Below are the key findings from the 2015 State of the Nation report:
By Shopper Tracker
Destination Via Occasion
Liquor segments are largely pre-meditated purchases driven by four distinct occasions:
- 64 per cent are ‘Relaxing’/for everyday: An informal occasion with a small number of people very familiar to the shopper (e.g family, flatmates), not looking to impress/show off.
- 28 per cent are for a ‘Casual Event’: Bought to socialise with; the shopper wants to impress other people, often for an informal occasion, could be in/out of home.
- 11 per cent are ‘Special Occasions’: A more formal “set piece” event that’s planned in and important to impress.
- 6 per cent are ‘Gifts’: The shopper is not the consumer, must impress.
Suppliers and retailers must align investment pre- and in-store to maximise this.
Is “Destination Value” Acceptable?
Most big brands are “Destination Value”, meaning they are highly planned and shoppers will not compromise by switching brand. In fact, they’re likely to switch retailer to get specifically what they want. Despite this, shoppers are least willing to pay more for these segments; they have been taught to shop around for price. So whilst the brand is strong, there is little opportunity for premium pricing.
Key segments:
Full Strength Beer
Light Beer
Mid-Strength Beer
Contemporary Beer
Bourbon Whisky
Cider is a Good Example of Driving Differentiation
Cider has achieved this via innovation and inspiration through ‘Flavoured’: what lessons apply to your segments/brands? At brand level, here are the Top 10 “Hero” SKUs that drive traffic, retailer loyalty and a price premium:
Top 10 Hero Brands
Stella Artois (Premium Beer)
Chivas Regal (Scotch Whisky)
Veuve Clicquot (Champagne)
Johnnie Walker Red (Scotch Whisky)
Tooheys New (Full-Strength Beer)
Corona (Premium Beer)
Brown Brothers (Moscato)
Crown (Premium Beer)
Bollinger (Champagne)
Tooheys Extra Dry (Contemporary Beer)
Price & Availability Image Improve
Shoppers tell us price has improved across the industry, led by Big Box, but challenged by Aldi (which is rated higher). Availability also improves: both remain key levers for investment.
Retailers Improve, but Could Do More
Retailer loyalty is improving; retailers are better defining their proposition and aligning with their shoppers more effectively. Suppliers must reflect this in their approach and discussions: what are your customers’ objectives by banner? How can you align?
Given the importance of a pre-meditated occasion driving most choices, it is surprising that this is hardly ever represented at shelf. Grocery aligns to the occasion better (e.g. Curtis Stone meals for $10): what can we learn and apply?
Similarly, look at how grocery has driven retailer loyalty. Why do they have coffee shops, seating areas and iPads in Grocery stores? If we accept that this is to drive loyalty and create a premium destination, then why is it not relevant in liquor? There’s a big opportunity for the retailer and supplier partners that can drive this type of thinking in liquor.
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