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Liqueurs - UK - January 2012

“Managing a shift in consumer perceptions can also help to change liqueurs from being viewed as old-fashioned by too many younger people. This is partly due to a failure to update the image of the category and capitalise on the category’s rich provenance as something alluring rather than anachronistic.”

– Jonny Forsyth, Senior Drinks Analyst

Some questions answered in this report include:

  • Are liqueurs missing out on sales by lacking relevance to younger drinkers?
  • Can greater investment in branding lead to healthier returns?
  • Is a lack of innovation holding the sector back?
  • Is the sales decline in 2011 a harbinger of things to come?

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Table of contents

  1. Introduction

      • Definition
        • Abbreviations
        • Executive Summary

            • The market
              • Figure 1: Market size forecast for the total UK liqueurs market, by value, 2006-16
            • Market factors
                • Figure 2: Typical calorie content by serving, by alcohol type, December 2011
              • Companies, brands and innovation
                • The consumer
                  • Figure 3: Occasions on which people drink/would be prepared to drink liqueurs, October 2011
                  • Figure 4: Consumer perceptions of liqueurs, October 2011
                • What we think
                • Issues in the Market

                    • Are liqueurs missing out on sales by lacking relevance to younger drinkers?
                      • Can greater investment in branding lead to healthier returns?
                        • Is a lack of innovation holding the sector back?
                          • Is the sales decline in 2011 a harbinger of things to come?
                          • Future Opportunities

                              • Many Mes
                                • Minimize Me
                                • Internal Market Environment

                                  • Key points
                                    • Trend towards in-home drinking
                                      • Figure 5: Trends for alcohol drinkers in the last 12 months, in home and out of home, 2007-11
                                    • Liqueurs can capitalise on the growth of the in-home cocktail market
                                      • Targeting key in-home occasions
                                        • Figure 6: Occasions for drinking alcohol at home, May 2011
                                      • The demand for fresher, lighter-tasting drinks is working against liqueurs...
                                        • …the emergence of calorie counting being one reason for this
                                          • Figure 7: Typical calorie content, by serving, by alcohol type, December 2011
                                        • There are tax incentives for liqueurs relative to other alcohol types
                                          • Figure 8: Proportion of excise duty and VAT in the total Retail Sales Price (RSP), for 700ml bottles of selected spirits/liqueur brands in the off-trade, December 2011
                                        • Moving liqueurs away from a seasonal dependence
                                          • Figure 9: Quarterly penetration of liqueur drinkers, Q1 2007-Q2 2011
                                      • Broader Market Environment

                                        • Key points
                                          • Consumer spend is under increasing pressure
                                            • Figure 10: Year-on-year percentage change in average weekly earnings compared to inflation in the UK and Consumer Confidence Index, January 2008-August 2011
                                          • Rise in ABs underpins importance of premiumisation
                                            • Figure 11: Forecast adult population trends, by socio-economic group, 2006-16
                                          • Impact of an ageing population
                                            • Figure 12: Forecast adult population trends, by age group, 2006-16
                                        • Competitive Context

                                          • Key points
                                            • A diminishing market leads to diminishing returns
                                              • Figure 13: Proportion of UK population who are alcohol drinkers, 2007-11
                                            • Few winners in this more competitive market
                                              • Figure 14: Penetration of major alcohol types in order of popularity, 2007-11
                                            • Increased demand for lighter, fresher alcoholic beverages
                                            • Strengths and Weaknesses in the Market

                                              • Strengths
                                                • Weaknesses
                                                • Who’s Innovating?

                                                  • Key points
                                                    • Bols foam helps people make their own liqueurs
                                                      • Baileys delivers annual flavour innovation
                                                        • Examples of liqueurs going premium
                                                          • Diageo seeks to recreate success of the US Cîroc model with new liqueur
                                                            • Beaux Ice Tea Liqueur to provide ‘lighter alternative’
                                                              • Innovating is essential to increasing uptake in the bar trade
                                                              • Market Size and Segmentation

