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  • Insight: Why premium spirits are powerhouse of UK on-trade

    The spirits sector remains the powerhouse of the UK on-trade enjoying strong growth which would be the envy of the wine sector. What’s more it’s the health of the premium spirits category that is really driving growth, particularly in the burgeoning premium bars and clubs sector.

    The spirits sector remains the powerhouse of the UK on-trade enjoying strong growth which would be the envy of the wine sector. What’s more it’s the health of the premium spirits category that is really driving growth, particularly in the burgeoning premium bars and clubs sector.

    mm By July 28, 2016
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    The Buyer’s guide to the latest on-trade spirits figures from William Grant & Sons with a specific focus on style bars and clubs.

     

    78% of bars now have a cocktail list up from 66% the previous year
    78% of bars now have a cocktail list up from 66% the previous year

    Walk in to any bar worthy of the name these days and you’re pretty much assured you’re going to be greeted with a heaving cocktail list and an array of spirits half of which you won’t have seen before.

    The drinks industry might have its issues, but you won’t find much to moan about in the increasing number of style bars that are opening up the length and breadth of the country.

    You only need to look at the figures to see why bar operators, at least, are smiling on the high street.

    In the last year, according to the William Grant & Sons 206 Market Report, the total on-trade spirits market was up 6.3% to rack up £5.8 billion in sales at a time when wine sales are flat at best.

    In fact, spirits accounted for 61% of the growth across all beers, wines and spirits sales in the on-trade and now has a 24.2% share of the total spend.

    Much of that is being driven in bars and clubs which accounted for 49.6% of spirits value sales in 2015 and 50.5% of volume sales.

    What is particularly noteworthy is this growth is still being driven by sales and interest in premium spirits as drinkers see a night out as an opportunity to trade up, and enjoy a new experience or two.

    The premium spirit market, estimates William Grant & Sons, is now worth £808m up a whopping 19.7% in the last year. It is hard to find figures to compare anywhere else in the drinks world.

    Crucially value sales continue to grow well ahead of volume, further evidence the premiumisation trend is not slowing down.

     

    Vodka: number one

    smirnoff red label

    Vodka might still be getting a bad press, but the drinking public can’t be reading it as it is still the number one spirits category with sales up 5.9%, or £110.2m. Vodka now makes up in one in three drinks being sold in the on-trade, with 35% value share and 31.1% volume share.

     

     

    Gin: on the rise

    Gin might be the gift that keeps on giving but it is way behind with only 9.9% value share and 9.3% volume share of the market, but is growing 21.2% in value and 13.9% in volume, with £101.1m sales added to the category last year.

     

    Rum: all spiced and flavoured

    Sales of all types of rum are on the march, but particularly the seemingly never-ending array of spiced and flavoured rums on the market. The rum category increased by £37.7m in 2015, but is still a niche player with only 3.5% value share and 3.3% volume share of the overall market, although volumes were up 20%.

     

    Liqueurs:  non-cream please

    William Grant & Sons also singles out the performance of non-cream liqueurs in 2015, which increased sales by £31.2 million. The category deserves our respect as it second behind vodka with a 11.9% value and 12.4% volume share of the on-trade spirits market up 4.7% and 3.3% respectively.

     

    Where are spirits being sold?

    Now it’s not just trendy stylish bars that are driving all this activity. For although the William Grant figures show bars and clubs are the biggest segment of the on-trade, worth £2.9 billion, the fastest growing sectors for spirits is actually in hotels and restaurants where customers are turning as much to the cocktail list as they are the wine list.

    The Langham's famous award-winning Artesian bar
    The Langham’s famous award-winning Artesian bar

    Other key headline figures for bars and clubs:

    • There are now 124,000 on-trade outlets, of which spirits feature in 115,000, up 0.2%.
    • Spirits sales exclusively in bars and clubs comes to £2.9 bn up 3.4%.
    • This is up £96m in the last year.
    •  There are 48,000 bars and clubs in UK, down 0.3%.
    • Growth is being driven in food led outlets and openings, with 515 new food-led pubs openings and 145 new restaurants.
    • 70% of spirits sales came from four categories: vodka (32.4%), liqueurs and specialities (23.1%), gin (9.9%) and blended whisky (6.8%).
    • But in bars and clubs vodka, specialities and non-cream liqueurs account for 62.2% of value sales.
    • Gin saw an extra £44m in sales, vodka was up £43m and flavoured/spiced rum was up £20m.
    • 78% of bars now stock a cocktail list, up from 66% in 2014.

     

    Here’s the on-trade’s top 10 spirits brands.

     

    Top 10 (By Value) On-trade Spirit Brands

    1 Smirnoff Red Label

    2 Jagermeister

    3 Jack Daniel’s Tennesse Whiskey

    4 Gordon’s

    5 Bacardi Carta Blanca

    6 Captain Morgan’s Spiced

    7 Russian Standard

    8 Courvoisier VS

    9 The Famous Grape

    10 Bell’s Original

     

     

    Top 10 by Volume On-trade Spirit Brands 

    1 Smirnoff Red Label

    2 Jagermeister

    3 Jack Daniel’s Tennesse Whiskey

    4 Gordon’s

    5 Bacardi Carta Blanca

    6 The Famous Grouse

    7 Captain Morgan’s Spiced

    8 Bell’s Original

    9 Bailey’s Original

    10 Courvoisier VS

     

    Top 10 Spirits Brands (value) in bars and clubs

    1 Smirnoff Red Label

    2 Jagermeister

    3 Jack Daniel’s Tennesse Whiskey

    4 Gordon’s

    5 Russian Standard

    6 Captain Morgan’s Spiced

    7 Absolut Vodka Original

    8 Bacardi Carta Blanca

    9 The Famous Grouse

    10 Courvoisier VS.

     

     

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