Keep festive spirits flowing

Christmas is the time for giving, and what better way to spread festive cheer than with a favourite tipple? Shoppers couldn’t agree more and are willing to pay extra for a bottle that will make their loved one’s day, or which will turn a gathering into a real celebration.

Christmas is a “fantastic time” for convenience retailers, according to Nigel McNally, managing director of distributor Brookfield Drinks. “Many shoppers are opting to pick up interim purchases from their local store, choosing to avoid the supermarkets in peak periods. Shoppers are also more willing to treat themselves, family and friends and trade up to premium products.”

McNally advises retailers to review their range within plenty of time before Christmas, to ensure they are stocking products that will maximise sales.

Spar UK brand director Susan Darbyshire says that HIM research shows that 11% of shoppers choose to buy alcohol in a convenience store over the range of other options in the marketplace, and this figure is growing year on year, giving c-store retailers the prospect of a very merry Christmas.

Jo Sykes, marketing director for alcohol & soft drinks at SHS Drinks, also sees a bright few months ahead. “The impulse sector had another cracking Christmas last year with beer, wine and spirit sales value up by 3.3% on the previous Christmas, generating approaching £1bn (£890.3m) in revenue for impulse retailers in the final quarter of 2016,” she says.

Ryan Thomson experienced Christmas retailing at Tagon Stores, in Shetland, for the first time last year and the main lesson he has learnt for this year is to stock up on alcohol. This year he’s ensuring he can’t go wrong.

“I’ve got an agreement with our wholesaler this year that we can return cases of alcohol that we don’t sell. So we can buy plenty and know not to worry about having lots of leftover stock,” he says.

Binny Amin, of Blean Village Londis, Kent, has noticed a clear pattern in the way his shoppers buy alcohol in the six-week run up to Christmas. “Generally from mid-November people start to buy the bigger pack sizes, then we get the impulse purchases of spirits, Prosecco and Champagne for parties, then in the last week it’s all the last-minute wines.”

Pile it high

Simon Lee, store manager of Co-op Welcome Marchwood, Southampton, advises other c-store retailers to get their alcohol category well stocked up and looking festive as early as they can. “The section must be sharp, eye-catching and peppered with effective point-of-sale material to highlight offers. Dressing the section with a Christmas-orientated theme will certainly catch your customers’ attention.”

Of course, without all the Christmas-specific products the alcohol category won’t look very festive. Simon says he stocks a lot of extra alcohol lines in the run up to Christmas, especially premium brands, as people will try a wide range of spirits.

“Pay particular attention to buying in a larger range of Champagnes, ports and specialist whiskeys you would not usually stock during the rest of the year; real ales, mulled wine and premium label wines all see significant uplifts in volume to help keep your tills ringing.

“We are also bringing in a lot more speciality brands as people like to buy more interesting and premium drinks for their guests, or for gifts,” he says.

Jimmy Robert is the store manager of two Eurospar stores in Wales, owned by Conrad Davies. He says alcohol gets a “huge uplift” at Christmas.

“For the four to five weeks in the run up to Christmas, there’s lots of parties going on every weekend so we get a constant flow of shoppers coming in to to get cases of wine, as well as bottles of spirits for parties.”

In preparation for all these parties, shoppers tend to want to make sure their drinks cabinet is well stocked with fun spirits and liqueurs. James Cragg, GB head of category development at Diageo, says spirits have contributed the most growth in the alcohol category, adding £198m to the category and accounting for 55% of total beverage alcohol (TBA) growth (Nielsen/CGA MAT total trade September 2014).

Spirits

The Christmas trading period is the key event in spirit sales, Cragg points out. Last Christmas the spirits category grew by £77m, faster than any other TBA category (Nielsen/CGA 12 weeks ending December 2013 vs 2012).

One of the star performers in this success story is gin, and this category is growing ahead of vodka and rum, according to Diageo. Tanqueray London Dry Gin taps into the demand for premium products and in turn is driving 19% of all gin growth in total impulse (Nielsen Total Impulse MAT data to 3 January 2016).

