Every year, retailers embrace the opportunity that comes with Christmas, and the drinks market is one that is prime for profit – but only if the category is meticulously managed and the right lines are in the right place.
by Kevin Scott
Over 40% of all spirits sales in convenience happens around Christmas period, so there is a huge opportunity for convenience stores, but that opportunity should never be underestimated, nor overestimated. There is a big chance to boost sales, but only if intelligent changes are made to ranging and merchandising to exploit the products that are most likely going to be in demand between now and December.
Unlike other events, the run up to Christmas is a long, often laborious period of time, but it’s one in which profits can be maximised and manufacturers are as ever queuing up to ensure their brands find a way onto your shelves.
At Maxxium, the company says it has a clear strategy to bring margin-enhancing innovation to retailers which meets the shopper demand for great tasting flavours, as well as innovative pack formats from brands they already enjoy.
The company’s key tips for retailers are:
- Give appropriate space to each category based on sales in store
- Vodka and blended hisky traditionally sell strongly in the Impulse channel, but these need to be balanced against the opportunity in other categories such as Non-Cream Liqueurs, which are often bought for consumption at a party or other event – and shoppers will often stop ‘last minute’ at a convenience outlet to make these purchases
- Stock a mix of full bottles and fractional sizes
- Stock a selection of ‘top brands’ – these give credibility to the outlet, and help shoppers make sense of the fixture
- If point of sale is available, use this to excite shoppers and help them navigate the fixture
- Make the fixture is as visible as possible; too often the shopper cannot see the full range of brands available due to the way that the fixture is arranged behind the counter.
The company’s biggest draw for Christmas buyers is The Famous Grouse, which was the leading blended whisky in the UK last Christmas. Ali Brown, Business Sector Controller, Cash & Carry/Impulse, Maxxium UK, comments: “We have high hopes to continue this trend over Christmas 2012 with both The Famous Grouse and The Black Grouse appearing on TV throughout December as part of a £1.175m spend, reaching a massive 40 million of the brands target audience.”
The Famous Grouse will also be available in gift cartons in selected outlets along with Teacher’s gift cartons.
The importance of introducing gift packs is one of the key differences you can make at Christmas. Grant’s, from First Drinks, is launching a gift pack, plus a smaller 3x50cl gift pack of different expressions.
The big one from the brand however is a major new on-pack promotion showcasing the Grant’s family tree with every pack purchased offering the consumer a £10 voucher to family history website, findmypast.co.uk. A total promotional pool of £5m is being offered by the brand.
Oliver Dickson, Senior Brand Manager for Grant’s, comments: “The findmypast.co.uk partnership is the perfect platform for us to communicate our authentic, five generations story and give consumers the chance to discover some of their own family stories in the process.”
And Dickson believes it will help the brand boost sales at Christmas: “The promotion concentrates on adding value rather than just pricing, and that’s something convenience shoppers are looking for.” However, he adds that as we get closer to Christmas, price becomes more of a driver. “Retailers use price to drive footfall as we approach Christmas. Price is what gets people through the door, so retailers must ensure they get that right. People are more savvy than ever.”
John Bradbury, Whyte & Mackay, UK Sales Director, says the best place to start is by getting the basics right. He says: “This includes making sure spirits are priced with large tickets which clearly show the name and price of each spirit to make it blatantly clear to consumers and easy to read over the counter and making sure high moving products are clearly visible above the height of the counter.”
Bradbury also points out that gift packs are easier to wrap as presents, so it makes sense to stock them. “As well as the gift packs, look at increasing facings of different SKU size as well. Stocking a 35cl product, such as Jura or Glayva, means that there is an alternative price point available for those who are looking for a quality gift at a more accessible price point.”
Mixing it up
With such a strong focus on spirits at Christmas is should be remembered that not every bottle purchased is a gift, and for those stocking up their own drinks cabinet they are likely to be looking for mixers to go alongside it. While Scottish retailers aren’t allowed to advertise soft drinks next to alcohol, that doesn’t mean they shouldn’t be upping the amount of mixers on offer.
Schweppes mixers and lemonade are an integral part of shoppers’ purchasing habits at this time of year, says Coca-Cola Enterprises.
Alan Halliday, Field Sales Director for CCE, says: “Mixers and lemonade experience a significant seasonal sales uplift as friends and families come together at home for social occasions. There is plenty of opportunity for more growth.”
And to mark this year, there will be special limited edition themed packaging across a range of Schweppes SKUs.
