2023
9
UK White Spirits and RTDs Market Report 2023
2023-03-09T03:09:55+00:00
OX1154827
2195
161249
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Report
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“As an expensive, discretionary product, white spirits have seen volume sales decline in 2022 amid pressure on household incomes, a trend that will continue over 2023-24. Marketing messages focused on…

UK White Spirits and RTDs Market Report 2023

£ 2,195 (Excl.Tax)

Description

Understand the current market and opportunities in the white spirits and ready to drink market. Use Mintel’s leading market intelligence to become more informed and tackle challenges in your industry. This report examines market size, market segmentation and consumer behaviours. Read on to discover our insights and analysis.

Current Market Overview

The UK white spirits market saw a decline in volume sales in 2022, both on- and off-trade. This trend is expected to continue, with the ongoing cost-of-living crisis causing consumers to cut back on nights-out and unnecessary spending.

By contrast, the RTD market experienced a modest growth in total volume sales during the same period. Mintel’s market research suggests that there is an opportunity for RTDs sold in retail environments to benefit from the negative economic outlook, with consumers switching to them from mixed drinks or cocktails sold at bars and restaurants.

  • RTD market consumer behaviour: Buying a pre-mixed alcoholic drink from a shop is seen as a good alternative to cocktails or mixed drinks from a bar by 36% of adults.

White Spirits and RTD Market Research – Trends and Opportunities

Pressure on household incomes has impacted the white spirits market, with almost half of regular consumers having cut back on their purchases. Smaller bottles offer a means to keep white spirits on people’s shopping lists. Smaller formats can also appeal to consumers on health grounds. Through offering portion control, white spirits brands can align themselves with the alcohol moderation trend. 

Beyond price, more consumers are considering environmental factors when shopping, with sustainable production ranking high among consumers of white spirits. It is expected that sustainability will not lose its importance to consumers over the next few years.

  • White spirits consumer trends: Sustainable production is regarded as important by 57% of white spirits buyers, though only 19% are prepared to pay more for this sustainability. Suggesting that makers of higher-priced sustainable products will, therefore, need to highlight aspects beyond sustainability if they are to persuade people to pay more.
  • White spirits market opportunity: 68% of consumers who have cut back on buying white spirits at retail said that smaller bottles would allow them to buy brands they couldn’t otherwise afford. This presents an opportunity for newcomer brands, who can encourage risk-averse consumers to trial their product with half-size or smaller formats.

Future Trends in the UK White Spirits and RTD market

Due to the ongoing economic crisis, consumer behaviour has been impacted in the white spirits and RTD market, particularly around on-trade sales. However, this changing consumer behaviour creates opportunities for growth.

White spirits are seen as making at-home occasions feel more special by 31% of adults. Linking up with snack brands on bundle deals should help white spirits brands to strengthen associations with evening in, with other alcoholic drinks categories such as wine offering cues here.

RTDs’ lower unit price mean consumers see them as more of an affordable treat than unmixed white spirits. By putting a stronger emphasis on ingredient quality, RTD brands can reinforce the ‘quality for less’ perception among consumers. Highlighting any unusual ingredients should help RTDs carve out a point of difference and encourage purchase.

Read on to discover more about the UK White Spirits and RTDs Market Report 2023, read our How People Shop for Alcoholic Drinks Market Report 2022, or take a look at our other Drinks Market Research.

Quickly Understand

  • The effects of inflation and pressure on household incomes on value and volume sales of white spirits and RTDs in 2022.
  • The likely effects on the category of a further income squeeze over 2023-24.
  • Shifts in buying channels in the aftermath of the COVID-19 pandemic and with renewed pressure on household incomes.
  • Factors influencing purchase of white spirits and whether people are prepared to pay more for these.
  • Trends in launch activity for both white spirits and for RTDs and opportunities for further innovation.
  • Attitudes towards low/non-alcoholic alternatives to white spirits.

Products and Brands covered in this report

Products: Vodka, Gin, White Rum, Tequila, Ready-to-Drink Beverages (White & Dark Spirits).

