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White Spirits and RTDs - UK - December 2017

“Recommendations, either from friends/family or from drinks professionals, are pivotal in bringing new users to white spirits. Shared discounts and marketing themed around shared knowledge offer viable means for companies to persuade people to recommend their products. The influence of bartenders also offers venues scope to encourage trading up.”
– Alice Baker, Research Analyst

This Report looks at the following areas:

  • Friend and family recommendations are key to recruiting new users
  • Good opportunities for premium and less sugary RTDs
  • Tangible ethical claims have strong appeal

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Table of contents

  1. Overview

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

          • The market
            • Inflation and growth in vodka and gin boost the market 2012-17
              • Further inflation and mixed volume sales expected 2017-22
                • Figure 1: Total value sales of white spirits and RTDs, 2012-22
              • Growth for vodka and gin in 2017, while white rum sales remain flat
                • White spirits’ on-trade performances mirror those of retail in 2017
                  • Various factors raise costs for spirits companies
                    • Health organisations urge cutbacks on alcohol
                      • Companies and brands
                        • Smirnoff remains ahead on vodka, while Gordon’s loses share despite sales growth
                          • Figure 2: Leading brands’ sales in the UK retail vodka market, by value, 2016/17*
                        • Leading and smaller brands continue to release limited editions
                          • Crossover brands enter the market
                            • Advertising spend falls to a four-year low in 2016
                              • Brands continue to project desirable lifestyle image in their 2017 advertising
                                • Smirnoff, Absolut and Bacardi all score well on fun
                                  • The consumer
                                    • Six in ten UK adults drink white spirits, while a third drink RTDs
                                      • Figure 3: Usage of white spirits, by type, October 2017
                                    • Ageing UK population to impede growth for both segments
                                      • Vodka enjoys varied usage, while gin is associated with relaxing at home
                                        • Price and promotions are key influences on white spirits buying
                                          • Figure 4: White spirits buying factors, when buying for themselves and as a gift, October 2017
                                        • Recommendations and gifting are key to recruiting new users
                                          • Figure 5: Behaviours relating to white spirits and RTDs, October 2017
                                        • Calorie labelling per serving on-pack and on menus could appeal to health-conscious drinkers
                                          • Figure 6: Attitudes towards white spirits and RTDs, October 2017
                                        • What we think
                                        • Issues and Insights

                                          • Friend and family recommendations are key to recruiting new users
                                            • The facts
                                              • The implications
                                                • Good opportunities for premium and less sugary RTDs
                                                  • The facts
                                                    • The implications
                                                      • Tangible ethical claims have strong appeal
                                                        • The facts
                                                          • The implications
                                                          • The Market – What You Need to Know

                                                            • Inflation and growth in vodka and gin boost the market 2012-17
                                                              • Further inflation and mixed volume sales expected 2017-22
                                                                • Growth for vodka and gin in 2017, while white rum sales remain flat
                                                                  • White spirits’ on-trade performances mirror those of retail in 2017
                                                                    • Various factors raise costs for spirits companies
                                                                      • Health organisations urge cutbacks on alcohol
                                                                      • Market Size and Forecast

                                                                        • Inflation and growth in vodka and gin lifts the market 2012-17
                                                                          • Further inflation and mixed volume sales results expected for 2017-22
                                                                            • Figure 7: Total value and volume sales of white spirits and RTDs, 2012-22
                                                                            • Figure 8: Total value sales of white spirits and RTDs, 2012-22
                                                                          • Forecast methodology
                                                                          • Market Segmentation

                                                                            • Vodka sales remain in modest growth throughout 2012-17
                                                                              • Consumer spending cutbacks to erode vodka volume sales
                                                                                • Figure 9: Total value and volume sales of vodka, 2012-22
                                                                                • Figure 10: Total value sales of vodka, 2012-22
                                                                              • Further strong volume sales growth for gin in 2017
                                                                                • Premiumisation helps to push prices up in 2017
                                                                                  • Gin’s growth to slow 2017-22
                                                                                    • Figure 11: Total value and volume sales of gin, 2012-22
                                                                                    • Figure 12: Total value sales of gin, 2012-22
                                                                                  • White rum volume sales remain flat in 2017
                                                                                    • White rum sales to remain flat 2017-22
                                                                                      • Figure 13: Total value and volume sales of white rum, 2012-22
                                                                                      • Figure 14: Total value sales of white rum, 2012-22
                                                                                    • Tequila/Mezcal grows but remain niche 2012-17
                                                                                      • Fall in number of young adults to impede growth for tequila/Mezcal
                                                                                        • Figure 15: Total value and volume sales of tequila/mezcal, 2012-22
                                                                                        • Figure 16: Total value sales of tequila/mezcal, 2012-22
                                                                                      • Strong NPD activity powers revival in RTDs
                                                                                        • Prices fall in 2017
                                                                                          • Ageing population and sugar concerns to hinder RTDs growth 2017-22
                                                                                            • Figure 17: Total value and volume sales of RTDs, 2012-22
                                                                                            • Figure 18: Total value sales of RTDs, 2012-22
                                                                                        • Channels to Market