                                                                • Key points
                                                                  • Liqueurs perform solidly in tough market conditions
                                                                    • Figure 15: Market size and forecast for the total UK liqueurs market, by volume and value, 2006-16
                                                                    • Figure 16: Market size forecast for the total UK liqueurs market, by value, 2006-16
                                                                  • Liqueurs to gain from shift to in-home drinking…
                                                                      • Figure 17: Off-trade market size for liqueurs, by volume and value, 2006-16
                                                                      • Figure 18: Market size forecast for the off-trade UK liqueurs market, by value, 2006-16
                                                                    • …but they will see on-trade sales diminish
                                                                      • Figure 19: On-trade market size for liqueurs, by volume and value, 2006-16
                                                                      • Figure 20: Market size forecast for the on-trade UK liqueurs market, by value, 2006-16
                                                                    • Forecast methodology
                                                                    • Companies and Products

                                                                      • Key points
                                                                        • Bacardi-Martini
                                                                          • Cellar Trends
                                                                            • Brown-Forman
                                                                              • Diageo
                                                                                • First Drinks
                                                                                  • Pernod Ricard
                                                                                  • Brand Research

                                                                                    • Brand map
                                                                                        • Figure 21: Attitudes towards and usage of liqueur brands, October 2011
                                                                                      • Brand attitudes
                                                                                        • Figure 22: Attitudes, by liqueur brand, October 2011
                                                                                      • Brand personality
                                                                                        • Figure 23: Liqueur brand personality – macro image, October 2011
                                                                                        • Figure 24: Liqueur brand personality – micro image, October 2011
                                                                                      • Correspondence analysis
                                                                                        • Brand experience
                                                                                          • Figure 25: Liqueur brand usage, October 2011
                                                                                          • Figure 26: Satisfaction with various liqueur brands, October 2011
                                                                                          • Figure 27: Consideration of liqueur brands, October 2011
                                                                                          • Figure 28: Consumer perceptions of current liqueur brand performance, October 2011
                                                                                          • Figure 29: Liqueur brand recommendation – Net Promoter Score, October 2011
                                                                                        • Brand index
                                                                                          • Figure 30: Liqueur brand index, October 2011
                                                                                          • Figure 31: Liqueur brand index vs. recommendation, October 2011
                                                                                        • Target group analysis
                                                                                          • Figure 32: Target groups, October 2011
                                                                                          • Figure 33: Liqueur brand usage, by target groups, October 2011
                                                                                        • Group One – Conformists
                                                                                          • Group Two – Simply the Best
                                                                                            • Group Three – Shelf Stalkers
                                                                                              • Group Four – Habitual Shoppers
                                                                                                • Group Five – Individualists
                                                                                                • Brand Communication and Promotion

                                                                                                  • Key points
                                                                                                    • 12 months to September 2011 saw major brands make a push
                                                                                                      • Figure 34: Topline spend in the UK liqueurs market, 2008/09-2010/11*
                                                                                                    • Pimm’s and Baileys account for over a third of spend…
                                                                                                      • Figure 35: Above-the-line advertising spend in the UK liqueurs market, 2008/09-2010/11* by brand
                                                                                                    • …as both brands launch new ad campaigns
                                                                                                      • Tia Maria focuses on fashion
                                                                                                      • Channels to Market

                                                                                                        • Key points
                                                                                                          • Off-trade consolidate domination of liqueurs market
                                                                                                            • Figure 36: Liqueurs volume sales, by channel, 2008-10
                                                                                                          • Multiples go from strength to strength
                                                                                                            • The rise of online alcohol purchasing
                                                                                                            • Consumer Usage for Liqueurs

                                                                                                              • Key points
                                                                                                                • Four in ten drink liqueurs
                                                                                                                    • Figure 37: Consumption of alcohol in the past six months, October 2011
                                                                                                                  • Widening the user profile is about changing taste perceptions
                                                                                                                      • Figure 38: Consumption of liqueurs, by gender and age, October 2011
                                                                                                                    • Low frequency of drinking continues to be a problem
                                                                                                                        • Figure 39: Frequency of liqueurs consumption, 2007-11
                                                                                                                      • Men and 18-24-year-olds drink liqueurs the most often
                                                                                                                          • Figure 40: Heavy liqueurs drinkers, by gender and age, 2011
                                                                                                                      • Consumer Perceptions of Liqueurs

                                                                                                                        • Key points
                                                                                                                          • Indulgence has the strongest connotations with liqueurs
                                                                                                                            • Positive liqueur attributes outweighed by negative connotations
                                                                                                                                • Figure 41: Consumer perceptions of liqueurs, October 2011
                                                                                                                              • A fresher focus can help liqueurs reach even more younger drinkers
                                                                                                                                  • Figure 42: Consumer drink preferences, by age, October 2011
                                                                                                                                • Moving perceptions from sickly to sophisticated
                                                                                                                                    • Figure 43: Net difference in consumer perceptions of liqueurs – liqueur drinkers versus non-liqueur drinkers, October 2011
                                                                                                                                  • Indulgent and relaxing connotations are strongest among females
                                                                                                                                      • Figure 44: Consumer perceptions of liqueurs, by gender, October 2011
                                                                                                                                  • Consumer Occasions for Drinking Liqueurs

