In Focus | Stocking up for Xmas: Festive alcohol

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With pubs and restaurants shut, home bars and beer keg machines were all the rage during lockdowns as many consumers turned to home drinking. They could be coming in handy again this festive season as cost-of-living concerns and the FIFA World Cup give another boost to domestic consumption.

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This Christmas – immediately preceded by the biggest global sporting extravaganza of 2022 – will be the first in three years free from restrictions on, or advice against, social gatherings. Among the growing product areas retailers should focus on are premium world lager, craft beers, Prosecco, flavoured vodka and tequila.

Affordable treats

Despite rising energy, food and fuel costs causing shoppers to be more careful where they spend their money, many will still be looking for affordable treats, particularly at Christmas, believes Chris Shead, off-trade channel director for Pernod Ricard UK.

“During tough economic times, people still choose to purchase little luxuries to treat themselves, and wine and spirits is an area where people traditionally spend more to treat themselves or others,” he says. “The long-term premiumisation trend is a resilient one, with people drinking less, but better, and, as they do, engaging more with what they are drinking, paying more attention to wine pairings and enjoying more cocktails.”

This Christmas, in fact, is set to be the biggest in terms of alcohol sales, as friends and families come back together for the festivities, and with the first winter World Cup, according to Pernod Ricard, which is behind such brands as Absolut vodka and Jameson Irish whiskey.

The drinks giant says 45% of shoppers have expressed interest in watching the Qatar tournament with friends and family, making this Christmas “different to any other”. It also suggests that tipples other than beer – the drink usually associated with the beautiful game – will win fans this year.

While Budweiser is intrinsically linked to the FIFA World Cup 2022 as official sponsor of the event as well as the England men’s football team, non-beer brands are getting in on the action too.

Pernod Ricard has introduced a limited edition range of Jameson Irish whiskey, featuring five football shirt themed bottles, supported by a £1m media campaign including social media, public relations and in-store activity for the competition.

It advises retailers not to over-commit to beer displays for the World Cup and to invest instead in secondary promotional space for spirits and premium wine, which it says have better margins and will inspire incremental trade-up as well as offering gifting opportunities.

Seamless transition
In preparation for the four weeks of matches kicking off on 20 November, Westons Cider head of business development Darryl Hinksman says retailers should start from now, pushing for what the supplier forecasts will be record cider sales for winter.

Darryl Hinksman, Westons Cider

“By bringing forward any Christmas offers or advertising from mid- to early November, creating off-shelf displays and prioritising best-sellers such as our Henry Westons Vintage – which now sells one bottle every second – retailers will be able to capitalise on increased sales from the World Cup and see escalated sales transition seamlessly into the festive period,” he says.

Stocking up
With more shoppers on a budget this year, buying habits may change, with many stocking up early on good deals to spread the cost of Christmas, as well as seeking out price-marked packs, good value multi-packs and bag-in-the box wine. “There is still a lot we don’t know about the cost-of-living crisis and how this will affect alcohol sales,” says Miriam Thompson, off-trade category marketing executive at craft beer supplier BrewDog.

“As we saw with shopper habits during the pandemic, consumers tend to be brand loyal within beer and they claim to have traded down brands less in alcohol versus other categories, seeing it as a treat when they might be cutting back in alternative areas of their lives,” she says.
Larger six- to 10-packs can be a key way to appeal to consumers who are feeling financial strain, Thompson adds, as they often deliver more value than smaller packs or single cans.

She advises that promoting top-performing BrewDog Mixed, Lost Lager and Punk IPA multi-packs as part of a festive display will help encourage shoppers to spend more.

While craft beer four-packs are the most important format throughout the year – and, as with singles, should sit in the chiller – six- to 12-packs outperform the market in the two weeks before Christmas. Category share of these larger packs jumps from 17% at the end of November to 23% at the end of December, says BrewDog.

Additionally, with larger mixed formats popular among first-time buyers, convenience retailers should stock the BrewDog mixed 330ml can eight-pack, an exclusive for impulse and a key growth driver last year, the company suggests.

Premium lines
“The way we shop at Christmas is different to every other time of the year, with shoppers increasing their basket spend and shopping less frequently,” says Thompson. She points out that it is a time too when people want to try new things and are more likely to buy premium brands and varieties.

“The range and space given to stock all year round won’t cut it – highlight bigger formats and safeguard with higher stock levels to meet consumer demand – and make sure you have some chilled,” she adds.

In wine, where the biggest volume in convenience is in £6 to £8 bottles, Accolade Wines’ marketing director for Europe, Tom Smith, predicts there will still be an element of trading-up for Christmas.

