REPORT IN FOCUS - Liqueurs show versatility as trends change
Far from being comprised of rather dusty brands consumed after dinner by a declining proportion of drinkers, liqueurs are among the most versatile products on the drinks market. According to a new report from just-drinks and The IWSR, the growth of the cocktail culture in the US and now increasingly in other markets, and the increasing popularity of flavoured versions of mainstream spirits have resulted in sustained growth in this most vibrant of categories. Ben Cooper reports.
If the liqueurs sector were completely reliant on the traditional after-dinner consumption of "stickies" such as Drambuie and Bénédictine, it would be something of a moribund category, owing to the adverse changes in consumption patterns. But fortunately changing fashions have created opportunities too, and the liqueurs category is evolving to meet them.
Indeed, a new report from just-drinks and The IWSR on the liqueurs market points to "steady growth" in the category, with volumes rising every year since 2000. According to the report, Global market review of liqueurs - forecasts to 2012, in 2007, the overall global liqueurs market (including travel retail) rose by 1.4% to reach 79.2m nine-litre cases. That said, while the category is growing steadily in most markets, the report reveals there are relatively few countries where explosive growth is being achieved.
"The liqueurs category is in full transition," the report states. "Its traditional role has been severely diminished by the decline in after-dinner drinking in many markets, attributable to the tougher enforcement of drink-driving laws and other social forces. As a rule of thumb, the older and less well-supported brands appear to be struggling, whereas younger, lower-strength products - the so-called modern liqueurs - seem to be faring better."
However, a further dimension of this versatile category has come to the aid of some of the traditional brands. "Traditional liqueurs have been thrown a lifeline with the growth of cocktail consumption," the report continues. "Many once highly traditional liqueur brands have been busily re-inventing themselves, highlighting their youthful and contemporary appeal and, importantly, their suitability as an ingredient of a mixed drink."
While the growth of the cocktail culture has been a particular feature of the US market, the report suggests this positive trend has been seen in other countries too. "Liqueur suppliers point to the growth of a cocktail culture, principally in the US, but increasingly in other markets as the key to the category's success. To a great extent, the growth of liqueurs is paralleling the increase in the cocktail culture around the world." Among the countries where the report indicates an expanding cocktail culture are the UK, Argentina, Spain and Japan.
So while the strength of the cocktail trend in the US has made this a natural marketing option for liqueurs stateside, this is now clearly a viable strategy elsewhere. One of the key elements in this strategy is incorporating bartender training courses and cocktail-themed on-premise incentives into the marketing mix but today online marketing also features in this area, notably in Japan.
"In markets like Japan consumers are getting more educated about cocktails," Malibu global brand director Colin Westcott-Pitt tells just-drinks. "The Internet is forming a more important part of the way that our target consumer communicates. Japan, in particular, is a very technologically based culture and a very interesting one for the brand when we start to put cocktail recipes online and do those kinds of things."
The cocktail culture is also leading many bartenders to experiment with once relatively obscure liqueur categories, which can result in sudden and unexpected growth for a particular brand or sub-segment. Old-fashioned liqueurs and cordials like Chartreuse, Curaçao and Crème de Violette are re-emerging as ingredients in today's classic cocktails, while less common ingredients like Orgeat syrup and Falernum are being re-created.
As the cocktail boom underlines, one of the key strengths of liqueur brands is their versatility. Indeed, as the report points out, the sector itself covers a wide range of products, and it is development in another area of the market that has provided the category with further growth.
The International Wine and Spirit Record (IWSR) defines a liqueur as any spirit with added sugar, which means the wide and growing array of flavoured spirits, and in particular some of the range extensions of prominent spirits brands, all technically come into the liqueurs category. Vodka makers such as Skyy are moving toward real fruit-infused vodkas, while others are offering lower-strength versions.
The fact that some of these brands straddle two categories is seen as advantageous from a marketing standpoint. Malibu is a case in point, a brand that is perceived and marketed as both a liqueur and a rum. Malibu sees itself in a category that could be defined as "premium mixable white spirits…that can include rums, vodkas and also some modern liqueurs".
So to an extent, the clear demarcation between spirits brands and liqueurs is eroding, which means that products technically defined as liqueurs are in fact competing in the mainstream spirits market, where there are significant growth opportunities to exploit.
For more information on this report, go to /store/product.aspx?id=66726&lk=rotw_store
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