Brands: Smirnoff, Glen’s, Absolut, Grey Goose, Gordon’s, Tanqueray, Bombay Sapphire, Greenall’s, Bacardi, Malibu, Jose Cuervo, Jack Daniel’s.

Expert Analysis from a Specialist in the UK Drinks Market

This report, written by Alice Baker, a leading senior analyst in the drinks industry, delivers in-depth commentary and analysis to highlight current trends in the UK white spirts and RTDs market and add expert context to the numbers.

As an expensive, discretionary product, white spirits have seen volume sales decline in 2022 amid pressure on household incomes, a trend that will continue over 2023-24. Marketing messages focused on enhancing at-home occasions and NPD in smaller bottles will help companies to keep white spirits on people’s shopping lists amid the cost-of-living crisis. Meanwhile RTDs sold in retail have the chance to benefit as people cut down on going out.

Alice BakerAlice Baker
Senior Food and Drink Research Analyst

Table of Contents

  1. Overview

    • Key issues covered in this Report
    • Products covered in this Report
  2. Executive Summary

    • The five-year outlook for white spirits and RTDs
      • Figure 1: Outlook for white spirits and RTDs, 2023-27
    • The market
    • Shifts in channels cause a volatile value sales performance over 2018-22
    • Further inflation and declining, then weak, volume sales expected for 2023-27
      • Figure 2: Market forecast for total value sales of white spirits and RTDs, 2017-27
    • Gin boom runs out of steam, while RTDs gain from the hot summer
      • Figure 3: Value sales of white spirits and RTDs, by category, 2018-22
    • On-trade regains ground from retail in 2022 but remains below its pre-pandemic levels
      • Figure 4: Value sales of white spirits and RTDs in the off- and on-trade, 2020-22
    • Spirits inflation accelerates in 2022 but continues to lag behind overall inflation
    • Further price rises are on the cards for 2023
    • Companies and brands
    • Various leading brands lose retail sales over 2021-22
      • Figure 5: Leading brands’ sales in the UK retail vodka market, 2020-22
    • Further activity in colourful spirits and low/no alcohol variants; brands take action on sustainability
    • Brand extensions, seasonal flavours and low/non-alcoholic variants continue in RTDs category
    • Diageo remains the leading advertiser amid falling category advertising spend in 2022
    • All analysed brands will lose out from the ageing UK population; low brand loyalty raises the possibility of switching
      • Figure 6: Key metrics for selected brands, 2023
    • The consumer
    • Income squeeze drives down usage of white spirits and RTDs in 2022
      • Figure 7: Usage of white spirits and RTDs (nets), 2021-22
    • White spirits will lose out in cost-of-living crisis in 2023-24, and from ageing UK population longer-term
      • Figure 8: Usage frequency for white spirits, by how people describe their finances, 2022
    • Unique ingredients and sustainable credentials are among means to appeal to shoppers
      • Figure 9: Factors considered important when buying white spirits, 2022
    • Income squeeze prompts cutbacks both for in-home and out of home
      • Figure 10: Behaviours relating to white spirits, 2022
    • Income squeeze will hinder low/non-alcoholic spirits alternatives’ ability to grow sales but could give a boost to RTDs
      • Figure 11: Attitudes towards white spirits and RTDs, 2022
  3. Issues and Insights

    • Smaller bottles and marketing focus on at-home occasions should help companies to navigate the income squeeze
    • Highlight ingredient quality, offer RTD versions and run tasting sessions to drive purchase of white spirits alternatives
    • RTDs sold in retail can benefit from the income squeeze
  4. Market Size and Performance

    • Shifts in channels cause a volatile value sales performance over 2018-22
      • Figure 12: Total value and volume sales of white spirits and RTDs, 2018-22
  5. Market Forecast