Regular soft drinks work as mixers too and sparkling sectors in the soft drinks category particularly increase in importance over the festive season. Last Christmas they grew quicker than still soft drinks, increasing by 10%, which was also ahead of the total soft drinks category. Coca-Cola is a key brand to drive success for independent retailers at Christmas and soft drinks growth over the Christmas season is largely driven by sparkling soft drinks.
Halliday says: “At Christmas, shoppers and consumers engage in two different phases: anticipation, which includes, planning, shopping and excitement, and celebration, which includes togetherness, indulgence and happiness. This indicates that there are opportunities for retailers throughout the season, from the lead-up in November to the celebrations in December.”
Keeping the wine flowing
Over the last year, many retailers have anecdotally reported increases in wine sales, very much in line with Neilsen’s data indicating that wine sales increased 7.5% in the six weeks running up to Christmas last year compared with the previous six weeks.
Clare Griffiths, European Marketing Director at Accolade Wines says that consumers choosing wine make around 50% of their decisions at the fixture. This is a lot more than other categories (i.e. 10% for butter or margarine), therefore retailers need to give some help to customers in their decision-making process.
She says: “Displaying wine alongside other relevant seasonal categories can boost impulse sales so retailers should group products together according to the occasions, such as a festive party, get-together for friends, a Christmas meal or even as a gift.
POS can work well doing this as customers will trade up for an occasion – POS highlighting ‘The perfect gift’ or ‘something for that special occasion’ will help to do this.”
As socialising and entertaining are high on the agenda for consumers, retailers should be prepared by ensuring they have plenty of stock refrigerated.
In independents and convenience stores, 90% of wine purchased is consumed on the same day, therefore white and rosé wines should be kept chilled, particularly sparkling wines. Griffiths adds: “If only a selection of wines can be chilled, stockists should ensure they chill wine from the higher price brackets.”
Along with stocking best sellers like Hardys and Stowells, a trend in the wine category is for lighter abv products.
Griffiths says that consumers are increasingly drawn to lighter style wine particularly during the summer however it is not one to discount during the winter months as it is a time when consumers are particularly conscious of over-indulging and will be looking for alternative options.
Banrock Station Light White and Banrock Station Light Rose are both 5.5% abv in strength, containing only one unit of alcohol per 125ml serving and only 60 calories, 30% less than a standard glass of wine.
Bacardi brings OakHeart to premix market
Following the success of Bacardi OakHeart, a new addition to the Bacardi range of pre-mixed cans will be available in time for Christmas this year: Bacardi OakHeart & Cola. The 250ml premix can is available in case sizes of 12 single cans, which have an rrp of £1.85.
The company says that the stand out design of the packaging draws inspiration from the distinctive Bacardi OakHeart parent brand, appealing directly to the core target audience, males from LDA-24.
Liam Newton, from Bacardi OakHeart comments: “These new cans are ideal for consumers who wish to enjoy a pre mixed Bacardi OakHeart at home or on the move. Tapping into the consumer trend for more fun and convenient ways to enjoy their favourite spirits, the Bacardi OakHeart & Cola 250ml premix gives fans the opportunity to savour the drink anytime, anywhere.” Launched in October 2011, Bacardi OakHeart (rrp £1.85) has already achieved a strong market position.
We wish you a wicked Christmas
WKD will be decorating this Christmas with its usual irreverent cheer. Christmas paper POS kits containing posters, shelf-trims and signs for seasonal opening times will be available free to all retailers.This year, WKD’s festive POS will be themed as part of a witty ‘Christ-Moose’ campaign.
A comprehensive selection of case deals will encourage retailers to stock up on WKD and help them to maximise profits. The brand will also have a range of account-specific promotions.
To offer great festive value and build sales for retailers, 4x275ml price-marked promotional packs of WKD Blue, Iron Brew and Purple will be available until the end of the year. Prominently flashed with an attention grabbing ‘Only £4.99 Result’ logo, the special packs have added shelf stand-out.
Soft Drinks Christmas Tips
Christmas is a big opportunity for retailers to increase sales of soft drinks and CCE wants to help retailers enjoy strong festive sales. Our Open More Business best practice on merchandising at Christmas will help drive sales not just for our brands, but for the whole category.
- The build-up to Christmas starts at the end of October, peaking in the final four weeks. In-store, CCE would advise retailers that keeping fully stocked will ensure that they won’t miss out on lost sales
- It is essential to start stocking product from the beginning of November to boost and maintain ‘early bird’ sales at the start of the Christmas period. Retailers should focus on targeting heavy consumers to maintain sales and also encourage occasional consumers with visibility of product displays early in the season to encourage purchase
- Create maximum visibility in-store and in-depot with POS to drive extra sales.
- Retailers should consider secondary siting when merchandising.