                                                                                                                                    • Key points
                                                                                                                                      • Liqueurs need to associate with more regular occasions
                                                                                                                                        • Figure 45: Occasions on which people drink/would be prepared to drink liqueurs, October 2011
                                                                                                                                      • Lack of obvious occasions is a major barrier to entry for non-drinkers
                                                                                                                                          • Figure 46: Occasions on which people drink/would be prepared to drink liqueurs – liqueur drinkers versus non-liqueur drinkers, October 2011
                                                                                                                                        • Younger drinkers see liqueurs as more sociable
                                                                                                                                            • Figure 47: Occasions on which people drink/would be prepared to drink liqueurs – over-35s versus under-35s, October 2011
                                                                                                                                        • Targeting Liqueur Drinkers by Attitudinal Groups

                                                                                                                                          • Key points
                                                                                                                                            • Four drinker types split by attitudes towards indulgence and refreshment
                                                                                                                                              • Figure 48: Attitudinal groups for drinker types, October 2011
                                                                                                                                            • Liqueurs appeal especially to lovers of indulgence
                                                                                                                                              • Figure 49: Attitudinal groups and whether they are liqueur drinkers, October 2011
                                                                                                                                            • Group one: A Taste For Heavier Drinks (26%)
                                                                                                                                              • What are their attitudes towards drinks?
                                                                                                                                                  • Figure 50: Index of which main drinks categories the four attitudinal groups consume, October 2011
                                                                                                                                                • Who are they?
                                                                                                                                                  • Approaches to targeting
                                                                                                                                                    • Group two: Caught Between Calories and Indulgence (19%)
                                                                                                                                                      • What are their attitudes towards drinks?
                                                                                                                                                        • Who are they?
                                                                                                                                                          • Approaches to targeting
                                                                                                                                                            • Group three: Refreshment First (31%)
                                                                                                                                                              • What are their attitudes towards drinks?
                                                                                                                                                                • Who are they?
                                                                                                                                                                  • Approaches to targeting
                                                                                                                                                                    • Group four: Calorie Controllers (24%)
                                                                                                                                                                      • What are their attitudes towards drinks?
                                                                                                                                                                        • Who are they?
                                                                                                                                                                          • Approaches to targeting
                                                                                                                                                                          • Appendix – Internal Market Environment

                                                                                                                                                                              • Figure 51: Occasions for drinking alcohol at home – 18-24-year-olds versus all drinkers, May 2011
                                                                                                                                                                              • Figure 52: UK excise duty rates on beer, cider, wine and spirits, 2003-11
                                                                                                                                                                          • Appendix – Market Size and Forecast

                                                                                                                                                                              • Figure 53: Market size forecast for the off-trade UK liqueurs market, by volume (litres), 2006-16
                                                                                                                                                                              • Figure 54: Forecast of total UK liqueurs volume sales, best- and worst-case, 2011-16
                                                                                                                                                                              • Figure 55: Forecast of total UK liqueurs value sales, best- and worst-case, 2011-16
                                                                                                                                                                              • Figure 56: Forecast of UK off-trade liqueurs value sales, best- and worst-case, 2011-16
                                                                                                                                                                              • Figure 57: Forecast of UK off-trade liqueurs volume sales, best- and worst-case, 2011-16
                                                                                                                                                                              • Figure 58: Forecast of UK on-trade liqueurs value sales, best- and worst-case, 2011-16
                                                                                                                                                                              • Figure 59: Forecast of UK on-trade liqueurs volume sales, best- and worst-case, 2011-16
                                                                                                                                                                          • Appendix – Brand Research

