Learn about all the festive opportunities across beers, wines and spirits this season
1. Booze is the star performing Christmas category
2. More than a quarter of shoppers buy Christmas alcohol from till displays
3. Promotions are coming back with a bang this Christmas
4. Cocktails are coming home this Christmas
5. Multipacks and larger formats are must-stock items
6. Christmas 2022 will be a World Cup double whammy
7. One in five cider drinkers want to see more AF options
8. Lighter variants are wooing younger drinkers
9. Premium brands will be quids in this Christmas
1. Booze is the star performing Christmas category
It’s time for retailers to get their booze aisles in order and buckle up for bumper sales, for alcohol is the star performing category over Christmas. Shoppers spent £2.2bn on drinks in the 2021 festive period, a rise of 10.7% on 2019 (NielsenIQ) NielsenIQ 12 w/e 1 Jan 2022 and 11% of convenience shoppers bought booze (Lumina Intelligence).
“The weeks leading up to Christmas are historically some of the most important for retailers, with shoppers increasing their alcohol purchases as they socialise more to celebrate the season,” says BrewDog off-trade category marketing executive Miriam Thompson, citing Nielsen IQ for 12 weeks ending 1 January 2022.
“This has been hugely impacted over the last two years with restrictions during the pandemic influencing the full year trend and dampening celebrations. Despite this, Christmas is still the most profitable trading period and is key to recruiting new shoppers. Shopper numbers are 2.7 times higher in December and 61% of these are new to the category.”
Chris Shelley is one retailer who is expecting the tills to chime this festive season. “One of the biggest trends we have seen over the past year is the rise in craft ales and premium wines and we expect these to do well over Christmas,” says Chris, who operates a Budgens store in Horsham, West Sussex.
“We’ve seen strong sales in mainstream craft beers like BrewDog’s Punk and Lost Lager and Camden Pale Ale and some of the stuff from the smaller local microbreweries. Premium wine has also been doing well. We do a Laithwaites range which really works well for us. With the cost-of-living crisis biting, people are still prepared to pay a premium for quality.”
2. More than a quarter of shoppers buy Christmas alcohol from till displays
It’s crucial that shoppers can find that quality, of course. Stocking up secondary displays for the festive season is therefore key. Lumina Intelligence research reveals that after the main booze chiller, which drove 28% of alcohol sales during the festivities of 2021, till displays were the next most important distribution point, responsible for 26% of sales.
“You can have the best products for the best prices but if people can’t see them in store you’re just not going to sell them,” says Sophie Towers, who operates three One Stop stores in Burnley, Lancashire. “People don’t come into convenience stores to browse – they’re often on autopilot so you have to put the products under their noses.
“Christmas is a massive time for me. We do beer stacks right in front of the counters and mix them up with other items that they might buy on impulse if they are going to meet family and friends – things like chocolate and flowers. If we don’t have flowers we might add nuts or crisps or something they might buy to share with people.”
3. Promotions are coming back with a bang this Christmas
Promotional strategies are paramount too. Deal activity took a dip during 2020’s festivities as retailers tried to manage demand through the first Christmas of the pandemic but rose again in 2021 with 45% of booze sales on promotion, a year-on-year rise of 10 percentage points [Lumina Intelligence].
They’re coming back even stronger this year, says Chris in Horsham. “As a Budgens store, of course we run the Budgens promotional cycle and it’s twice as big as it is normally this year,” he says. “That’s partly because we have the World Cup coming up later this month but it’s also because we are anticipating that more people will be shopping in convenience and treating themselves at home over Christmas.”
Bestway Wholesale trading director Kenton Burchell expects shoppers to be treating themselves with flavoured vodka and gin lines such as Au Vodka Blue Raspberry, Ciroc Red Berry and Whitley Neill Rhubarb & Ginger Gin, as well as RTDs such as Smirnoff Cola and Vodka mix, Gordon’s Premium Pink Gin & Tonic.
“Retailers can promote these formats through promotions and early festive deals, creating a merchandise display of these categories to invite customers to consider the various flavours and formats,” he says. “Retailers should create an instore ‘theatre’ with promotional displays to attract customers, and to convince them to shop early.”
