For years commentators – both retailers and suppliers – have been slamming these moves as madness. Why cut prices at the time of year when consumers are most likely to be willing to trade up to something a bit more special?
Last Christmas, 57% of all drinks were sold on promotion, according to Nielsen’s 12-week sales figures to January 4.
Deep discounting in the supermarkets brought an early sales spike in November, but didn’t stop a large chunk of consumers holding back their drinks shopping until just a couple of days before Christmas.
In spite of the massive amount of discounting, Christmas did bring a sales uplift of some 3.6%, while volumes remained flat.
Spirits were the biggest winners during the period, with sales up £56.3 million against flat volumes, and still wine sales grew £32.8 million, against volumes which slipped 3.2%.
Just imagine what those figures could look like if retailers put even more effort into trading consumers up to more premium brands this year, rather than funding price-cuts.
As the recession begins to ease, consumers are becoming more willing to experiment, and this could be the year to get customers to fork out a little bit extra on something really special.
Amy Ledger, marketing manager for Continental Wine & Food, says: “With the more buoyant and positive economic environment comes an increased consumer confidence and the willingness to loosen the purse strings in order to celebrate, experiment and have a little fun.
“We are starting to see a little more experimentation, particularly with wine choices – there are very few bottles of wine available for under £5 and, as a result, consumers are more willing to try something different within their price range.”
The UK’s gastronomic boom is continuing apace and Christmas is the perfect time to put more interesting or ambitious recipes into practice – and amateur chefs will be looking for the perfect wine match for their dishes.
Many retailers offer their customers free food- matching advice, and this is the time of year to encourage shoppers to match wines to each of the different courses they are serving – from light, fragrant aperitifs through starters and main courses to dessert wines and digestifs.
Fortified wines always see a festive sales spike, so don’t forget the role a dry oloroso or amontillado sherry or white or rosé port can play as an aperitif, fino or manzanilla with a fish course, and PX, tawny or LBV port with pudding or as an after-dinner drink.
Mentzendorff managing director Andrew Hawes says: “Port enjoyed another very strong Christmas period, which is not surprising. It is very much the natural choice for the festive season and its leading brands, such as Taylor’s, are as much a part of the celebrations as, say, Quality Street.”
Ned Llewellyn, head of wholesale at Alliance Wine, says Prosecco predictably did well last Christmas.
“The surprising stars of the show for us were the indigenous grapes from the south of France, which sold very well over the festive period,” he adds. “Mid-range Chile did well – which reflects people’s acceptance of trading up at Christmas – as did top-end Argentinian wines.”
In terms of trends for this Christmas, Llewellyn says: “Retailers should be on the hunt for interesting grower Champagnes, as these represent great value for money at a key time of year for fizz. Other trends to watch out for are oaky Chardonnays, which are making a strong comeback, and interesting Spanish wines, as there’s a huge amount out there to choose from at the moment and they pair really well with a variety of flavours, which is perfect over Christmas.”
CWF’s Ledger adds: “Consumer interest in all things Italian – be it wines or speciality liqueurs – continues apace, particularly with younger consumers, and we anticipate that this trend is set to continue throughout the forthcoming festive season.”
Beyond Christmas week, the whole of December is party season, so retailers need to make sure they are stocked up with sparkling wines – which grew 14.8% last Christmas, driven by Prosecco, and supermarket deals on Champagne, as well as spirits, liqueurs and mixers for those impromptu purchases.
There are plenty of simple cocktail recipes available online, or as POS from suppliers. A few of these artfully displayed around the shop, on tear-off shelf strips or as leaflets, could encourage cross-purchasing and trading up.
“The Christmas period can be expensive so we expect to see even more consumers hosting drinks at home or pre-drinking before heading out with friends,” says Nick Barker, brand manager for Midori and Auchentoshan at Cellar Trends. “To tap into that trend retailers could look at highlighting easy cocktails to make at home through point of sale marketing.”
