UK drinkers are falling out of love with whisky and turning to vodka instead, according to a report out today. This trend is not unique to the UK.  Sales of pastis in France and vodka in Russia are falling, as people switch from traditional spirits to more expensive and exotic alternatives.

The report, from independent market analyst Datamonitor, estimates that the UK spirits market is now worth just over £9bn in 2003, with the average Brit drinking 3.7 litres of spirits and spending £152 per head. 

But like the rest of Europe, consumption is stagnating and sales are showing very gentle growth, growing at just 2.2% annually. The market is expected to grow at more or less the same rate in the next four years, and it is forecast to reach £10.2 bln in 2008.
In the UK, whisky is the biggest category. The average Briton drinks 1.2 litres (a little over a bottle and a half) of whisky every year, accounting for very nearly a third of overall British spirits consumption. But this market has performed badly in recent years, with sales of blended Scotch whisky - the cheapest, and best-selling, whisky category - consistently falling. Although sales of single-malt Scotches and American whiskeys have made up some ground for the category overall, the general picture has been one of decline.

Vodka, conversely, is not historically popular in Britain: UK sales were negligible until the 1960s - yet vodka sales are now almost as high as whisky sales, at 1.0 litre per person. Datamonitor expects the gap to have narrowed to less than 0.1 litres by 2008, as vodka continues to grow while whisky stagnates.
"British people consider vodka and light rum more palatable in mixed drinks or cocktails, whether at home or in the bar - and they are averse to the sacrilege to mixing whisky with cola or lemonade," says Datamonitor drinks analyst John Band, the author of the report. "But while it is easy to say that whisky is in decline because it has an 'old-man'-ish image and doesn't mix well with other drinks, that is not quite the whole story."
The situation in vodka's home country, Russia, is the mirror image: vodka sales have been declining year-on-year, as people switch to drinks such as beer, which are perceived as healthier - indeed, beer is generally considered a soft drink in Russia. Although vodka's dominance of the Russian spirits market is still dramatic, with vodka still accounting for well over 90% of the market, smaller (generally imported) categories such as whisky have shown extremely strong growth over the last five years.
There is a similar trend in France, where whisky sales have been rising year-on-year while sales of the country's traditional drinks of anis and pastis have been plummeting. Whisky sales in France are now running at 1.7 litres per person, ahead of the UK, while anis and pastis sales are down to 2.1 litres. By 2008, the gap is forecast to narrow: Datamonitor expects whiskey consumption will continue at around 1.7 litres, while anis and pastis consumption will fall to around 1.8 litres per person.
"The French not only now drink more Scotch than the Scots, but are on track to drink more Scotch than they drink brandy or pastis. It is clearly not the case that marketing whisky to new consumers and making it look cool is impossible - it is just hard to do in Britain," says Band.

It would be a mistake to make spirits marketing efforts too focused on young drinkers, however, the report warns. Across Europe, the largest group for spirits drinkers is the over-55s: they account for 48% of consumption in Germany, 46% in the UK, 40% in Sweden, 38% in Italy, and 37% in France. In most cases, the 45-54 age group is the next largest, accounting for another 15% of consumption in the UK.
As well as accounting for more than half of spirits drinking, the 45+ age group is also among the fastest growing in terms of spending power. In the UK, the spending power of the average 50-64 year-old is forecast to rise at 1.7% a year for the next five years, compared to just 1% for the average 25-49 year-old. Similar trends can be seen in Spain and the Netherlands, while incomes in Germany and France are expected to keep pace with the average.
"Winning over some young adult drinkers from FABs (alcopops) and beer is a good way for certain spirits brands with a clear 'cool' ethos to grow.  It has worked for Bacardi in the UK, and for J&B's Scotch in Spain," says Band. "But it is not necessarily the best way to make money from spirits. Over-45s have increasingly more cash to spend on drinks - and are rather less likely than younger age groups to go in for Friday and Saturday night binge drinking."
"To target older consumers, marketers need brands that have a strong quality perception - but that avoid the stuffy image that have damaged gin and whisky sales in the UK. People aged 50 rightly don't consider themselves old, as they might have done a couple of generations ago; so you need a brand that's cool but not obviously aimed at youth. This is why high-priced, high-quality super premium brands like Grey Goose and Tanqueray 10 have taken off over the last few years -and why we'll see many more such launches in the future."