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Spirits Summit: insight and analysis from the leading trade event

By PMA

- Last updated on GMT

Related tags: Spirits, Rum, Alcoholic beverage, Drink, Us

Spirits Summit: insight and analysis from the leading trade event
This week saw the Publican's Morning Advertiser's annual Spirits Summit, which took place in Soho during London Cocktail Week. Find out all the insight from the event below.

Presentation and best practice fundamental to spirits revolution

spiritsbarlow

Customer marketing director at Diageo GB Richard Barlow predicted a “spirits revolution” and highlighted the importance of best practice in cocktail selling and serving.

Diageo has trained 7,000 bar staff in the past year, aiming to ensure cocktails are presented well and that expert staff can recommend drinks.

“People are going out less but looking for a greater experience. Spirits offer endless possibilities and individualism,” Barlow said.

“There’s no time like the present. We have a vision to create a spirit revolution.”

24% of the alcohol market is taken by spirits in the UK, compared to 36% in the US. Barlow said this indicate the room for growth.

And he puts training and the forefront.

“A third of consumers don’t know what category of spirit they are going to buy when they enter a bar,” he said.

“We can do better. 9/10 are more likely to go back for a second drink due to its presentation. But there are still drinks being served in pint glasses with no ice.”

In one Diageo project, when pub the Claddah Ring, Hendon, introduced a cocktail menu its total sales grew 15%.

Further research found 36% more spirits are sold when bars serve cocktails.

Premiumisation, craft spirits and health are key trends

spiritsmeek

The drinks sector, both globally and in the UK, is facing a continuous march towards premiumisation, delegates to the Spirits Summit were told last week.

Mark Meek, CEO of the International Wine and Spirits Record (IWSR) said that while the sector was seeking to increase value on products, another key trend was category blur from promiscuous consumers.

“We’re seeing more and more of this - consumers, particularly millennials, are not tied to one category or brand, they’ll swap around, even in one evening.”

He called on the sector to do more to define the concept of “craft” as well, and said a leading trend, certainly within the US market, was the increasing rise of independent producers, which was putting pressure on established brands. “Millennials want independent products, they want to be seen as unique, it’s about giving them something different.”

Health was also playing a major part in consumer choices and brands needed to cater for this: “The fastest growing segment for Heineken is in the low alcohol, or no-alcohol beer. The whole concept of living well is a key demographic.”

The fastest growing spirits categories for the UK market over the next five years will be US whiskey, vodka, rum and gin, he told delegates. “Rum is particularly doing well, there’s a real opportunity for it and we’re hearing more people talking about it.”

Meanwhile, he said the IWSR forecast for beer was less positive, with the category predicted to continue to decline by 11.7m cases over the next five years. That compared with an increase in spirits of 1.7m cases, wine by 2.4m cases and cider outpacing the pack with a rise of 5.8m cases by 2020.

When it comes to brands in the spirit sector, he said the situation was quite fluid, and while the current leading brands in the UK included Smirnoff, Captain Morgan and Russian Standard, if you looked back five years, those names were largely different, with Bells and Glen’s Vodka riding high.

Spirits sales are on the rise, pubs need to take advantage

spiritswisson

Senior drinks analyst at Mintel Chris Wisson urged licensees to take advantage of the value spirit drinkers bring to pubs.

Wisson explained that value spirit sales are on the rise, and research indicates the trend is set to continue.

Wisson revealed that when asked which brands are worth spending more on, half of drinkers said spirits.

And with 72% of spirit drinkers stating they drink at least once a week, it’s a lucrative market to tap in to.

“Consumers are looking more for premium when they go out, even if they are going out less,” he said.

Dark spirits are 12.4% up since 2010, with white spirits up a healthy 11.4%, while premiumisation is on the rise.

“Drinkers are looking for quality over quantity. But consumers are becoming immune to the word premium,” Wisson said.

Stats revealed at the summit indicate 57% of people think some products are falsely branded as premium.

So what makes a customer pay more?

Wisson continued: “They want premium drinks to have a full flavours the highest factor. Quality ingredients, extra time and care in production, and heritage.”

Wisson warned against “gimmicky” flavoured spirits such as fish and bubblegum vodka available in the US, citing the 42% of dark rum drinkers who think adding flavour compromises the taste.

But drinkers can be drawn by natural flavours, the most popular of which being honey, strawberry, cherry and citrus.

The spirits industry has grown to become more “recognised” and “respected” by government

spiritsbeale

The spirits industry is slowly starting to reap the benefits of a better relationship with the government according to the Wine and Spirit Trade Associations (WSTA) chief executive Miles Beale.

Beale said: “The landscape has changed dramatically. March saw a 2% cut in excise duty for spirits. Alongside other cuts and freezes, it made the best result for the UK drinks industry in almost twenty years. From an industry under threat even three years ago, we are one that is on the rise: recognised and respected by government.

Ministers and MPs are keen to spread our good news. I propose we help them.”

However, Beale stressed that there is still more the government can do, calling for a commitment to serving only UK spirits at government receptions and events.

He added: “Consumers of an industry with 18% of the EU’s jobs should not also be contributing some 40% of all excise duty collected across the 28 EU member states and it is clear that reducing the tax burden can unleash unlocked potential, particularly for export of high quality British products.”

The rise and rise of gin was a major theme at the Spirts Summit, and according to the WTSA, 140 million bottles were exported from the UK last year-enough to stretch once around the equator and still have enough left to fill three Olympic swimming pools.

Premium golden rums are also performing well, seeing 11% growth in the UK’s on trade in the last year and a £26m rise in value over the same period. But it’s vodka and liqueurs were the excitement really lies for the WSTA, spirits Beale said were finding a growing

Related topics: Spirits & Cocktails

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