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UK White Spirits and RTDs market report

"That an interesting flavour profile stands out as the top way to add value stands in contrast to white spirits' traditional proposition of providing a subtle flavour, with vodka in a more challenging position in this respect. Gin has an edge in this context, being by its nature a flavoured drink."

- Amy Price, Senior Food and Drink Analyst

This report is looking at the following areas:

  • Flavour is the top way to add value
  • Major players move into craft
  • Long-established brands trump smaller producers
  • Potential for lower-alcohol/healthier versions

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

  • Vodka is a clear, colourless, almost odourless spirit made from the distillation of potatoes, and sometimes from corn, rye, wheat, sugar beet molasses or other agricultural matter. The European Union requires that vodka must have a minimum ABV (Alcohol by Volume) of 37.5%. Flavoured vodka products such as Smirnoff Blueberry and Absolut Raspberri Vodka, which are simple flavoured versions of the base spirits, are included in this Report.
  • Gin predominantly derives its flavour from juniper berries and falls into two distinct categories: distilled gin is made from re-distilling the neutral spirit of agricultural origin with juniper berries and other botanicals, while compound gin is made by flavouring the neutral spirit with flavourings without re-distilling it and is hence typically considered inferior in quality.
  • White rum is produced from sugarcane juice and molasses. Unlike dark rum, it is aged in plain oak casks or stainless steel tanks so the colour remains clear. Bacardi and Malibu are the two best-known brands in the segment.
  • Tequila is a distilled beverage made from the blue agave plant, primarily in the area surrounding the city of the same name in Mexico. Tequila is most often made at 38-40% ABV but can also be produced at 31-55%. Mezcal is made from the maguey plant, a type of agave plant, although it remains decidedly niche in the UK.
  • RTDs is a trade term used to describe any drink featuring an alcoholic drink and a mixer sold pre-mixed typically either in bottles or cans. They include fruit-, herb-, soda- or water-based, still or carbonated drinks combined with at least one base spirit, and usually have an ABV of 4-6%. Mintel uses the term RTDs and pre-mixed drinks interchangeably in this Report.
  • Not all RTDs are made from white spirits (eg Jack Daniel's & Coke in a can), although white spirits have traditionally been the base spirit for this category. This Report will analyse the whole RTD market, not just those products with white spirits as a base.

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Table of contents

  1. Overview

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

          • The market
            • Sales rise in 2016
              • Figure 1: Forecast of UK value sales of white spirits and RTDs, 2011-21
            • Companies and brands
              • Smirnoff continues to dominate vodka
                • Fruit and sweet flavours widely seen in NPD
                  • Major players move into craft
                    • Category adspend rises
                      • Smirnoff excels on brand image
                        • Figure 2: Attitudes towards and usage of selected brands, November 2016
                      • The consumer
                        • 56% drink white spirits
                          • Figure 3: Usage of white spirits, by type, September 2016
                        • White spirits/RTDs are most popular when relaxing at home
                          • Figure 4: Occasions when white spirits and RTDs are drunk, September 2016
                        • Flavour is the top way to add value
                          • Figure 5: Attributes worth paying more for when buying white spirits, September 2016
                        • Interest in lower-alcohol/healthier versions
                          • Figure 6: Attitudes towards white spirits and RTDs, September 2016
                        • What we think
                        • Issues and Insights

                          • Flavour is the top way to add value
                            • The facts
                              • The implications
                                • Major players move into craft
                                  • The facts
                                    • The implications
                                      • Long-established brands trump smaller producers
                                        • The facts
                                          • The implications
                                            • Potential for lower-alcohol/healthier versions
                                              • The facts
                                                • The implications
                                                • The Market – What You Need to Know

                                                  • Sales rise in 2016
                                                    • Vodka leads the market
                                                      • The on-trade leads on values
                                                        • Alcohol duty stays flat
                                                          • New guidelines put the spotlight on alcohol consumption
                                                          • Market Size and Forecast

