Christmas alcohol: Make it merry and bright

As if Christmas doesn’t present a jolly enough opportunity for the alcohol category, 2017 will see the day land on a Monday, meaning even more sales can be lapped up by c-store retailers on the final Sunday of trading (Christmas Eve).

Claire Kendall, Diageo senior customer category manager, impulse & wholesale, says that while 23 December is likely to be the busiest day in the supermarkets, Christmas Eve will be affected by early closing for a Sunday, meaning the gift of footfall for the convenience channel.

“This is likely to result in increased footfall in the convenience channel, with customers frequenting their local store to make last-minute purchases – therefore it’s more important than ever that retailers ensure that they have perfected their range to help boost sales during this key time.”

We’ve got used to hearing throughout 2017 that premiumisation is the big trend within alcohol, and this trend is only going to be emphasised by the jolly spirit that comes with Christmas. Research by Kantar has confirmed that customers are more likely to trade up to higher quality and more premium spirits brands over the festive period (Kantar World Panel Purchase Share of Spend 52 weeks January 2016).

Faith Holland, head of category development at Diageo GB, adds: “Super-premium spirits have become the fastest-growing segment of spirits in the latest year as shoppers look to treat themselves and their friends and family, and are increasingly willing to pay more for a quality product.

“While they account for just 3.1% of sales over the year, they account for nearly 4% over the Christmas period (Nielsen Scantrack, data to 12 August 2017), so are especially important at this time of year.

“Ensuring that a range of premium spirits are stocked over the festive period will inspire shoppers when they’re looking for that perfect gift, and trade people up when they’re shopping for a Christmas treat,” she adds.

Research by Diageo has shown that gin has been the number one contributor to total spirits performance in the impulse channel over the past year, and its popularity shows no signs of slowing down.

Gin was also the second contributor to overall total beverage alcohol performance over Christmas 2016, according to Diageo’s stats, and this has led the drinks giant to predict that gin has potential to be the number-one contributor over Christmas 2017.

To make way for this fast-expanding category, Simply Fresh retailer Mehmet Guzel plans to de-list some lines within his spirits category so that he can expand his gin range at his two London stores.

“We want to de-list the less popular lines and concentrate on what’s on-trend,” he explains. “There’s a lot of talk within the retailer social media network about gin and how popular it has become, and other retailers are increasing their ranges and getting really premium bottles on shelves, so I’m going to take a leaf out of their book.”

Mehmet explains why it’s important for him, and potentially other c-store retailers, to rethink their spirits categories at the moment. “We don’t think our sales in spirits are as good as they should be at the moment and I think that’s because a lot of people are going online, on Amazon, or many other websites, to get their alcohol at a better price and to find a larger range.

“Therefore, I think we need to ensure our core spirits are at a very competitive price, even if that means our margins are tiny, and we need to increase our range of artisan bottles, especially within gin and vodka categories as these are on-trend.

“I think the combination of these two changes will work together as while the low prices will encourage shoppers to come here to pick up their spirits, in doing so they will also see that we offer a great variety of other options and might choose to trade up and try something new.”

Harris Aslam, director of Eros Retail, in Scotland, has had a very similar strategy in mind with the recent relaunch of the category in his fifth store, in Markinch.

“Alcohol is a pretty important category for us. We’ve created a store within our store, called the Greens Vineyard, which has built a good reputation and made the store a destination shop for buying BWS.

“During our recent relaunch of the category we increased our gin range so we have more niche lines, which have been working very well for us. In fact, that tactic of bringing in more niche lines works well across the spirits.

“This is particularly the case in the run-up to Christmas as people are buying gifts and are looking for a more premium product. The good thing is that when they come in and see our great range in the run-up to Christmas they will remember that for future gifting occasions throughout the year.”

Harris is absolutely right that this is a great time for c-store retailers to increase their range of premium artisan lines. A key sales driver at Christmas is gifting, with 50% of shoppers on this mission looking to buy alcohol (Kantar 2016).

Also, research has shown that consumers at Christmas are more open to trying new things, with 9.3 million trying a new drink over the festive period (versus 14.3 million over the six months leading up to Christmas) and 47% of them are influenced to drink a category/brand over the festive period that they don’t typically (Nielsen Scantrack, data to 12 August 2017 vs a year ago, Nielsen Homescan, data to 15 July 2017 vs year ago).

William Grant & Sons is tapping into the premiumisation and gifting trends by creating a ‘One for Everyone’ gift ideas list. The list of whiskies aims to offer a drink for every taste and personality.

