Alcohol: Spirits & RTDs: spirits surge by £150m as prices grow

Brits are glugging the hard stuff like never before, having knocked back an extra four million litres of supermarket-bought spirits in the past year. In fact, spirits’ £152.3m growth is the greatest gain of any booze sector.

Average prices are up 1.9%, driven by a combination of premiumisation and duty. “The duty increase is driving most value growth,” says Nielsen client business partner Helen Stares. “But it’s also because more shoppers are moving towards premium products, which tend to have a higher abv, so in turn command higher rates of duty.”

And so deals are changing. Litre deals are still crucial for mainstream brands, but the £15 price point is becoming harder to maintain. Tesco is now selling litre bottles of Grouse, Gordon’s (the two fastest growers of the year), Smirnoff and others for £16. Nielsen also notes growing use of deals on the standard 70cl format, particularly for more premium brands such as Jack Daniel’s and Bombay Sapphire. Both are now on deal at Tesco for £15/70cl and so are yielding £5.43/litre more than Grouse or Gordon’s.

Breaking the reliance on litre deals, particularly in the build-up to Christmas, will help drive future value growth, says Pernod Ricard commercial director Chris Ellis. “If you go to a store you might be hit by a gondola end of litre deals on standard spirits, walk down the power aisle and be hit by another one,” he says. “You might have come for premium or cocktail ingredients, but you end up not making it to the spirits aisle. It’s having an impact on consumers’ ability to trade up.”

Still, many are trading up. All of the big four have upped their craft (particularly gin) ranges. Hendrick’s and Kraken have jumped by a third; Grey Goose is up by a fifth. In spite of falling prices in the mainstream (Grouse’s success is partly down to it undercutting Bell’s by 60p/litre), standard brands are still contributing to this pattern with pricier spin-offs. See Grouse Mellow Gold’s 63% growth or Gordon’s new pink gin (below) for proof.

Prices are also up in RTDs as market-leading alcopop WKD flounders and pricier premixes grow. Gordon’s G&Ts are up £5.9m combined; Jack Daniel’s & Cola has added £2m. Such products typically carry a 50% premium over alcopops such as WKD or Hooch. Format is significant, with all of the three top 10 RTDs in decline relying mostly on bottles rather than the trendier can. “Cans are now established as a premium format,” says Diageo off-trade sales director Guy Dodwell.

As they’re easier to cool, carry and dispose of, cans have practical benefits, too. “C-stores are disproportionately important to the way RTDs are consumed - ordinarily soon after purchase,” says Stares. WKD, take note.

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Gordon’s Pink Gin by Diageo

Who said pink was just for girls? Gordon’s Pink launched late in the year to a palpable explosion of enthusiasm, and has already amassed over £3m in value sales largely from limited distribution. Now it’s moving into a wider range of stores, with listings in Sainsbury’s, Morrisons and Tesco. Diageo is hardly the first to spot the potential in pink - premium brands like Pinkster have been in growth since the gin boom began - but it’s the first to do it at an accessible price point.