Gin, White Rum and Other White Spirits - UK - March 2009

About this report

Sales of gin and other white spirits have grown by 5% in value and volume since 2003, fuelled by growth at the budget and premium ends of the market, to over 46 million litres valued at £1.2 billion in 2008.

Sales fell in 2008, however, with the economic downturn accelerating an exodus of customers from pubs and bars, white rum losing its way, and gin struggling to attract young drinkers.

Key themes

• Which categories are expected in suffer in the economic downturn?
• How are shifting demographics likely to impact on white spirit sales?
• Which categories are using innovation and marketing to drive sales?
• Which sales outlets offer the greatest opportunity for future growth?

Table of contents

Issues in the Market
Key themes
Definitions
Abbreviations
Market in Brief
Sales take a downturn
A challenging trading environment
Gin and rum struggling
Buoyant supermarket sales
On-trade drinkers trade up
NPD lacking in white rum
Targeting opportunities
The future
Internal Market Environment
Key points
Sophisticated drinkers trade up
Figure 1: Lifestyle statements on expensive tastes, 2008
Bringing cocktails into the home
Figure 2: Trends in agreement with lifestyle statements, 2004-08
Alcohol consumption falls as health concerns rise
Figure 3: Trends in agreement with health lifestyle statements, 2004-08
Duty taxes maxed out?
Figure 4: UK excise duty on spirits for every 1% of strength per 100 litres, 1998-2008
Raw material costs spiral
Anti-social behaviour results in greater regulation
Drinking and driving
Smoking ban shifts focus to food
Retail discounting tarnishes brands
Fraud also a major issue
Seasonality a factor in spirit sales
Trade bodies and their activities
Gin & Vodka Association
Wine and Spirits Trade Association
West Indies Rum & Spirits Producers' Association
Broader Market Environment
Key points
Credit crunch hits beleaguered on-trade
Population growth bodes well
Figure 5: Structure of the UK adult population (18+), by age, 2003, 2008 and 2013
UK regulation
Government and industry tackle alcohol abuse
Government threatens labelling legislation
The Portman Group self-regulates
EU regulation
EU spirit drinks regulations
Competitive Context
Key points
Spirited competition
Figure 6: UK value sales of alcoholic drinks, by sector, 2003-08
Vodka leads in youth appeal
Men shift allegiance to the dark side
RTD decline slows and cocktail trend emerges
Figure 7: Summary of market strategies in alcohol categories competing with gin and other white spirits, 2008
Strengths and Weaknesses in the Market
Strengths
General white spirits
Gin
Rum
‘Other’ white spirits
Weaknesses
General white spirits
Gin
Rum
‘Other’ white spirits
Market Size and Forecast
Key points
Flat market now falling
Figure 9: UK volume and value sales* of gin, white rum and other white spirits, both on and off-trade, 2003-13
Figure 10: UK volume sales* of gin, white rum and other white spirits, both on- and off-trade, by sector, 2003-13
The future of the market
Forecast
Factors used in the forecast
Segment Performance
Key points
Gin and white rum lose out
Figure 11: UK on- and off-trade volume sales* of gin, white rum and other white spirits, by type, 2006-08
‘Other’ spirits post strong value growth
Figure 12: UK on- and off-trade value sales* of gin, white rum and other white spirits, by type, 2006-08
Gin
Volume sales bottoming out
Figure 13: UK on- and off-trade volume and value sales of gin, 2003-13
Non-premium category suffering
Premium prospects positive
White rum
White rum loses out to golden aura
Figure 14: UK on- and off-trade volume and value sales* of white rum, 2003-13
Provenance takes centre stage
Premium sales very niche
Other white spirits
Sustainable growth for tequila
Figure 15: UK on- and off-trade volume and value sales* of other white spirits, 2003-13
Out with the shots, in with the cocktails
Speciality drinks boosted by increasing consumer sophistication
Market Share
Key points
Strongest growth from premium brands
Figure 16: Manufacturers’ estimated shares in UK off-trade volume sales of gin, white rum and other white spirits*, 2007-08