                                                                                          • Higher prices in the on-trade allow it to lead on values but not volumes
                                                                                            • Figure 19: UK value and volume sales of white spirits and RTDs in the on- and off-trade, by type, 2015-17
                                                                                          • White spirits’ on-trade performances mirror those of retail in 2017
                                                                                          • Market Drivers

                                                                                            • Inflation and increased alcohol duties raise costs for spirits companies
                                                                                              • UK Supreme Court approves alcohol minimum unit price
                                                                                                • Income squeeze threatens category growth
                                                                                                  • Premium RTDs can benefit from an income squeeze
                                                                                                    • A third of adults have reduced alcohol intake
                                                                                                      • Health organisations advise measures to reduce alcohol consumption
                                                                                                        • Ageing UK population to impede both white spirits and RTDs
                                                                                                          • Further growth in distilleries in 2016
                                                                                                          • Companies and Brands – What You Need to Know

                                                                                                            • Smirnoff remains ahead on vodka, while Gordon’s loses share despite sales growth
                                                                                                              • Leading and smaller brands continue to release limited editions
                                                                                                                • Crossover brands enter the market
                                                                                                                  • Advertising spend falls to a four-year low in 2016
                                                                                                                    • Brands continue to project desirable lifestyle image in their 2017 advertising
                                                                                                                      • Smirnoff, Absolut and Bacardi all score well on fun
                                                                                                                      • Market Share

                                                                                                                        • Smirnoff retains its position as the leading vodka brand in retail
                                                                                                                          • Figure 20: Leading brands’ sales and shares in the UK retail vodka market, 2014/15-2016/17
                                                                                                                          • Figure 21: Leading distributors’ sales and shares in the UK retail vodka market, 2014/15-2016/17
                                                                                                                        • On-trade promotions boost Russian Standard
                                                                                                                          • Gordon’s remains the leading gin brand in retail
                                                                                                                            • Figure 22: Leading brands’ sales and shares in the UK retail gin market, 2014/15-2016/17
                                                                                                                            • Figure 23: Leading distributors’ sales and shares in the UK retail gin market, 2014/15-2016/17
                                                                                                                          • …but its lead narrows as competition heats up
                                                                                                                            • Tanqueray pushes forward
                                                                                                                              • Increased distribution helps smaller gin brands to grow
                                                                                                                                • NPD boosts own-label gin
                                                                                                                                  • Bacardi’s sales slip as white rum’s lacklustre performance continues
                                                                                                                                    • Figure 24: Leading brands’ sales and share in the UK retail white rum market, 2014/15-2016/17
                                                                                                                                    • Figure 25: Leading distributors’ sales and share in the UK retail white rum market, 2014/15-2016/17
                                                                                                                                  • Sierra displaces Jose Cuervo as the leading tequila brand in retail
                                                                                                                                    • Figure 26: Leading brands’ sales and share in the UK retail tequila/mezcal market, 2014/15-2016/17
                                                                                                                                    • Figure 27: Leading distributors’ sales and share in the UK retail tequila/mezcal market, 2014/15-2016/17
                                                                                                                                  • WKD fails to benefit from the RTDs’ resurgence
                                                                                                                                    • Figure 28: Leading brands’ sales and shares in the UK retail RTDs market, 2014/15-2016/17
                                                                                                                                  • Diageo RTDs do not always mirror performance of the main brands
                                                                                                                                  • Launch Activity and Innovation