                                                            • Value and volume sales rise in 2016
                                                              • Figure 7: Total value and volume sales of white spirits and RTDs, at current and constant prices, 2011-21
                                                              • Figure 8: Forecast of UK value sales of white spirits and RTDs, 2011-21
                                                              • Figure 9: Forecast of UK volume sales of white spirits and RTDs, 2011-21
                                                            • The impact of the EU referendum vote
                                                                • Figure 10: Alternative scenarios for the white spirits and RTDs market, 2016-21
                                                                • Figure 11: Alternative scenarios for the white spirits and RTDs market, at current prices, 2016-21
                                                              • Brexit vote has limited impact on consumers’ finances
                                                                • The market in 2008-09
                                                                  • Savvy habits are already established
                                                                  • Market Segmentation

                                                                    • Vodka leads the market
                                                                      • Figure 12: Total value and volume sales of vodka, at current and constant prices, 2011-21
                                                                      • Figure 13: Forecast of UK value sales of vodka, 2011-21
                                                                    • Gin’s growth continues
                                                                      • Figure 14: Total value and volume sales of gin, at current and constant prices, 2011-21
                                                                      • Figure 15: Forecast of UK value sales of gin, 2011-21
                                                                    • White rum sees sluggish performance
                                                                      • Figure 16: Total value and volume sales of white rum, at current and constant prices, 2011-21
                                                                      • Figure 17: Forecast of UK value sales of white rum, 2011-21
                                                                    • Tequila/Mezcal sees value growth, driven by on-trade performance
                                                                      • Figure 18: Total value and volume sales of tequila/Mezcal, at current and constant prices, 2011-21
                                                                      • Figure 19: Forecast of UK value sales of tequila/Mezcal, 2011-21
                                                                    • RTDs continue to suffer
                                                                      • Figure 20: Total value and volume sales of RTDs, at current and constant prices, 2011-21
                                                                      • Figure 21: Forecast of UK value sales of RTDs, 2011-21
                                                                  • Channels to Market

                                                                    • The on-trade leads on values
                                                                      • Off-trade top for volumes
                                                                        • Figure 22: UK value and volume sales of white spirits and RTDs in the on- and off-trade, by type, 2014-16
                                                                    • Market Drivers

                                                                      • Alcohol duty stays flat
                                                                        • Figure 23: UK excise duty rates for selected alcoholic drinks, 2006-16
                                                                        • Figure 24: Consumer price indices for all items, wine, beer and spirits (2006=100), 2006-16
                                                                      • Consumer caution could hit discretionary spending
                                                                        • New guidelines put the spotlight on alcohol consumption
                                                                          • Opportunities for lower/no-alcohol (or calorie) drinks
                                                                            • Number of distilleries sees continued growth in the UK
                                                                              • Demographic changes could impact the market
                                                                                • Ageing population presents a challenge
                                                                                  • Figure 25: Usage of white spirits, by age, September 2016
                                                                                • Dominance of C1s and C2s demonstrates the need to push value for money
                                                                                • Companies and Brands – What You Need to Know

                                                                                  • Smirnoff continues to dominate vodka
                                                                                    • Gin brands benefit from ongoing popularity, with Gordon’s leading
                                                                                      • Leading rum brands see sales rise, despite category dip
                                                                                        • RTDs see slight retail growth from pre-mixed cans
                                                                                          • Fruit and sweet flavours widely seen in NPD
                                                                                            • Major players move into craft
                                                                                              • Category adspend rises
                                                                                                • Smirnoff excels on brand image
                                                                                                • Market Share

                                                                                                  • Smirnoff continues to dominate vodka
                                                                                                    • Other brands also see growth
                                                                                                      • New Amsterdam sees strong growth as the newcomer to the segment
                                                                                                        • Figure 26: UK retail value sales of the leading vodka brands, 2014/15 and 2015/16
                                                                                                      • Gin brands benefit from ongoing popularity, with Gordon’s leading
                                                                                                        • Bombay Sapphire enjoys impressive growth
                                                                                                          • Sipsmith positions itself as a strong craft brand
                                                                                                            • Figure 27: UK retail value and volume sales of the leading gin brands, 2014/15 and 2015/16
                                                                                                          • Leading rum brands see sales rise, despite category dip
                                                                                                            • Figure 28: UK retail value and volume sales of the leading white rum brands, 2014/15 and 2015/16
                                                                                                          • Tequila/Mezcal brands remain limited
                                                                                                            • Figure 29: UK retail value and volume sales of the leading tequila/Mezcal brands, 2014/15 and 2015/16
                                                                                                          • RTDs see slight retail growth, coming from pre-mixed cans
                                                                                                            • Figure 30: UK retail value and volume sales of the leading RTD brands, 2014/15 and 2015/16
                                                                                                        • Launch Activity and Innovation

