The big challenge for independents is ensuring they take a decent share of this business at a time when multiple grocers traditionally use price-cutting on major drinks brands to drive footfall. Multiples tend to grab the major share of big shopping trips in the final weeks of the pre-Christmas period. Drinks suppliers warn that independent retailers should not try to compete head-on with multiples in terms of pricing, because it is a battle they cannot win.
They should instead concentrate on areas where they can enjoy success through putting the focus on premium wine, spirits, beer and cider – as shoppers are in the mood to spend more on special treats over the festive period. ‘Premiumisation’ is very much the buzzword this time around, because trading up is a factor across so many drinks categories as shoppers are in the mood for spending (even if they cannot afford it). There is also an opportunity for impulse outlets to put more focus on buoyant sectors such as craft beer, because they can stock single bottles of local beers, unlike multiples that are four-pack orientated.
Traditional favourites
There are many other opportunities scattered around the drinks fixture, including low-alcohol wine and no-alcohol beer as more shoppers become health-conscious. Other emerging categories that some convenience operators may consider worth stocking include pre-mixed drinks and cocktails. Of course, traditional categories such as spirits, port, sherry, liqueurs and sparkling wine also perform well at Christmas, so independents have to make sure they stock the leading brands in these categories if they can find the space, because these are the big volume-drivers. Alcohol is also heavily associated with ‘gifting’ and impulse retailers are well placed to maximise this by positioning gift tags and packaging close to the drinks fixture.
Social media is one factor that convenience retailers can harness in the weeks ahead to fight off the price-driven challenge of the multiples. Social media gives convenience operators an advantage over the bland, corporate identity of multiples, because they can personalise their offering and make it more relevant to local shoppers.
The desire to buy something more indulgent impacts on all drinks categories – from whisky all the way to beer and beyond – in the weeks ahead. Suppliers are also aware of this shopper trend and are catering for it with ever more indulgent brands. Diageo, for example, is adding the limited edition Black Raspberry to its Cîroc vodka range from 19 November. With a retail price of £39, it may only be relevant to a small number of convenience retailers with big-spending shoppers!
Premium brands
Pernod Ricard UK is also emphasising the premium opportunity with a £3m marketing push “to ensure shoppers are thinking about their alcohol choices before going into a store”. The campaign focuses on the company’s premium brands, Absolut, Jameson Caskmates, Plymouth Gin and Beefeater Pink. The company is urging convenience retailers to run a sales push from this month (November) to encourage take-up of premium lines. It claims retailers who can trade three shoppers into premium spirits every week during the period will make an extra £550 by the end of the year. Chris Shead, the company’s off-trade channel director, says: “This is a huge opportunity for retailers. They can get it right by doing three things: ensuring premium spirits get proportionately more shelf space than standards, increasing spend by advertising cocktails in-store and ensuring new products are listed to excite consumers.”
Premiumisation is also a factor in the beer category. Toby Lancaster, category and shopper marketing director at Heineken UK, says: “Premiumisation is an important ongoing trend, because 39% of shoppers would like to trade up to more premium products as a treat. Throughout the period, shoppers are often looking for something extra-special when browsing the aisles. November and December rank as one of the top periods for beer sales, presenting an opportunity to maximise sales when consumers are naturally spending more.
Strong range
“With 52% of beer and cider value sales sold over key seasonal periods, retailers should begin their Christmas preparation sooner rather than later, stocking up and ensuring that they have a strong range of core ciders and beers, as well as more premium options. Retailers should ensure these premium brands are displayed in prominent positions, either at the end of aisles or as part of larger displays.
“Many people will be entertaining and having parties over Christmas and will be looking for party snacks for their guests – so retailers should make it as easy as possible for them to pick up food and drink together. With the alcohol-free category being in huge growth, retailers should feature brands to harness additional sales from health-conscious shoppers. One in five UK adults is now teetotal, and over half of the top 10 bottled beers gaining the most distribution in the last year were alcohol-free.”
Costcutter’s “Bringing Christmas Together” festive promotional campaign includes national press and TV advertising, website support and point-of-sale for its retailers. Jenny Leetch, the company’s brand manager, says: “Beer, wine and spirits is a key driver for convenience retail throughout the Christmas season, with shoppers looking for something extra-special to treat their guests. This year, spirits are set to be the big sellers, with the trend for gin and whisky still going strong. Last Christmas, gin enjoyed a 33% increase in sales and whisky saw an 11% uplift.”
Wine is always a huge festive earner and sparkling varieties are heavily in demand, because they tap into the celebratory atmosphere. David Mallory, channel director at E&J Gallo, says: “Sparkling wines usually perform well at Christmas, as they are synonymous with special occasions and are great for parties. Barefoot Bubbly Pinot Grigio, which we launched last year, was a hit last Christmas and is a great option for the festive season.
“Shoppers are in greater need of alcohol products during this period for a variety of reasons, including family get-togethers, office parties and presents. As a result of this, they are more likely to be swayed by discounts, multi-buy offers and gift packs. Lower-alcohol options are a significant trend. The drinking landscape has changed, with more consumers, particularly millennials, becoming aware of the benefits of limiting alcohol consumption. For consumers looking to moderate their alcohol consumption, single-serve formats are also a useful option and a rapidly growing category in convenience.”