Key brand analysis
Gin
Figure 17: Estimated brand shares in UK off-trade volume sales of gin, 2007-08
Gordon’s (Diageo)
Bombay Sapphire (Bacardi Martini)
Greenall’s Gin (G&J Greenall)
Plymouth Gin (Pernod Ricard)
Tanqueray (Diageo)
Beefeater (Pernod Ricard)
Premium/super-premium gins
Own-label
White rum
Figure 18: Estimated brand shares in UK off-trade volume sales of white rum, 2007-08
Bacardi (Bacardi Martini)
Other white spirits – Tequila
Jose Cuervo (Diageo)
Patrón (Cellar Trends)
Sauza (Beam Global)
Sambuca
Cachaça
Companies and Products
Figure 19: Brand map, UK gin, white rum and other white spirits*, 2008
Bacardi Martini
Bombay Sapphire
Bacardi
Tequila
Cachaça
Beam Global UK
Sauza
Hornitos
Cellar Trends
Patrón
Pyrat
Luxardo
Diageo
Gordon’s
Tanqueray
Jose Cuervo
Emporia Brands
Grande Absente
Nardini
First Drinks Brands/William Grant
Hendrick’s
Glen Catrine
Global Brands
Ypióca
G&J Greenall
Hayman Distillers
Gin
Rum
Tequila
Hi Spirits
No. 209
Antica Sambuca
Inspirit Brands
Ocho
Partida
El Dorado
Sagatiba
Marblehead
Zephyr
Seagram’s
Olmeca Tezon
Maxxium
Cruzan
Brugal
Pernod Ricard
Beefeater
Plymouth Gin
Havana Club
PLB
Matusalem
UB Drinks
Blackwood’s
Brand Communication and Promotion
Key points
Sales fall in tandem with adspend
Figure 31: Main monitored media advertising expenditure on gin, white rum and other white spirits, 2004-08
Seasonality a factor
Adspend by advertiser – Diageo overtakes Bacardi Martini in 2008
Figure 32: Main monitored media advertising spend on gin, white rum and other white spirits, by advertiser, 2004-08
Adspend by brand – Gordon’s outspends Bacardi in 2008
Figure 33: Top 10 leading advertisers on gin, white rum and other white spirits, 2004-08
Marketing themes
Disparate themes emerge in gin marketing
Heritage the key focus for rum
Government campaigns
Channels to Market
Key points
Volumes fall despite off-trade gains
Figure 34: UK volume sales of gin, white rum and other white spirits, by channel and outlet type, 2006-08
Value suffers in on-trade
Figure 35: UK value sales of gin, white rum and other white spirits, by channel, 2006-08
On-trade
Pubs and bars feel the recession
Off-trade
Supermarkets: An increasing majority of volume sales
Independent grocers hold onto share
Off-licences struggle to compete with supermarkets
Travel retail
Premium growth propels white spirit sales
The Consumer – Consumption and Frequency
Key points
Gin consumption
A stable consumer base
Figure 36: Trends in gin consumption, 2004-08
Gin has an older, but affluent, constituency
Figure 37: Trends in frequency of drinking gin, 2004-08
Young, in-home drinkers offer potential
Figure 38: Trends in drinking gin in and out of home, 2004-08
Branded monopoly
Figure 39: Trends in banded vs. own-label gin consumption, 2004-08
White rum consumption
Marginal drop in consumer base for white rum
Figure 40: Trends in consumption of white rum, 2004-08
Widespread appeal of rum
Targeting young AB women
Figure 41: Trends in frequency of drinking white rum, 2004-08
Figure 42: Trends in drinking white rum in and out of home, 2004-08
Branded not gaining ground
Figure 43: Trends in branded vs. own-label white rum consumption, 2004-08
Appendix
Consumer research
ACORN
Advertising data
Abbreviations
Appendix – Market Environment
Figure 57: Drinking lifestyle statements, by gender and age, 2008
Figure 58: Health lifestyle statements, by gender and age, 2008
Figure 59: Lifestyle statements on expensive tastes, by gender and age, 2008
Figure 60: Structure of the UK adult population (18+), by age, 2003-13
Appendix – Consumption and Frequency
Figure 61: Gin consumption, by demographic sub-group, 2008
Figure 62: In-home gin consumption, by demographic sub-group, 2008
Figure 63: Out-of-home gin consumption, by demographic sub-group, 2008
Figure 64: White rum consumption, by demographic sub-group, 2008
Figure 65: In-home white rum consumption, by demographic sub-group, 2008
Figure 66: Out-of-home white rum consumption, by demographic sub-group, 2008

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By sector: Spirits, Rum (in Spirits), Gin (in Spirits)

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