Gordon’s is the world’s best-selling London Dry Gin (Nielsen volume sales November 2015) and accounts for 57% of the gin category value sales in impulse (Nielsen Scantrack Total Impulse data to 30 January 2016).

Many new gins have come onto the market this year, including new Cucumber Gin from The English Drinks Company, an independent UK producer. Cucumber Gin (rrp £35 per 70cl bottle, 40% abv) is made from 100% British grain and offers cucumber scents combined with an aromatic juniper base.

Consumers are becoming more adventurous in their choice of liqueurs and spirits, so it’s worth stocking some of the less run-of-the-mill bottles. Continental Wine & Food Ltd (CWF) marketing manager Amy Giacobbi says: “Amaretto is now very widely drunk, and quality grappas are starting to get a strong foothold in the Italian restaurant sector. The top-quality Marzadro brand stocked by CWF has been a great success since its launch.”

CWF also hopes its Lixx shot-style drinks will be popular in the party season as they have been designed to have appeal across both male and female audiences. The range comprises sour apple and tangy cherry flavours, with a 15% ABV. Giacobbi says: “They can be consumed as purchased, or used as the base to create value-for-money cocktails.”

With more and more consumers shaking it up with cocktails prepared at home, Warninks Advocaat (rrp £11 per 70cl bottle) has partnered with UK bartenders to show that the Snowball cocktail (advocaat, lemonade and lime) is perfectly suited to every Christmas occasion.

Warninks global marketing manager Matthijs Wilhelmus says: “With more people experimenting at home with cocktails and looking for stylish drinks to serve over the festive period, we thought it was the perfect time show that there are more ways to enjoy the Snowball than with a glacé cherry on top.”

The brand’s Christmas activity will run from the 1st to the 24 December, supported by activity including radio advertising.

It’s a gift

Spirits aren’t only good for parties; they also make a good gifts, and Binny says the spirits miniatures are particularly good for encouraging shoppers to make impulse purchases.

“Gift packs for about the £5 price are popular for Secret Santa gifts. What’s more, if these have generic packaging we can even keep them out for Father’s Day so there’s no risk of over-stocking.”

Pernod Ricard’s James Middleton says its important to remember all the little gifting moments in the run-up to the day itself. “For example, a lot of people do Secret Santa and they set a £5 or £10 limit for presents,” he points out.

Pernod Ricard has a wide range of stocking filler-priced gift sets. These include: an Absolut ‘Create the Classics’ gift pack (rrp £7), which contains a miniature bottle of Absolut Raspberri, Absolut Vanilia and Absolut Citron, together with a selection of classic cocktail recipes; a Jameson and Ginger Ale gift pack (rrp £8) accompanied by a branded glass; a Malibu Pina Colada gift pack (rrp £8) with a coconut cup, and hanging tree miniature; plus Absolut and Malibu gift packs (rrp £4) that are exclusive to the impulse channel.

Shaun Heyes, channel director for Treasury Wine Estates, points out that gifting represents a huge opportunity for retailers. “There is genuine interest from consumers in receiving wine as a gift – yet retailers don’t offer enough opportunities for shoppers to purchase it as a quality gift,” he says.

“And even when it is done, convenience stores lag behind supermarkets when it comes to alcohol and gifting – despite the huge opportunity, especially since consumers are willing to spend more on wine as a gift (HIM Preparing for Christmas 2016 report, Omni-channel Barometer).”

He advises looking for suppliers who offer bespoke gifting opportunities, and when you do find them ensuring you communicate with shoppers about these gifting options.

Treasury Wine Estates this year is offering Wolf Blass Silver Label and Penfolds Koonunga Hill Shiraz Cabernet in premium, bespoke gift boxes (rrp £11.99).

Claire Kendall, category development manager at Diageo GB, agrees gifting is a huge driver of footfall at Christmas, with over half the shoppers on this mission going into store with the main purpose of buying alcohol. “Customers are also more likely to trade up to higher quality and premium spirits brands.

