Executive Summary

The UK white spirits market was worth £2.31bn in 1997, representing 39.4% of the UK market for spirits and liqueurs.

Vodka is worth £1.18bn, gin £640m and white rum £410m. The minor white spirits are led by tequila, but pre-mix cocktails in single-serve containers, such as Bacardi Breezer or Smirnoff Moscow Mule, is the new growth category.

With vodka and white rum appealing to younger drinkers, the white spirits have fared better than the dark spirits such as whisky and brandy for many years, although real-term growth is difficult to achieve in any spirits market. In value terms, sales are concentrated in the on-trade (public houses, clubs and bars), where investment in more attractive drinking outlets is a positive factor. Higher volumes are sold through the more competitive take-home outlets.

The distinctive feature of white spirits is the category dominance by a `big three' brands: Gordon's gin, Smirnoff vodka and Bacardi white rum. The strongest category dominance (over 80% market share) is by Bacardi, the privately-owned white rum that leads the overall global spirits market.

Smirnoff and Gordon's were united in 1997 by the merger of Grand Metropolitan and Guinness, whose spirits subsidiaries will now trade as United Distillers & Vintners (UDV), the world's largest distilling group. Other UK distillers are led by JBB (Vladivar vodka), Allied Domecq (Beafeater gin) and Seagram (White Satin gin).

Prospects for growth can only be regarded as reasonable, as long as these drinks and their pre-mix cocktail versions continue to appeal to young adults (except gin, which has an older consumer profile). The millennium celebrations should provide a temporary boost for the spirits market.

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