Sophie in Burnley tries to empower her staff to drive these sales. “I ask them to walk through my stores as if they were customers so that we can see where there are gaps,” she explains. “Shoppers often just walk in looking for whatever they’ve come in for. If something isn’t selling well, you can change that by putting it in front of people.”
4. Cocktails are coming home this Christmas
Many are betting that pre-mixed, ready-to-serve cocktails (as well as the spirits and accoutrements to make them from scratch) will be big this Christmas.
“In the present economic climate, making cocktails at home is becoming increasingly popular,” says Bestway Wholesale’s Burchell, pointing to NielsenIQ data that shows impulse sales of ready to drink (RTD) cocktails have surged by 26% in the past year [52 w/e 4 June 2022].
“Consumers are experimenting with their drinks at home and creating a home bar where they can entertain friends and family. There is an emergence of new pre-mixed spirits and cocktails … the variety of flavours available in the market makes it attractive for people to purchase and trade up.”
Indeed, more than one in four RTDs sold are now cocktails. “Cocktails are now accounting for 27% of the RTD market in the grocery multiples over the last 12 weeks,” he says, citing NielsenIQ data for the 12 weeks ending 2 July 2022.
“Taking this into account, it’s undeniable that larger pack sizes are sure to sell well around these times when shoppers are looking for a convenient way to stock up for hosting opportunities and parties in one trip.”
5. Multipacks and larger formats are must-stock items
It’s not just cocktails that will sell well in multipacks this Christmas, of course. With larger pack formats offering shoppers who are feeling the pinch the chance to save money, many suppliers are expecting sales of such formats to be particularly strong over the festivities of coming months.
For example, Treasury Wine Estates launched its 19 Crimes Chardonnay, Chard, in a 1.5 litre bag in box format at the end of October, in time for Christmas. The launch followed the introduction of 19 Crimes Red to the format in 2021 and the roll out of boxes of Revolutionary Rosé over the summer.
“Based on our 19 Crimes Red and Rosé 1.5l bag-in-box performance, we are expecting the Chard to deliver a significant uplift to value sales of the overall bag-in-box category, driving value for our brand and our customers,” said head of marketing Ben Blake on announcing the launch.
Citing a May Shopmium report on the impact of the cost-of-living crisis, BrewDog’s Thompson adds: “As we saw with shopper habits during the pandemic, consumers tend to be brand loyal within beer and consumers claim to have traded down less in alcohol versus other categories.
“Consumers see alcohol as a treat when they might be cutting back in alternative areas of their lives. Larger pack sizes and formats – such six or 10-packs – can be a key way to appeal to shoppers that are feeling the strain, often delivering more value for money than smaller packs or single cans.”
While Thompson says that four-packs account for roughly 40% of craft beer sales in the weeks running up to Christmas, she also notes that as the big day gets closer demand for larger packs increases. “Six to 12-can multipacks over-index in the two weeks before Christmas, with share jumping from 17% at the end of November, to 23% at the end of December [NielsenIQ],” she says.
“Fifty per cent of first-time purchases come from multipacks and larger mixed formats significantly over index with first time buyers, so it is important to have a mix of formats available to meet different shopper needs.”
Westons Cider has introduced a variety of bigger pack formats to tap this seasonal demand. Head of business development Darryl Hinksman says Henry Westons Vintage six-pack and its new Stowford Press 10-pack have been particularly successful.
“Stowford Press’s recently introduced price-marked pint can four-pack of Stowford Press Apple Cider is also a great way for retailers to maximise profits as pint cans significantly overtrade in the convenience channel with a 7.4% share of cans value compared to 3.8% in total market [IRI 52 w/e 11 September 2022].”
6. Christmas 2022 will be a World Cup double whammy
Down in Horsham, Chris will be getting his festive beer stacks and wine trees at the front of store earlier than usual. “Of course, this year we have the double whammy of the World Cup (which kicks off in Qatar on 20 November) and then Christmas, so I expect alcohol sales to do really well,” he says.
Suppliers agree that there’s more to play for this year. “With the FIFA World Cup taking place in the winter for the first time this year, an exciting opportunity has opened up for cider,” says Westons’ Hinksman. “If retailers can stock up in advance, and communicate the events to customers, they will be able to reap the benefits from Halloween right through Christmas party season and into the new year.
