William Grant & Sons’ top industry trends
Premium spirits grew by 9.9% last year and now account for more than 11.7% of the UK spirits market, William Grant & Sons’ 2017 Market Report has revealed. Here are the consumer and trade trends driving the spirits industry in 2017.
Total premium spirits are now worth more than £1.2 billion, and remain a “key driver” for the overall spirits market, the report states. Premium mixers are also benefitting, growing 139% in volume and 157% in value in 2016.
While the on-trade is driving the majority of the spirits sector’s performance, up by 3.1% compared to last year, the industry has also enjoyed growth within the off-trade of 1.5%.
Gary Keogh, marketing director of William Grant & Sons UK, said: “Consumer behaviour and habits have continued to evolve in this time of uncertainty, but there still remains an element of consistency with the trends identified in our previous reports, as the consumer trends and resulting behaviours have adapted to this new normal.
“More than ever, brands need to have a point of view, share their values, and reach heightening expectations to meet consumer needs. The brands that succeed will be those that can balance these often conflicting needs and offer inclusive, collective experiences, a playful sense of purpose, and meet on-demand consumer expectations without compromising on quality.”
Described as a comprehensive appraisal of consumer behaviour and macro trends affecting the drinks industry, the report reveals how the UK on- and off-trade is shaping up in 2017.
Click through to the following pages to discover the trends that are driving the spirits industry in 2017.
An era of ‘uber uncertainty’
From divided nations to divided generations, William Grant depicted an era of uber and unprecedented uncertainty – intensified by “growing inequality, both economically and socially, advances in technology at a pace much faster than we can cope with, and the polarisation of society, manifesting in the rise of political parties of the extreme left and right”. This has resulted in two reactions from consumers, the report states – firstly, ‘cocooners’, who feel more comfortable living in an echo chamber where there they only experience views that align with their own and where the status quo is maintained. The second are ‘new world embracers’, who actively seek both experiences and brands that take them outside of a ‘filtered world’, accessing new and different cultures that offer fresh perspectives.
Attitudes crossing traditional demographic lines
There has been a shift away from traditional labels, William Grant states, as consumers and brands reject demographics applied by marketers. These filters – designed to “portray the ‘perfect’ image of a product being enjoyed by the stereotypical consumer target” – will continue to become “increasingly irrelevant and undesirable” in the coming year. Instead a focus on ‘consumer mindset, attitude and passion points’ across demographics will prevail, as brands seek to “meaningfully connect” with today’s consumers. This is further accentuated by the “death of generations”: the notion that is it not enough to simply identify a target audience by age – rather, brands must recognise their audience “as people”, and “deeply understand [their] attitudes and values, considering cultural influences and context”. This is particularly true of the term ‘millennial’. Referring to a group of people born between 1977 and 1996, therefore aged between 20 and 40, is deemed “too amorphous for effective marketing”.
“I want what I want when I want it”
Consumers are demanding increasing levels of convenience with zero-tolerance for a compromise on quality, the report states, and this goes hand-in-hand with ‘mass hyper-personalisation’ – whereby consumers are “less willing to accept generic offerings and are demanding ever-increasing levels of personalisation”.With this in mind, consumers are also “sceptical about what is truly real”, and are therefore seeking “the authentic, the imperfect and the unpolished” – seen through the desire for wild ingredients and fading stigma around imperfect produce. This trend links to increasing sustainability consciousness, to which the on-trade is responding with the likes of zero-waste, while brands are accentuating their green credentials.
The interconnectivity of the purchasing environment
The path to purchase – the steps to a consumer buying a product – is becoming “increasingly complex”, with more product choices, more channels through which to engage and buy, and more opportunities arising to share and discuss experiences through social media, states William Grant. As such, it is “important for brands to remain agile to new possibilities along the decision process”, with a focus on occasion drivers and shopper purchase – i.e. a big night out vs a quiet drink; buying a special gift vs refilling the cupboard. Of particular significance is e-commerce, which is fuelled by increased use of the mobile platform; improvements in predictive algorithms and automated SEO technology; the introduction of robots and chatbots to automate basic customer service functions; omni-channel checkouts; and same-day or same-hour delivery.
Policy and promotion within the drinks industry continues to change year-on-year in line with macro-consumer trends and government regulations, according to the report. The two biggest health trends – the moderation of alcohol and the demonisation of sugar – remain “highly relevant” in 2017, with consumers becoming “more health-conscious than ever”. This has been demonstrated through the rise of health apps, the increased popularity of healthy eating cookery books, and moderated alcohol intake with a movement towards “less but better”. Health and wellness continue to be the biggest drivers in product innovation within the drinks industry, William Grant says, from collagen-infused gin to mood-boosting cocktail ingredients and vodkas with real fruit infusions.
As consumers increasingly “seek out the unusual”, bars are placing as much of a focus on the menu as they are on the drink itself to match imbibers with a suitable drink of choice. “From the world’s first augmented reality menu at City Social [London], to menus developed around artistic movements, this trend is reinventing the way people look at the humble menu,” the report reads, accentuating the use of unusual ingredients to provide consumers with social currency – from pig’s blood to June beetle juice. In addition, the trend for pre-batched ingredients allows for the theatre of the serve and speed of service from the bar.
Quality experiences over products
Experiences are “today’s social currency”, and are the way in which consumers express themselves over social media. While the experience trend is not necessarily new, the change in focus within this trend – away from products – is about time-poor consumers “achieving a shared sense of participation and… accessible moments of collective escapism”. Such examples include the resurgence of the Tiki cocktail trend, alcoholic ice creams, and ‘kidult’ experiences. As consumers continue to search for premium experiences within their home environment, the opportunity for at-home treating is becoming even more important, the report states. As such, it is “imperative” that drinks brands consider how they make the premium on-trade experience accessible in this setting. High-end subscription services and Pernod Ricard’s at-home spirits system Opn are two examples of innovation in the’ hometainment’ space.
As consumers increasingly champion causes they believe in regardless of age, gender, ethnicity or social status, more and more brands are using their marketing and social purpose initiatives to offer a ‘point of view’ and embrace this “inclusive diversity”, the report states – citing beer band Heineken’s recent ‘Open Your World’ campaign as an example. There’s also an existing hyper-local movement running in tandem – brought about as part of the changing interpretation of luxury – that “focuses on products and services from an immediate locality”, giving said brands “a unique sense of place and story”. This is evident in the emergence of hyper-localised craft spirits and an increasing number of restaurants and bars growing ingredients in-house.