The drinks retail should be investing in for Christmas 2023

The amount of shop floor space dedicated to spirits is growing. While there’s been a heavy leaning in the last five years towards gin…is it still considered the nation’s go-to drink?

Not according to some industry insiders, who say there are lots of other options vying for buyers’ attentions this season, as consumers expand their palates and seek something shiny and new for their Christmas celebrations.

Liam Belton, trade lead at Master of Malt, says he’s seen some very interesting developments in the industry during the past year. “We’ve seen some of the biggest growth in the flavoured categories for the on-trade. Flavoured vodka has seen an 18.5% increase, and there has been a 36% growth in flavoured rums,” he explains.

Another area Liam says has “boomed” is dark rums (a 111% increase in sales from 2021 to 2022). “We put this down to the fact that bartenders are likely swapping out more expensive whiskies for dark rum to look after their margin.”

And the drinks expert has seen massive interest in premium Mexican drinks. Mezcal had a 60.9% uplift in the first quarter of 2023 compared to 2022, and some brands of cachaca and tequila have reported sales up over 250%. 

His best bets for buyers over the coming months?

“Luxury-inspired home imbibing. Premium spirits and high end serves that will impressive Christmas guests. And I’m seeing the return of the retro serve, but with a twist - swapping spirits in Christmas classics to bring them bang up to the moment.”

Tequila sales are on the rise

It might seem the tequila trend has just popped out of nowhere, but according to the Wine and Spirit Trade Association (WSTA) that’s not the case. Their report last summer showed an 83% rise in tequila sales compared to pre-Covid levels, up in value by 94% in British shops and supermarkets.

Award-winning bartender and tequila expert, Deano Moncrieffe, is delighted the drink is finally making a splash in the industry.

“In my opinion Mexican spirits and agave spirits are the most versatile category in the world,” he says. “This plays a huge part in why tequila (and mezcal) have become the second largest category in the US, only being outdone by vodka.”

He says this is “huge news” for two reasons. “Number one, because the UK is heavily influenced by US drinks trends. And, number two, this has never happened before.

“Previously the two big categories that had an unbreakable partnership at numbers one and two were vodka and whisky. Now tequila and agave spirits have vodka in their sights.”

And Deano is confident this ‘takeover’ will happen. “It’s just a matter of time.”

Dark and spiced rum should factor into Christmas buying

Like Liam, Ken Schro of The Rum Shop, has seen a keen growth in the spirit in recent years. More than 70% of his shop’s stock is rum, or rum-related, and Ken says spiced rum is flying high at the moment.

“We’ve had all this talk, for years, about rum being the ‘next big thing’. It’s always happening. Talk to anyone about it, ask them when, and they’ll say ‘oh we had Covid’, or ‘it’s the interest rates’. I say, yes, rum will be the next big thing. I don’t know when, but it’s coming.”

Ken says the industry as a whole has seen an increase in overall rum sales.

“From our point of view there’s been a lot of interest in British spiced rum. Lots of micro distilleries are being set up here. They import the molasses or the liquid and do their own production, putting their own twists on it, with aging and blending with spices.”

While spiced rum is proving a heavy hitter, there is a new (ish) kid on the block in this sector – botanical rum, picking up cue from the marketing and language that’s been so successful in the gin-making world.

Ken explains, “Botanical rum is not very different, but it’s used as a term in the sale of the rum. When you say ‘botanical’, people think floral, and a bit of spice, some herbs. Ask them about spiced rum, and they’ll go to those heavy spices, but spiced rum can also contain flavours of fruit or berries. This is a bit of education. To make people understand spiced rum is so much more than they know.”

So botanical, spiced and British rums look to be solid choices for buyers this season. Ken also advises looking for the unusual and extraordinary, so you have some ‘showpieces’ that will really stand out as gifts on your shelves.

“The great thing about rum,” Ken adds, “is, depending on how it’s made, where it’s from and the different molasses used, you can find something for everyone. It’s so versatile as a drink, being white, dark or agricole, with a variety of different ways of ageing it.”

The rise of Ready-To-Drink

Are you ready for a more sophisticated kind of cocktail in a can? It appears the British public is. In 2020 and 2021, deep in lockdown, there was a surge in cocktail culture.

As we looked to entertain ourselves within the confines of our homes, makeshift bars sprung forth in back gardens, granny’s old side table was fashioned into a drinks cabinet, and sales of spirits soared. According to analysts at Kantar, an additional £199m was shelled out by consumers on wine, beer and spirits in the four weeks to March 2020, while during that month alcohol sales in general were up 22%.

