“Brands at the premium tier in particular should tread carefully when experimenting with flavour as it risks masking the ‘pure’ flavour of the drink, something which is so important for premium spirits.”
– Chris Wisson, Senior Drinks Analyst
Some questions answered in this report include:
- How can spirit brands build standout in the market?
- What are the risks associated with flavour innovation?
- Can tequila finally break through in the UK?
- How can the RTDs market arrest its decline?
White spirits and RTDs are a popular part of the UK drinks landscape. The market is often seen as more fast-moving and innovative than dark spirits, with brands such as Smirnoff and Absolut driving this image. Value sales rose by 2.5% to £4.3 billion in 2013 and are forecast to reach £4.7 billion by 2018. However, much of this growth is fuelled by inflation and trading up to the premium tier as volume sales are broadly flat.
Vodka remains the market’s driving force. The spirit’s ‘neutral’ flavour means that it has been able to tap into the current popularity of flavour innovation to drive growth. As in many drinks markets, mixability is a key trend and younger drinkers in particular are now often drinking spirits such as rum and vodka with mixers, or looking for flavoured variants of their favourites. As well as the market housing a number of well-known brands, own-label vodka is also popular and enables consumers to engage with the market at lower price points.
Included in this report:
- 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 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. However, more complex blends, using several ingredients, including herbs are excluded, and called Liqueurs and are covered in Mintel’s Dark Spirits and Liqueurs – UK, August 2013 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 most well-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 remains decidedly niche in the UK. Jose Cuervo is the leading off-trade brand by some distance in the UK market.
- RTDs (Ready-to-Drink) is a trade term used to describe any drink featuring an alcohol and a mixer pre-mixed before being sold, 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%.
- The older style of RTDs are typically sold in bottles – examples include Bacardi Breezer and WKD. The newer style of RTDs are typically sold in cans, with an increasing number of large brands entering the market – examples include Gordon’s and Tonic and Bacardi and cola. 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.