                                                                                                          • Flavour innovation
                                                                                                            • Fruit flavours are widely seen
                                                                                                              • Gin embraces new flavours
                                                                                                                • Indulgent flavours also prove popular in NPD
                                                                                                                  • Smoky/smoked flavours have potential
                                                                                                                    • Major players move into craft
                                                                                                                      • Retailers look to premiumisation
                                                                                                                        • Provenance offers a premium cue
                                                                                                                          • Making more of British credentials
                                                                                                                            • Consumer interest in health provides an incentive to NPD
                                                                                                                              • Calorie content
                                                                                                                                • Sugar content
                                                                                                                                  • Exploring reduced or no alcohol content
                                                                                                                                    • Frozen cocktail trend continues in RTDs
                                                                                                                                    • Advertising and Marketing Activity

                                                                                                                                      • Total category adspend rises
                                                                                                                                        • Figure 31: Total above-the-line, online display and direct mail advertising expenditure on white spirits and RTDs, 2013-16
                                                                                                                                        • Figure 32: Above-the-line, online display and direct mail advertising expenditure on white spirits and RTDs, by category, 2013-16
                                                                                                                                      • Diageo’s Smirnoff and Gordon’s lead spend
                                                                                                                                        • Smirnoff looks to inclusivity
                                                                                                                                          • Gordon’s ramps up spend in 2015 and 2016
                                                                                                                                              • Figure 33: Above-the-line, online display and direct mail advertising expenditure on white spirits and RTDs, by top 10 brands (sorted by 2015), 2013-16
                                                                                                                                            • Bacardi supports its Bombay Sapphire and Grey Goose brands
                                                                                                                                              • Retailers push spirits ranges
                                                                                                                                                • New Amsterdam targets Millennials
                                                                                                                                                  • Brands look to alternative marketing initiatives
                                                                                                                                                    • WKD unveils Blush Hour campaign
                                                                                                                                                      • Glen’s signs Westlife star as brand ambassador
                                                                                                                                                        • Absolut pushes #AbsolutNights
                                                                                                                                                          • Malibu embraces connected bottles to engage with its audience
                                                                                                                                                            • Belvedere’s #makethedifference campaign looks to charity
                                                                                                                                                              • Tanqueray teams up with luxury brands for Perfect Ten campaign
                                                                                                                                                                • Nielsen Ad Intel coverage
                                                                                                                                                                • Brand Research

                                                                                                                                                                    • What you need to know
                                                                                                                                                                      • Brand map
                                                                                                                                                                        • Figure 34: Attitudes towards and usage of selected white spirit brands, November 2016
                                                                                                                                                                      • Key brand metrics
                                                                                                                                                                        • Figure 35: Key metrics for selected white spirit brands, November 2016
                                                                                                                                                                      • Brand attitudes: Smirnoff excels on trust
                                                                                                                                                                        • Figure 36: Attitudes, by white spirits brand, November 2016
                                                                                                                                                                      • Brand personality: Malibu is seen as the most fun, Smirnoff and Bacardi as most accessible
                                                                                                                                                                        • Figure 37: Brand personality – Macro image, November 2016
                                                                                                                                                                      • Gordon’s seen to be most traditional; Malibu stands apart as feminine
                                                                                                                                                                        • Figure 38: Brand personality – Micro image, November 2016
                                                                                                                                                                      • Brand analysis
                                                                                                                                                                        • Bombay Sapphire enjoys an upmarket image
                                                                                                                                                                          • Figure 39: User profile of Bombay Sapphire, November 2016
                                                                                                                                                                        • Smirnoff boasts a strong brand image
                                                                                                                                                                          • Figure 40: User profile of Smirnoff, November 2016
                                                                                                                                                                        • Grey Goose is seen most widely as worth paying more for
                                                                                                                                                                          • Figure 41: User profile of Grey Goose, November 2016
                                                                                                                                                                        • Bacardi enjoys widespread appeal
                                                                                                                                                                          • Figure 42: User profile of Bacardi, November 2016
                                                                                                                                                                        • Gordon’s continues to be seen as traditional
                                                                                                                                                                          • Figure 43: User profile of Gordon’s, November 2016
                                                                                                                                                                        • Malibu is seen to be the most fun, and feminine
                                                                                                                                                                          • Figure 44: User profile of Malibu, November 2016
                                                                                                                                                                        • Glen’s Vodka has the weakest brand image
                                                                                                                                                                          • Figure 45: User profile of Glen’s Vodka, November 2016
                                                                                                                                                                      • The Consumer – What You Need to Know

