First Drinks: Premium brands to drive UK growth

First Drinks has outlined the continued importance of premium drinks brands in driving growth in the UK market.

The Market Report, published for the second time by the William Grant & Sons subsidiary, is an annual market overview of the trends in the spirits and champagne categories.

The key findings of the report were:

 ·        The impact of the economic climate:  During these tough times, consumers are reacting in one of two ways: trading up and buying less or trading down and buying more.

·        The importance of authenticity: The revival of an interest in craft, tradition, heritage and provenance and the importance of an authentic story in building premium brands.

·        Flavour and experimentation: An enthusiasm amongst drinkers for taste and flavours and the rising trend in experimentation, particularly in the on-trade. 

·        Online shopping: Online shopping in the UK has taken off faster than anywhere in Europe with 26% penetration – retailers need to embrace this opportunity.

·        The convenience channel: The growth in convenience shopping and the prediction that the channel will grow by more than £10bn in the next four years - rising fuel costs mean that consumers are shopping locally to save money.

·        Cocktails: The increased interest in cocktails – cocktail consumption is set to grow by over 10% in the next two years as 76% of on-trade outlets report equal or increased cocktail sales year on year. 

·        Gifting: With spirits accounting for one in three of all alcohol gift purchases, gifting remains crucial for the off-trade – accessibility is key with the need for solutions across all price points.

·        Value: Whilst price is definitely a key factor for consumers, quality is also important.  Value across all price points is increasingly important to shoppers. 

·        Events: Uplifts in profit of around 20% have been witnessed by retailers during major events and special occasions, for all areas of the trade this highlights the importance of getting the timing right on key activations throughout the year

·        Policy: The impact of policy and regulations on promotions continues to affect the trade. Maintaining accessibility will be central to continued growth. As the average unit price increases, growth in smaller spirit pack such as 35cl and 50cl has been witnessed.

Chris Mason, managing director of First Drinks, said: “In a marketplace which appears to be polarising between the high-end and lower-end of the market, we remain totally committed to building premium brands – this is at the heart of our ethos.”

“It is essential that we fully understand current trends and adapt to the needs of shoppers and consumers in this ever-changing market. This is something the First Drinks Category Management team do exceptionally well, providing retailers with impartial advice on merchandising and innovative solutions to drive sustainable growth for all spirits categories.”