The pre-mix market is growing because there is a good range of products on offer, so stock as many products as space and customer profile allows
A good starting range would be vodka & cola, gin & tonic and rum & cola styles, ideally supported by a vodka & tonic and a whiskey & cola variant
Avoid duplication, but be mindful that slight variations can appeal to different consumers. For example, there are different pre-mix brands on the market using white, dark and golden/spiced rums
Take advantage of the changing seasons. In the summer months, products such as Pimm's & lemonade will be popular
Merchandise in the chiller if at all possible in store tests, selling pre-mixed spirits chilled delivers a 30% sales uplift compared with ambient
Keep pre-mix spirits and RTDs (such as Smirnoff Ice and WKD) as distinct offers as they target different consumers
Consumers generally select pre-mix spirits as an 'unwind' drink, so target shoppers on their way home from work
Diageo recommends that 250ml cans should retail at £1.70, although many retailers are choosing to sell them at above this.
So it's worth giving the category a second thought. Two further articles to help you make the most of spirits follow in future issues, but we begin our focus with an update to the report on the pre-mixed spirits category first published in C-Store's April 16 issue.
Pre-mixed spirits are 'perfect serve' versions of consumers' favourite spirits and mixers, sold in a can format. And as well as benefiting from a convenient format and the marketing clout of major brands, the category is also being boosted by manufacturers working very hard to position the products within their own drinking 'occasion'. This opportunity is based around the transition that consumers make from work to home, from activity to relaxation.
Value sales in the off trade already run into tens of millions and the category is enjoying double-digit growth. Last month market research firm Mintel predicted that the market would swell five-fold to reach £140m within five years, and Asda reported sales growth in the category of 160% between May and July.
Back in April Steve Hamilton, innovation and nurture director at Diageo GB, told C-Store that the choice of high-quality products now available was driving the market forward.
"Lots of major spirits brands, with lots of different mixers, are now being offered to consumers," he says. "Manufacturers are investing in this category, and really positioning the drinking occasion in an in-home setting for the first time.
"In addition, until recently suppliers have not been able to place products as a range in-store before. But with more products available, it means we can promote a range together, with multibuys and such like."
The pre-mix category is entirely distinct and separate from RTD products such as Smirnoff Ice and WKD.
Whereas RTDs have a younger, slightly downmarket profile and are associated with energetic occasions, the pre-mix purchaser is typically 25 to 45 years old and reasonably affluent, and will consume the drinks at home in a relaxed, 'unwinding' context.
But busy consumers are not always aware of which spirit and mixer products they have in their cupboards at home and, as such, consumers shopping in c-stores on their way home from work are ideal targets. Indeed, research indicates that 60% of pre-mixes are consumed on the day of purchase, putting c-stores in prime position to benefit.
A wide range of well-known spirits and mixer brands are already available such as Gordon's gin with Schweppes tonic, and Smirnoff vodka with Ocean Spray cranberry juice drink.
Diageo's range alone covers eight different combinations, and other major spirits brands such as Bacardi, Whyte & Mackay and Jack Daniel's are also available in convenient pre-mix variants.
When selecting a range, a good place to start is to pair the most popular spirits with the most popular mixers, such as vodka & cola, gin & tonic and rum & cola. If space permits, add in other spirits and mixers such as whiskey & cola and vodka & tonic, and allow for products with a strong seasonal bias such as Pimm's & lemonade.
As usual, the challenge is to appeal to the needs and tastes of as many customers as possible without creating repetition. It is also worth remembering that stocking as wide a range as you can allows you to run multibuy promotions or to encourage customers to try new varieties while they are picking up their favourite line.
Wherever possible, pre-mix spirits should be sold chilled as most products are consumed on the same day as purchase. In tests, moving the range from ambient display to chilled created a 30% uplift in sales.
Diageo regularly visits 8,000 convenience stores and is able to help with merchandising and pos material. The company recommends that products from the range are sold at a single price point of £1.70, although some retailers and groups are choosing to charge at above this level.
New products are being added at a good rate, but Diageo is particularly excited by the launch of Smirnoff vodka & cola as it is the number one spirit and mixer combination.
And with new combinations being introduced at a good rate, it is estimated that the category could be worth at least £10m to c-stores by the year 2013.