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Biggest brands: Top 10 alcohol brands
[August 16, 2006]

Biggest brands: Top 10 alcohol brands

(Marketing Via Thomson Dialog NewsEdge) Retailers' heavy use of price promotions has eroded value from the wine and beer sectors, but brandy sales soared.

WINE - pounds 2780m-pounds 2785m

After a stellar performance last year, in which it became the country's most popular alcoholic drink, value growth in wine has slowed to 2.6% this year, with sales approaching pounds 2.8bn. Buyer numbers are declining, while value is also being taken out of the market by the continuous use of price promotions: manufacturers have competed to place wines at pounds 3.99, with several normally higher-priced brands, including Banrock Station and Kumala Zenith, being sold almost exclusively at this price point.

Despite their strong identities, the success of Kumala, Blossom Hill and E&J Gallo has more to do with such promotions than any branding strategy, according to a TNS analyst. While this approach benefits individual brands, it does little for the growth of the category, as consumers simply switch from one price promotion to another.

Christmas is the critical trading period, accounting for 20%-30% of a brand's sales. Jacob's Creek, whose sales fell 17% last year, failed to pull off the promotional trick, while Lindemans' 37% sales decline reflects the fact that its promotional success in 2005 was not replicated in this year's figures.


SPIRITS - pounds 2115m-pounds 2120m

The healthy 2.6% rise in this category's value sales disguises a loss of buyers countered by an increase in spend by loyal customers. Average consumption rose half a litre to almost 12.5 per person per year, as consumers found more occasions for buying spirits.

Brandy was the best-performing sector, growing by 13% on the back of a big increase in purchase frequency as consumers drank it at times other than special occasions. As a counterpoint, whisky has failed to reposition itself and sales have declined. The contrast between whisky and vodka, which is largely unflavoured and thus more flexible, is becoming increasingly marked: vodka grew by 2% this year, and lost less than 1% of its buyers, while whisky lost almost 4% of its consumer base.

Baileys ceded its top slot to Smirnoff Red, which grew 24% by picking up new buyers and increasing average spends. Its ads highlight its triple distillation process, while sponsored music events provide a platform to promote its products to young adults.

The top-selling whisky, The Famous Grouse, enjoyed double-digit growth, based on strong advertising, NPD and its rugby union sponsorship ties.

BEER & LAGER - pounds 1780m-pounds 1785m

Value in the beer and lager market is also being eroded by widespread use of price promotions. Multi-buy offers were popular with retailers this year, with Christmas deals of 'Two for pounds 14' widespread. 'Three for ...' offers have also now been introduced.

The trend away from ales continues: just one non-lager - Guinness - appears in the top 10. Constant price competition has eroded the perceived difference between premium and standard lager, affecting sales of Stella Artois especially, whose low price is at odds with its 'Reassuringly expensive' strapline. Grolsch, whose sales fell 25%, has also been hit hard.

Carling's 11% fall is the result of a bad Christmas and consumer defections to brands such as Foster's and Carlsberg, whose brands are more distinctive, principally due to their sporting links, and which consequently enjoyed more successful promotions.

However, sales of bottled ales have been growing, and their prices have been rising as their (more affluent) consumers show that they are happy to spend money on products they enjoy. 'Exotic' lager brands such as Peroni, Cobra and Asahi have also benefited from higher consumer spending in the sector.

TOP 10 WINE

Rnk Brand 2006 2005 Change
(pounds m) (pounds m) (%)
1 Hardys 165-170 155-160 7
2 Blossom Hill 115-120 85-90 37
3 E&J Gallo 90-95 70-75 26
4 Kumala 90-95 65-70 35
5 Stowells of Chelsea 70-75 75-80 -7
6 Banrock Station 60-65 50-55 20
7 Jacob's Creek 60-65 75-80 -23
8 Lindemans 30-35 50-55 -37
9 Namaqua 30-35 25-30 10
10 JP Chenet 25-30 15-20 56

Source: TNS Worldpanel

TOP 10 SPIRITS

Rnk Brand 2006 2005 Change
(pounds m) (pounds m) (%)
1 Smirnoff Red Vodka 90-95 70-75 24
2 Baileys (excl Glide, Minis) 85-90 90-95 -3
3 The Famous Grouse 75-80 60-65 21
4 Bell's Scotch Whisky 75-80 70-75 3
5 Gordon's Gin 70-75 60-65 16
6 Bacardi White Rum 50-55 50-55 2
7 Grant's Vodka 50-55 40-45 16
8 Teacher's Scotch Whisky 50-55 45-50 6
9 Grant's Scotch Whisky 40-45 45-50 -14
10 Three Barrels Brandy 25-30 25-30 -8

Source: TNS Worldpanel

TOP 10 BEER

Rnk Brand 2006 2005 Change
(pounds m) (pounds m) (%)
1 Stella Artois 310-315 300-305 4
2 Carling 135-140 155-160 -11
3 Foster's 105-110 80-85 32
4 Carlsberg 100-105 95-100 6
5 Budweiser 80-85 70-75 12
6 Grolsch 75-80 100-105 -25
7 Carlsberg Export 70-75 70-75 1
8 Kronenbourg 1664 65-70 65-70 1
9 Carlsberg Special Brew 55-60 35-40 49
10 Guinness Draught 40-45 40-45 -1

Source: TNS Worldpanel

Copyright 2006 Marketing. Source: Financial Times Information Limited - Europe Intelligence Wire.

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