Consumers want greater variety and quality from their alcoholic drinks. Shireen Khalil looks at what is new, what is selling and what will be the hot trends of 2018.
Maximising sales on your core range and stocking the right profitable niche products are the main ways you can boost your alcohol profit in 2018.
British drinking culture is evolving, with consumers wanting variety and quality.
Ben Smith, head of corporate communications at Concha y Toro UK, can attest to this. He says that in white wines, there is a strong trend towards more aromatic grape varieties. “Viognier is one grape that has enjoyed fantastic growth over the past two years,” he adds. “Cono Sur Bicicleta Viognier is growing at around 22% by value and sells more than 50,000 9l cases in the UK each year.”
Meanwhile, Malbec, a red grape variety, continues to show growth in convenience retail: “Unusually for wine, it is bought more by men than by women, and has strong associations with meat, either barbecued or steaks,” Smith says.
More than 300 new breweries were launched in the UK last year, according to a report by the accountancy firm UHY Hacker Young, as a boom in craft beer sales encouraged new entrants into the market.
As a result, the number of breweries in the UK has risen above 2,000 for the first time since the 1930s.
The growing popularity of craft beer and higher prices for pints of beer has helped the top 50 bars and pubs across the UK post a 4% rise in year-on-year turnover in the 12 months to October, according to commercial lender Ortus Secured Finance.
Therefore, is is important to ensure that your business is on board the craft beer and cider train in 2018.
David Sheppy, managing director at Sheppy’s Cider, says that when it comes to stocking the right craft ciders and beers, brands with a story need to occupy a hefty share of shelf space.
“Discerning drinkers are looking for heritage, provenance and high quality,” Sheppy says. “They are also favouring genuine cider brands with a long history and expert knowledge.”
Sheppy’s has been around for just over 200 years and is a sixth-generation cider-making family.
“Knowledge and expertise has been passed down the generations to ensure our real cider is genuinely crafted the ‘proper’ way,” Sheppy says. “We recognised the trend for single-serve size to target responsible drinking. That is why we have just launched a new format – 330ml cans.”
Together with wine, spirits account for £21.1bn (53%) of the UK alcohol market, according to the Wine and Spirit Trade Association’s Market Overview report for 2016.
Accolade Wines, one of the UK’s bestselling wine companies, is adding a new flavoured vodka to its Echo Falls range, expanding its Fruit Fusions wine range with Summer Berries Vodka (37.5% ABV).
“We know that the Echo Falls consumer buys vodka on average 10 times a year, spending around £150,” says Echo Falls brand manager Laurence Hinton. “Our extensive consumer research showed a clear desire for a flavoured vodka from our consumers and because of its overwhelming popularity in the UK, Summer Berries was the natural choice for us.”
With packaging playing a fundamental role in helping boost sales and profit, Echo Falls has created a unique style with elegant pleating around the neck and the front label strongly featuring the iconic Echo Falls Fruit Fusion design.
“The back label is double-printed to maximise the brand presence on-pack,” Hinton says.
The alcohol category is tipped to attract more consumers in 2018 thanks to its ever-evolving variety. The key, it would seem, is to stock reputable brands with a solid back story, and to give bespoke brands and new flavours shelf space.
Our message is simple: ignore premium and you will miss out. We are seeing success in the on-trade, where premium accounts for 50% of all spirits sold, which tells us consumers are willing to spend more on premium spirits. In comparison, 18% of all spirits sold in the convenience and wholesale channels are premium, so it is about upping volumes to make the most of the obvious opportunity.
“Malt whisky experienced a strong uplift of 90% last year; however, only 51% of shoppers have a brand in mind when they enter a store. So, we have created ‘Expertly Selected Whiskies’ to help them navigate between brands and pick the right whisky for the right occasion or recipient.”
channel director for impulse, Pernod Ricard UK
“Our bestselling wine is Casillero del Diablo Cabernet Sauvignon, which IRI data shows is the UK’s bestselling Cabernet Sauvignon.
“Chile continues to be one of the countries of origin that wine shoppers really trust to deliver quality at an affordable price point. The brand is supported by a strong marketing campaign, including our partnership with Sky Cinema, and individual marketing plans for the main wholesalers and retailers.
“Casillero Cabernet sells for an average £6.74 a bottle in convenience, which is one of the highest among the leading brands, and means there is potential for good returns for wholesaler and retailer alike.”
Ben Smith, head of corporate communications, Concha y Toro UK
“Consumers are drinking less cider by volume, but better in terms of quality. Discerning drinkers are favouring smaller, traditional producers.
“At Sheppy’s, we have just launched a new canned range. This format for craft cider is making a return and is more popular than ever. Our cans meet the demand for premium products in a smaller 330ml serving size.
“Other advantages of cans include being easier for retailers to stock, as they are lighter and simpler to stack, and being more environmentally friendly as they have less of a carbon footprint. The drinks are available in VAT 14 – Premium Classic Cider, ABV 5%, and VAT 07 – Premium Cloudy Cider, ABV 4.5%.”
David Sheppy, MD, Sheppy’s Cider
“The best wholesalers create trends by working closely with sommeliers and the small independent retail community in their marketplace. Only these people can create significant demand nowadays. Trying to use marketing agencies has less and less impact, because more and more consumers now want ‘the real thing’ – wines and spirits that have been handcrafted by small artisans.”
Michael Sager, Sager + Wilde restaurant, London
“Margins tend to be squeezed in the off-licence category, especially spirits. From a merchandise point of view, it is good, but the bit that always tends to be a squeeze is the margin.
“Our bestselling category is beer, particularly the Stella Artois four-packs – from a volume point of view, they are the quickest-selling items, regardless of what trends are about.”
Spar Winford Ford, Bristol