Diageo is significantly bumping up investment behind its key brands in the hope of convincing retailers not to enter into their annual Christmas freefall on alcohol pricing.
New multi-million pound TV ads for Baileys, Smirnoff, Gordon’s and Guinness and the off-trade launch of Pimm’s Winter are among activity from the drinks giant in the run-up to Christmas, aimed at driving both volume and value.
Recently appointed off-trade MD Benet Slay admitted that discounting was likely to be as fierce as last Christmas, when the price of a one-litre bottle of Baileys fell to £9.88.
“Pricing will be aggressive and I think the challenge for retailers will be to differentiate,”
he said. “The appetite to just lead on price is the primary appetite now and prices will probably go lower this Christmas. But in terms of the consumer, hosting a perfect Christmas is the key thing and price is a very small part of the mix.”
With Christmas Day falling on Sunday, Slay said people were likely to leave their shopping until even later, which posed a logistical challenge for retailers. They could maximise sales by encouraging consumers to buy earlier and hitting the big three weekends before Christmas.
Number one spirit brand Smirnoff is launching a £4m TV and ad campaign in October, a 36% increase on Christmas 2004.
Newly launched premium variant Smirnoff Norsk will be supported by a £400,000 spend and miniatures will be placed on litre bottles of Smirnoff.
Gordon’s Gin also has a new £2.1m TV ad from September to December.
Pimm’s Winter, which was trialled at Waitrose last winter, will be launched in most multiples and backed by with a £2m investment, including a new ‘Harry’ ad breaking on October 24.
Claire Hu