Diageo unveils spirits plan to 2020
Diageo has revealed “ambitious plans for this year and the following years” across its spirits portfolio - including a packaging update and shot machine for Smirnoff, an investment and new launch for Baileys, an increase in field sales teams as well as a long term plan to build its Reserve Brands business.
Speaking at its Diageo GB’s winter trade press briefing event, a selection of directors and category heads unveiled plans to “unlock headroom” and “making spirits the choice” by getting the on-trade to sell “four more spirit-based drinks per day” and increase spend by “encouraging trade up” by selling “five drinks per outlet per day up by £1.”
“We are determined to invest and drive the spirits revolution forwards and have planned a multi-million pound investment across the on and off-trade,” said Richard Barlow, Diageo GB customer marketing director.
“Whilst beer still dominates the total beverage alcohol (TBA) category in terms of size, spirits have contributed the most growth, adding £198m to [the] TBA category and accounting for 55% of TBA growth,” said James Cragg, Diageo GB head of category development.
Baileys
Baileys will launch a new TV advert on 20th November introducing the catchline: ‘Here’s to us’ to celebrate how “women bring out the brilliance in each other,” said Anna MacDonald, Baileys marketing director, Western Europe.
We will introduce “a limited edition Baileys Chocolat Luxe gold bottle on the 1st November which will be available for order in the on-trade from 20th October,” and “in 2015, Baileys will take steps to introduce new drinkers to the spirit whilst also re-engaging with existing fans,” said MacDonald.
“2015 will also see the launch of a campaign to ‘put Baileys on the lips’ of over one million people,” she explained and pointed out that “the campaign represents the largest on-trade investment in the Baileys brand in over a decade, with a new campaign to ‘Style Your Night’ – a sampling activity in four UK cities set to reach 100,000 consumers.”
Smirnoff
The Smirnoff brand will continue to cement its position with its new ‘Filter’ campaign, which is designed to “increase brand recognition and associate Smirnoff with effortlessly good times,” said Karen O’Shea, Smirnoff marketing manager, Western Europe.
“The campaign will be fully supported by a full packaging redesign across the whole range, including Smirnoff No.21, Smirnoff Ice, Smirnoff Gold and Smirnoff pre-mix cans,” all of which will be available next summer,” said O’Shea.
“2015 will also see the launch of the ‘Smirnoff Remix’ machine into the on-trade. The machine, allows licensees to create over 150 flavoured Smirnoff shots, which can be served straight up or as part of a mixed drink and aims to drive category sales by giving consumers the confidence to try new flavours, as well as making it easier for bar staff to dispense shots and customise tailored drinks for their consumers,” O’Shea explained.
“Smirnoff will also be focusing on building its association with electronic dance music and festivals” as well as partnering with “Spotify to create ‘filtered’ playlists and collaborations with likeminded DJs to create a series of music videos and interviews,” she added.
Increasing field sales across the UK
“We are putting more feet on the street and have put more than 40 field sales team members out there in the past three months,” said John Collins, field sales director, Diageo GB, as he described the way this would help Diageo broaden its reach to pubs and bars across the UK.
“We are increasing our coverage of outlets by 50% compared to the past year and we are doubling our fleet of mini vans, which can carry the whole portfolio in the back, from 20 to 40,” said Collins.
Christmas trading
Diageo urged the trade to make the most of boosting spirits sales over the festive period, reminding that “last Christmas, the spirits category grew by £77m, faster than any other TBA category,” said Cragg.
“Almost three in four British adults visited the on-trade over the festive period last year, with Christmas parties driving spirits to have the greatest uplift across TBA,” pointing out that “5.7m additional spirits serves are consumed over Christmas.”
Premiumisation
“Customers in the on-trade spend more on nights out at Christmas, the spirits category benefits due to seasonal trade-up, increased cocktail consumption, ‘treat spend’ and premiumisation,” he explained, while Faith Holland, Diageo GB’s head of on-trade category development, added: “Over one in five serves of spirits are premium over the festive period,” illustrating the continued trend for premiumisation across UK pubs and bars.
Nick Temperley, head of Reserve Brands GB at Diageo revealed that, in line with this trend, Diageo has “plans to make the Reserve portfolio [which includes high end brands such as Johnnie Walker whisky, Tanqueray gin, Haig whisky, Ciroc vodka, Ketel One vodka, Bulleit bourbon and Ron Zacapa rum] worth around 20% of the total Diageo business by 2020.”
The Reserve Brands portfolio is currently “between 12-13% of the Diageo business” said Temperley, but is “growing ahead of the market” with sales “led by gin, vodka and whisky.”