                                                                                                                                    • Major and smaller brands continue to release limited editions
                                                                                                                                      • Leading players and niche brands add seasonal flavours
                                                                                                                                        • Smaller brands refer to historical events to spark consumer interest
                                                                                                                                          • Limited-edition packaging used to add visual appeal and showcase ethical credentials
                                                                                                                                            • Craft spirits brand unveils cask-aged gin
                                                                                                                                              • Flavoured gins appear in an array of colours
                                                                                                                                                • Diageo targets Millennials with pink gin
                                                                                                                                                  • Unusual colours provide strong differentiation
                                                                                                                                                    • Growth in premium own-label NPD
                                                                                                                                                      • Botanicals detailed to enhance premium positioning
                                                                                                                                                        • Crossover brands enter the market
                                                                                                                                                          • Beer companies expand into white spirits
                                                                                                                                                            • …as do wine producers
                                                                                                                                                              • Condiments brand unveils garlic vodka
                                                                                                                                                                • References to terroir used to make significance of ingredient provenance more tangible
                                                                                                                                                                  • Belvedere unveils terroir-focused Single Estate range
                                                                                                                                                                    • Craft distillers emphasize their unique ingredients
                                                                                                                                                                      • Waitrose launches first gin created by customer
                                                                                                                                                                        • Leading players build up their RTD ranges
                                                                                                                                                                          • Craft brewers launch their own pre-mixed G&Ts
                                                                                                                                                                            • Smaller brands and retailers release premium RTDs
                                                                                                                                                                              • Fruit and tea flavoured RTDs flag up their quality ingredients
                                                                                                                                                                                • Drawing inspiration from the on-trade
                                                                                                                                                                                • Advertising and Marketing Activity

                                                                                                                                                                                  • Advertising spend falls to a four-year low in 2016
                                                                                                                                                                                    • Figure 29: Total above-the line, online display and direct mail advertising expenditure on white spirits^ and RTDs (sorted by 2016), 2013-17
                                                                                                                                                                                  • Diageo continues two-pronged focus on inclusivity and enjoyment
                                                                                                                                                                                    • Smirnoff airs its latest ‘we’re open’ advert
                                                                                                                                                                                      • ‘Choose Love’ campaign supports the LGBT community
                                                                                                                                                                                        • Gordon’s continues to push the treat aspects
                                                                                                                                                                                          • Gordon’s Facebook competition lays clues for followers
                                                                                                                                                                                            • Multiple brands promoted in link-up with Amazon
                                                                                                                                                                                              • Bacardi positions Grey Goose as ideal gift in Christmas advert
                                                                                                                                                                                                • New Bacardi campaign celebrates the carnival
                                                                                                                                                                                                  • Pernod Ricard supports its rum brands
                                                                                                                                                                                                    • Malibu projects aspirational ‘perfect summer’ image
                                                                                                                                                                                                      • Havana Club looks to drive associations with Cuban lifestyles
                                                                                                                                                                                                        • Smaller brands highlight their differences from the mainstream on social media
                                                                                                                                                                                                          • Hendrick’s focuses on cucumbers and praises unconventionality
                                                                                                                                                                                                            • Chase Distillery highlights its family-owned credentials and in-house production
                                                                                                                                                                                                              • Nielsen Ad Intel coverage
                                                                                                                                                                                                              • Brand Research

                                                                                                                                                                                                                  • Brand map
                                                                                                                                                                                                                    • Figure 30: Attitudes towards and usage of selected brands, November 2017
                                                                                                                                                                                                                  • Key brand metrics
                                                                                                                                                                                                                    • Figure 31: Key metrics for selected brands, November 2017
                                                                                                                                                                                                                  • Brand attitudes: Smirnoff and Gordon’s have the strongest quality associations
                                                                                                                                                                                                                    • Figure 32: Attitudes, by brand, November 2017
                                                                                                                                                                                                                  • Brand personality: Smirnoff and Bacardi are the most widely seen as accessible
                                                                                                                                                                                                                    • Figure 33: Brand personality – Macro image, November 2017
                                                                                                                                                                                                                  • Gordon’s is the most widely seen as traditional
                                                                                                                                                                                                                    • Figure 34: Brand personality – Micro image, November 2017
                                                                                                                                                                                                                  • Brand analysis
                                                                                                                                                                                                                    • Absolut is widely seen as fun, and has something of a cool image
                                                                                                                                                                                                                      • Figure 35: User profile of Absolut, November 2017
                                                                                                                                                                                                                    • Smirnoff is the most trusted brand
                                                                                                                                                                                                                      • Figure 36: User profile of Smirnoff, November 2017
                                                                                                                                                                                                                    • Gordon’s is associated with tradition and quality
                                                                                                                                                                                                                      • Figure 37: User profile of Gordon’s, November 2017
                                                                                                                                                                                                                    • Russian Standard performs well on purity and authenticity compared with other brands
                                                                                                                                                                                                                      • Figure 38: User profile of Russian Standard, November 2017
                                                                                                                                                                                                                    • Sipsmith’s craft positioning boosts sophisticated image
                                                                                                                                                                                                                      • Figure 39: User profile of Sipsmith, November 2017
                                                                                                                                                                                                                    • Bacardi scores well on fun
                                                                                                                                                                                                                      • Figure 40: User profile of Bacardi, November 2017
                                                                                                                                                                                                                    • Over-45s are most inclined to recommend Greenall’s
                                                                                                                                                                                                                      • Figure 41: User profile of Greenall’s, November 2017
                                                                                                                                                                                                                  • The Consumer – What You Need to Know