“Overall, we are expecting shoppers to behave in different ways – to switch down to cheaper products or to reduce frequency and basket size. But we think where people can, they will try and make Christmas special – especially after months of limited spending,” he says.

“Christmas Day will see a greater emphasis on celebrating and treating. For some, that means trading up to premium options, while for others it may be an extra bottle of their everyday favourite.”

Price tiers
The trick, Smith suggests, will be to tier products according to price on-shelf and to push big brands such as Hardys, Echo Falls and Lambrini, alongside premium bottles retailing at £8 to £10. At the premium end, Argentinian Malbec should be included in any Christmas range.

Two thousand wine drinkers voted it the most popular festive red wine last year, followed closely by Merlot and Rioja, in a survey by Virgin Wines.

Adapting the range to Christmas favourites and chilling white, rosé and sparkling wine,as well as ready to drinks (RTDs), to appeal to people on the way to a gathering or wanting a bottle to consume immediately, will keep customers on-side, says Charles Overin, head of marketing, brand and insights at Kingsland Drinks.

“Sparkling always over-indexes at Christmas and between Christmas and New Year’s Eve, as well as Old World wines and classics such as Rioja,” Overin says, with wine from Bordeaux, Chablis and Champagne traditionally doing well over the festivities.

“Prosecco sales are always strong and rosé Prosecco in particular has performed well over the last two Christmases,” he adds. “We are confident Christmas will be a key period for cans too,” says Overin, pointing to Vin Crowd wine spritzers and Mix Up gin and vodka-based drinks as likely beneficiaries.

“Canned alcoholic drinks are perfect for this time of year, especially among younger generations who prefer a casual, accessible, affordable and fun drink. They’re portable, can be consumed directly from the can, and can be disposed of and recycled easily.”

Other suppliers are challenging convention in the wine market with bold brands, more-approachable taste profiles and innovative marketing to attract the younger adult drinker. Examples are Jam Shed, 19 Crimes and, making its Christmas debut this year, Cali by Snoop, a partnership between the American rapper Snoop Dogg and Treasury Wine Estates.

Heritage brands
Larger packs “catering for moments of togetherness” will be key for cider during the festivities, says Darryl Hinksman, head of business development at Westons Cider. “Occasions such as Christmas, when people come together to have a drink and celebrate, provide great sales-boosting opportunities for the cider sector,” he adds, with shoppers turning to traditional heritage brands that they trust.

These include Henry Westons Vintage, which is available in four-, six- and eight-packs. Westons Cider’s largest format, the Stowford Press 10-pack, has been growing strongly, while the cider brand’s price-marked packs of four-pint cans are a good opportunity for convenience, Hinksman maintains, where pints account for a 7.4% share of canned cider sales, compared with 3.8% in the total market.

Pack formats
“Having a variety of pack formats clearly visible and accessible in-store is a great way to drive profits in the run-up to Christmas, when people will be stocking up to cater for different taste preferences in advance of friends and family gatherings,” says Hinksman.

He suggests it is a myth that cider is just a drink for the summer months. “While it is true that some sub-sectors of cider, such as fruit cider, are more heavily influenced by good weather and seasonality, that is just not the case for many of the more-traditional apple serves, especially during the festive season,” he says.

Thatchers Gold

Thatchers Cider concurs and maintains its Thatchers Katy light sparkling cider in 500ml bottles is perfect for Christmas celebrations, served in a Champagne flute, and will appeal to customers “looking for an interesting and innovative alternative to Prosecco”, especially when stocked in the chiller.

With a third of shoppers only buying cider in cans, it is important for retailers to stock both bottles and cans, says Aston Manor Cider, with its Frosty Jack’s and Crumpton Oaks Cider available in both formats.

While promotions are important, says the supplier, chilling cider ready to drink plays a stronger role than retailers might appreciate. For impulse purchases, the fact that it is sold cold is often a greater consideration for shoppers than price, Aston Manor adds.

Ralph Amos, national account manager, off-trade, Greene King

Stocking premium alcohol will allow retailers to have a foot in the door of the gifting market, with 60% of shoppers expected to give alcohol as a present this Christmas and 40% looking to treat friends and family despite economic pressures. So says Pernod Ricard, which has many brands that it says tend to do well as gifts, including Chivas 12 Scotch Whisky and Jameson Black Barrell Irish blended whiskey.

In wine, Kylie Minogue branded Prosecco rosé in heart-embossed bottles, similar to those used for Freixenet Italian sparkling rosé and Prosecco, are strong gifting contenders for Christmas. Having been launched in November 2021, the bottle featuring the Australian superstar’s name is now the biggest-selling Prosecco rosé in the UK market, says supplier Benchmark Drinks.