Andrew Nunney, category, shopper and insight director at Accolade Wines, agrees about the importance of premium shoppers. “Christmas offers retailers an opportunity to stock premium or trade-up options, because shoppers are on the lookout for more-premium wines to cater for festive events. Traditional convenience loses share the closer we get to Christmas, but last year sales grew overall and there are opportunities throughout the 12 weeks leading up to Christmas Day, so retailers should offer trade-up options of the most-loved wine brands.
Drop-in guests
“Christmas is also a time for the ‘drop-in’ occasion, when family and friends drop by to give presents or enjoy a festive drink. Consumers will therefore want to be prepared for these visits, so boxed wine provides the perfect, stress-free option when catering for large groups of drop-in guests. It is important that retailers offer a full range of wines across numerous price-points. It is a time when retailers see a lot of last-minute buyers, people shopping for special occasions, stocking up for drop-in visits and celebration occasions. Therefore, a strong range of affordable, trade-up and premium options should be available.” Accolade recently added a Prosecco to its Echo Falls range. “Prosecco has been successful at attracting new shoppers to the category, but with penetration at only 33% of the population, there’s still plenty of room for growth.”
Dan Harwood, head of wine education at Halewood Wines & Spirits, says: “Prosecco was at its peak last Christmas and although there’s talk of people turning away from it, it’s unlikely to happen any time soon. However, tastes are evolving and there is growing demand for organic Prosecco as people seek something extra-special. Wine is an extremely popular Christmas gifting choice, due to its convenience and versatility. Promotions aimed at those customers looking to make multiple purchases always go down well – encouraging shoppers to pick up extra bottles to accommodate last-minute guests or for unexpected gifts.”
Exciting choices
Amy Giacobbi, marketing manager at CWF, says: “Consumers are more willing to try something different within their price range, whether it be exploring a new country of origin or trying a new grape variety. This is especially true around the Christmas period. Therefore, besides the old favourites, retailers will be looking to add exciting, new choices for the festive period and beyond.
“Sparkling wines remain a favourite and there is a range of options to suit different tastes, budgets and occasions. Gin continues to dominate the spirits and cocktail sectors and seems likely to maintain this position as many new and interesting products and gin-based liqueurs are launched.”
Concha y Toro is also encouraging retailers to focus on gifting and encouraging them to stock more premium wines that are suitable as presents – especially sparkling wines and upmarket reds. It says premium reds such as Malbec do very well over the festive season and has launched Trivento’s Private Reserve Malbec as a more-indulgent option. The company points out that rosé continues to grow very strongly, especially lighter-coloured styles, and it recently introduced a Casillero rosé.
Product placement
Thomas Bennett, trade marketing controller at drinks producer Global Brands, says: “To create an in-store experience around must-stock Christmas products, retailers should pay attention to product placement and merchandising. Shelves and free-standing units should always be fully stocked and presentable, and products should be placed near relevant linking items.
“Placing display units by tills helps to draw shoppers’ attention. We offer a range of POS to help retailers, and social media assets for them to use online, to show off our portfolio. This is particularly effective around Christmas, when more people are tuned into social media. Consumers are spending more time on social media, suggesting they are a more captive audience, susceptible to brand messages. A big sales-driver is gifting, with 67% of people stating that they buy alcohol as a present – so convenience retailers should create a gifting area in their store.”
Nick Williamson, marketing director at the Campari Group UK, agrees about the importance of display in the weeks ahead. “Building visibility is key; retailers need to think about creating stand-out display behind or in front of the till for premium spirits to drive consideration and purchase. Gift packs or bags should also be considered where possible to highlight and promote the gifting opportunity during this key period for premium spirits.
“Christmas displays and stocks should be ready for November to capture the opportunity, but importantly remember to maximise this in December – when the majority of spirits sales take place. This is also where the convenience shopping mission is most prominent and particularly important to capture late purchases right through the run-up to Christmas and New Year.”
Winter warmers
Whisky is one of the traditional categories that always benefits from festive spending. Scott Dickson, marketing manager at Loch Lomond Whiskies, says: “Single malt whisky tends to be associated with Christmas and the winter months due to its warming properties, with sales tending to spike around this time of year. As part of extending choice, retailers should look to premium brands, especially single malts, which are enjoying strong growth in the convenience sector.
“It is important for retailers to offer a range of single malts during the winter months and especially in the run-up to Christmas. Not only do customers purchase single malt as a treat for themselves, but it also makes an ideal gifting opportunity to offer consumers around the festive period.” Loch Lomond’s festive range includes a special edition single malt created to celebrate golf’s Open Championship (RRP £36), which it says is an ideal gift for fans of the event.
Ultimately, Christmas is the time when a spirit of indulgence grips the nation, which is why retailers can afford to stock novel brands. Amy Burns, marketing manager at Distell, says: “There’s a growing trend of consumers looking to try something different and experiment with flavour profiles and serves. In a market saturated with sweet and, at times, sickly cider, Savanna Dry stands out. The double-chilled, triple-filtered cider provides consumers with a crisp taste, instead of being overly sweet. Savanna Dry offers retailers a chance to upsell – thanks to its classic serve of a wedge of lemon in the neck. Retailers can make the most of this by displaying lemons alongside the bottles to encourage cross-purchase.”
By Martin Geary
