Premium alcohol brands sees 70% increase due to coronavirus

A study produced by Kantar has revealed that the the UK's weekly spending habits within the alcohol category during lockdown has increased by 70% for premium brands.

The study noted that Government's Eat Out to Help Out scheme during August helped the on-trade business boost sales after months of lockdown.

However, shortly after the one-month scheme finished, coronavirus cases have seen a dramatic increase, resulting in the introduction of more local lockdowns and the rule of six.

Off trade sales alcohol sales remains the fastest growing category at +24.2% YoY (Kantar, FMCG Panel, 4we 6 September 2020) in the UK, in line with behaviour across many other markets.

Consumers have have been increasingly consuming alcoholic beverages at home to replace traditional on-trade occasions, with beer being the most most popular, with sales jumping by 66% for April to June this year.

Some brands have capitalised on the shift and exceeded the loss from on-trade sales.

Low/no and premium alcohol brands within the on-trade has seen triple digit growth in June, reverting to pre-COVID-19 growth.

In their report, Tim Winfield sales director for Kantar's analytics, consulting division UK and John Maingi, head of analytics for Kantar's Consulting Division UK, both advised the following to retailers.

They said: "As social distancing restrictions start to lift and then are re-applied, category leaders will want to plan for an evolving landscape instead of a rebound to pre-COVID-19 norms."

Tips and advice for retailers on how to respond to continues alcohol sale trends include:

• Understand the total portfolio of products. Identify the highest margin contributors, know what brings unique incremental value and what can be transferred, rationalise range, and identify new product introduction opportunities.

• More heavily-branded categories such as Alcohol, Dairy, Soft Drinks, and Confectionery are driving this strong growth. Understanding the incremental impact of your brand in the total category will help engagement and sell in with retail customers

• Consider bigger bottles and pack sizes, ready-to-drink offers, premiumisation, secondary location of spirits, ease of shop findability and PPA. 70% of premium brands have grown their category share during COVID-19 when compared to last year. As recessionary implications bite, shopper behaviour will change to price and promotion expectations.

They added: "Adapt to the constant demands from the retailers to reduce space, rationalise SKU and facings, guarantee supply and still grow is a challenge that almost all FMCG companies are experiencing."