“We know that 73% of shoppers would buy spirits as gifts from convenience stores (HIM CTP 2014). There is a massive opportunity for convenience retailers to add sales by increasing a focus on gifting occasions, especially during the Christmas period.”

One safe bet for gifting at Christmas is Baileys. Says Guy Dodwell, sales director for the off trade at Diageo: “Baileys Chocolat Luxe is a premium offering from Baileys that combines two things universally loved by women: real Belgian chocolate and Baileys. It appeals to a younger, more affluent consumer than Baileys Original, attracting new shoppers into the Baileys trademark and, in turn, into the spirits category.”

Ramesh Shingadia, owner of two Londis stores in Horsham, West Sussex, agrees that Baileys is an important line for the festive season, along with sherry. But he warns that retailers have to be careful to avoid over-stocking on them.

“It’s important to get these in for Christmas, but they are not so popular after the new year is over, so it’s important not to be left with too much stock at the end of the season.”

Sandeep Bains, of Simply Fresh, Faversham, Kent, says Baileys is one of his top sellers at this time of year, especially the 20cl bottles.

Simon at Co-op Welcome Marchwood has also noticed that 20cl bottles can be very popular at this time of year, especially gift packs of miniatures and branded glasses which “always make great stocking fillers”.

Fractionals are popular throughout the spirits category, especially in the impulse channel where they drive 70% of all spirits growth (Nielsen Scantrack, Total Impulse, week ending 3 January 2014) as they provide consumers with the choice to buy a specific bottle size to suit their chosen occasion.

The smaller size is particularly succesful for the vodka category, contributing 53% of vodka growth at Christmas, with the 20cl size driving more than half of this increase (Nielsen Scantrack, Total Impulse, week ending 03 January 2015).

Stocking a range of smaller SKUs that have lower price points helps tempt shoppers to buy into the category and is a simple way to meet the needs of more shoppers. With 69% of alcohol sales coming from shoppers spending £10 or less (HIM CTP 2016), fractionals can be key to driving spirits sales through unlocking the ‘something for tonight’ mission.

Diageo points out that 35cl packs of Tanqueray London Dry Gin delivered 42% of spirits growth in convenience (Nielsen Total Impulse MAT data to 3 January 2016).

In the previous year, fractionals accounted for more than half of spirits units sold and grew faster than total spirits, with 35cl being the best-selling fractional size (Nielsen Scantrack, Total Off Trade, 52 weeks ending 21 May 2016).

HIM (CTP 2015) has also found that 22% of convenience spirits shoppers say that smaller pack format options are the most important factor to them when selecting products in store.

Go premium

While smaller sizes are driving sales from those looking to shell out less, Christmas is a time when shoppers are also happy to push the boat out. Convenience retailers should “ride the premium drinks wave” or risk missing out on the “opportunity for sales revenue at a time when shoppers are more willing to trade up”, according to Pernod Ricard UK.

“Christmas is such an important time for premium drinks,” says Pernod Ricard impulse channel director James Middleton. “We saw premium alcohol grow in volume and value by 12% last year. This is a really good opportunity for the independent sector.”

Binny agrees that premium brands will catch the shopper’s eye. “People definitely like their brands,” says Binny, “We make sure we have all the main brands available, as well as niche products. People like to try new flavours and brands, especially if they are gifting.”

Sandeep Bains agrees and urges other retailers not to try to compete with multiples on their low price points. “In the run up to Christmas, if people are on their way to a party or getting last-minute supplies for their party, they will come to our store and buy what they need. If people have planned a party for three weeks’ time and are going out especially to buy cheap alcohol in advance, they will drive to the supermarket to get the multi-buy they’ve seen advertised on TV.”

He says c-store retailers need to remember that they serve a purpose within their community. “They offer distress purchases and they don’t need to copy what their local Tesco is doing. There’s no point in working at a loss.

“I make sure to have a strong range of premium drinks as we sell a lot more of those this time of year, such as Ciroc, Hennessey, Jack Daniels, Hendricks and Tanqueray.”

