Smirnoff reigns supreme in still-suffering category

23 February, 2007

Red Label remains the brand to watch in a spirits market that lost £10 million last year

There are no prizes for guessing the brand sitting pretty at the top of the spirits table. Clear leader Smirnoff Red Label continues to outstrip its nearest rival by some £80 million in a declining market.

While Smirnoff posted only modest growth, a £12 million marketing budget helped Diageo to build provenance for the brand . A marketing focus on product quality and purity has been given further momentum with the Diamond in a Bottle on-pack promotion and its Electric Cabaret marketing campaign.

In a market that declined by £10 million in 2006, any brands showing double-digit growth had an impressive year. Glen's Vodka fought its way into the top five, pushing in between The Famous Grouse and Gordon's with a spectacular 20 per cent rise in value and volume.

It was a poor year for Smirnoff stablemate Bell's, with sales plummeting by 13 per cent and volume losing 16 per cent.

The Famous Grouse closed the gap on its rival, adding weight to predictions that Maxxium's big bird could mount a serious challenge to Diageo's top blend. The Famous Grouse's success in a struggling category is largely down to relying on doing what it does best - continuing its Scottish rugby sponsorship and preening its feathers in numerous TV and press ads.

Gordon's also upped its game in 2006 with a raft of sponsorship deals, including Gordon Ramsay's Kitchen Nightmares, the Turner Prize and UKTV Food.

But no amount of sponsorship can make up for the brand's rapidly falling sales, as it looks set to lose its foothold on the £100 million landmark.

Gordon's now needs to concentrate on clawing back the fourth spot from Glen's and, with their sales so closely matched, both brands have a good shot at this prime position.

Teacher's has benefited from a year of stability with Beam UK, but its modest growth has been outstripped by William Grant's impressive performance , showing there's still plenty of life left in the blended Scotch category. Reversing last year's trend of sharply dropping sales, William Grant's has made use of its sponsorship deal with Classic FM to reaffirm its identity as a brand for over-50s.

Whyte & Mackay relaunched its flagship brand with a look inspired by its Glaswegian heritage and brought in 13, 19 and 22 Year Old blends in June, reversing last year's dramatic fall in sales. Together with High Commissioner, Whyte & Mackay has jumped up the leader board with double-digit growth.

But worryingly, High Commissioner is the only brand in the top 20 where value outstrips volume growth, showing that pricing remains dangerously competitive in the spirits category.

It was a quiet year for lone ranger Jack Daniel's with the iconic brand continuing to hold its own in the top 10, but it wasn't close to repeating last year's impressive value rise of 12 per cent.

Cognac and brandy have enjoyed a renaissance with brands striking a chord with younger consumers. Not wanting to be outdone by Courvoisier's Earn It campaign, Three Barrels rolled out a direct mail campaign targeting more than 80,000 consumers with £1-off next purchase vouchers.

Now under the direction of First Drinks Brands since the acquisition of brand owner Raynal & Cie by William Grant & Sons, the brand has benefited from a more consistent and coherent marketing plan.

Martell is within touching distance of Three Barrels and ≠Pernod Ricard's off-trade launch of Martell Noblige later this year might just be the boost the brand has been waiting for.

Aimed at young professionals, Martell Noblige has created a new reference point in the Cognac category - VSOP Plus - that is a step above VSOPs because it must be aged for at least five years, according to Pernod Ricard.

Red Square has leapt headlong into the top 20 and, with a 12 per cent rise in value, it's creeping up on Booker's own-label Chekov. Vladivar has been left trailing in the wake .

Despite its image overhaul and significant investment in UK marketing, the brand is still struggling to gain a dominant position among its vodka opponents.

It's a close call between the bottom four brands as Jameson gets within spitting distance of Glenfiddich and Bombay Sapphire starts to breathe down the neck of Vladivar.

With their total sales so close together, it's hard to say which brand will put up the best fight. But with Bombay Sapphire posting 15 per cent growth, perhaps the brand will fly the flag for gin and sail past its whisky and vodka rivals.

In such an unstable market there's everything to play for.

Star performer

Glen's Vodka

As the fourth biggest spirits brand in take-home, Glen Catrine's Glen's Vodka is causing a stir in the spirits category. Bacardi has found itself elbowed out of the top five and Glen's is now snapping at the heels of the Famous Grouse.

This unassuming vodka brand does very little in the way of big-money marketing, with its simple ads depicting sober judges and Glen's old-fashioned label design. But its lack of a funky bottle or innovative marketing is obviously not holding back this value-for-money vodka brand as it storms its way up the spirits league.

Market leader Smirnoff Red Label may be way off in the distance, but it's certainly not too far-fetched to believe that in a few years' time this young pretender could jump straight into Bell's shoes and be crowned second in line to the spirits throne.

Top 20 spirits


Brand Supplier Sales £m % Change

1 Smirnoff Red Label Diageo 193.4 1

2 Bell's Diageo 113.3 -13

3 Famous Grouse Maxxium UK 112.2 2

4 Glen's Vodka Glen Catrine 93.9 20

5 Gordon's Diageo 93.7 -6

6 Bacardi Bacardi-Martini 84.6 -3

7 Teacher's Beam Global 65.1 1

8 Jack Daniel's Bacardi-Martini 55.4 3

9 William Grant's First Drinks Brands 48.5 20

10 Courvoisier Beam Global 32.3 2

11 Three Barrels First Drinks Brands 28.5 1

12 Martell Pernod Ricard 27.9 4

13 High Commissioner Glen Catrine 26.5 18

14 Whyte & Mackay Maxxium 24.9 12

15 Chekov Booker 20.2 -1

16 Red Square Halewood International 19.8 12

17 Glenfiddich First Drinks Brands 17.8 3

18 Jameson

Pernod Ricard 17.8 -2

19 Vladivar Maxxium 17.7 -2

20 Bombay Sapphire Bacardi-Martini 17.6 15

Nielsen MAT to Dec 30 2006, GB off-trade

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