                                                                                                                                                                        • 56% drink white spirits
                                                                                                                                                                          • White spirits/RTDs are most popular when relaxing at home
                                                                                                                                                                            • Flavour is the top way to add value
                                                                                                                                                                              • Long-established brands trump smaller producers
                                                                                                                                                                                • Real fruit flavour innovation garners greatest interest
                                                                                                                                                                                  • Interest in lower-alcohol/healthier versions
                                                                                                                                                                                    • Openness to craft drinks from big manufacturers
                                                                                                                                                                                    • Usage of White Spirits and RTDs

                                                                                                                                                                                      • 56% drink white spirits
                                                                                                                                                                                        • Vodka is the most popular type
                                                                                                                                                                                          • The young drive gin renaissance
                                                                                                                                                                                            • Figure 46: Usage of white spirits, by type, September 2016
                                                                                                                                                                                          • White spirits are most commonly drunk with a mixer
                                                                                                                                                                                            • Figure 47: Usage of white spirits, by type and choice of mixer, September 2016
                                                                                                                                                                                          • Vodka also leads flavoured varieties
                                                                                                                                                                                            • Figure 48: Usage of flavoured white spirits, September 2016
                                                                                                                                                                                          • Almost a quarter of 18-34s drink five types of white spirits
                                                                                                                                                                                            • Figure 49: Repertoire of usage of types of white spirits, September 2016
                                                                                                                                                                                          • 18-44s are most likely to drink RTDs
                                                                                                                                                                                            • Figure 50: Usage of RTDs, September 2016
                                                                                                                                                                                        • Occasions for Drinking White Spirits/RTDs

                                                                                                                                                                                          • White spirits/RTDs are most popular when relaxing at home
                                                                                                                                                                                            • Figure 51: Occasions when white spirits and RTDs are drunk, September 2016
                                                                                                                                                                                          • The young drink white spirits before/on a night out; older users when relaxing at home
                                                                                                                                                                                            • Figure 52: Selected occasions when white spirits are drunk, by age, September 2016
                                                                                                                                                                                          • RTDs are popular when out and about among Londoners
                                                                                                                                                                                          • Attributes worth Paying More for

                                                                                                                                                                                            • Flavour is the top way to add value
                                                                                                                                                                                              • White spirits’ traditional proposition has centred on subtle flavours
                                                                                                                                                                                                • Botanicals put gin in a strong position to push flavour
                                                                                                                                                                                                  • Figure 53: Attributes worth paying more for when buying white spirits, September 2016
                                                                                                                                                                                                • Naturalness appeals to 44%
                                                                                                                                                                                                  • Long-established brands trump smaller producers
                                                                                                                                                                                                  • Interest in White Spirits and RTDs

                                                                                                                                                                                                    • Real fruit flavour innovation garners greatest interest
                                                                                                                                                                                                      • Figure 54: Interest in buying different types of white spirits and RTDs, September 2016
                                                                                                                                                                                                    • 24% are interested in low-calorie RTDs
                                                                                                                                                                                                    • Attitudes towards White Spirits and RTDs

                                                                                                                                                                                                      • Potential for lower-alcohol/healthier versions
                                                                                                                                                                                                        • Figure 55: Attitudes towards white spirits and RTDs, September 2016
                                                                                                                                                                                                      • No-added-sugar proposition appeals to almost half
                                                                                                                                                                                                        • Figure 56: White spirits and RTDs – CHAID – Tree output, September 2016
                                                                                                                                                                                                      • Openness to craft versions from big manufacturers
                                                                                                                                                                                                        • Matching mixers to gins as a means of exploration
                                                                                                                                                                                                          • Premium mixers attract activity
                                                                                                                                                                                                          • Appendix – Data Sources, Abbreviations and Supporting Information

