If your customers purchase only one bottle of spirits this year, chances are it will be in November or December as they stock up for the party season. And with the Christmas and New Year celebrations already in their thoughts, now’s the time to turn your attention to this most seasonal of sectors.

Vodka rocks
Vodka is the new champion category at Christmas, accounting for 50% of growth within total spirits (ACNielsen, off trade value to December 29, 2007), and its versatility as the ‘blank canvas’ in cocktails and long serves makes it ideal for entertaining.

This Christmas Diageo has eight new gift sets including a Smirnoff shaker (rrp £17), 20cl shaker set (£10) and 20cl long drink set (£10) and the brand will receive a £3.5m marketing investment.

Newcomer Dannoff is looking to make its mark with a quadruple-distilled offer pitched at the under £10 mark. UB Drinks is backing it with a £3.5m campaign.
Beers, wines and spirits is the leading category at Christmas, worth £3.5bn in the 12 weeks to the big day last year, of which £1.5bn went through the tills in the off trade in the last four weeks alone. Spirits account for £900m of this (ACNielsen), pipped only by light wine as the nation’s celebration drink of choice.

Maxxium UK off trade marketing manager Sian Baxter quotes a recent BBC survey which ranked alcohol as the No.3 Christmas essential behind turkey and cranberry sauce. “With 30% of retailers’ annual spirits turnover generated over the November/December period alone, planning cannot start a moment too soon,” she says. “Consumers spend half their annual budget on spirits during the festive season with almost a quarter of the UK population still shopping for alcohol, both for themselves and for gifts, on Christmas Eve.”

Diageo Great Britain sales director David Smith says that last Christmas spirits exceeded all expectations with £28m incremental growth over the period, and predicts that this year will be even better. “We believe there is the possibility of £37m-worth of extra value this festive season,” he says.

Pernod Ricard UK’s customer development director Dan Reuby says there’s one thing retailers absolutely must get right in coming weeks. “Availability is the most obvious and yet critical component for success at Christmas. We know that if shoppers cannot find their preferred brand, 46% will not buy a different brand or variant,” he says. As many as 11% of spirits shoppers say they would leave the store to buy elsewhere if their preferred brand wasn’t available, so keep products visible and in stock – any out-of-stocks will lose valuable custom.”

Diageo’s Smith points out that the 50% of spirits buyers who only enter the category on one or two occasions each year pick the most popular brands. “Christmas is one occasion when people want to be reassured they are buying quality products they can be proud to serve to guests or to give as a gift,” he says.

That view is supported by Reuby. “The key to retailer success this Christmas is to stock well-established and popular brands, since these resonate most strongly with consumers at a time when they are looking to purchase a range of quality drinks,” he says.

Tips for Christmas stocking
● Put brand leaders at eye level on shelf
● Use window displays for prominent positioning of gift boxes and leading brands
● Capitalise on off-shelf displays by using them only for brand leaders and higher value products
● Displays should feature full-price products rather than discounted items to prompt impulse buys of more expensive products ● Have high-margin lines available for tasting - it will make customers far more likely to purchase the product
● Provide on-shelf cocktail recipes and be sure to stock the ingredients
● Use press quotes and recommendations on shelf barkers or blackboards to help to endorse key products. Source: Pernod Ricard
He also expects that, despite the drop in disposable incomes over the course of this year, consumers will trade up for affordable treats, which remain a huge opportunity for c-stores. “This is particularly apparent for cognac,” he explains. “The category is in 4% value growth, but premium cognac is growing at 13% and super-premium at 22%. The same trend is also being seen across gin, vodka, malt whisky and golden rum.”

Adds Reuby: “Consumers are not always seeking the lowest price product at a time when they are celebrating with friends and family.”

Maxxium’s Baxter makes the case for promoting spirits above wines and beers. “Seven of the top 20 alcohol brands at this time of year are spirits and, on average, a store at Christmas will display almost twice as many spirits brands compared with either beers or wines,” she says. “Eye-catching, organised displays can encourage customers to try or consider something new this year.” She suggests positioning mixers next to spirits to encourage cross-purchasing.

In terms of promotions, it’s a case of balancing an enticing offer with reasonable value, and here Diageo’s Smith advises convenience retailers to concentrate on single bottles of spirits, which saw 4.3% growth last year. “Around half of spirits shoppers choose lighter spirits and are unwilling to spend more than £20 in a single transaction,” he says.

“This year we are again recommending retailers focus on a single-bottle promotion; that’s 70cl for convenience stores.”

Present and correct

Perhaps the biggest opportunity however is in gifting, with spirits not only being one of the most common Christmas presents, but also the perfect fall back for the tricky-to-buy-for friend or relative, and the ultimate safe bet as a last-minute present.

“Alcohol is the leading gifting category by volume in grocery – making up 65% of all gifts bought,” says Smith (TNS Gifttrack December 2007). “Spirits account for more than half of this and should correspondingly be given extra display and focus in your store.”

And let’s not overlook one more vital ingredient in the sales mix: the excitement of Christmas itself. “Our research has shown that shoppers are still carrying out their regular routine shops until December when they actively start looking for Christmas purchases,” says Smith. “Therefore, before December there is a fantastic opportunity for retailers to encourage early spirits purchases by creating some excitement to entice shoppers out of their routine shop mode.”
Whisky galore
Blended whisky struggled to keep pace with vodka as the biggest seller on the spirits shelf, but it remains a favourite among men aged 35+, and with an ageing population there’s plenty of prospects for growth.

Brands account for £7.80 out of every £10 spent on blended scotch, up from £6.80 for the rest of the year (AC Nielsen) and during the 12-week period up to Christmas whisky shoppers buy an average of three bottles – more than any other spirit. They are also the biggest spenders, splashing out on average £36.40 (ACNielsen).

This Christmas, Bell’s will be running a campaign to build on the launch of Bell’s Original, backed by a £2m marketing spend. It establishes founder Arthur Bell as the face of the brand in Bell’s first TV ads since 2005, set to run from this month.

A Chivas Regal gift pack features a tin designed by New York architect Evan Douglis to reflect the luxury aspect of the brand, and The Glenlivet’s range of 12-, 15- and 18-year-old gift packs include premium leather boxes.

Irish whiskey Jameson offers two gift packs, available either in a metallic-finish green box or silver presentation tin.
Liqueur lips
Diageo GB is launching a new £6.5m marketing campaign for Baileys and Baileys Flavours, entitled ‘Listen to your Lips’. Starting next month, the campaign will be backed by a £4m media spend, a 30% increase on last year’s investment.

POS items include freestanding display units, pallet wraps, bunting, shelf barkers, wobblers and posters. Baileys is also offering 13 new gifting SKUs.

A second burst of Malibu’s ‘Get Your Island On’ TV advertising will air in time for Christmas, kicking off in mid-November on national and satellite channels until mid-December.

Tia Maria will continue its sponsorship of female-oriented television in the run up to Christmas. The latest series of ‘Deliciously Unexpected’ clips will be aired during Grey’s Anatomy, Lipstick Jungle and Dirty Dancing the Time of your Life on Living TV.