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Liqueurs - UK - June 2010

This report covers the UK market for liqueurs in the on- and off-trade on which excise duty is paid in the UK. Duty-free sales and personal imports of duty-paid product have been excluded from all data unless specified.

  • The liqueurs market splits into two main types: traditional liqueurs, such as Cointreau or Tia Maria are typically thick, sweet products with a spirit base and combined with an infusion of flavours such as fruit or herbs and cream-based liqueurs, such as Bailey’s Irish Cream.
  • Traditional liqueurs often appear in classic cocktails eg, Cointreau or Grand Marnier in Cosmopolitans. Helped by the continuing popularity of cocktails, Mintel forecasts this segment will grow to represent over half of all liqueur value sales by 2013 in an otherwise declining market.
  • Currently, liqueurs are still more likely to be drunk neat (three quarters of drinkers) rather than in cocktails (less than half), primarily due to the dominance of market leader Bailey’s Cream which is a rare example of a strong brand in a heavily fragmented market.
  • Despite being drunk by a half of UK adult drinkers, the total liqueurs market suffers from its perception, by women especially, as a guilty pleasure to be indulged in only occasionally. For example, a half of liqueur drinkers think “they make a nice treat”, a third that “that they are fine in small measures” and a quarter that “they are for special occasions only”.
  • Key to arresting value sales decline is to increase occasions for usage and offset guilt about drinking liqueurs more often. Becoming more integral in the dessert category can help to replace the diminishing after-dinner liqueur occasion, while mixing liqueurs with functional ingredients such as superfruits can balance indulgence and health.
  • Dual targeting is also key to maximising revenue. Older (45+ year-olds) consumers associate drinking liqueurs with in-home, after-dinner “cocooning” occasions. In contrast, 18-24 year olds are much more likely to drink liqueurs as part of a cocktail, therefore perceiving them as exciting, sociable and about going out.

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Table of contents

  1. Issues in the Market

      • Definition
        • Abbreviations
        • Future Opportunities

          • Liqueurs can benefit from the ‘fresh factor’
            • Tapping into Cocktail Nostalgia
            • Market in Brief

              • A tale of two markets
                • Traditional liqueur sales will keep market afloat
                  • Frequency, frequency, frequency
                  • Internal Market Environment

                    • Key points
                      • Drinking in slow but steady decline…
                        • Figure 1: Trends in proportion of the UK population drinking alcohol, 2005-09
                      • … and the on-trade is feeling the pain
                        • Figure 2: Trends in alcohol drinking in-home versus out-of-home, 2005-09
                        • Figure 3: Trends for index of household spend in real prices (2005 = 100), by quarter, for spirits, wine and beer, 2006 Q1-2009 Q2
                      • Liqueurs helped by the rise in popularity of cocktails
                        • Figure 4: Consumer attitudes towards trying new drinks, by drink type, July 2009
                      • … something which has not translated to in-home – yet
                        • Figure 5: Trends in cooking habits, May 2009-January 2010
                      • The limitations of seasonality
                        • Figure 6: Trends for quarterly penetration of liqueur drinking in Britain, 2006 Q1-2009 Q3
                      • Striking a balance between naughty and nice
                        • Figure 7: Personal concerns of UK consumers, January 2010
                    • Broader Market Environment

                      • Key points
                        • Liqueurs hit by escalating duty
                          • Figure 8: Trends for changes in duty for liqueurs, 2002-10
                        • But are supermarkets’ wings about to be clipped?
                          • Consumer spend will remain weak in 2010
                            • Timely growth in 25-34s
                              • ABC1 growth will continue unabated
                              • Competitive Context

                                • Key points
                                  • Among spirits, only vodka and whisky have a higher penetration
                                    • Figure 9: trends for consumption of different alcohol drinks in the past 12 months (ranked by 2009), 2005-09
                                  • Within spirits, only ARTDs are experiencing a steeper decline in users
                                    • Figure 10: Trends for penetration of different types of spirits consumed, pre-economic downturn (2005-07) compared to post (2007-09)
                                  • Liqueurs is a more female-friendly spirit than vodka
                                    • Figure 11: Usage index (100 =a verage) of liqueurs compared to vodka, gin and whisky, by gender, age group and socio-economic group, 2009
                                • Strengths and Weaknesses in the Market

                                  • Strengths
                                    • Weaknesses
                                    • Who’s Innovating?