                                                                                                                                                                                                              • Abbreviations
                                                                                                                                                                                                                • Consumer research methodology
                                                                                                                                                                                                                  • Forecast Methodology
                                                                                                                                                                                                                    • CHAID – Methodology
                                                                                                                                                                                                                      • Figure 57: White spirits and RTDs – CHAID – Table output, September 2016
                                                                                                                                                                                                                  • Appendix – Market Size and Forecast

                                                                                                                                                                                                                      • Figure 58: Best- and worst-case forecasts for the total white spirits and RTDs market, by value, 2016-21
                                                                                                                                                                                                                      • Figure 59: Best- and worst-case forecasts for the total white spirits and RTDs market, by volume, 2016-21
                                                                                                                                                                                                                      • Figure 60: Best- and worst-case forecasts for the vodka market, by value, 2016-21
                                                                                                                                                                                                                      • Figure 61: Best- and worst-case forecasts for the vodka market, by volume, 2016-21
                                                                                                                                                                                                                      • Figure 62: Forecast of UK volume sales of vodka, 2011-21
                                                                                                                                                                                                                      • Figure 63: Best- and worst-case forecasts for the gin market, by value, 2016-21
                                                                                                                                                                                                                      • Figure 64: Best- and worst-case forecasts for the gin market, by volume, 2016-21
                                                                                                                                                                                                                      • Figure 65: Forecast of UK volume sales of gin, 2011-21
                                                                                                                                                                                                                      • Figure 66: Best- and worst-case forecasts for the white rum market, by value, 2016-21
                                                                                                                                                                                                                      • Figure 67: Best- and worst-case forecasts for the white rum market, by volume, 2016-21
                                                                                                                                                                                                                      • Figure 68: Forecast of UK volume sales of white rum, 2011-21
                                                                                                                                                                                                                      • Figure 69: Best- and worst-case forecasts for the tequila/Mezcal market, by value, 2016-21
                                                                                                                                                                                                                      • Figure 70: Best- and worst-case forecasts for the tequila/Mezcal market, by volume, 2016-21
                                                                                                                                                                                                                      • Figure 71: Forecast of UK volume sales of tequila/Mezcal, 2011-21
                                                                                                                                                                                                                      • Figure 72: Best- and worst-case forecasts for the RTDs market, by value, 2016-21
                                                                                                                                                                                                                      • Figure 73: Best- and worst-case forecasts for the RTDs market, by volume, 2016-21
                                                                                                                                                                                                                      • Figure 74: Forecast of UK volume sales of RTDs, 2011-21
                                                                                                                                                                                                                  • Appendix – Market Drivers

                                                                                                                                                                                                                      • Figure 75: Trends in the age structure of the UK population, 2011-21
                                                                                                                                                                                                                  • Appendix – Market Share

                                                                                                                                                                                                                      • Figure 76: UK retail volume sales of the leading vodka brands, 2014/15 and 2015/16
                                                                                                                                                                                                                      • Figure 77: UK retail value and volume sales of the leading vodka manufacturers, 2014/15 and 2015/16
                                                                                                                                                                                                                      • Figure 78: UK retail volume sales of the leading gin brands, 2014/15 and 2015/16
                                                                                                                                                                                                                      • Figure 79: UK retail value and volume sales of the leading gin manufacturers, 2014/15 and 2015/16
                                                                                                                                                                                                                      • Figure 80: UK retail volume sales of the leading white rum brands, 2014/15 and 2015/16
                                                                                                                                                                                                                      • Figure 81: UK retail value and volume sales of the leading white rum manufacturers, 2014/15 and 2015/16
                                                                                                                                                                                                                      • Figure 82: UK retail volume sales of the leading tequila/Mezcal brands, 2014/15 and 2015/16
                                                                                                                                                                                                                      • Figure 83: UK retail value and volume sales of the leading RTD manufacturers, 2014/15 and 2015/16