Lifting the spirits

I were to sum up alcohol sales over Christmas 2017 in one word, it would be “gin”. At Nielsen, we define the Christmas period as the 12 weeks to December 30 and in that time gin sales were £199.4 million, which means they increased by £55.4 million compared with Christmas 2016. There’s no sign the bubble is about to burst either. Growth at Christmas 2016 was £22.4 million, so gin has increased its value growth nearly two-and-a-half times in a year. The spirit added more value to
total alcohol sales than any other category, with its contribution dwarfing that of the next biggest grower, wine, which increased sales by £23.8 million. Among our team of alcohol analysts, no one can remember such an impressive performance for a single-category spirit during the Christmas period, and if current growth rates continue, gin looks likely to overtake blended whisky by next Christmas.

The gin trend clearly took off in 2017 and accelerated even further around Christmas. As we saw throughout the year, the main reason for its growth was that it was attracting new shoppers.

Those who were already buying gin were persuaded to spend more: the average price per litre of a bottle of gin increased by £1.55 compared with Christmas 2016. Some shoppers were prepared to trade up and buy more expensive brands, but sales have increased across all price points for gin. This trend is set to continue.

Apart from gin, it’s been very much a continuation of the trends we saw during 2017, with world beer up 12% and craft beer, while still small, up 44% year on year, aided by increased discounting and promotional activity. More mainstream brands of beer have had a challenging time, with value down 0.7%, and this comes as shoppers make the switch into world and craft, across both ale and lager.

In cider, apple sold a modest amount more, 1.9%, and its price increased compared to last Christmas. Some of this can be attributed to shoppers moving into more traditional brands of cider, akin to the movement into craft beer. Flavoured cider grew at 1.4% year-on-year and, in this segment, new pack formats fuelled the growth, as shoppers bought into cans in a shift away from the glass bottle format.

Sparkling wine growth slowed down but still showed an increase of 7.8%, while Champagne declined by 13%. Information from our Homescan panel shows clear evidence of shoppers shifting their spend from Champagne to sparkling wine, and sparkling wine shoppers willing to spend a little more to get a better quality product, with more than ever being sold at over £8 a bottle.

With Christmas Day falling on a Monday in 2017, an extra trading day meant that spend was pushed into the final week before Christmas. Smaller stores benefitted from this as consumers went to local shops for last-minute purchases. The discounters continued to gain share, although their growth in alcohol sales has slowed down slightly.

What does 2018 hold for the alcohol category? The biggest change will be the start of minimum unit pricing in Scotland in May, pushing up the prices of many drinks, particularly lager, cider and spirits. There may well be a surge in sales in Scotland during April, as shoppers look to take advantage of the pre-legislation prices. Consumers are price-conscious and we expect to see a fall in sales in Scotland as the price increases come in. 

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