                                      • Key points
                                        • Liqueurs target desserts occasion
                                          • Liqueurs as part of pre-mixed cocktails
                                          • Market Size and Forecast

                                            • Key points
                                              • Liqueurs have been struggling to hold their own in a tough marketplace
                                                • Cosmetically the category will remain stable but not in real terms
                                                  • Figure 12: Forecast of volume and value sales of the total liqueurs market, 2005-15
                                                • Factors used in the forecast
                                                • Market Segmentation

                                                  • Key points
                                                    • Cream-based liqueurs will struggle
                                                      • Figure 13: Forecast of volume and value sales of the cream-based liqueurs market, 2005-15
                                                    • Traditional liqueurs will benefit from on-trade cocktail revenue
                                                      • Figure 14: Forecast of volume and value sales of the traditional liqueurs market, 2005-15
                                                      • Figure 15: Forecast of volume share of the total liqueurs market, by segment, 2005-15
                                                    • Shooters are on a downward spiral
                                                      • Figure 16: Forecast of volume and value sales of the shooters market, 2005-15
                                                  • Companies and Products

                                                    • Key points
                                                      • Cellar Trends
                                                        • Diageo
                                                          • First Drinks
                                                            • Pernod Ricard
                                                            • Brand Elements

                                                                • Key points
                                                                  • Brand map
                                                                      • Figure 17: Attitudes towards and usage of liqueur brands, May 2010
                                                                    • Brand qualities of liqueur brands
                                                                      • Baileys rules the roost
                                                                        • Figure 18: Personalities of various liqueur brands, May 2010
                                                                      • Experience of liqueur brands
                                                                        • Baileys most popular, Luxardo little known
                                                                          • Figure 19: Consumer purchase of various liqueur brands, May 2010
                                                                        • Brand consideration for liqueur brands
                                                                          • Baileys most off-putting, others similarly considered
                                                                            • Figure 20: Consideration of various liqueur brands, May 2010
                                                                          • Brand satisfaction for liqueur brands
                                                                            • Baileys best for buyers, Luxardo less appealing
                                                                              • Figure 21: Satisfaction with various liqueur brands, May 2010
                                                                            • Brand commitment to liqueur brands
                                                                              • Baileys has highest loyalty
                                                                                • Figure 22: Commitment to various liqueur brands, May 2010
                                                                              • Brand intentions for liqueur brands
                                                                                • Sweet liqueurs have similar retention
                                                                                  • Figure 23: Future usage intentions for various liqueur brands, May 2010
                                                                                • Brand recommendation for liqueur brands
                                                                                  • Baileys most recommended, Luxardo a let down
                                                                                    • Figure 24: Recommendation of various liqueur brands, May 2010
                                                                                  • Cointreau
                                                                                    • What the consumer thinks
                                                                                      • Figure 25: Attitudes towards the Cointreau brand, May 2010
                                                                                    • Disaronno
                                                                                      • What the consumer thinks
                                                                                        • Figure 26: Attitudes towards the Disaronno brand, May 2010
                                                                                      • Baileys
                                                                                        • What the consumer thinks
                                                                                          • Figure 27: Attitudes towards the Baileys brand, May 2010
                                                                                      • Channels to Market

                                                                                        • Key points
                                                                                          • On-trade decline hits liqueurs revenue
                                                                                            • Liqueurs increasingly reliant on multiple grocers
                                                                                              • Figure 28: UK distribution of liqueurs by volume, by trade sector, 2007-09
                                                                                          • Brand Communication and Promotion

                                                                                            • Key points
                                                                                              • Advertising spend has increased despite economic downturn
                                                                                                • Figure 29: Spend per year on above-the-line advertising for liqueurs, 2005-09
                                                                                              • Advertising reflects popularity of liqueur sales over Christmas
                                                                                                • Figure 30: Average spend on above-the-line advertising for liqueurs, by month, 2005-09
                                                                                              • Investment in Baileys has driven the market
                                                                                                • Figure 31: Top spending liqueur advertisers aggregated over the period, 2007-09
                                                                                                • Figure 32: Top spending liqueur brands aggregated over the period, 2007-09
                                                                                            • The Consumer – Usage

                                                                                              • Key points
                                                                                                • Either love them or hate them
                                                                                                    • Figure 33: Proportion of people who drink liqueurs and those who would or would not consider drinking them in future, March 2010
                                                                                                  • Limited crossover between cocktail and neat liqueur drinkers
                                                                                                      • Figure 34: Proportion of people who drink liqueurs neat, as part of cocktails, and/or both, March 2010
                                                                                                    • Liqueurs capture a younger, upmarket audience…
                                                                                                      • Figure 35: Liqueur drinkers over the past 12 months, by demographics, March 2010
                                                                                                    • … but for 18-24s, their experience of liqueurs is all about cocktails
                                                                                                        • Figure 36: Net difference* between those who drink liqueurs as part of a cocktail compared to those who drink them neat, by age group, socio-economic group and gender, March 2010
                                                                                                      • Liqueur ‘rejecters’ are mainly downmarket, older men
                                                                                                        • Figure 37: Those who have no intention of drinking liqueurs in the future (rejecters), by gender, age group and socio-economic group, March 2010
                                                                                                      • Increasing in-home occasions a priority
                                                                                                          • Figure 38: Frequency of drinking liqueur either in-home or out-of-home, 2010
                                                                                                      • The Consumer – Attitudes Towards Liqueurs

