Decline even affects Christmas trading

23 February, 2007

Marketing works but NPD fails as market ­continues to struggle with consumer apathy

It's no surprise to see Diageo the off-trade winner in the liqueurs sector with two of its brands sitting in the top positions.

But with the total category declining by 2 per cent in both value and volume, the drinks giant hasn't escaped unharmed.

Baileys felt the brunt of such sharp ­decline and, despite generating excitement around its off-trade roll-out of two new flavours - Hint of Mint and Hint of Crème Caramel - sales plummeted to £72.7 million from £96.9 million in 2005.

In the pre-Christmas trading period cream liqueurs - usually a banker for the festive season - surprised the market with a 9 per cent decline - 21 per cent in volume terms (according to Nielsen figures for the four weeks to Dec 23). Much of this was attributed to Diageo's two-for-£25 deal, which took the market leader away from price-fighting activity, preserving margins but at the expense of sales.

Pimm's put in a star performance with a year-round marketing campaign pushing sales of its Pimm's Winter and Original variants.

As part of a £3 million spend, the double decker Pimm's bus visited key events up and down the UK in a summer sampling drive, and winter saw the relaunch of TV ads featuring the Pimm's O'clock catchphrase.

Southern Comfort's sales remained stable with Bacardi Brown-Forman investing £1.25 million in TV and cinema ads called Start Things Up With SoCo - designed to promote a name change in the brand. Elsewhere, Pernod Ricard took the decision to axe its flavoured Malibu range in a move to rejuvenate stagnant sales.

In the lower reaches of the top 10, brands competed in a declining market and the only surprise success story was Intercontinental Brands' Vodkat, which raced into ninth spot, knocking Pernod out of the top 10 line-up.

Star performer

Vodkat

If sales figures are anything to go by, Vodkat has taken the liqueurs and specialities category by storm with a 1,606 per cent sales surge.

You can tell from the number of times the word "cool" is mentioned in its press releases who is the main target consumer. This lower alcohol, vodka-style product has 22 per cent abv and is aimed at 18 to 25-year-olds looking for a premium spirit to drink over ice or with mixers.

Its innovative national marketing campaign is based around a search for five feisty figures to become brand ambassadors - "the Vodkats".

It has secured listings with major retailers including Sainsbury's, Threshers and Bargain Booze, and it will be interesting to see if Vodkat's runaway success will be sustainable .

Top 10 liqueurs and specialities

Position

Brand Supplier Sales £m % Change

1 Baileys Diageo 72.7 -25

2 Pimm's Diageo 27.6 12

3 Southern Comfort Bacardi-Martini 24.6 1

4 Malibu Pernod Ricard 19.3 0

5 Tia Maria Pernod Ricard 17.5 -4

6 Archers Peach Schnapps Diageo 8.9 -16

7 Cointreau Maxxium 7.9 -8

8 Drambuie Bacardi-Martini 6.5 -1

9 Vodkat Intercontinental Brands 6.4 1606

10 Irish Meadow Halewood International 6.1 7

Nielsen MAT to Dec 30 2006, GB off-trade




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