                                                                                                                                                                                                                    • Six in ten UK adults drink white spirits, while a third drink RTDs
                                                                                                                                                                                                                      • Ageing UK population to impede growth for both segments
                                                                                                                                                                                                                        • Vodka enjoys varied usage, while gin is associated with relaxing at home
                                                                                                                                                                                                                          • Price and promotions are key influences on white spirits buying
                                                                                                                                                                                                                            • Recommendations and gifting are key to recruiting new users
                                                                                                                                                                                                                              • Calorie labelling per serving on-pack and on menus could appeal to health-conscious drinkers
                                                                                                                                                                                                                              • Usage of White Spirits and RTDs

                                                                                                                                                                                                                                • Six in ten UK adults drink white spirits
                                                                                                                                                                                                                                  • No gender bias in white spirits
                                                                                                                                                                                                                                    • Figure 42: Usage of white spirits, by type, October 2017
                                                                                                                                                                                                                                  • Ageing UK population is a threat to white spirits
                                                                                                                                                                                                                                    • Younger drinkers have the most varied repertoires
                                                                                                                                                                                                                                      • Figure 43: Repertoire of white spirit types drunk, October 2017
                                                                                                                                                                                                                                    • Few people drink white spirits neat
                                                                                                                                                                                                                                      • Figure 44: Drinking of different serves of white spirits, (nets), October 2017
                                                                                                                                                                                                                                    • Drinking with a mixer leads for all types except tequila/Mezcal
                                                                                                                                                                                                                                      • Figure 45: Drinking of different serves of white spirits, by type, October 2017
                                                                                                                                                                                                                                    • A third of adults drink pre-mixed drinks
                                                                                                                                                                                                                                      • Figure 46: Usage of RTDs, by format, October 2017
                                                                                                                                                                                                                                    • Ageing population will also affect RTDs
                                                                                                                                                                                                                                    • Usage Occasions for Selected Types of White Spirits

                                                                                                                                                                                                                                      • Vodka enjoys varied usage both at home and out-of-home
                                                                                                                                                                                                                                        • Figure 47: Usage occasions for selected types of white spirits, October 2017
                                                                                                                                                                                                                                      • Gin tends to be chosen for relaxing at home
                                                                                                                                                                                                                                        • Focus on cocktails could open up more a more varied range of occasions
                                                                                                                                                                                                                                          • Tequila/Mezcal does better for out-of-home than at-home occasions
                                                                                                                                                                                                                                            • On-trade recommendations should prove powerful in recruiting new users
                                                                                                                                                                                                                                              • Few drink any type of white spirit with a meal
                                                                                                                                                                                                                                                • Link-ups with retailers are a means to promote meal pairings
                                                                                                                                                                                                                                                • White Spirits Buying Factors

                                                                                                                                                                                                                                                  • Price and promotions exert a significant influence
                                                                                                                                                                                                                                                    • Price is less compelling for the gifting occasion
                                                                                                                                                                                                                                                      • Figure 48: White spirits buying factors, when buying for themselves and as a gift, October 2017
                                                                                                                                                                                                                                                    • White spirits’ high price underpins brand loyalty
                                                                                                                                                                                                                                                      • Brand loyalty is lower for white spirits than dark spirits
                                                                                                                                                                                                                                                        • Gin should be best-placed to tap into consumer interest in flavour
                                                                                                                                                                                                                                                          • Going well with mixers influences a quarter of buyers
                                                                                                                                                                                                                                                            • Recipe suggestions and in-store positioning can showcase mixability
                                                                                                                                                                                                                                                              • Combined packs with mixers could enhance the appeal of mixability when gifting
                                                                                                                                                                                                                                                              • Behaviours Relating to White Spirits and RTDs