“By bringing forward any Christmas offers or advertising to mid-November, creating off-shelf displays and prioritising bestsellers such as our Henry Westons Vintage – which now sells one bottle every second [IRI 52 w/e 16 July 2022] – retailers will be able to capitalise on increased sales from the World Cup and see escalated sales transition seamlessly into the festive period.”
Thompson at BrewDog points to a NielsenIQ estimate that puts the size of the prize that’s up for grabs for retailers in terms of booze sales at a lip-smacking £1.7bn. “Occurring at an already social time, we could see a merging of occasions and switching between alcoholic drinks, with beer expected to benefit thanks to its connection with football,” she says.
7. One in five cider drinkers want to see more AF options
Not everyone wants to drink the hard stuff these days, of course. That’s why Brothers launched an alcohol-free version of its Toffee Apple Cider in time for Christmas 2021, a product the brand expects to see strong sales of over coming months.
“At Brothers, we want to ensure our customers can continue to enjoy exciting flavours if they choose not to drink alcohol, without compromising on taste,” says Randall, citing a 2022 Mintel report. “Twenty percent of cider drinkers would like to see more choice available in the low and no cider category.”
It’s not just cider. “Within the beer category, Heineken 0.0 continues to lead the no & low alcohol category with 21.3% share of the beer & cider no alcohol segment, while continuing to grow by 11.5% year on year,” says Wilson at Heineken, citing NielsenIQ data for the four weeks ending 26 February 2022.
“While lager holds the lion’s share of no alcohol in beer and cider, well-known ale and craft brands are also on the rise within this category. Shopper penetration has been the primary driving force of growth for no & low for the last five years, but there is still a lot of headroom to grow. While beer & cider is purchased by 74.8% of households in the off trade, no alcohol is only purchased by 12.3% [Kantar 52 w/e 3 October 2022].
“Encouragingly, we’re seeing signs that no & low alcohol is being purchased and consumed more frequently. While January used to be the high watermark for no/low alcohol shopper penetration, the participation in this category now effectively mirrors total beer and cider throughout the year.”
8. Lighter variants are wooing younger drinkers
Beer and cider aren’t only getting lighter in terms of alcohol content, either. The launch of lines such as Heineken Silver, Strongbow Ultra Dark Fruit and Beavertown Sunlight ‘Lite’ Lager suggests growing demand for lighter variants and lower calorie counts. Wilson expects such products to do well this Christmas, particularly with younger drinkers.
“An extra-refreshing lager at 4% ABV, Heineken Silver is made using an ice-cold brewing process at -1°C for a crisp flavour and subtle finish, with a low bitterness of 10 IBUS offering a lighter drinking profile,” he says. “Heineken Silver will deliver a premium offering and a more accessible taste that will drive appeal and sales among younger adult drinkers.
“We know that innovation is a large sales driver in the beer category, especially among younger adult drinkers who are constantly on the lookout for new products and styles to try. Our research shows an incredibly high intent to purchase Heineken Silver, with 76% of consumers who have tried it saying they would purchase it again [Kantar testing].”
9. Premium brands will be quids in this Christmas
Many other players expect shoppers to be more willing to splash out on indulgences at home this Christmas. “It’s safe to assume that the cost-of-living crisis will impact on at least some consumers’ spending habits,” says John Price, head of marketing at KBE Drinks, which markets and distributes brands including Kingfisher and Sagres lagers in the UK.
“Having less disposable income in their pockets may well mean fewer visits to pubs and restaurants, and potentially more eating and drinking at home this Christmas. This should present an opportunity for convenience retailers. That’s why premium world lagers like Kingfisher and Sagres are great options for convenience retailers to stock, as they can typically fetch a minimum of 30% more than other more mainstream options.”
Head of brand and trade marketing at Mast-Jägermeister UK Johnny Dennys is equally confident that consumers will trade up. “Spirits are gifted at Christmas so stocking a range of premium, well-recognised brands, as well as limited editions or new releases is ideal,” he says. “Jägermeister is the UK’s favourite shot brand in the off-trade in December, with 45% of Jägermeister sold in the 12 weeks up to New Year”.
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