Category Guide: Seasonal Alcohol

Lee Graham reveals how wholesalers can boost sales of alcohol as the party season approaches

According to researcher Him!, the beer and cider category is the sole reason why 13% of retailers visit wholesalers. What’s more, once in-depot, up to 40% buy beer and cider, making it the number one purchased category in cash & carries. At seasonal times of year, sales are only likely to increase. Indeed, alcohol is second only to dry groceries in terms of cash generation over the holiday season, with an 11% share of stores’ total income.

There has been a raft of innovation in beer and cider in recent years, but according to Heineken, focusing on core brands is key. Craig Clarkson, category & trade marketing director – off trade at Heineken, says: “While we are seeing growth from premium brands and emerging sub-categories, they remain relatively modest in comparison to the core brands that are driving total cider and beer performance – the top 10 brands account for more than half of all category value sales. In the case of our own portfolio, it is market-leading brands like Foster’s and Strongbow that represent the engine room of our business, and indeed the wider category.”

During Christmas 2013, cider did tremendously well, showing a huge increase of £9m compared to a more modest £2m growth in the beer category. Flavoured cider sales are currently up more than 50% year on year in the off-trade alone, which has been good news for the Brothers brand in particular.

Brothers’ managing director Matthew Showering says: “Cider is no longer a category lending itself purely to the sunshine. Brothers Toffee Apple Cider exemplifies this, selling 42% of its total annual volume between September and January.”

Showering’s view is supported by C&C Group, which recently introduced Hornsby’s, a US-style hard cider. Head of customer marketing Ed Shoebridge says: “Wholesalers shouldn’t underestimate the benefit to retailers of engaging and interesting products and point-of-sale at Christmas time, when customers are in celebratory mode and looking to have fun.”

But, he cautions: “Focusing on specifically seasonal products can be a risk. If consumers don’t buy, retailers are left with wasted stock when the festivities end. The good news is that brands and flavours that perform well throughout the year, such as Magners, are likely to see an increase during the festive period.”

In recent times, new flavours have been particularly successful for Baileys and Jack Daniel’s. Baileys Chocolat Luxe, which combines Baileys with real Belgian chocolate, was one of the five biggest winning brands in the grocery channel last Christmas, making it one of the most successful launches in Diageo’s history. In turn, the popularity of Jack Daniel’s Tennessee Honey means it is now worth £44.1m, making it the number one spirits launch of the past five years.

“Drinkers have become more discerning, demanding new flavours and experiences,” says Crispin Stephens, trade marketing manager at Jack Daniel’s. “There has been an increase in the number of consumers who are willing to trade up to premium brands.”

According to Freixenet, the sparkling wine category presents a huge sales opportunity for wholesalers, with the category now growing at 20% and worth £521m. It is also the fastest growing beers, wines and spirits category in both the on- and off-trade, and the only category in double-digit growth.

“Yet while 44% of adults drink sparkling wine in the UK, only 27% purchase it in the off-trade, highlighting a clear opportunity for wholesalers to help retailers convert consumers into shoppers,” says managing director Damian Clarke.

Pernod Ricard UK off-trade channel director Chris Shead agrees. “There have been great performances by premium wines and spirits over the past few years, but there have still been missed sales opportunities,” he says.

Low-alcohol beverages are also increasing popular. Building on the success of Foster’s Radler, now the UK’s bestselling lower ABV lager, Heineken has introduced two variants: 2% ABV Foster’s Radler with Lime and Ginger and a 0.0% ABV original Foster’s Radler.

Continue reading for on-trade and retailer viewpoints


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