New products alongside big budget marketing should warm retailers’ hearts this Xmas.

That last-minute dash to stock up on drinks at Christmas looks set to be nothing short of mayhem this year with the big day falling on a Sunday. According to Diageo UK joint managing director Benet Slay, the trend for last-minute shopping needs to be curtailed. “We have seen an increase every year in people shopping late.” he said, “but we have to keep Christmas broad. Don’t let it get funnelled into one week.”

He says by driving earlier sales, especially in the spirits markets, retailers could benefit from more sales as consumers are tempted to open bottles earlier.

This year Diageo is hoping to encourage just that with a special promotion to prompt customers to open their bottles and not leave them sitting on the side. Diageo says 55% of Baileys bottles bought from October to December are not opened until Christmas Eve, and the company hopes to change this.

Part of Baileys’ Christmas campaign features an onpack promotion offering consumers the chance to win a £100,000 chilled lifestyle. Prizes are printed under the cap so consumers have to open the bottle.

The brand’s main focus this year is on blending with ice. The Baileys Big Blending Initiative sees the brand teaming up with Moulinex to offer branded Baileys blenders. A £5m investment will include new television advertising, outdoor and instore Christmas pos.

To further drive this chilling message co-branded Baileys and Polar ice cubes will also be available. Exclusive for the independent trade this year will be a 50cl pack for Christmas. In the gift segment a Baileys gift pack will feature a dome-bottomed glass so consumers can swirl the ice in the drink.

Last Christmas the brand saw growth at 21% MAT on total trade volume (source: AC Nielsen/Diageo). Baileys is currently trialling two new flavours - mint caramel and crème caramel - at BAA’s retail division World Duty Free at airports around the UK.

As retailers who sell alcohol are aware, the take home category is particularly healthy at the moment, with Christmas 2004 showing growth at 4% year on year to £2.3bn in the eight-week Christmas period (source: Diageo).

While cut-throat pricing is less of an issue in the spirits category than in beer, it is still of concern to both manufacturers and smaller retailers.

According to a recent report in Convenience Store’s sister paper OLN, spirits excise is cheaper in 2005 than it was 10 years ago, and in some cases average prices of leading brands are cheaper than in 1985, with summer deals contributing to record low supermarket prices this year. Slay says that having pricing activity earlier on - in November and early December - could encourage consumers to shop earlier.

Allied Domecq’s Teacher’s brand is taking a swipe at the heavy discounting of certain brands with its latest marketing campaign. As part of its 175th anniversary, the whisky brand will be backed with a £1.5m investment programme targeting the traditional 50+ male drinker by parodying ‘buy one get one free’ offers and prize draws. Teacher’s senior brand manager Nick Marshall says: “Research strongly suggests that mature whisky drinkers, and in particular Teacher’s drinkers, are scornful, almost cynical, of many of these gimmicks.”

Diageo is hoping its latest launch will be considered anything but a gimmick. Pimm’s Winter is based on the old No.3 cup, which last appeared on shelves 35 years ago. The drink combines the old cup recipe with a hint of orange and spices to produce a warming drink for winter. The makers recommend the drink to be served warm with one part Pimm’s to three parts apple juice, but the drink can also be served cold with lemonade or ginger ale.

First trialled last year in Waitrose, Pimm’s Winter went down well with customers and became the number one speciality drink over an eight-week period, outselling its nearest rival two to one, reports the company. Diageo hopes Pimm’s Winter will become as seasonally synonymous as its summer cousin Pimm’s No 1, which gains 85% of its sales in the 14 weeks from May to mid September and is showing MAT growth at 23% (source: AC Nielsen/Diageo).

Overall, the total speciality drinks category is showing good growth at 9% year on year against the total spirits category of 2% (AC Nielsen MAT 6/8/05/Diageo).

The Pimm’s Winter launch is backed by a £2m marketing campaign including a version of the ‘Harry’ advertising campaign, regional press and wedding programme activity, 250 sampling days, leaflets to encourage shoppers to serve it warm, and pos.
Marketing at this time of year becomes especially important as the brands battle it out (see box right). First Drinks Brands marketing director Fiona Chinn says: “Christmas is the key time for all of our portfolio, which is dominated by whisky and liqueurs - 46% of malt whisky and 50% of liqueurs are sold in the run-up to Christmas, so it is essential we upweight our activity.”

As well as advertising the Glenfiddich brand, First Drinks will be pushing Disaronno Amaretto and there will be sampling for Amarula and PR activity for Grant’s. Gift tins and cartons will be available for Glenfiddich and Grant’s.

Chinn says that particular brands do especially well over Christmas: more than 60% of sales of Warninks advocaat are in the last five weeks of the year.
Another boost for sales comes from encouraging customers to try some of their favourite brands in different ways. Laphroaig is supporting its new quarter cask with trade PR encouraging its use in cocktails.
Maxxium UK has launched a new consumer ‘Easy Cocktails’ campaign for its Plymouth Gin brand featuring a range of at home ‘at home’ drinks recipes created by TV chef James Tanner.