Jimmy at Eurospar North Wales agrees that Christmas is a good time for selling premium products. He has increased the range of flavoured Ciroc vodkas, as well as getting in the other premium brands such as Grey Goose.

It might well be a smart move as vodka contributes 66% to super-premium growth in total impulse (Nielsen Scantrack, Total Impulse, week ending 3 January 2015).

Wine time

Ralph Patel, of the Look-In in Woodmansterne, Surrey, says wine is his best-seller at Christmastime.

“We are quite a small store in a small village so people don’t tend to do their full alcohol shop with us, but they will pop in on their way to a dinner party, or if they realise they’ve run out of a certain bottle in their home.

“We get more sales in the run up to Christmas, not only because of that impulse factor, but also because of the gifting factor and the fact more people are hosting a get-together.”

Wine is clearly an important category for convenience stores throughout the year, but specifically at Christmas when almost one-third of wine sales (31%) are purchased from convenience stores (Nielsen, Total Convenience, Still Wine, Value Sales, 12 week data to 2 January 2016).

Shaun Heyes at Treasury Wine Estates says that as consumers like to trade up to a slightly more expensive wine on special occasions such as Christmas, adding in some higher-priced wines is sensible. He recommends retailers stock a wider range of £8+ wines overthe key trading period. He backs up his argument by saying £8+ wines account for 17% of impulse sales compared with 12% in the prior weeks (Nielsen, Impulse, Still Wine, Value Sales, 12 weeks data to 2 January 2016).

What’s more, 32% of all super-premium sales occurred over the 12 weeks of Christmas (Nielsen Scantrack, Total Impulse, week ending 3 January 2014).

Heyes says the key trading period for Christmas is the two weeks prior to the 25th. “More and more, the big Christmas shop is being done in Christmas week in grocery. Therefore, c-stores need to try to appeal more to the key shopper missions in the two weeks leading up to Christmas.”

Christmas Day falls on a Sunday in 2016 and this is likely to impact the peak trading days in the lead up to Christmas, with the Thursday and Friday both expected to be the biggest trading days.

If retailers want their wine range to stand out from the multiples’, they could consider a British line-up. CWF’s Giacobbi says: “We 
predict that there will be continued growth of the British wine market, within which our Straw Hat range remains a popular choice for 
consumers. The Straw Hat comprises a juicy red, a fruity white and a rosé and such is the popularity of the brand, two new size formats have been launched: 18.7cl and 2.25ltr Bag in Box variants in each varietal. The 2.25ltr Bag in Box format is perfect for parties and get-togethers, stays fresh for up to six weeks after opening and represents excellent value for money for the consumer, with each box containing the equivalent of three x 75cl bottles.”

Sparkling wine

Shoppers who really want to add some sparkle to their celebrations will be turning to fizz this season. Binny says his two big sellers in the run up to Christmas are Prosecco and Champagne.

CWF’s Giacobbi points out that offering customers a choice of sparkling options to help them celebrate in style is crucial. She says sparkling wines remain a favourite celebratory drink throughout the year, with household supplies increasing at Christmas. “Not only the obvious choice for a celebratory toast, today there are a range of options within the sparkling category to suit different tastes, budgets and occasions,” she comments.

English sparkling wine is one tipple to stock for celebrations, and research by wine app Vivino has found that English sparkling wine is taking some of the sparkle out of Champagne’s sales. Vivino app users have scored the sparkling wines they’ve tasted and some of the brands to feature in the top 10 include: Camel Valley; Nyetimber Tillington; Herbert Hall; The Chapel Down Winery; Digby; and Gusbourne.

Jimmy believes it’s always worth having one really high-end sparkling product available for those who want to make it an extra-special celebration. “We have a bottle of Champagne priced at £105. We sell about six of those a year, which is a really good earner,” he reveals.

