daniel’s, August 2017
                                                                                                                                                                                              • Courvoisier enjoys the most sophisticated image
                                                                                                                                                                                                • Figure 34: User profile of Courvoisier, August 2017
                                                                                                                                                                                              • Baileys is the most trusted brand
                                                                                                                                                                                                • Figure 35: User profile of Baileys, August 2017
                                                                                                                                                                                              • Glenfiddich has strong associations with tradition and quality
                                                                                                                                                                                                • Figure 36: User profile of Glenfiddich, August 2017
                                                                                                                                                                                              • The Famous Grouse is widely seen as traditional
                                                                                                                                                                                                • Figure 37: User profile of The Famous Grouse, August 2017
                                                                                                                                                                                              • Captain Morgan favoured by under-35s
                                                                                                                                                                                                • Figure 38: User profile of Captain Morgan, August 2017
                                                                                                                                                                                            • The Consumer – What You Need to Know

                                                                                                                                                                                              • Half of UK adults drink dark spirits
                                                                                                                                                                                                • Ageing UK population to hinder growth
                                                                                                                                                                                                  • Dark spirits’ high price underpins brand loyalty
                                                                                                                                                                                                    • Promotions are more compelling than low price for dark spirits buyers
                                                                                                                                                                                                      • Drinking with mixers is a key entry point for dark spirits
                                                                                                                                                                                                        • Gifting provides another key entry point
                                                                                                                                                                                                          • Ethical aspects have strong appeal
                                                                                                                                                                                                            • Sugar concerns limit the appeal of liqueurs
                                                                                                                                                                                                            • Usage of Dark Spirits and Liqueurs

                                                                                                                                                                                                              • Half of adults drink dark spirits
                                                                                                                                                                                                                • Considerable overlap in whisky drinking habits
                                                                                                                                                                                                                  • Gender bias prevails for dark spirits
                                                                                                                                                                                                                    • Promoting cocktail use could help to tempt women in
                                                                                                                                                                                                                      • Figure 39: Usage of dark spirits, by type, July 2017
                                                                                                                                                                                                                    • Dark spirits are likely to lose out from ageing UK population
                                                                                                                                                                                                                      • Figure 40: Repertoire of dark spirit types drunk, July 2017
                                                                                                                                                                                                                    • Blended whisky is as likely as Bourbon to be drunk with a mixer
                                                                                                                                                                                                                      • Drinking with mixers is higher among under-25s
                                                                                                                                                                                                                        • Figure 41: Ways of drinking dark spirits, by type, July 2017
                                                                                                                                                                                                                      • Ageing population also has implications for liqueurs
                                                                                                                                                                                                                        • Figure 42: Usage of liqueurs and flavoured dark spirits, by type, July 2017
                                                                                                                                                                                                                    • Dark Spirit Buying Factors

                                                                                                                                                                                                                      • Dark spirits’ high price props up brand loyalty
                                                                                                                                                                                                                        • Introductory offers and ‘trial-size’ bottles offer means to encourage experimentation
                                                                                                                                                                                                                          • Figure 43: Dark spirits buying factors, July 2017
                                                                                                                                                                                                                        • Flavour is neck-and-neck with brand as purchase influencer
                                                                                                                                                                                                                          • Making flavour differences more tangible would help to address consumer uncertainty
                                                                                                                                                                                                                            • Dark spirits’ treat status makes promotions more compelling than price
                                                                                                                                                                                                                              • Need to explain the importance of ageing and small batch production
                                                                                                                                                                                                                              • Behaviours Relating to Dark Spirits and Liqueurs

                                                                                                                                                                                                                                • Drinking with mixers serves as a key entry point for dark spirits
                                                                                                                                                                                                                                  • Cocktail recipes in on-trade and retail offer a platform for promoting mixability
                                                                                                                                                                                                                                    • One in three people have moved on from the drinks of their youth
                                                                                                                                                                                                                                      • Figure 44: Behaviours relating to dark spirits/liqueurs, July 2017
                                                                                                                                                                                                                                    • Gifting is another key entry point into dark spirits
                                                                                                                                                                                                                                      • Companies must pitch their marketing both to drinkers and non-drinkers
                                                                                                                                                                                                                                        • Important to ensure that drinkers let others know of their preferences
                                                                                                                                                                                                                                          • A third of drinkers/buyers research dark spirits before buying
                                                                                                                                                                                                                                          • Attitudes towards Dark Spirits and Liqueurs