                                                                                                                                                                              • Figure 60: Brand usage, October 2011
                                                                                                                                                                              • Figure 61: Brand commitment, October 2011
                                                                                                                                                                              • Figure 62: Brand momentum, October 2011
                                                                                                                                                                              • Figure 63: Brand diversity, October 2011
                                                                                                                                                                              • Figure 64: Brand satisfaction, October 2011
                                                                                                                                                                              • Figure 65: Brand recommendation, October 2011
                                                                                                                                                                              • Figure 66: Brand attitude, October 2011
                                                                                                                                                                              • Figure 67: Brand image – macro image, October 2011
                                                                                                                                                                              • Figure 68: Brand image – micro image, October 2011
                                                                                                                                                                              • Figure 69: Profile of target groups, by demographics, October 2011
                                                                                                                                                                              • Figure 70: Psychographic segmentation, by target group, October 2011
                                                                                                                                                                              • Figure 71: Brand usage, by target group, October 2011
                                                                                                                                                                            • Brand index
                                                                                                                                                                              • Figure 72: Brand index, October 2011
                                                                                                                                                                          • Appendix – Brand Communication and Promotion

                                                                                                                                                                              • Figure 73: Above-the-line annual advertising spend in the UK liqueurs market, by brand, 2008/09-2010/11
                                                                                                                                                                          • Appendix – Consumer Usage for Liqueurs

                                                                                                                                                                              • Figure 74: Most popular types of alcohol consumed in the past six months, by demographics, October 2011
                                                                                                                                                                              • Figure 75: Next most popular types of alcohol consumed in the past six months, by demographics, October 2011
                                                                                                                                                                              • Figure 76: Most popular types of alcohol consumed in the past six months, by demographics, October 2011
                                                                                                                                                                              • Figure 77: Next most popular types of alcohol consumed in the past six months, by demographics, October 2011
                                                                                                                                                                          • Appendix – Consumer Perceptions of Liqueurs

                                                                                                                                                                              • Figure 78: Agreement with the perceptions of liqueur as ‘Fresh-tasting’ and ‘Heavy-tasting’, by demographics, October 2011
                                                                                                                                                                              • Figure 79: Agreement with the perceptions of liqueur as ‘Old-fashioned’ and ‘Fun’, by demographics, October 2011
                                                                                                                                                                              • Figure 80: Agreement with the perceptions of liqueur as ‘Boring’ and ‘Trendy’, by demographics, October 2011
                                                                                                                                                                              • Figure 81: Agreement with the perceptions of liqueur as ‘Relaxing’ and ‘A party drink’, by demographics, October 2011
                                                                                                                                                                              • Figure 82: Agreement with the perceptions of liqueur as ‘Adventurous’ and ‘Sophisticated’, by demographics, October 2011
                                                                                                                                                                              • Figure 83: Agreement with the perceptions of liqueur as ‘Indulgent’ and ‘Sickly’, by demographics, October 2011
                                                                                                                                                                              • Figure 84: Agreement with the perceptions of liqueur as ‘Fresh-tasting’ and ‘Heavy-tasting’, by demographics, October 2011
                                                                                                                                                                              • Figure 85: Agreement with the perceptions of liqueur as ‘Old-fashioned’ and ‘Fun’, by demographics, October 2011
                                                                                                                                                                              • Figure 86: Agreement with the perceptions of liqueur as ‘Boring’ and ‘Trendy’, by demographics, October 2011
                                                                                                                                                                              • Figure 87: Agreement with the perceptions of liqueur as ‘Relaxing’ and ‘A party drink’, by demographics, October 2011
                                                                                                                                                                              • Figure 88: Agreement with the perceptions of liqueur as ‘Adventurous’ and ‘Sophisticated’, by demographics, October 2011
                                                                                                                                                                              • Figure 89: Agreement with the perceptions of liqueur as ‘Indulgent’ and ‘Sickly’, by demographics, October 2011
                                                                                                                                                                          • Appendix – Consumer Occasions for Drinking Liqueurs

                                                                                                                                                                              • Figure 90: Most popular occasions on which people would be prepared to drink liqueurs, by demographics, October 2011
                                                                                                                                                                              • Figure 91: Next most popular occasions on which people would be prepared to drink liqueurs, by demographics, October 2011
                                                                                                                                                                          • Appendix – Targeting Liqueur Drinkers by Attitudinal Groups