                                                                                                        • Key points
                                                                                                          • Liqueurs’ indulgent positioning is a double-edged sword
                                                                                                            • Figure 39: Attitudes towards drinking liqueurs, March 2010
                                                                                                          • Women need to be given an excuse to indulge in liqueurs more often
                                                                                                            • Figure 40: Net difference* between statements on liqueurs, women compared to men, March 2010
                                                                                                          • Cocktail drinking has shaped younger drinkers’ perceptions of liqueurs
                                                                                                              • Figure 41: Net difference* between statements on liqueurs, under-45s compared to over-45s, March 2010
                                                                                                            • Calorie content surprisingly not a barrier to women
                                                                                                            • The Consumer – Occasions for Drinking Liqueurs

                                                                                                              • Key points
                                                                                                                • Like it or not, liqueurs are synonymous with Christmas…
                                                                                                                  • Figure 42: Liqueur drinking occasions in the past year, March 2010
                                                                                                                • … but cocktails are expanding liqueurs into new occasions
                                                                                                                    • Figure 43: Net difference* between occasions for people who drink liqueurs neat, compared to as a cocktail, March 2010
                                                                                                                  • Liqueur occasions for the younger ‘cocktail generation’
                                                                                                                      • Figure 44: Net difference in drinking occasions for liqueurs in the past year, over-45s compared to under-45s, March 2010
                                                                                                                  • Appendix

                                                                                                                    • Consumer research
                                                                                                                      • Advertising data
                                                                                                                        • Focus groups
                                                                                                                        • Appendix – Internal Market Environment

                                                                                                                            • Figure 45: Trends in healthy lifestyles and eating/snacking habits, 2005-09
                                                                                                                            • Figure 46: Calories contained in typical serves of different alcohol types, 2009
                                                                                                                        • Appendix – Broader Market Environment

                                                                                                                            • Figure 47: GDP, PDI, consumer expenditure, at constant 2005 prices (ie real terms), 2005-15
                                                                                                                            • Figure 48: Trends in the age structure of the UK population, 2005-15
                                                                                                                            • Figure 49: Forecast adult population trends, by socio-economic group, 2005-15
                                                                                                                        • Appendix – Brand Communication

                                                                                                                            • Figure 50: Liqueurs, top ten spending advertisers, 2007-09
                                                                                                                            • Figure 51: Top ten liqueur brands, by advertising spend, 2007-09
                                                                                                                            • Figure 52: Spend by media type for the liqueurs and spirits category, 2005-09
                                                                                                                        • Appendix – The Consumer – Usage

                                                                                                                            • Figure 53: liqueur drinkers over the past 12 months, by demographics, March 2010
                                                                                                                            • Figure 54: Liqueur non-drinkers over the past 12 months, by demographics, March 2010
                                                                                                                        • Appendix – The Consumer –Attitudes Towards Liqueurs

                                                                                                                            • Figure 55: Most popular attitudes towards drinking liqueurs, by demographics, March 2010
                                                                                                                            • Figure 56: Next most popular attitudes towards drinking liqueurs, by demographics, March 2010 (continued)
                                                                                                                            • Figure 57: Other attitudes towards drinking liqueurs, by demographics, March 2010 (continued)
                                                                                                                            • Figure 58: Net difference between statements on liqueurs, neat liqueur drinkers compared to cocktail liqueur drinkers, March 2010
                                                                                                                        • Appendix – The Consumer – Occasions for Drinking Liqueurs

                                                                                                                            • Figure 59: UK value sales of alcoholic drinks, by type, 2007
                                                                                                                            • Figure 60: Occasions people have drunk liqueurs in the past year, by demographics, March 2010
                                                                                                                            • Figure 61: Next most popular liqueur drinking occasions in the past year, by demographics, March 2010 (continued)
                                                                                                                            • Figure 62: Liqueur drinking occasions in the past year by whether people drink them neat or as part of a cocktail, March 2010

                                                                                                                        Companies Covered

                                                                                                                        • Asda Group Ltd
                                                                                                                        • Bacardi-Martini Ltd
                                                                                                                        • British Beer and Pub Association
                                                                                                                        • British Market Research Bureau (BMRB)
                                                                                                                        • Co-operative Group
                                                                                                                        • De Kuyper Royal Distillers B.V.
                                                                                                                        • Department of Health
                                                                                                                        • Diageo Plc
                                                                                                                        • Diageo UK
                                                                                                                        • First Drinks
                                                                                                                        • Government Actuary's Department (GAD)
                                                                                                                        • Häagen-Dazs
                                                                                                                        • Heaven Hill Distilleries Inc.
                                                                                                                        • Intercontinental Brands (ICB) Ltd
                                                                                                                        • J. Sainsbury
                                                                                                                        • Kantar Media
                                                                                                                        • Lidl (UK)
                                                                                                                        • Outdoor Advertising Association of Great Britain
                                                                                                                        • Pernod Ricard
                                                                                                                        • Tesco Plc
                                                                                                                        • Waitrose
                                                                                                                        • William Grant and Sons Distillers Ltd
                                                                                                                        • Wm Morrison Supermarkets

                                                                                                                        Liqueurs - UK - June 2010

                                                                                                                        £1,995.00 (Excl.Tax)