 

Another spirits driving force which is pushing its premium whiskies this Christmas is Pernod Ricard, with its ‘Expertly Selected Whiskies’ Christmas campaign. The firm says Christmas is the perfect time of year to drive purchases of Scotch whisky, with sales increasing 68% in the eight weeks ahead of the big day.

The campaign aims to boost awareness of the supplier’s top-performing premium Scotch whiskies: The Glenlivet Founders Reserve; Chivas Regal 12 YO; Scapa Skiren; Aberlour 12 YO; and Ballantine’s Finest. A recent addition to the ‘Expertly Selected Whiskies’ range is the newly-launched Glen Keith Distillery Edition (rrp £30, abv 40%).

James Middleton, channel director for impulse at Pernod Ricard UK, says that by increasing sales of premium spirits by 50% throughout November and December (116 bottles or 14 per week) c-store retailers can take up to an additional £2,500.

He adds: “Our message is simple: ignore premium this Christmas and you will miss out. We are seeing success within the on trade, where premium accounts for 50% of all spirits sold, which tells us consumers are willing to spend more on premium spirits. In comparison, 18% of all spirits sold within the convenience channel are premium, so for retailers it’s about upping volumes to make the most of the obvious opportunity.”

The drinks firm has also created a cocktail-focused campaign especially for the festive season. The campaign is based on insight that the demand for making 
cocktails at home has increased by 23%, with 22 million cocktails searches made in the past year (CGA Mixed Drinks Report Q1 2017).

The campaign is called ‘Mix with The Good Stuff’ and it aims to boost awareness of three simple cocktails: the espresso martini (with Absolut vodka, Kahlua and espresso); Jameson, ginger & lime; and the Plymouth pink G&T (with Plymouth Gin).

Another big brand which has been boosted by the rising interest in cocktails, and particularly coffee cocktails, is Tia Maria.

The brand this month introduces a new limited-edition Christmas value-added pack. In true artisan style, the 70cl gift packs offer the bottle within a stylish chrome cylinder, featuring built-in chalk board which allows shoppers to personalise it. They come with a promo rrp of about £15.

Alistair Pummery, off-trade marketing manager at Tia Maria, says the coffee cocktail looks set to explode in the years ahead thanks to shoppers’ increasingly globalised palates and influential ‘social seekers’ looking for the next big thing.

Simon Biddle, of Biddle’s Simply Fresh in Redditch, Worcestershire, points out that there are many ways for alcohol consumers to show they’re got a refined palate and splash their cash on luxury drinks, beyond premium spirits.

“We sell a lot more premium items at Christmas so we make sure we are well stocked up on Champagne. There is bound to be a proposal or family announcement over Christmas so we make sure we are ready for every celebration. Alcohol does really well over Christmas.”

Alex Kapadia, a Bargain Booze and Wine Rack franchisee who has two stores in Surrey and Bedfordshire, says that magnum bottles of prosecco are proving popular with his shoppers.

”Prosecco is still going strong and magnums of prosecco are selling really well. The Freixenet prosecco looks really impressive on shelf. It’s got diamond-effect glass which catches the eye and so that has pulled in quite a few sales as well.

“It helps when the bottle looks impressive on its own as people tend to like to buy something a bit interesting.”

Dan Harwood, head of wine education for Halewood Wines & Spirits, says a “good-quality bottle of wine or prosecco always fits the bill” at a Christmas party.

“Prosecco and fizz should be placed in the chiller, so that customers can get them from shop to party venue and served immediately. It’s equally important to offer a good selection of robust red wines and fortified wines such as port and sherry, as these are all seasonal favourites, too.

“The Christmas season is the perfect time to treat guests to a good wine and retailers should maximise this desire to spend more on special occasions by showcasing their more high-end products.

“For the fizz-lover looking for something a bit special this festive season, try Smith and Evans, from Somerset, which makes stunning traditional method sparkling wines that rival the best in the country,” he advises.

 

Amy Giacobbi, Continental Wine & Food Ltd marketing manager, says that because there are very few bottles of wine available for less than the £5 mark, consumers are more willing to try something different within their price range, whether it be exploring a new country of origin, or trying a new grape variety.

“This is especially true around the Christmas period and during the approaching months to Christmas as off-trade operators will be assessing their current offering and considering how they can refresh their range of wines and liqueurs to meet ever-changing consumer trends and tastes. Therefore, besides the old favourites, retailers will be looking to add some exciting new choices for the festive period and beyond.

