Adding value. That is this year's buzz phrase in the drinks trade, and Scotland is taking that on board with new formulations, promotions and the over-ice message.
Scottish & Newcastle continues to top the list of the top food and drink companies in Scotland and it is the UK's leading beer and cider producer. Its sales grew again this year through a variety of initiatives with its beer and cider brands.
The company is working with retailers to add value to the beer and cider categories, creating excitement in the aisles with new partnerships and creative thinking, says Craig Clarkson, head of off-trade customer marketing.
"We have done some innovative marketing with products such as Jacques, Bulmers Original and Foster's Twist," says Clarkson. "We launched a partnership between Bulmers Original and The Ice Company to produce dual-branded bags of ice because this stimulates incremental purchase and trial of brands.
"New pack formats, an 'over ice' message and new in-store siting solutions for beer and cider have all helped to add value and growth to these categories in the past year."
Scotch whisky continues to be a big draw for consumers and sales are helping to drive the alcoholic drinks sector in Scotland. "It's an exciting time for Scotch whisky," says David Williamson of the Scotch Whisky
Association (SWA). "Record exports and investments are leading to a new confidence in the future prospects for malt and blended products."
Nine out of every 10 bottles of Scotch are shipped overseas and 2006 was a record year for Scotch whisky exports, which rose 4% to £2.5bn, says the SWA. This represents a quarter of UK food and drink exports worldwide.
Whisky accounts for 13% of Scotland's exports, excluding oil and gas, and two thirds of Scottish food and drink exports. More than 41,000 jobs depend on the whisky market's continued success, and the good news is that producers are confident the market will remain in growth.
Export market growth is broad-based with traditional markets such as France and the US remaining buoyant, while newer markets such as China, Venezuela, South Africa, India and Brazil are developing fast. China has been a particularly strong growth market, due to a growing trend of mixing it with green tea.
The UK market remains the industry's third largest in volume and accounts for about 10% of total sales. According to Williamson, the home market has been challenging in recent years, but greater investment in marketing and the influx of premium products is attracting new drinkers.
The whisky market is split roughly 80% off-trade, with the large retail outlets taking the lion's share, and 20% on-trade sales. The larger producers, such as Diageo Scotland and Chivas Brothers, are listed within the top five of Scotland's leading food and drink companies, but smaller whisky producers are also tapping into demand for premium and niche products.
"There is a lot of innovation in the industry, with new finishes, cask-strength releases and the re-emergence of blended malts offering different choices," says Williamson.
Gordon & MacPhail, which describes itself as the "world's leading malt whisky specialist" and offers more than 300 presentations of single malts, says demand is excellent across its ranges.
"Our key drinkers range from novices to experienced, discerning whisky drinkers," says MD Ian Urquhart. Sixty per cent of its sales go to export markets and the remaining 40% stay in the UK.
The company's latest acquisition, the Benromach Distillery, which is the smallest working distillery in Speyside, is the first to produce an organic single malt. The product won the supreme title in the 2007 Scottish Food and Drink Excellence Awards, sponsored by The Grocer. "The publicity generated a lot of interest and sales of the Benromach range have increased dramatically in the past few months," says Urquhart.
Gordon & MacPhail is launching nine new products this year, including a Benromach Peat Smoke (46%) and a Rare Vintage Strathisla 1957. n
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