Last Christmas wasn’t great for RTDs – sales slipped 2.3% over the festive period, according to Nielsen – but this year suppliers are hoping growing interest in cocktails with RTDs as mixers could reverse that decline.
Debs Carter, marketing director for alcohol at WKD owner SHS Drinks, says: “The emergence in popularity of using RTDs in cocktails is one of the biggest recent drinks trends and one that directly affects in-home consumption. This approach originated in the on-trade and is now being mirrored in the off-trade, presenting trading-up opportunities for off-licences this Christmas. RTDs are still seen as drinks in their own right, but they are now also increasingly being used as ingredients for making cocktails at home.”
She adds: “RTD cocktails are ideal for festive occasions – they are quick and easy to make, add a dash of colour to proceedings and are a fun talking point.
“The cocktail trend is good news for off- licences as it provides the opportunity to generate incremental sales from the spirits and mixers used to make the drinks.”
Ale was one of last year’s winners, with sales up 4.6% over the 12 weeks to January 4. This is a great time to trade consumers up to craft beers with mixed pack or cross-category mix-and-match deals, and to introduce budding beer fans to winter warmers such as porter, rauchbier and strong Belgian brews.
Summer is the key time for cider sales, but flavoured ciders were one of last year’s biggest winners at Christmas, with sales up a massive 56.4%.
This year Kopparberg has joined Rekorderlig in launching a winter cider, and the trend looks set to continue.
SHS’s Carter, who also handles Merrydown, says: “The growth in consumer interest in and sales of flavoured cider has been phenomenal, and the £176.9 million flavoured cider sector is still very much in its ascendancy. With cider producers now launching seasonal limited editions or warmer flavours for the winter months, it’s a good time to take a look at what’s on offer for the festive season.
“Because there are so many cider brands, flavours and pack formats available, and because cider is consumed by such a large percentage of the population – almost two- thirds (60%) of adults now include cider in their drinks repertoire, according to Mintel – it really is crucial, particularly at Christmas, to offer customers as much choice as space permits.”
Merrydown has been marketing itself as a particularly good accompaniment for food, and has created a set of cider-matched festive recipes, which can be found on its website.
Michelle Raworth, brand manager for Lambrini at Halewood International, adds: “Lambrini is seeing a popular trend for fruity flavours over the Christmas season, with sales up by around 7% in the 12 weeks leading up to Christmas 2013, according to Nielsen. Wine-style drinks such as the newly launched Lambrini Strawberry variant are a popular choice for parties, and lower abv Luci by Lambrini is a great alternative for those who prefer a lighter and less calorific option.”
Premium soft drinks, alcohol-free wines and beers and mocktails also have potential, as non-drinking consumers or those who want to limit their alcohol intake trade up.
Lighter lagers with abv levels of 1.2%-2.8% grew sales by 32.9% last Christmas, while low-alcohol and non-alcohol beers grew 4.9%, according to Nielsen, and more than a third of adult soft drinks sales take place in the last three months of the year.
Fran Draper, brand manager for Eisberg alcohol-free wine, says: “Eisberg saw a doubling in sales over the Christmas period last year, compared to a normal month. This demonstrates that not everyone is looking for alcohol, and that there is a huge opportunity to quench the thirst of non-drinkers too.”
Claire Kelly, senior brand manager for Crabbie’s alcoholic ginger beer at Halewood International – which also produces non- alcoholic range John Crabbie & Co – says: “Retailers should be aware of the growing market for adult soft drinks. Quality crafted soft drinks allow retailers to offer consumers the chance to trade up from a standard can of pop.”
Amanda Grabham, marketing director for soft drinks at SHS Drinks, adds: “Every year we see huge sales uplifts at Christmas – 49% of Shloer’s sales last year were in the eight weeks leading up to Christmas and New Year – and we expect to see the same trading pattern again this festive season.”