Adult stocking-fillers is another opportunity, with craft ales such as Shepherd Neame’s Christmas Ale, Otter Brewery’s new Otter Claus dark ruby ale, and Greene King’s Old Speckled Hen and Abbot Ale among the contenders. “Perfect as a gift, Old Speckled Hen over-trades at Christmas and drives the ale category at this time of year,” says Greene King’s national account manager for the off-trade, Ralph Amos.

❚ Thatchers Blood Orange Cider, available in 500ml bottles and 440ml cans, is described by its supplier as the biggest cider launch in the off-trade for 2022, adding more value to the category than all other launches in the sector this year combined. Blood orange is the biggest flavour trend across alcohol, with Beefeater Gin, JJ Whitley vodka and Beavertown IPA among other brands on board. Thatchers is taking the concept into at-home cocktails with online recipes for a Blood Orange Spritz and a Marmalade G&C.

Thatchers Blood Orange Cider

❚ A new fun way to enjoy Jägermeister is being pushed by the supplier of the herbal liqueur: chilled down to -18°C in the freezer. Manufacturer Mast-Jägermeister says Jägermeister is the UK’s favourite shot brand in the off-trade in December, with 45% of sales taking place in the 12 weeks up to New Year. It has launched an “ice-cold” on-pack promotion, with 500,000 bottles featuring heat-sensitive labels with a secret code that becomes visible when reaching the perfect serve temperature, linked to more than 1,500 prizes.
❚ In cocktails at home, there was a lot of interest in making hot toddies last Christmas, according to Pernod Ricard, and while not a new concept, they might gain ground this year as we try to keep warm with the heating turned down. Retailers can encourage interest with creative displays for Baileys Original Irish Cream with hot chocolate, warm mugs of Brother’s Toffee Apple cider, and Kopparberg Spiced Apple.

Orie Lawrence, national account executive, Brown-Forman

Sandra Brunet, marketing director, Campari Group UK

In the run-up to Christmas, entrepreneurial retailers are readying themselves for an anticipated uplift in sales of bartender-quality cocktail ingredients such as syrups, fruit purées, just-add-alcohol cocktail cartons, and flavoured spirits.

Products from Funkin Cocktails and Monin, as well as flavoured spirits such as AU, Cîroc and Smirnoff vodka, are popular choices for retailers, with some even stocking shakers and stirrers to give shoppers the complete bar experience. Tequila – not just drunk as a shot with a lick of salt and suck of lime – is also benefiting in the off-trade from the at-home cocktail-making trend.

“Tequila is on fire and premiumising,” says Orie Lawrence, national account executive at Brown-Forman, which is responsible for the El Jimador tequila brand.

In fact, sales of tequila doubled in value in the off-trade versus two years ago, according to market analyst NielsenIQ. A big part of this is that 65% of UK spirits drinkers prefer the Mexican liquor in cocktails such as a margarita or Mexican Mule, rather than as shots, says Brown-Forman.

While at-home cocktail making peaked during lockdowns, the appetite for self-mixed drinks remains high, says Pernod Ricard. As part of this, it says hot toddies saw the “greatest evolution” during the Christmas period last year.

Spritz and Espresso Martini were also popular cocktails, it says, and this November it is launching a YouTube channel with mini tutorials on how to make these and other most-searched winter cocktails, including an Absolut and Kahlua Espresso Martini, and The Glenlivet Hot Toddy.

Associated branded content will also be available to retailers for use on Facebook, Instagram and Twitter to educate and inspire shoppers before they even enter the store, helping to drive cocktail ingredient sales.

Creating a bit of in-store theatre with ingredients for specific cocktails merchandised together is effective in encouraging multiple purchases, says Sandra Brunet, marketing director at Campari Group UK. “As consumers look to make their celebrations stand out, retailers should encourage their customers to mark the occasion with premium sparkling drinks,” she says.

“This should not be limited to the traditional Prosecco or Champagne offerings”. Instead, she suggests retailers give guidance on how to “elevate sparkling wines into sophisticated serves”, by adding Aperol, for instance, or other flavoured liqueurs to help increase in-store spend.

“The Aperol spritz is the perfect way to encourage consumers to enjoy Prosecco in an alternative way – combining three parts of Prosecco with two parts of Aperol, one part of soda water, and a slice of orange for garnish, to create a simple but iconic serve,” she says.