A market leader that took advantage of the sales bump was hard seltzer heavyweight White Claw, which moved an enormous 65 million cases in 2021, helping solidify RTD spirits-based drinks as a major player

According to IWSR’s Drinks Market Analysis, the ready-to-drink category is expected to increase its market share to 8% of the total alcohol sector by 2025, with a strong consumer demand for better, bar-quality products. The IWSR also discovered 56% of those buying RTD products said flavour was the most important factor when they considered how premium a drink was, followed closely by branding and packaging.

Rob Wallis, co-founder of MOTH, says he’s seen significant growth in RTDs since founding his premium cocktail company. “It’s a result of premiumisation in the category when it comes to ingredients, taste and packaging.

“RTDs take the pressure off hosting at home, especially during busy times like Christmas. All you have to do is take a can out of the fridge, then shake and pour it into your favourite glass and serve to your guests.”

This season Rob expects Espresso Martinis to remain a hit, closely followed by the Margarita, and a classic Pina Colada.

Abby Matthew, director of The Cocktail Co has also seen a burst of interest in the sector and agrees with Rob that it’s been largely consumer-driven as shoppers “increasingly seek convenience and quality”.

“With busy lifestyles, people are looking for ready-to-drink options that offer the high-quality cocktail experience without the need for extensive preparation.”

Abby has seen, what she calls, significant improvement in the overall quality of RTD cocktails in recent years, propelled by the explosion of exciting craft cocktails in bars. Brands are, she adds, increasingly choosing premium ingredients.

Several flavour trends have been noted too. “During the summer cocktails with refreshing, fruity profiles have been most sought-after. Drinks with passionfruit, pineapple and citrus fruits evoked a tropical vibe.”

As the weather cools, the demand for seasonal, unique offerings is expected. “Hot-serve RTD cocktails have emerged as a top trend,” Abby says. “During the festive season, consumers are looking for quick and hassle-free options to entertain guests and enjoy themselves. RTDs are the perfect solution, allowing hosts to offer a variety of premium drinks without the need for extensive mixology skills or time-consuming preparations.”

Abby picks out flavours such as hot apple gin, and spiced rum punch, as leading the way this season.

Tom Mayes, co-founder of Edmunds Cocktails thinks the gingerbread Espresso Martini will be one of the hottest drink in RTDs this Christmas. “Cocktail menus can be bamboozling,” he says. “A twist on a classic, like the Espresso Martini, is always popular, and a nice way of pushing people slightly out of their comfort zone. We’ve also seen the Cosmopolitan being really popular this year, perhaps part of the 90s revival and the pink Barbie craze?

“Looking ahead, we’re also expecting tequila to continue its strong growth, so we’re investing in developing Margaritas, Palomas and Picantes.”

Look out for plant-based cream spirits

Tequila might be shining bright at the moment, but a new drinks category is growing apace – plant-based cream liqueurs.

With Mintel reporting 26% of households avoiding dairy products in 2022 (a figure that shows no signs of slowing down), and with British palates tuned to luscious cream liqueurs as the weather cools, the new-wave of plant-based bottles could well prove worth investment in fine food retail.

Market leader Baileys has Almand, but looking beyond the obvious, there are some quirky talking points to discover. They include the completely clear, but luxuriously-textured Wild Abor. Made with natural ingredients, beyond the warm, vanilla/chocolatey original flavour, the brand has launched Cherry & Almond, and Fine Cinnamon & Sweet Cardamom.

While Dirty Cow, puts a fun touch on the category with its quirky branding, offering Loaded Chocolate and Sooo Vanilla no-cream liqueurs that deliver on mouthfeel and flavour, without any dairy.

Insider insight

Anna Ward, senior research consultant at Euromonitor shares her three hot predictions for the drinks sector this Christmas:

1. Cost-of-living pressures will continue to influence purchasing decisions over the festive period – the desire to celebrate with friends and family will be balanced against the need to cut back on discretionary spending. Some socialising occasions that would previously have taken place in bars and restaurants may be moved into the home due to the comparative affordability of retail prices.

2. No and low-alcohol drinks will be an important part of the picture over Christmas. Younger legal drinking age groups, in particular, are prioritising moderation and a mindful approach year-round. The range of alcohol-free adult beverages available continues to grow, providing choice and sophisticated flavours across occasions. 

3. Rum has been attracting attention for some time but is still worth mentioning as a growth category. Super premium rum is gaining popularity as a complex, sipping drink, adding to the category’s versatility. Rum also benefits from the range of flavour profiles covered and suitability for different cocktails. Production spans many countries with distinct production methods and varied brand stories, which aligns well with ongoing demand for provenance in spirits.