Mast-Jaegermeister UK is calling on Multiple Grocers, and the Impulse sector alike, to reconsider the way they merchandise their spirit offering in order to capitalise on the untapped opportunities within it.
With grocers missing out on a category worth a potential £300m, MJUK is unveiling its latest development as part of its Give It A Shot initiative. The two pronged solution involves – 1) a planogram driven by a need-states spirits segmentation and 2) granting more status to ‘Party Shot Spirits’, with a dedicated area within the fixture to help drive incremental sales.
The category initiative urges retailers to introduce a need-states driven planogram that groups spirits together based on their appeal to the consumers’ needs and occasions, breaking with traditional spirit boundaries. It is designed to drive increased interest in categories that add ‘something different’, like ‘Party Shot Spirits’, tying in with the rise of today’s cocktail culture.
The MJUK category team has identified six need states, based on consumer insight and through working with TNS/Kantar, that correlate to the type of spirit that is most likely to be consumed and ultimately purchased for the growing number of off-trade occasions. Whilst each state influences consumers’ spirit decisions, naturally some spirits such as Jägermeister, bridge more than one state. The need states are, Cheerful, Bold, Exclusive, Discerning, Cosy and Sociable.
Mast-Jaegermeister UK, Customer Marketing & Insights Controller, Jonathan Dennys comments, “Retailers are continuing to stock and present their spirits in the same, conventional format as they have for years – a re-think will allow retailers to tap into the trend of more knowledgeable consumers, willing to try more interesting products and categories that may have previously taken a back seat, ultimately driving incremental sales for the whole category. The traditional model of conventional positioning by category limits incremental purchases, dulls inspiration and potentially leads to lost sales.
“It is well known that drinking trends start in the on-trade and then migrate to the off-trade. With Jägermeister, now the second largest spirit in the on-trade, the time is right to expand its presence in the off-trade.
New Spirit Segmentation
MJUK has used these need states to further refine the spirits category in to five segments and six sub-segments. This view of the category stems from actual customer behaviour, leading to a ranging solution that is easy to navigate, and, most importantly, inspires customers by disrupting the traditional fixed product ranging solution.
‘Party Shot Spirits’ is one of the most buoyant sub-categories within the category; with a +13% volume growth and 10% value growth1, set against overall spirits volume growth of just 2%. Thanks to 37% penetration growth the spirit has witnessed over the last 12 months2, Jägermeister is perfectly suited to signpost this category, inspiring consumers to purchase spirits.
If ‘Party Shots’ were to achieve just half of the share that they have in the on-trade, it would create a category worth £300m, presenting retailers with a £241m ‘opportunity gap’3 to tap into with efficient merchandising.
This breakdown allows for a new fixture layout that provides grocers with the opportunity to give greater prominence to the ‘Party Shot Spirits’ segment, a key growth area in shots, which accounts for 15% of the total spirits value in the on-trade, but only accounts for 1.5% of the total spirits value in the off-trade.4
The new look merchandising crucially helps consumers find what they ‘need’ without having to traverse the whole fixture, breaking with traditional spirit boundaries and driving increased interest in categories that add ‘something different’, to satisfy the rise of today’s more adventurous consum.
- Cheerful: Consumers are looking for refreshing spirits, suitable for a celebration. The spirit will be consumed on a high-energy occasion either on a ‘big night in’ or drunk at home before going out
- Bold: Consumers are more likely to trial something unusual and new with an individual taste
- Exclusive: Consumers are seeking exclusive spirit offerings, which are not widely available. These consumers search for prestige and status when selecting their spirits
- Discerning: Consumers show a preference for ‘mature’ flavours and are looking for quality. These shoppers are willing to pay extra for a premium product
- Cosy: Consumers want unpretentious brands that provide quality, comforting flavours they are familiar with
- Sociable: Consumers want to buy spirits to share with their friends and enjoy on social occasions
Spirits are broken down into ‘special occasion’, ‘traditional liqueurs’, ‘get together’, ‘party’ and ‘cocktail ingredients’ with many of these segments further refined into sub-segments.
‘Special occasion’ spirits can be categorised as ‘celebration’, which includes premium vodkas and gins and are quality products suited to an up-tempo party. Alternatively ‘Special Occasion’ spirits may be classified as ‘treat’, Scotch Whiskeys and cognac – typically darker in colour and mellower in taste – and are suitable for a more relaxed, contemplative occasion.
‘Get together’ spirits are characterised as either higher or lower tempo. The former spirits sub-segment is ideal for groups of friends drinking together at home, while lower tempo spirits, a blended whiskey for example, are for extended, slower-paced catch ups.
Party Spirits consists of two further sectors; ‘long drinks’ party spirits which includes vodkas, rums and classic bourbons and also ‘shot drinks’ party spirits, which itself is broken down into two further segments. Jägermeister, Tequila, Sambuca make up a ‘higher ABV’ grouping, while Sourz, Cactus Jack and Schnapps compose the ‘lower ABV’ grouping. The spirits in the Higher ABV group can be characterised as being full-bodied and having a more challenging taste profile.
Together, the higher and lower ABV groups within shot drinks party spirits are great incremental products on top of a consumer’s regular purchases and provide a drinks solution across the consumer spectrum.
The ‘cocktail ingredients’ segment consists of everything the home mixologist needs to create cocktails, including bitters and syrups. (Not included on the planogram)
Further insight commissioned by Mast-Jägermeister UK in partnership with research company Brand Genetics identified ten occasions where spirits, and Party Shot Spirits in particular, are growing in relevance, highlighting just why they are so important to the new look fixture. There is a marked increase in occasions for spirits to be consumed alongside beers, drunk at house parties or drunk whilst dining with friends.
A practical example of this is to locate Jägermeister adjacent to products that are consumed during the same occasion, such as ‘pre-drinks / getting ready to go out’ or ‘celebration occasions’, rather than sitting within traditional non-cream liqueurs. The latter is a sub-category that is not suited to these occasions and, therefore, these liqueurs will not be considered as an additional purchase at the moment of decision.
1Jager to confirm
2Nielsen homescan, July 16
3Nielsen: 08.10.16 & CGA: 09.07.16
4Nielsen: 08.10.16 & CGA: 09.07.16
5Nielsen / CGA data 09.15