There are several certainties that can always be relied upon – the Queen's Speech, the over-consumption of turkey and stuffing, and an inordinate number of opportunities to celebrate. In years gone by, licensed premises echoed to the sound of Champagne corks popping as consumers abandoned their frugal spending habits to treat themselves. However, as the on trade continues to change, is this image of Christmas still relevant? Phillip Montgomery, CGA Strategy, looks at the Fizz phenomenon and concludes that while Champagne can still hold its head high, it is by no means the only Fizz on the block
In truth, the consumption of Champagne will always remain integral to the Christmas celebration. After all, it is the celebration drink of choice. CGA data reinforces this, with Champagne seeing a 3.4% uplift in volume performance on the 12 Weeks to Christmas 2012 vs. 2011 (the best performing of all Fizz categories). Indeed, as the financial outlook improves and the premiumisation of outlets continues to sweep across the trade, the opportunity for Champagne at Christmas may grow even more as higher quality, more premium outlets stock brands to satisfy the ever-more discerning clientele.
However, while Champagne will always remain a factor in festive stocking policies, will the future for this form of Fizz be mired with competition from other categories over the Christmas period? There are a number of trends at play in the trade at present that could threaten Festive Champagne category performance. One of the chief protagonists of this threat is Sparkling Wine.
Sparkling Wine has undergone a metamorphosis in recent years in the on trade. Driven primarily by the increasing popularity of Prosecco and Cava, the category has really benefited from increased consumer engagement. Sparkling Wine is now a bigger category in volume terms than Champagne to the on trade.
With a similar profile to Champagne, but at a typically lower price, the category has been positioned as a ‘premium trade down’ from Champagne, which may have enticed cash-strapped consumers towards it. While not offering the same margin opportunity as Champagne, Sparkling Wine’s popularity, relative affordability in the eyes of the consumer and similar Fizz profile may convince licensees to stock more of the category around the festive period. Indeed, CGA research has shown that Sparkling Wine’s rate of sale in a typical outlet is more influenced by the Christmas period than Champagne – adding further weight to the justification for stocking by licensees at Christmas.
While Sparkling Wine does not represent a departure from the stocking of Champagne, it certainly challenges the autonomy previously enjoyed by Champagne.
Cocktails – a force to be reckoned with
While the battle of the Fizz categories is certain to continue this Christmas, the Fizz category itself may be susceptible to challenges from outside the wine and Champagne sector. The growing provision of cocktails in the trade represents a real threat to festive Fizz, with the capacity of the category to be another drink of choice in a celebration sense not boding well for the more traditional celebratory beverages.
As licensees look to use different levers such as coffee and Wi-Fi to draw consumer footfall into their outlets, cocktails have become an important weapon. The 2013 CGA Cocktail report suggests that the on-trade cocktail market has grown 3.9% in the last year, with gains in the stocking of cocktails spearheaded by pubs.
The threat from Cocktails has even broadened in the last year as innovation in serve and flavour has taken hold of the category. While the Mojito remains king, innovation has given the category a new sense of vigour. There has been a growth in the use of vehicles such as custom serve-ware from kettles to jam jars to boost the theatre of serve, while the rise in the incidence of new beer, hot and sparkling cocktails are evident at all levels of the trade. This has meant that there is a wider pool of more premium, innovative cocktail options available to the average consumer than ever before.
As we approach the festive period, and consumers are more prepared to treat spend, further engagement with this increasingly sophisticated cocktail provision is highly likely, potentially to the detriment of the Fizz category. For licensees, when considering stocking, it will be important to understand the potential benefits of cocktails in their individual outlets (with food or at a high tempo occasion), but undoubtedly any form of provision will bring financial rewards.
Choice is paramount
So what should licensees consider about the stocking of Festive Fizz this Christmas? Of course, Champagne will remain a must stock. The category is the celebration drink of choice and undoubtedly consumers will still flock here when the tune of Auld Lang Syne reverberates. However, balance and engagement with new trends will provide competitive advantage for licensees. The enhanced stocking of Sparkling Wines, Cocktails and even the more premium packaged ciders may bring rewards; enabling licensees to take advantage both of the low tempo food-led opportunity as well as the higher tempo celebratory occasion.