Pernod Ricard urges premium spirits push at Christmas
The convenience channel is missing a trick on premium spirits and should use Christmas 2014 to catch up with the grocers, according to a leading supplier.
Pernod Ricard said 30% of spirits sales in supermarkets are premium – which it defines as 20% above average, starting now at £15.66 – but that figure stands at just 18% in the impulse channel.
Chris Shead, off-trade channel director at Pernod Ricard UK, told OLN: “It’s interesting to observe the growth of the premium spirits market over the past five years. In the multiples it’s gone from 25% to 30% of the value. In the impulse channel it’s gone from 16% to 18% so it’s only grown 2%. There’s a bit of a lag in impulse and it needs to catch up and we want to help.
“In the impulse channel retailers make sure they get entry level right and make sure they are competitive at the lower end. That’s important but only for a certain segment of your shopper base and increasingly with the trend towards more people shopping in the impulse channel they are getting a broader demographic in their stores and there is an opportunity to drive premium spirits.”
Shead believes Christmas is the perfect time to address the issue by encouraging retailers to make off-licences more festive and easy to shop, and improve ranging to help trade shoppers up to more expensive bottles.
“There is a whole move towards premium at Christmas,” he said. “Throughout the rest of the year £1 in £5 is spent on premium. In the 12 weeks to Christmas that goes to £1 in £4, and in the week before it changes to £1 in £3. People like spending more on gifts and hosting. People like to buy a nice malt whisky or gin, something better than they normally buy because they are on show.
“Retailers should really understand just how dynamic growth is in premium. There’s a big gap between 18% [the amount of spirits sales in convenience are premium] and 30% [in the grocers]. Four years ago the gap was 8% and now it’s 12%.
“Over Christmas 50% of wine sales in convenience are premium. It’s only 22% in grocery. It is a massive asymmetry, but it shows the convenience channel can do premium.
“Make it easy for people to shop the category.
“With shoppers increasingly looking to trade up over the festive period there is a great opportunity for retailers to seize the opportunity to match the success of premium spirits in grocery this Christmas.
“To put this in perspective, creating a 30% share for premium spirits in impulse would equate to £13 million of incremental sales, so the opportunity is massive.
“We would particularly urge retailers to seize the opportunity to grow sales of premium vodka and premium blended and malt Scotch whiskies, where we expect demand to be particularly high.”
Shead added that retailers can look forward to plenty of limited-editions and gift packs from a portfolio that includes Chivas Regal, Jameson, Absolut, Jacob’s Creek, Campo Viejo, Brancott Estate, and Perrier-Jouët.
Pernod Ricard UK has designed the following five-step guide to help retailers push premium spirits:
Meet the ‘Trade-Up’ Need
- More ‘on-show’ occasions take place at Christmas than any other time of year
- Ensure there is a Premium option across all spirits to avoid any missed sales opportunit
Make Christmas Special
- 20% of non-shoppers say they would buy spirits in Impulse if events were made more of
- Drive that sense of occasion at the fixture with seasonal POS and inspirational drinks ideas
Keep it Simple – Make it Easy
- Behind the counter makes browsing difficult in Impulse – shoppers say “pricing is hard to read and offers unclear”
- Make the range and offers more visible and help shoppers reach a decision before the till point
Christmas Time is Party Time
- Hosting or attending ‘at-home’ parties means an increase in Premium+ spirits purchasing
- Drive visibility through enhanced Premium ranging and full availability during the Christmas party season
Drive Gifting in Spirits
- Shoppers tell us Premium spirits are an ideal gift and often a last minute impulse purchase
- Focus on gift packs to drive incremental sales and make it even easier for shoppers with gift bags