Pot of Gould – Premium possibilities beckon for gin
In her first monthly column for just-drinks, renowned spirits journalist Patience Gould looks ahead to what 2007 has in store for the major international spirits producers.
Political happenings and wars aside, 2007 promises to be a year of rich pickings for the key spirits players. The clamour for all things premium will continue - and that's good for profit margins. To date, the upward swing has mostly favoured Scotch and Cognac, but more recently vodka has been clambering on the premium bandwagon, using heritage, purity and packaging design in the marketing mix.
However, my crystal ball tells me that the one to watch this year will be a gin, Beefeater to be precise, which has been given a new lease of life by Pernod Ricard-owned Chivas Brothers. Having already underlined its premium credentials with its eponymous Scotch whisky, Chivas is clearly gearing up to give Beefeater the same treatment.
It is now the only major gin brand produced in London, and the UK's capital is going to be featured as the gin's spiritual home. The distillery has been refurbished, complete with its own bar, and the company has staged its first international 'gin symposium'. This was held in London, and was attended by a posse of leading bartenders and mixologists from the US and the UK. So you don't have to be a rocket scientist to see where Pernod Ricard's strategy is going.
New international advertising is in the pipeline and a revised - evolutionary rather than revolutionary - look is soon to be unveiled. The emphasis here will also be on underlining the brand's quality, by using heavier glass and making the label more contemporary and in line with today's London.
Generally, gin has been a white spirits category bubbling with activity though this is not reflected in the overall figures. However, that said, the prime international contenders - headed by Beefeater, Bombay Sapphire, Tanqueray and Plymouth - are well set to capitalise on the growing band of consumers looking for something other than vodka.
The V word has, of course, dominated the action and will no doubt continue to do so, particularly in it its prime stamping ground the US. In terms of markets, the US is the prime driver for all premium spirits, but particularly for vodka, Scotch and Cognac. There, conspicuous consumption prevails and the 'imported' tag carries much kudos. In the last five years, the market has been responsible for the revival of Cognac and has witnessed the extraordinary growth of single malt Scotch whiskies, while the vodka 'brandwagon' continues to roll.
Indeed, such is the activity in the US that it is now attracting the big vodka players from Russia. And, with their colossal spending power, these will be making their presence felt.
Interestingly, Russia is fast becoming a premium spirits Mecca, with its huge swathe of wealthy consumers. With vodka seen as a commodity spirit in the country, the likes of Scotch and Cognac carry the cache of being 'imported' - and due to their colour could not be more different - as a result they are seen as premium spirits. Meanwhile, we are seeing the second coming for China which is proving a prime stamping ground, with its vast populace no strangers to spirits. As with Russia, it's Scotch and Cognac fronting the action.
Regarding the battle of the multinationals, the rivalry between Diageo and Pernod Ricard is set to escalate in the coming months. They compete head-on when it comes to Scotch and gin, respectively Johnnie Walker versus Chivas and Tanqueray versus Beefeater. But it's the wholly different natures of the two that makes this rivalry so fascinating.
For me, Pernod has the edge. After all, it has a Cognac, Martell, which, its ties with LVMH aside, remains a chink in Diageo's armour, for the time being at any rate. To be a success in Asia, a Cognac is a prerequisite - Diageo certainly knows it - but there is no top Cognac currently available. Buying Rémy of course could be on the cards when the company comes out of its distribution alliance with Maxxium. But that won't be until March 2009 - and a lot can happen in two years…
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