Research in Focus - 'The World’s Top Performing Spirits Brands' from The IWSR/just-drinks
A new report incorporating The IWSR's spirits rankings and a just-drinks readership survey confirms Johnnie Walker’s status as the undisputed global brand leader in the spirits sector but also has some positive findings for brands such as Jack Daniel’s, Absolut and Captain Morgan.
There will be some satisfaction in Louisville, Kentucky at findings published in the latest The IWSR/just-drinks report, The World’s Top Performing Spirits Brands.
The report, which incorporates The IWSR’s ranking based on volume, retail value and five-year growth with a just-drinks reader survey of industry opinion on what have been the best-performing brands of 2010, suggests Jack Daniels, the flagship brand of Louisville-based Brown-Forman, punches above its weight in the global spirits market.
In the overall ranking from The IWSR, Jack Daniel’s came in fourth with a total score of 310 (out of a possible 327), and was the only brand not owned by either Diageo or Pernod Ricard to feature in the top eight.
Moreover, in the brand 'stand out' rating element of the survey, where readers were asked to rate the brands on a score of 1 to 5, it came second behind Johnnie Walker, the top brand in The IWSR’s overall ranking. Jack Daniel’s had an average rating of 4.10, while Diageo’s flagship Scotch whisky brand scored 4.19. Jack Daniel's was also the only other brand to have a score above 4.
The report states that Jack Daniel’s continues to perform well, on the back of “consistent and long-term brand building”. The consistent approach extends into most aspects of marketing, the report continues, including “presentation, advertising and premium pricing”.
Given that, in the top eight, Brown-Forman is surrounded by brands from the substantial portfolios of Diageo and Pernod, it is interesting to note that the report adds: “Brown-Forman’s single-minded focus upon Jack Daniel’s is an undoubted strength.”
Innovation is also playing a role, the report suggests. Brown-Forman reports “double-digit” growth for its two premium line extensions, Gentleman Jack and Single Barrel. Meanwhile, the report adds that Jack Daniel’s has enjoyed “remarkable success” with its RTD extensions, while the brand also entered the flavoured whiskey market with the introduction of a honey-flavoured variant earlier this year.
Another brand which, perhaps unsurprisingly, scores well on innovation is Absolut vodka.
While the Pernod-owned vodka comes in third on The IWSR overall ranking - behind Johnnie Walker and Smirnoff - the just-drinks reader survey gave Absolut the highest rating with regard to innovation, with an average score of 3.73, versus 3.35 for Johnnie Walker and 3.30 for Smirnoff.
The report states that Absolut “transformed” the vodka category in the early 1980s when Michel Roux, who headed up its US importer, Carillon Importers, took what had been a “sleepy” Swedish brand and developed it into “a global icon”. Together with Absolut’s advertising agency, DDB (later TBWA), Roux pioneered many of the marketing concepts that are hallmarks of the modern white spirits industry today, the report continues, such as the emphasis on bottle design, trendy advertising, the association with the world of art and fashion, the development of flavoured variants and premium pricing. “That basic innovation has served to drive Absolut to become what is today an 11m-case brand,” the report notes.
While Absolut’s average revenue per-case fell marginally in 2010, from US$251.58 to US$249.42, Absolut’s global retail sales rose by 5.4% to US$2.7bn. Sales outside the US grew by 15%, while US sales increased by 2% to 4.6m cases. The brand's total sales increased by 5.4% to 11m cases.
Meanwhile, Johnnie Walker was not only the leading brand in the IWSR rankings but was also identified, ominously for its competitors, as the brand with the most growth potential in the just-drinks reader survey.
When readers were asked to rate how much potential each of the brands had to gain further market share or penetration over the next 12 months, Diageo’s flagship Scotch whisky brand scored 3.71, followed by Absolut with 3.51, Jack Daniel’s with 3.49 and Captain Morgan with 3.37. Johnnie Walker outscored both of the other Scotch whisky brands in the IWSR top ten by some measure: Pernod's Chivas Regal and Ballantine’s rands had ratings of 3.21 and 2.68, respectively. Interestingly, Smirnoff only rated fourth in the survey on growth potential, possibly a less welcome finding for Diageo.
However, both The IWSR’s research and the reader survey data confirm that, in Johnnie Walker, Diageo holds the undisputed heavyweight of the global spirits market.
Johnnie Walker's volumes grew by 8.5% in 2010 to reach 15.5m nine-litre cases, excluding RTD volumes and sales in sub-Saharan Africa and the Pacific Islands. The brand sells more than 1m cases in three markets, namely the US, Brazil and Thailand, and more than 500,000 cases in a further three countries, Mexico, Australia and Greece. While Greece could fall below the 500,000-case mark this year, China is set to become the next 500,000-case market, The IWSR forecasts.
Back in 1999, Diageo said that it planned to double the size of the Johnnie Walker brand in about ten years. In fact, it took five. The company now believes it can double the size of the business again – that would be to around 32m cases – over the coming ten years, with “fantastic” growth potential in emerging markets.
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