    • Category to lose out to income squeeze in the short-term, and ageing UK population in the long-term
      • Figure 13: Outlook for white spirits and RTDs, 2023-27
    • Further inflation and declining, then weak, volume sales expected for 2023-27
    • Ageing UK population will erode category sales
    • On-trade will struggle to regain its former position
      • Figure 14: Market forecast for total value sales of white spirits and RTDs, 2017-27
      • Figure 15: Market forecast for total volume sales of white spirits and RTDs, 2017-27
      • Figure 16: Market forecast for total volume sales of white spirits and RTDs, 2017-27
    • Learnings from the last income squeeze
      • Figure 17: Value and volume sales growth in the UK white spirits and RTDs category, 2008-14
    • Forecast methodology
  6. Market Segmentation

    • Gin boom runs out of steam in 2022
      • Figure 18: Total value and volume sales of white spirits and RTDs, by segment, 2018-22
    • RTDs gain from the hot summer and increased on-trade distribution
  7. Channels to Market

    • On-trade regains ground from retail in 2022 but remains below its pre-pandemic levels
      • Figure 19: Value and volume sales of white spirits and RTDs in the on- and off-trade, by segment, 2020-22
  8. Market Drivers

    • Inflation is the key concern for consumers and brands…
    • Inflation in the spirits category continues to lag behind overall inflation in 2022…
      • Figure 20: RPI inflation for off-trade wines and spirits and all items, 2019-22
    • Inflation runs faster in the on-trade than off-trade in 2022
    • Further price rises are on the cards for 2023
    • Ukraine conflict prompts a backlash against Russian vodkas
    • Despite government support, energy prices are still a major concern
    • Rising interest rates mean that the pressure will move up to middle- and higher-income households
    • High inflation and rising interest rates will weigh down the post-COVID recovery
    • Consumer spending power will be curbed
    • Unemployment is at a near-50-year low
    • Consumers’ financial wellbeing has fallen from the highs of 2021…
      • Figure 21: Household financial wellbeing index, 2016-22
    • …and most people are feeling the effects of price rises
    • Income squeeze will continue to erode white spirits sales over 2023-24
    • Ageing UK population will erode category sales
      • Figure 22: Usage of white spirits and RTDs, by category, by age group, 2022
    • Cost-of-living crisis will add momentum to the alcohol moderation trend
      • Figure 23: Alcohol reduction and non-usage, 2021-22
    • New pub openings in 2022 fail to offset the overall decline
  9. Regulatory and Legislative Changes

    • Reforms to alcohol duty rates in 2023 will drive up prices for spirits
    • Scotland’s MUP drives down spirits sales while boosting RTDs
    • Scotland’s DRS will include alcohol as well as soft drinks
    • England, Wales and Northern Ireland will implement DRS in 2025 but will vary in how these are administered
    • Regulations on in-store placement of HFSS foods allow more prominence for alcoholic drinks
  10. Market Share

    • Price inflation masks volume decline for Smirnoff in 2022
      • Figure 24: Leading brands’ sales and shares in the UK retail vodka market, by value and volume, 2020-22
    • Glen’s benefits from the backlash against Russian vodkas
    • Flavour innovation drives growth for JJ Whitley
    • Gordon’s loses sales amid gin’s decline
      • Figure 25: Leading brands’ sales and shares in the UK retail gin market, by value and volume, 2019/20-2021/22
    • Bacardi dominates white rum segment but loses ground to own-label
      • Figure 26: Leading brands’ sales and shares in the UK retail white rum market, by value and volume, 2019/20-2021/22
    • Gordon’s loses share of RTDs segment as other brands and own-label advance
      • Figure 27: Leading brands’ sales and shares in the UK retail RTD alcoholic drinks market, by value and volume, 2019/20-2021/22
    • Increased distribution and public profile boost Funkin
  11. Launch Activity and Innovation: White Spirits