Comparing the category against all categories, the average person who buys spirits in the convenience sector is an older male who makes one extra shop visit per week than others. Trip spend is £16.96 with a 20% impulse spend (source: HIM CTP 2005 Category Summary: Spirits).

To get the best out of these customers, and to encourage more purchasing at this time of year, Diageo’s Slay says retailers have to provide the ingredients for a ‘perfect Christmas’- one that enables the 11.8 million households who buy spirits at Christmas (source: Diageo) to be hosts with the most. He says retailers must be ready to hit the three weekends before December 25.

“Christmas is about delivering quality of consumer experience,” says Slay. “The category has to have space to standout. Clear visibility should be given to leading brands.”

Senior brand manager for Baileys Matt Hunt says Christmas is about “generosity and excess. Retailers need to know what sizes are available and have the right brands”. Slay says Christmas is about good visibility: “Retailers must help people understand how the shopping experience can reflect the Christmas experience.” He says that as well as profiting earlier on in the Christmas period, c-stores can make the most of the week between Christmas and New Year when people are gearing up for parties.

One of the problems faced by retailers who sell spirits is theft. The CTP report highlights the fact that retailers feel that they have to put spirit bottles out of reach of the customer and away from high profit free flow areas. This, says the report, prevents shoppers engaging with the category and drives them away.

A Blueprint scheme is addressing this issue with the Putting Leaders on Display (PLOD) campaign. The scheme is currently promoting an anti-theft security cap that fixes onto the bottle, which can then be displayed on open shelves. The caps can be removed only by the retailer, and thieves would have to smash the bottle to get the cap off. This innovation and ones like it could see spirits back where they belong - in the path of the customer.

The Smirnoff portfolio is getting a boost with the launch of Smirnoff Norsk into the off trade, targeted at the 25+ age group. The launch is being supported by a £400,000 marketing campaign.

Halewood International has launched its second Juiced extension of the Red Square Reloaded Brand - Blue Juiced. The drink is made of 10% blueberry and citrus juice with guarana. It has an abv of 5.1% and will be available in 70cl and 275ml bottles.

VK Vodka Kick has launched a new pack design for 275ml 12 packs.

Global Brands has extended the range of Corky’s Vodka Shots with a special edition chocolate orange flavour this month for the Christmas period.

Martell Cognac has launched a VSOP gift pack containing a 35cl bottle and two Martell balloon glasses.

First Drinks has launched a Grant’s Mini barrel of whisky which fits onto a work surface and holds 1.5 litres of spirit.

While the alcoholic RTD sector may be, as WKD brand manager Debs Carter puts it, “challenged”, reports of its imminent death are extremely premature. Global Brands retail sales director Andrew Stolland says: “The RTD market is worth over £1bn in the UK, it’s the most innovative of all the categories and it’s here to stay.”
Carter says the RTD market is a particularly important one for c-stores, with 36% of RTD volume through the impulse channel (source: ACNielsen/Beverage Brands). While RTDs have traditionally been seen as a female purchase, both Beverage and Global target male drinkers, who tend to be less planned in their purchases and often leave drinks buying until the last minute.

Another sure sign that there is money waiting to be made in this sector is Diageo’s launch in August of 275ml bottles of Absolut Cut. The drink targets existing RTD consumers, plus those who liked pre-mixed drinks, and Absolut Vodka drinkers. Inbev says the brand will benefit from the long-term success of its parent brand.

To ensure success in this sector, Carter says retailers should look to stock the big brands, chilled and in bigger sizes.

According to Beverage Brands research, 70% of RTD purchasers prefer bigger bottles and packs, with 70cl sales growing by 11% in 12 months.

Retailers can also benefit from the second edition of the Blueprint for Alcoholic RTDs which has just been released by The Federation of Wholesale Distributors.
Says Carter: “We predict that pillar brands are going to be more important with the Top 3 - WKD, Smirnoff Ice and Bacardi Breezer - continuing to dominate the market.” But she says the category needs innovation to survive: “We will trip ourselves up as a category if we just bring out new variants all the time.”


Smirnoff: Launch of TV and cinema ads, on pack campaign to win holidays to New York.

Bacardi rum: Ad campaign ‘The Way It Should Be’, marking a change in direction for the brand.

Gordon’s: TV ads and a repeat of ‘The Colourful Gin’ campaign. New sponsorship of Classic FM’s Smooth Classics at Seven programme.

Courvoisier S.A.S: Advertising including national press and posters, plus a neck collar promotion for Courvoisier VS and Courvoisier VSOP Exclusif styles to promote a book offer and a chance of winning dinner at Le Gavroche.

Martell Cognac: Second wave of ‘Let The Conversation Flow’ campaign targeting 35-49-year-old men and women.

Smirnoff Ice: Largest Smirnoff Ice campaign since 1999. On-pack promotion on four packs, 12 packs and 70cl to win headphone hats.