Mulled wine is another Christmas and autumn essential for the drinks cupboard. Giacobbi says: “Mulled wine has captured the hearts of UK consumers seeking the warming spicy taste of the festive period throughout the cold winter months. Catering for all tastes and budgets are Winter Warmer Mulled Wine at 10% ABV and Harvest Fruits Mulled Wine at 8% ABV – both offering a convenient no-fuss option and allowing consumers to heat and drink on demand rather than steeping a bottle of red wine with flavours for lengthy periods of time, as it comes ready to warm and pour. It’s perfect for impromptu visitors over the festive period.”

Looking at the other seasonal favourites of fortified and mulled drinks, Giacobbi says ginger has been a popular flavour for a number of years, including RTDs, ginger beers and the traditional Green Ginger wine, which is now established as a Christmas staple served on its own or in a range of winter cocktails.

Cider

Binny says one surprisingly popular beverage at Christmas is flavoured cider.

“Flavoured cider goes really well. People have started buying it for cooking their gammon joints in. We also sell a lot of multipacks of cider at this time of year, both for cooking and personal consumption,” he points out.

Debs Carter, marketing director for alcohol at SHS Drinks, agrees that cider is very popular at this time of year and says Merrydown Cider is the number two heritage brand by volume in impulse stores (Nielsen Scantrack).

She adds that sales volumes of Merrydown Vintage Medium 750ml bottles sold through the impulse sector increased by 18% last Christmas.

“While mainstream cider sales are more affected by seasonal fluctuations and generally peak during the summer months, heritage cider brands have more loyal consumers who enjoy drinking these brands throughout the year and so sales of these are less influenced by the weather.

“Weekly sales of mainstream glass bottled apple cider were down by 14% during December last year versus the rest of the year, while heritage ciders’ weekly average sales were up by 3% (Nielsen Scantrack).”

Value sales of Merrydown Vintage 750ml bottles increased by 24% during the final quarter of the year (Nielsen Scantrack).

Along with sharing, the growing popularity of mulled cider could be having an impact on demand for larger pack sizes of cider. Carter says: “It really is in retailers’ interest to put more focus on and devote more space to sharing bottles of cider on shelf and in the chiller in the lead up to and during the festive season.”

Price pointers

Price is another factor to consider when stocking cider. Brookfield Drinks’ McNally says that despite the increased likelihood of shoppers buying premium brands for gifts and celebrations, many shoppers will also be looking for value products alongside the premium ones, especially if just buying for consumption at home.

He adds: “Price will be a driving factor for many shoppers, so offering pricemarked packs (PMPs) such as the newly-introduced Diamond White triple-filtered premium cider £1.25 PMP 500ml can help to communicate price transparency with shoppers and allow them to budget efficiently at expensive times such as Christmas.”

Sales of PMPs are 8% greater over Christmas period than the previous 40 weeks, according to Nielsen Scantrack (Total Impulse, week ending 3 January 2014).

Ramesh agrees that PMPs are a great way to help stock fly off the shelves, and he finds they are particularly effective with spirits. “The spirits category goes really well at Christmas, especially when the premium brands are available in PMPs.”

Sandeep says offering good deals and promotions is vital, and are especially effective with both cider and beer: “We have multibuy deals stacked up high at different positions around the store. People buy these just for personal consumption. They know that they’ll get through them throughout the holidays so they stock up. We do deals of two, three or six for a certain price point and we sell them by the case load.”

Simon also makes sure all pricepoints are catered for: “You mustn’t forget the lower end of the market, and include items such as large packs of beer which can make great displays in creative stacks near the checkouts, space permitting.”

Last year Ryan, of Tagon Stores, sent out flyers informing residents of the alcohol promotions he was running in store, but he was pleasantly suprised by how popular they were. He even found that people were choosing to do their entire alcohol shop at his store simply because they had read about the promotions on offer.

“I expected that people would still choose to do their bulk buy of alcohol at the supermarket, but we had a lot of people come here to do that,” he says.

Simon advises that there are sales to be had across the full range of alcohol at this time of year. “Even old favourites such as Cherry B, Babycham, bucks fizz and Lambrini will sell in huge volumes over the festive period. Exciting merchandising, great product availability along with an increased premium product range will help to maximise sales and ensure our customers have a very merry Christmas and happy new year!”