                                                                                                                                                                                                                                            • Ethical aspects have strong appeal
                                                                                                                                                                                                                                              • Figure 45: Attitudes towards dark spirits/liqueurs, July 2017
                                                                                                                                                                                                                                            • Consumers’ researching tendencies boost socially responsible companies
                                                                                                                                                                                                                                              • Charity tie-ups rare within dark spirits
                                                                                                                                                                                                                                                • On-pack calorie labelling per serving could appeal to health-conscious drinkers
                                                                                                                                                                                                                                                • Qualities Associated with Selected Types of Liqueurs

                                                                                                                                                                                                                                                  • On-pack recipe suggestions and cross-promotion could help liqueurs to forge a more versatile image
                                                                                                                                                                                                                                                    • Figure 46: Qualities associated with selected types of liqueurs, July 2017
                                                                                                                                                                                                                                                  • Cream-based liqueurs are the most widely seen as a treat
                                                                                                                                                                                                                                                    • Consumer health concerns around sugar limit the appeal of certain types
                                                                                                                                                                                                                                                      • Scope to explore use of sugar alternatives
                                                                                                                                                                                                                                                        • Bitters could be promoted as a less sweet form of fruit liqueur
                                                                                                                                                                                                                                                          • Opportunities for expansion in vegetable-based products
                                                                                                                                                                                                                                                          • Appendix – Data Sources, Abbreviations and Supporting Information

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

                                                                                                                                                                                                                                                                    • Figure 47: Forecast of UK sales of dark spirits and liqueurs, by value, best- and worst-case, 2017-22
                                                                                                                                                                                                                                                                    • Figure 48: Forecast of UK sales of dark spirits and liqueurs, by volume, best- and worst-case, 2017-22
                                                                                                                                                                                                                                                                    • Figure 49: Forecast of UK sales of whisky, by value, best- and worst-case, 2017-22
                                                                                                                                                                                                                                                                    • Figure 50: Forecast of UK sales of whisky, by volume, best- and worst-case, 2017-22
                                                                                                                                                                                                                                                                    • Figure 51: Forecast of UK sales of dark/golden/spiced rum, by value, best- and worst-case, 2017-22
                                                                                                                                                                                                                                                                    • Figure 52: Forecast of UK sales of dark/golden/spiced rum, by volume, best- and worst-case, 2017-22
                                                                                                                                                                                                                                                                    • Figure 53: Forecast of UK sales of brandy/Cognac/Armagnac, by value, best- and worst-case, 2017-22
                                                                                                                                                                                                                                                                    • Figure 54: Forecast of UK sales of brandy/Cognac/Armagnac, by volume, best- and worst-case, 2017-22
                                                                                                                                                                                                                                                                    • Figure 55: Forecast of UK sales of liqueurs, by value, best- and worst-case, 2017-22
                                                                                                                                                                                                                                                                    • Figure 56: Forecast of UK sales of liqueurs, by volume, best- and worst-case, 2017-22
                                                                                                                                                                                                                                                                    • Figure 57: Total volume sales of dark spirits and liqueurs, 2012-22
                                                                                                                                                                                                                                                                    • Figure 58: Total volume sales of whisky, 2012-22
                                                                                                                                                                                                                                                                    • Figure 59: Total volume sales of dark/golden/spiced rum, 2012-22
                                                                                                                                                                                                                                                                    • Figure 60: Total volume sales of brandy/Cognac/Armagnac, 2012-22
                                                                                                                                                                                                                                                                    • Figure 61: Total volume sales of liqueurs, 2012-22
                                                                                                                                                                                                                                                                  • Forecast methodology
                                                                                                                                                                                                                                                                  • Appendix – Advertising and Marketing Activity

                                                                                                                                                                                                                                                                      • Figure 62: Above-the-line, online display and direct mail advertising on dark spirits and liqueurs, by parent company and brand (sorted by top four advertisers in 2016), 2013-17
                                                                                                                                                                                                                                                                  • Appendix – Usage of Dark Spirits and Liqueurs

                                                                                                                                                                                                                                                                      • Figure 63: Ways of drinking liqueurs/flavoured dark spirits, by type, July 2017

                                                                                                                                                                                                                                                                  Companies Covered

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

                                                                                                                                                                                                                                                                  Dark Spirits and Liqueurs - UK - September 2017

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