Pernod Ricard UK predicts consumer trends accelerated by lockdown will continue driving wine and spirits growth this Christmas

Christmas 2020 is set to be a little different this year for the Off-Trade, with the On-Trade operating at reduced capacity, as well as social-distancing and health and safety measures impacting shopping behaviour. The COVID-19 pandemic has accelerated consumer trends that were already starting to emerge and Pernod Ricard UK (PRUK) is supporting the convenience channel adapt to this ‘new normal’ by focusing on three key areas for growth within wine and spirits:

• Cocktails at home – 43% of consumers claim to have attempted making the perfect cocktail during lockdown[1], as the complete closure of the On-Trade reduced options to enjoy convivial moments out of home 
• Winning categories this Christmas – Gin, Vodka, Whiskey and Wine
• New fields sales partner – PRUK has appointed McCurrach as its new field sales agency to reach more stores ahead of festive period

Festive at-home cocktail occasions

Cancelled holidays and On-Trade closures during lockdown encouraged consumers to find new drinking occasions to enjoy through virtual cocktail hours, experimenting with serves with a slight bias towards cocktails with fewer ingredients that were easier to make – and this trend is predicted to continue through to Christmas. As a result, the UK’s favourite confinement cocktails differed from those they would typically be able to enjoy in the On-Trade with the Piña Colada rising to number two¹, helping Malibu achieve +79% volume and +86% value growth in the Off-Trade⁸. Espresso Martinis have also been a Top 10 favourite[2], with more shoppers adding Absolut, Kahlúa and Filter Coffee to their baskets during the 12 weeks of lockdown[3]. This trend is only set to continue, due to the On-Trade experiencing a phased recovery, and 46% of 19-34-year-olds saying they would make cocktails at home this Christmas[4]. This Christmas, more than one fifth of shoppers will be making cocktails at home and 82% of those who said they made cocktails at home last year plan to make the same amount if not more this year[5].

Winning categories this Christmas: Gin, Vodka, Whiskey and Wine

Independent research by PRUK, with almost 2,000 consumers, identified gifting and hosting as the main reasons for spirit purchases at Christmas, with hosting accounting for 56% of all spirits occasions in December and 48% of people buying alcohol as a gift last year[6]. Gin, Vodka, Irish Whiskey and Wine have always been important categories for both hosting and gifting at Christmas, however, growth has accelerated in these sectors in 2020 and are the four key categories that have seen exponential growth during the lockdown period. 

• Gin has been remarkably resilient during the COVID-19 crisis (Off-Trade) and has seen continued double-digit growth for the past 12 weeks, accelerating +38.4% vs. MAT +12.1%. PRUK has the most extensive Gin portfolio and has consistently performed ahead of the category (+64% vs. +12.1% value). The Gin category is also booming in eCommerce since the beginning of the COVID-19 crisis, showing triple-digit growth in the last 12 weeks (AC Nielsen ending 12.07.20). Beefeater is growing +99.5% in value and 96.5% in the Off-Trade. Plymouth is back in growth in the Off-Trade (+9.7% value sales) and during the lockdown period experienced double-digit value growth (+33.6%), driven by its strong presence in the off-trade and eCommerce acceleration. Since acquisition in June 2019, MALFY is seeing outstanding performance in the Off-Trade, growing +21.5% in value[7]
• Vodka is now the second biggest value contributor in Total Spirits after flavoured Gin, worth £45.9m in value sales. Absolut is the fastest growing brand in its competitive set and is experiencing strong Off-Trade value growth momentum (+18.3%). Absolut continues to hold the majority Premium+ Vodka Off-Trade sales with the value share growing +57%⁷
• Irish Whiskey is the second fastest-growing category behind Gin with Jameson leading its remarkable growth. Jameson is the UK’s #1 Irish Whiskey brand and is seeing a significant performance in the Off-Trade (+22.1% value), and growing seven times faster than Total Whisky (+3.1%)⁷
• Wine momentum is building as more consumers enjoyed wine at home, as opposed to in pubs and bars, during the COVID-19 crisis and the Off-Trade has seen +27% value growth and +22% volume growth (MAT to 26.06.20). PRUK is ramping up investment in this category and can claim the #1 red wine and #2 white wine in the UK with Campo Viejo and Brancott Estate respectively. The company is also continuing to add value to the market through the average bottle price being over £1 the market value (£7.23 vs £6.07)⁷

Increased support through new field sales partner

Pernod Ricard UK has selected McCurrach as its new field sales partner in convenience to create a brand-new permanent team, which will cover over 1,800 stores. Furthermore, Pernod Ricard UK will be a full category partner for McCurrach’s MyStore+ app, joining current partners to provide category advice and offers to retailers via the app.

Chris Shead, Off-Trade Channel Director at Pernod Ricard UK, comments: ‘Lockdown has altered consumer shopping habits and one of the biggest changes within wine and spirits has been the shift in consumer spend to the convenience off-trade. The trend to shop locally continues to drive impulse and this provides a real opportunity to the channel in the run up to Christmas, to become a destination for key festive categories such as Whiskey and Wine. With social distancing measures likely to still be in place, we’re predicting the Christmas purchasing period will happen earlier, with shoppers planning ahead of time to minimise time spent in store.  We’re delighted to be working with McCurrach to ensure we are supporting retailers to act fast to retain these new shoppers and that the right products are available based on emerging consumer trends.”