    • Flavour innovation continues
    • Brands and retailers release fruit flavours
      • Figure 28: Examples of fruit-flavoured gin launches, 2022
    • Leading and niche brands continue to explore sweet treat flavours
    • Brands look to widen their audience with savoury flavours
      • Figure 29: Portobello Road Distillery British Asparagus Vodka, UK, 2022
    • Low/no alcohol launches continue
    • Leading brands extend their ranges of non-alcoholic spirits alternatives…
    • …but face competition from newcomer brands and own-label
      • Figure 30: Examples of alcohol-free alternatives to white spirits, 2022
    • Further activity in lower ABV versions
    • Limited-edition spirits launches commemorate historical events
      • Figure 31: Dropzone Brewery’s gin commemorates the 40th anniversary of the Falklands War
    • Spirits brands team up with artists to honour women’s history
      • Figure 32: Examples of white spirits launches honouring women’s history, 2022
    • Beefeater revives its Crown Jewel premium variant
    • Spirits brands mark the Platinum Jubilee with limited edition launches
    • Platinum Jubilee launches put the focus on aesthetics…
    • …and on provenance
      • Figure 33: Examples of white spirits launches for the Platinum Jubilee, 2022
    • Celebrity launches continue
    • Vodka brands overhaul their packaging
    • Brands continue their efforts to improve their sustainability
    • Brands supplement references to recycled glass with other environment-related claims
    • Leading and niche brands explore cardboard bottles
      • Figure 34: Greenall’s cardboard bottle, 2022
    • Further activity in spirits made with surplus ingredients
      • Figure 35: Example of BrewDog’s Bad Beer vodka range, 2022
    • East London Liquor Co launches refill scheme
    • Charity links can help to spark the feel-good factor
    • White spirits brands look to show their support for Ukraine
      • Figure 36: Examples of white spirits launches with charity links, 2022
  12. Launch Activity and Innovation: RTDs

    • More brands extend into RTDs
    • Spirits brands release RTD versions
      • Figure 37: Examples of spirits brands extending into RTD versions, 2022
    • Brands cross into RTDs from other categories
      • Figure 38: Examples of RTDs launches from crossover brands, 2022
    • Retail launches look to offer the on-trade experience at home
      • Figure 39: Whitebox Cocktails’ Margarita looks to compete with the on-trade, 2022
    • RTD brands enter new retail channels
    • RTDs brands continue to innovate with flavours
    • WKD expands its range
    • Brands and retailers further explore autumn/winter flavours
      • Figure 40: Examples of own-label RTDs launches with autumn/winter flavours, 2022
    • Low/no alcohol launches continue
      • Figure 41: Examples of low/no alcohol RTDs launches, 2022
    • Caffeinated RTDs blur the boundaries with energy drinks
  13. Advertising and Marketing Activity

    • Advertising spend falls sharply in 2022
      • Figure 42: Total above-the-line, online display and direct mail advertising expenditure on white spirit and RTDs, 2019-22 (sorted by 2022)
    • Diageo continues to lead advertising in 2022
    • Adverts for Gordon’s zero-alcohol variants focus strongly on flavour
    • Smirnoff encourages responsible drinking over the festive season
    • Cîroc makes its UK TV advertising debut
    • Bacardi Martini is the second biggest advertiser in 2022
    • Grey Goose presented as essential for celebrations…
    • …and for nights in
    • Patron highlights its provenance and craft credentials
    • Pernod Ricard focuses on Absolut in 2022
    • Absolut highlights its versatility…
    • …and champions inclusivity
    • Ceders adverts portray zero alcohol as being no barrier to enjoyment
    • Other selected campaigns
    • Jose Cuervo tours UK cities with cocktail-making ‘washing machine’
    • Mermaid Gin sponsors surfing festival
    • Wray & Nephew hosts live music concert at the Notting Hill carnival
    • Craft spirits brands promote ‘British Aquavit’
    • Funkin promotes the feel-good aspects of its RTD cocktails
    • Nielsen Ad Intel coverage
  14. Brand Research