                                                                                                                                                                              • Figure 92: Target groups, by demographics, October 2011
                                                                                                                                                                              • Figure 93: General attitudes towards alcohol/food, by target groups, October 2011
                                                                                                                                                                              • Figure 94: Consumption of alcohol in the past six months, by target groups, October 2011
                                                                                                                                                                              • Figure 95: Consumer perceptions of liqueurs, by target groups, October 2011
                                                                                                                                                                              • Figure 96: Occasions on which people would be prepared to drink liqueurs, by target groups, October 2011
                                                                                                                                                                              • Figure 97: Agreement with the statements ‘I typically prefer fresh-tasting drinks’ and ‘I typically prefer drinks which quench my thirst’, by demographics, October 2011
                                                                                                                                                                              • Figure 98: Agreement with the statements ‘I typically prefer creamier drinks’ and ‘I typically prefer drinks that do not fill me up too much’, by demographics, October 2011
                                                                                                                                                                              • Figure 99: Agreement with the statements ‘I typically prefer rich-tasting drinks’ and ‘I typically prefer drinks that do not taste too sugary’, by demographics, October 2011
                                                                                                                                                                              • Figure 100: Agreement with the statements ‘I typically prefer drinks with lots of flavour’ and ‘I typically prefer drinks with low calorie content’, by demographics, October 2011
                                                                                                                                                                              • Figure 101: Agreement with the statements ‘In the main I do not worry about calories when deciding what to drink’ and ‘I like to indulge myself from time to time by eating foods that aren’t good for me eg chocolate, ice cream etc’, by demographics, October 2011
                                                                                                                                                                              • Figure 102: Agreement with the statements ‘I typically watch my calorie intake when eating’ and ‘I do not like constantly being told what I should and should not drink or eat for health reasons’, by demographics, October 2011

                                                                                                                                                                          Companies Covered

                                                                                                                                                                          • Aldi Stores Ltd (UK & Ireland)
                                                                                                                                                                          • Asda Group Ltd
                                                                                                                                                                          • Bacardi-Martini Ltd
                                                                                                                                                                          • Bank of England
                                                                                                                                                                          • Berry Bros and Rudd Ltd
                                                                                                                                                                          • British Beer and Pub Association
                                                                                                                                                                          • British Sky Broadcasting Group plc (BSkyB)
                                                                                                                                                                          • Brown-Forman
                                                                                                                                                                          • Campari Group
                                                                                                                                                                          • Carolans
                                                                                                                                                                          • Cellar Trends Ltd
                                                                                                                                                                          • Co-operative Group
                                                                                                                                                                          • Dairy Crest Group plc
                                                                                                                                                                          • De Kuyper Royal Distillers B.V.
                                                                                                                                                                          • Diageo Plc
                                                                                                                                                                          • Diageo UK
                                                                                                                                                                          • Drambuie Liqueur Company Ltd
                                                                                                                                                                          • Drinkaware Trust
                                                                                                                                                                          • Edrington Group (The)
                                                                                                                                                                          • Facebook, Inc.
                                                                                                                                                                          • First Drinks
                                                                                                                                                                          • First Quench Retailing
                                                                                                                                                                          • Freeview
                                                                                                                                                                          • Gfk NOP
                                                                                                                                                                          • Government Actuary's Department (GAD)
                                                                                                                                                                          • Gü Rensow Ltd
                                                                                                                                                                          • Häagen-Dazs
                                                                                                                                                                          • Harvey Nichols UK
                                                                                                                                                                          • Hiram Walker & Sons Limited
                                                                                                                                                                          • J. Sainsbury
                                                                                                                                                                          • JD Wetherspoon
                                                                                                                                                                          • Kantar Media
                                                                                                                                                                          • Lidl (UK)
                                                                                                                                                                          • Luxardo S.p.A.
                                                                                                                                                                          • Marks & Spencer
                                                                                                                                                                          • Maxxium UK
                                                                                                                                                                          • Oddbins Ltd
                                                                                                                                                                          • Pernod Ricard
                                                                                                                                                                          • Red Bull UK
                                                                                                                                                                          • Selfridges Retail Ltd
                                                                                                                                                                          • T-Mobile (UK) Ltd
                                                                                                                                                                          • Tesco Plc
                                                                                                                                                                          • The Portman Group
                                                                                                                                                                          • Virgin Media Ltd
                                                                                                                                                                          • Virgin Mobile
                                                                                                                                                                          • Vodafone Group Plc (UK)
                                                                                                                                                                          • Waitrose Ltd
                                                                                                                                                                          • Whyte & Mackay Ltd
                                                                                                                                                                          • Wm Morrison Supermarkets

                                                                                                                                                                          Liqueurs - UK - January 2012

                                                                                                                                                                          £1,750.00 (Excl.Tax)