Christmas Drinking - UK - November 2010

About this report

* Christmas is the perfect time for brands to attract 18-34 year-old drinkers. For example, over half (53%) of this age group who are Christmas drink buyers try something outside of their usual repertoire of drinks during the festive period.
* Alcohol manufacturers have an opportunity to help make people good hosts. For example, six in ten stock up for when guests come around, and they can benefit from party packs, containing small bottles of a variety of spirits and wines, to satisfy all guest’s tastes.
* Improved packaging that highlights limited editions or premium USPs such as vintage for wine or age for spirits is crucial in appealing to the 21 million adults who buy alcohol as a gift over Christmas. This is essential because these buyers include non-drinkers who lack detailed knowledge of key gifting products such as Scotch.
* Premium brands need to find ways to appeal to bargain hunters at Christmas rather than just rely on their name and prestige, as while three-quarters of UK alcohol buyers look for bargains at Christmas, a quarter also wants more expensive drinks than usual, with there being considerable overlap between the two needs.
* While older (55+) consumers are more likely to be better off at the moment, younger (18-34) adults still represent the most valuable target for alcohol producers at Christmas time. They are more optimistic that their finances will get better over the coming year and much more likely to see Christmas as a time for drinking in greater quantity.
* Online is an increasingly important retail channel for alcohol at Christmas. The three in ten UK adults Mintel identifies as most likely to spend comfortably over Christmas 2010 are 8% points more likely than average to use this method, which allows them to buy in bulk more conveniently.

Table of contents

Issues in the Market
Definition
Abbreviations
Market in Brief
Christmas is filled with opportunity for alcohol brands…
…but such opportunity is diminishing
Alcohol behaves like a buyer’s market when the opposite is true
Christmas 2010 is likely to be hit by consumer caution
Consumer Perceptions of Their Current Financial Status
Key points
Consumer confidence falters
Figure 1: Quarterly trends for percentage change in GDP and consumer confidence, Q1 2005-Q3 2010
Only a quarter perceive themselves to be in a healthy financial state
Figure 2: How people categorise their current financial situation, September 2010
A growing financial disparity between the older and younger generations
Consumer Perceptions of Finances Over Christmas 2010
Key points
Consumers are slightly more pessimistic than optimistic
Figure 3: How people predict their financial situation will change over the next six months, September 2010
The poor expect to get poorer over the next six months
Figure 4: How people categorise their current financial situation, by their predictions of how their financial situation will change over the next six months, September 2010
The optimism of youth
Figure 5: Expectations that their economic situation will get better, by gender and age, September 2010
Potential Alcohol Spenders Over Christmas 2010
Key points
Three in ten are in a strong position to spend
Figure 6: Spending potential of consumers over Christmas 2010 based on their current financial situation and predictions of how it will change, September 2010
With age comes caution
Figure 7: Potential for Christmas spending groups, indexed, by gender, age and socio-economic group, September 2010
Champagne/sparkling wines are well placed to perform well in Xmas 2010
Figure 8: Drink types which those in a strong position to spend are more likely than average to drink over the Christmas period, September 2010
Online is a key medium for those who can afford to spend
Figure 9: Statements about Christmas drinking which those in a strong position to spend are more likely than the norm to agree with, September 2010
Sainsbury’s can cash in on Christmas trade
Figure 10: Potential for Christmas spending, by supermarket used for main grocery shopping, September 2010
The Impact of Marketing and Innovation on Xmas Drinking
Key points
Significantly increased brand spend…
Figure 17: Trends for uplift in above-the-line advertising spend in November/December for the total alcohol category, 2006-09*
…but declining share of voice
Figure 18: Trends for alcohol above-the-line advertising spend in November/December as a proportion of all UK advertising spend, 2006-09*
Niche seasonal drinks target Christmas period
Scotch whisky dominates the gift market
Other spirits slower to capitalise on this opportunity
How Alcohol Purchasing Habits Shift Over Xmas
Key points
Christmas attracts buyers from outside the market
Figure 19: Proportion who normally purchased alcohol at Christmas for in-home consumption, September 2010
Figure 20: Drink buyers over the Christmas period compared to the proportion of UK drinkers, September
Specific seasonal drinks see a sharp sales uplift
Figure 21: Alcohol types normally purchased at Christmas for in-home consumption, September 2010
Cider is struggling to convert its success into seasonal sales
There is more opportunity to try new drinks…
…due to more drinking opportunities combined with a shift in mindset
A big opportunity for sherry over Christmas 2010
Purchasing becomes as much about others as yourself
Stocking up not just for Xmas but the rest of the year!
Actual Consumer Expenditure on Xmas Drinking
Key points
Christmas drives double-digit sales of alcohol
Off-trade is the big winner
Figure 22: Trends for total UK alcohol expenditure, by on-trade and off-trade, Q1 2007-Q4 2009
A key time for spirits
Figure 23: Average sales uplift in Q4 compared to the average quarter sales for the major alcohol categories, by on- and off-trade, 2007-09
In real terms, sales of alcohol have fallen dramatically
Figure 24: Annual percentage growth of total UK alcohol spend in Q4 and share of total of total yearly alcohol spend, in constant (2006) prices
Appendix – Consumer Perceptions of Their Current Financial Status
Figure 26: Current financial status of consumers, by demographics, September 2010
Figure 27: Attitudes towards financial situation over the next six months, by current financial status of consumers, September 2010
Figure 28: Potential for Christmas spending, by current financial status of consumers, September 2010
Figure 29: Attitudes towards alcohol spending over Christmas 2010, by current financial status of consumers, September 2010
Figure 30: Alcohol types normally purchased at Christmas for in-home consumption, by current financial status of consumers, September 2010
Appendix – Consumer Perceptions of Finances Over Christmas 2010
Figure 31: Attitudes towards financial situation over the next six months, by demographics, September 2010
Appendix – Potential Alcohol Spenders Over Christmas 2010
Figure 32: Potential for Christmas spending, by demographics, September 2010
Figure 33: Attitudes towards alcohol spending over Christmas 2010, by potential for Christmas spending, September 2010
Figure 34: Alcohol types normally purchased at Christmas for in-home consumption, by potential for Christmas spending, September 2010
Appendix – Actual Consumer Expenditure on Xmas Drinking
Figure 46: Trends for off-trade expenditure, by major drinks category, Q1 2007-Q4 2009
Figure 47: Trends for on-trade expenditure, by major drinks category, Q1 2007-Q4 2009

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By sector: General drinks

By market: United Kingdom (in Europe)