    • Brand map
      • Figure 43: Attitudes towards and usage of selected brands, 2023
    • Key brand metrics
    • All brands will lose out from the ageing UK population, though Greenall’s less so than others
      • Figure 44: Key metrics for selected brands, 2023
    • Brand loyalty in white spirits is low
    • Brand attitudes: Smirnoff and Gordon’s are the most trusted brands; Smirnoff also leads on value
      • Figure 45: Attitudes, by brand, 2023
    • Smirnoff, Gordon’s, Bacardi and Grey Goose are seen as good quality by four in 10
    • Brand personality: Smirnoff and Gordon’s are the most widely seen as accessible; Grey Goose has some associations with exclusivity
      • Figure 46: Brand personality – Macro image, 2023
    • All brands perform similarly on perceptions of ethical
    • Gordon’s is seen as the most traditional and is on par with Bacardi and Smirnoff on authenticity
      • Figure 47: Brand personality – Micro image, 2023
  15. Usage of White Spirits and RTDs

    • Usage of white spirits is down on 2021
      • Figure 48: Usage of white spirits (nets), by type, 2021-22
    • Drinking with a single mixer leads for all white spirits types apart from tequila
      • Figure 49: Drinking of different serves of white spirits, by type, 2022
    • Four in 10 adults drink RTDs
      • Figure 50: Usage of RTDs (nets), 2021-22
    • RTDs in cans are the most widely drunk format
      • Figure 51: Usage of RTDs, by format, 2022
  16. Usage Frequency for White Spirits

    • A third of users drink white spirits weekly or more often
    • Income squeeze in 2023-24 will further erode volume sales
      • Figure 52: Usage frequency for white spirits, by age group and how people describe their finances, 2022
  17. Factors Considered Important when Buying White Spirits

    • Various means to appeal to white spirits buyers
      • Figure 53: Factors considered important when buying white spirits, 2022
    • Consumer interest in unique flavours puts pressure on companies
    • Go into more depth on provenance to emphasise ingredients’ specialness
    • Sustainability will not lose its importance amid the income squeeze
  18. Behaviours Relating to White Spirits

    • Income squeeze prompts cutbacks both for in-home and out of home
      • Figure 54: Behaviours relating to white spirits, 2022
    • Focus marketing on at-home occasions
      • Figure 55: Instagram post from I Heart prosecco’s “Movie Nights” campaign, 2021
    • Smaller bottles can appeal both on value and health grounds
      • Figure 56: In-store display by Gordon’s comparing prices for its original and RTD version at Sainsbury’s Battersea Park Road, 2022
  19. Attitudes towards White Spirits and RTDs

    • Views of low/non-alcoholic spirits alternatives as over-priced will hinder their ability to benefit from the alcohol moderation trend
      • Figure 57: Attitudes towards white spirits and RTDs, 2022
    • Explore smaller bottles and RTD versions and offer tasting sessions to drive purchase of white spirits alternatives
    • Offer low/non-alcoholic RTDs in lunchtime meal deals
    • Opportunities for expansion in own-label products
    • RTDs sold in retail can benefit from the income squeeze
    • Emphasise high-quality ingredients to strengthen RTDs’ appeal
      • Figure 58: Opihr’s canned G&Ts highlight ingredient provenance, 2022
  20. Appendix – Data Sources, Abbreviations and Supporting Information

    • Abbreviations
    • Consumer research methodology
  21. Appendix: Forecast Methodology

    • Market forecast and prediction intervals
      • Figure 59: Market forecast and prediction intervals for total value sales of white spirits and RTDs, 2017-27
      • Figure 60: Market forecast and prediction intervals for total volume sales of white spirits and RTDs, 2017-27
    • Market drivers and assumptions
    • Forecast methodology
  22. Appendix – Market Share

      • Figure 61: Leading brand owners’ sales and shares in the UK retail vodka market, by value and volume, 2020-22
      • Figure 62: Leading brand owners’ sales and shares in the UK retail gin market, by value and volume, 2019/20-2021/22
      • Figure 63: Leading brand owners’ sales and shares in the UK retail white rum market, by value and volume, 2019/20-2021/22
      • Figure 64: Leading brands’ sales and shares in the UK retail tequila market, by value and volume, 2020-22
      • Figure 65: Leading brand owners’ sales and shares in the UK retail tequila market, by value and volume, 2020-22
      • Figure 66: Leading brand owners’ sales and shares in the UK retail RTD alcoholic drinks market, by value and volume, 2019/20-2021/22

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