                                                                                                                                                                                                                                                                • Recommendations are key to recruiting new users
                                                                                                                                                                                                                                                                  • Discounts and ‘shared wisdom’ messages could act as incentives
                                                                                                                                                                                                                                                                    • Figure 49: Behaviours relating to white spirits and RTDs, October 2017
                                                                                                                                                                                                                                                                  • Influence of bartenders offers scope for trading users up
                                                                                                                                                                                                                                                                    • Spirits companies look to unlock the power of professional recommendations
                                                                                                                                                                                                                                                                      • Gifting is a key entry point for white spirits
                                                                                                                                                                                                                                                                        • Gin producers could push the ‘shared moment’ angle
                                                                                                                                                                                                                                                                          • Visual appeal enhances the gifting potential
                                                                                                                                                                                                                                                                            • Consumer concerns around sugar in RTDs pose a challenge and an opportunity
                                                                                                                                                                                                                                                                              • Smaller brands launch lower-sugar RTDs in 2017
                                                                                                                                                                                                                                                                                • On-pack charity pledges have wide appeal
                                                                                                                                                                                                                                                                                  • Smaller players lead the way on charity link-ups
                                                                                                                                                                                                                                                                                  • Attitudes towards White Spirits and RTDs

                                                                                                                                                                                                                                                                                    • On-pack calorie labelling per serving could appeal to health-conscious drinkers
                                                                                                                                                                                                                                                                                      • Calorie labels on drinks menus can boost white spirits’ appeal in the on-trade
                                                                                                                                                                                                                                                                                        • Figure 50: Attitudes towards white spirits and RTDs, October 2017
                                                                                                                                                                                                                                                                                      • Strong interest in premium RTDs
                                                                                                                                                                                                                                                                                        • Cocktails have a weak image for convenience
                                                                                                                                                                                                                                                                                          • Subscription schemes could speak to consumer desire for convenience
                                                                                                                                                                                                                                                                                          • Appendix – Data Sources, Abbreviations and Supporting Information

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

                                                                                                                                                                                                                                                                                                    • Figure 51: Total volume sales of white spirits and RTDs, 2012-22
                                                                                                                                                                                                                                                                                                    • Figure 52: Forecast of UK sales of white spirits and RTDs, by value, best- and worst-case, 2017-22
                                                                                                                                                                                                                                                                                                    • Figure 53: Forecast of UK sales of white spirits and RTDs, by volume, best- and worst-case, 2017-22
                                                                                                                                                                                                                                                                                                    • Figure 54: Total volume sales of vodka, 2012-22
                                                                                                                                                                                                                                                                                                    • Figure 55: Forecast of UK sales of vodka, by value, best- and worst-case, 2017-22
                                                                                                                                                                                                                                                                                                    • Figure 56: Forecast of UK sales of vodka, by volume, best- and worst-case, 2017-22
                                                                                                                                                                                                                                                                                                    • Figure 57: Total volume sales of gin, 2012-22
                                                                                                                                                                                                                                                                                                    • Figure 58: Forecast of UK sales of gin, by value, best- and worst-case, 2017-22
                                                                                                                                                                                                                                                                                                    • Figure 59: Forecast of UK sales of gin, by volume, best- and worst-case, 2017-22
                                                                                                                                                                                                                                                                                                    • Figure 60: Total volume sales of white rum, 2012-22
                                                                                                                                                                                                                                                                                                    • Figure 61: Forecast of UK sales of white rum, by value, best- and worst-case, 2017-22
                                                                                                                                                                                                                                                                                                    • Figure 62: Forecast of UK sales of white rum, by volume, best- and worst-case, 2017-22
                                                                                                                                                                                                                                                                                                    • Figure 63: Total volume sales of tequila/Mezcal, 2012-22
                                                                                                                                                                                                                                                                                                    • Figure 64: Forecast of UK sales of tequila/Mezcal, by value, best- and worst-case, 2017-22
                                                                                                                                                                                                                                                                                                    • Figure 65: Forecast of UK sales of tequila/Mezcal, by volume, best- and worst-case, 2017-22
                                                                                                                                                                                                                                                                                                    • Figure 66: Total volume sales of RTDs, 2012-22
                                                                                                                                                                                                                                                                                                    • Figure 67: Forecast of UK sales of RTDs, by value, best- and worst-case, 2017-22
                                                                                                                                                                                                                                                                                                    • Figure 68: Forecast of UK sales of RTDs, by volume, best- and worst-case, 2017-22
                                                                                                                                                                                                                                                                                                  • Forecast methodology
                                                                                                                                                                                                                                                                                                  • Appendix – Advertising and Marketing Activity

                                                                                                                                                                                                                                                                                                      • Figure 69: Total above-the line, online display and direct mail advertising expenditure on white spirits^ and RTDs, by top 3 advertisers (sorted by 2016), 2013-17
                                                                                                                                                                                                                                                                                                  • Appendix – Usage of White Spirits and RTDs

                                                                                                                                                                                                                                                                                                      • Figure 70: Usage of flavoured white spirits, by type, October 2017

                                                                                                                                                                                                                                                                                                  White Spirits and RTDs - UK - December 2017

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