A year to remember for the off licences

Legislation and shifting consumer preferences influence the market with MUP and the rise of craft both significant

 

LESLEY Ann Gray, strategic lead for Scotland at market research company Kantar Worldpanel – which provides the listing of the top 50 Scottish non-alcohol brands in Scotland and the Top 25 Scottish alcohol brands in Scotland – analyses the year for the leading Scottish brands in Scottish food and drink retailing

ALONGSIDE many developments in the alcohol sector in Scotland, 2018 will be remembered as the year when Minimum Unit Pricing (MUP) was introduced.

Although it’s too early yet to know whether MUP has been successful, early indicators are that it has had an impact on the market.

That said, it is difficult to separate this effect from the impact of the good summer which encouraged shoppers to stock up on drinks. Initial indicators show that while the alcohol market is in growth, the overall volumes purchased are in decline with some switching towards smaller packs.

What we are also starting to see is bigger differentiation between the performance of Scotland’s alcohol market and the rest of Britain when we look at volume growth for different drinks.

This time of year also sees shoppers trading up as we look forward to Christmas and New Year and as a result it is expected that MUP will have less effect on premium brands.

Over 80% of us bought alcohol on a deal in the last year, but promotions are now declining both in Scotland and the rest of the UK. At Kantar Worldpanel we know that although a third of all products are sold on promotion, only two thirds of these will drive incremental sales for the retailers.

Alcohol is one of the few categories where promotions are likely to deliver real growth. However, the percentage of alcohol sold on promotion has fallen, from 39% before the introduction of MUP, to 22% in the last 6 months.

This fall represents a challenge to both brand owners and retailers in terms of how to achieve growth through full price sales.

The good news is that brands are crucial to the take-home alcohol category, and are growing at seven times the rate of own label alcohol in Scotland, a figure which isn’t expected to change as MUP starts to bed in.

Brands are also growing faster in Scotland than the rest of UK. This growth looks set to continue, particularly in cases where MUP has eliminated the price differential between a branded product and the own label equivalent.

This year’s chart contains a rich mix of older and more established brands as well as reflecting the trends toward craft beers and gins.

Tennent’s remains the number one alcohol brand in Scotland, and continues to target new consumers. Famous Grouse and Glen’s vodka swap places for the number two and three slots respectively, with the whisky brand taking the top spirit spot.

As can be expected, whisky dominates, taking 18 of the 25 slots. The number one malt goes to Highland Park, with Tamnavulin from Speyside entering the chart at 15. Closely on the heels of Famous Grouse we have Whyte and Mackay and Grants in positions four and five.

Edinburgh Gin makes its first appearance at a very strong number six in the charts, with Hendrick’s also appearing for the first time at number 20. The gin category continues to grow as new brands and flavours come to market, as well as benefiting from the success of premium mixers, and it is expected that gin will continue to feature in future charts.

Like the of rise in popularity of gin, craft beer is represented by Innis & Gunn and Brewdog with the former getting the number nine slot having appeared at number 16 last year. Brewdog once again makes it into the top ten. Both companies continue to innovate in how they market their brands and appeal directly to consumers.

Our recent panel surveys have shown that the profile of drinking is changing, and people are becoming ever more aware of drinking responsibly.

The number of adults drinking in home and out of the home has decreased, putting pressure on brands to find new shoppers.

Looking forward to 2019, the brands that will retain their place will be those that focus on the motivations behind the occasions.

Which drink is chosen when depends on the consumer’s  needs at any given moment in time. If you know this, then you know what role your brand can play.

This is what drives differentiation and allows brands to see where there are gaps to grow into and attract new customers.

Top 25 Scottish take-home alcoholic drinks brands in Scotland

  Brand Rank 2018 Rank 2017 Moving up
1 Tennent’s 1 1  
2 Famous Grouse 2 3
3 Glen’s Vodka 3 2  
4 Whyte & Mackay 4 4  
5 Grant’s 5 6
6 Edinburgh Gin 6   NE
7 Bell’s 7 5  
8 McEwan’s 8 7  
9 Innis & Gunn 9 16
10 Brewdog 10 10  
11 Highland Park 11 15
12 Isle of Jura 12 9  
13 Glenlivet 13 12  
14 Drambuie 14 8  
15 Tamnavulin 15   NE
16 Glenfiddich 16 18
17 Laphroaig 17 17  
18 O.V.D 18 14  
19 Belhaven 19 19  
20 Hendrick’s 20   NE
21 Dalwhinnie 21 22
22 Talisker 22 23
23 Auchentoshan 23 20  
24 Glenmorangie 24 25
25 Cardhu 25 13