“Sparkling wines remain a favourite not only at this time of year but all year round, as people have developed a real taste for the fizz.”

Most traditional festive meals, with turkey, ham and stuffing, will pair more easily with red wines such as cabernet sauvignon, pinot noir and malbec.

 

Ben Smith, head of corporate communications at Concha y Toro UK, says malbec and pinot noir are growing hugely.

He explains: “Pinot noir has grown by about 35% in the past four years, while malbec continues to surge on – total malbec growing at 40% by value (IRI reports, total still wine, 52 weeks to 16 September 2017) and Trivento Reserve malbec is the UK’s best-selling malbec.

“Pinot noir is a great match for turkey and one that brand owners such as Cono Sur are really investing in to build consumer awareness via above- and below-the-line activity. Bicicleta pinot noir is the UK’s number-one selling version.”

Red wine significantly over-indexes for the Christmas Day occasion, according to Shaun Heyes, channel director, Treasury Wine Estates. He says shoppers are keen to purchase a wine that sits at a premium to the wines they would buy on a normal shop, so it is important you have more premium red wines on shelf for this occasion – wines that might sit in the £8-£12 range. Wolf Blass Yellow Label and Silver Label wines are an excellent example of this.

Wolf Blass Yellow Label and Silver Label ranges are outperforming the market with sales up by 12% year on year, Heyes says.

Simply Fresh retailer Mehmet Guzel says the run-up to Christmas is all about high-quality red wine. He says this is the main drink that people stock up on in preparation for their festive get-togethers, followed by prosecco.

“Christmas, for our shoppers, is about stocking up on red wine and going a little bit more premium with their choices.

“People are willing to spend a little bit more to get something unique for their friends and family to enjoy. We have people trading up from £10 bottles to £15 bottles.”

Mehmet adds that he will put promotions on prosecco to encourage shoppers to stock up on this when they see it.

“In the past we’ve done ‘three bottles for £22’, but we will have to increase this price a little this year in order to keep our margin as our buying price has gone up. We might do ‘three for £25’, which will work out to about a £5.50 saving.”

Val Aston, director of Proudfoot Group, with five stores around Scarborough, North Yorkshire, says that she has to ensure stores provide great value for money otherwise shoppers can easily find better offers elsewhere.

“When it comes to wine we have to offer options from £3.99 to £6.99. In the Newby store we might sell some bottles at £10, but not many.

“With spirits we need to be selling 70cl bottles at £11.99 and one ltr bottles at about £15.99.”

But even her bargain-hunting shoppers still seem to be happy to spend more as long as they getting a great deal. “We do notice people starting to trade up from a 70cl bottle to a 1ltr bottle at Christmas, and buying larger packs of beer and cider. To be honest, the bigger the pack the better for us when it comes to lager,” she days.

“We have to remain competitive against all the other players out there, because even if they don’t have a store located near to our stores, they still have their delivery service making it easier than ever for people to get the best deal.”

Harris agrees with Val that an important part of the BWS category at Christmas is high-value bulk deals.

“People will look to buy in large quantities at Christmas and will often buy all the alcohol they need in one shop so we want to make sure they do that trolley shop with us,” he asserts.

Not only is it important to offer good multi-deals, Harris adds that it is essential to promote these strongly across social media, posters and leaflets so that people will come into the store specifically to pick up those deals.

Manny Patel, of Manny’s in Long Ditton, Surrey, says his shoppers go bulk-buy crazy in the run up to Christmas when they are all looking for the best bargains on their big baskets.

“The amount of alcohol we sell increases massively at Christmas, especially with the number of 
multipacks we sell,” says Manny.

“We notice people going for all the offers because they expect to find good deals when they’re buying in large quantities.”

 

The main Christmas lessons are that red wine pairs perfectly with the Christmas roast and people want to impress when hosting the big day, as well as at all the parties in the weeks beforehand, so retailers should stock up on a wider than usual range of high-quality red wines.

The sparkling wine category remains in strong growth, and that’s especially true for the festive occasions, so impulse retailers must ensure they have some competitively-priced options for sparkling wines, ideally in the chiller, perfect for taking along to those dinner parties. Multi-deals will also go down well with the organised bargain hunters.

Also, try stocking some new premium bottles as the festive season is the one time of year when most people are willing to trade up quite substantially. And remember to offer special, limited-edition and quirky packs for those gifting occasions.