Meanwhile, wholesaler Bestway predicts ready-to-drink cocktails, such as the Kopparberg Cocktail Collection cans introduced in the spring, will do well for Christmas this year because they are “hassle-free” and allow consumers to experiment without having to shell out on more costly bottles of spirits.

Also taking the guesswork out of cocktail making, the line-up of flavoured Essences premium Grey Goose vodka will be seeing its first Christmas this year with Bacardi-Martini aiming the just-add-soda-and-ice spritz style drinks at the rise in home cocktail making. With their lower 30% ABV, they also appeal to modertors.

Top tips for displaying alcoholic drinks this festive season include:
❚ Retailers should explain cost per serve in recipes either displayed in-store or on social media, to highlight savings made by drinking at home. Having a strong online presence to engage with customers will drive visits to your store.
Pernod Ricard UK
❚ Food and wine pairings increase in popularity at Christmas, so include communication about taste on shelf-barkers to help shoppers make an easy choice in-store.
Accolade Wines
❚ Sampling, merchandising with party food, and festive cocktail suggestions will help get customers into the Christmas spirit.
Thatchers Cider
❚ Hold regular staff tasting sessions, especially when new stock arrives, encouraging everyone to take notes that can be passed on to customers in the form of advice. Some suppliers, including BrewDog, can provide background and tasting notes.
BrewDog

Tom Smith, marketing director, Europe, Accolade Wines

Chris Milton, off-trade sales director, Thatchers Cider

An increase in those doing alcohol-free Dry January – with 19% of adults participating to some extent in 2022 – presents an opportunity for retailers to get behind no- and low- alcohol. A record number of no- and low-alcohol products will be bought this Christmas, says Tom Smith, marketing director for Europe at Accolade Wines, as consumers, and particularly younger adult drinkers, choose to moderate their alcohol intake.

It is important, he says, that retailers have confidence in including alcohol-free in their drinks ranges, not least because of improved formulations winning over sceptics who had been turned off by negative perceptions of the past. He says Accolade’s new launches, &then and Hardys Zero, give people who are moderating their alcohol consumption a selection of “truly high-quality, zero-alcohol alternatives that showcase the flavours and characters of full-strength wine”.

Brothers Drinks Co, which last year introduced Toffee Apple Alcohol Free cider, agrees that it is important to offer choice, with 20% of cider drinkers saying that they would like to see more options in the ‘low and no’ alcohol sector.

But today’s moderate drinker will have other considerations than simply abstaining altogether. Half of those taking part in this year’s Dry January, for instance, started out intending to cut down, rather than shunning alcohol completely.

“Drinking less, but better, has been one of the stand-out trends to hold firm over the last few years,” says Chris Milton, off-trade sales director for Thatchers Cider, pointing to the supplier’s premium Thatchers Gold, Thatchers Haze, and the new Thatchers Blood Orange, as well as its alcohol-free cider, Zero.

The new generation of moderate drinkers will also be looking at labels to seek healthier options.

Lines such as the 4% ABV Heineken Silver, although not a low-alcohol beer, have a lighter drinking profile and might appeal to the mindful drinker, as might Strongbow Ultra Dark Fruit cider, with 30% fewer calories than its original version.

Stocking perry, often perceived as a lower-ABV alternative to wine, says Aston Manor Cider, can also give consumers wanting to moderate alcohol more choice. Its new-look Chardolini, it says, is ideal as a relaxing drink with friends.

Competitor Lambrini, with a 60% share of the perry category, has been reinforcing its status as a celebratory drink with its “Bring the Brini” social campaign partnering this year with former party girl, celebrity Denise Van Outen.

Talwinder Singh, owner, Nisa Local, Mansfield, Nottinghamshire

Draft keg machines, which became popular in homes during lockdown, are likely to be put to good use in the run-up to Christmas for get-togethers and as a cheaper alternative to enjoying a pint in the pub.

Retailer Talwinder Singh, who owns a Nisa Local in Mansfield, Nottinghamshire, is set to benefit as he has about 15 to 20 of the kegs from supplier Beer Hawk stocked in a four-metre display at his 650sq ft store.

The six-litre kegs in big brands including Stella Artois, Stella Artois Unfiltered, Löwenbräu, Budweiser, Innis & Gunn and Tiny Rebel Pineapple Express IPA, give the business profit margins of between 15% and 17%.

They also have the benefit of customers not only seeking them out in the store in the first place, but returning to drop off empties, says Singh, who finds that generally sales pick up during holiday periods.

“They are year-round sellers. And with the football and the cost-of-living crisis, it is something we expect to do well in the run-up to this Christmas,” he says.