Spirits deliver the bulk of BWS growth
Spirits are driving 0.9% value growth in the £15.8 billion off-trade BWS market (Nielsen, year to April 23, 2016) and, while alcohol consumption is in long-term decline, “quality is winning over quantity”, according to a leading supplier.
In its 2016 market report, which covers the 60,000 off-trade outlets in the UK split between the grocery and convenience sector, William Grant & Sons said the BWS market has grown by almost £146 million in the past year.
Two-thirds of that growth has come from spirits, with sparkling wine the other growth driver.
Wine remains the largest BWS off-trade category with £5.4 billion in sales and a 34.2% share of the market. The onslaught of bubbles is continuing, with Champagne and sparkling wine remaining the fastest growing category, up 13.8%. This has been driven by a surge in shopper numbers, up 19.4%.
Spirits now account for a quarter of all BWS spend with the largest categories continuing to be blended whisky and vodka, which account for almost half of value sales. The fastest growing categories within spirits are flavoured and spiced rum (up 13.1%) and gin (up 9.9%).
Grocery is the largest part of the BWS off-trade market, boasting £12.1 billion in value sales and a 76.6% share of total value, the report said.
The growth of both spirits and sparkling wine has helped to drive an additional £64 million in sales for the grocery sector. Spirits are up by £61 million at the multiples, driven by 53% incremental sales of gin. The fastest growing category at the supermarkets is sparkling wine and Champagne, up by 13.2%.
The report said: “Value sales growth is driven by shoppers purchasing more frequently and more shoppers entering the spirits sector.”
The trends change when looking at the 47,000 convenience stories in the UK.
This sector continues to grow ahead of the overall grocery market, with sales up 2.2% to £3.7bn.
Beer is the largest category in convenience, accounting for 30.6% share and enjoying
a larger proportion of sales compared to the other channels.
As with grocery, Champagne and sparkling wine is the fastest growing category, up 17.9%, driven by sparking wine (excluding Champagne), which is up 30.1%. Spirits are worth 23% of BWS in the convenience channel, with sales of £853 million.
This sector continues to see growth, up 5% ahead of the total market.
Despite all the focus on other spirits such as gin, it is vodka and blended whisky that account for more than two-thirds of all convenience spirit sales.
The report says there are now 3,000 wholesalers in the UK. Sales into independent and convenience retailers are down 0.6% and represent 51.5% share of total wholesale.
Meanwhile, online alcohol sales are expected to grow 13% in 2016 compared to the previous year.
Rita Greenwood, William Grant managing director for UK and Ireland, said: “As attitudes towards drinking continue to evolve and premium spirits become a wider set of experience and social occasions, it is essential that brands adapt if they are to remain relevant with today’s discerning consumers.”