Pernod Ricards Passport Scotch whisky is unashamedly a mainstream brand

Pernod Ricard's Passport Scotch whisky is unashamedly a mainstream brand

It's the last thing the English language needs, but could a companion term to the verbally-ugly 'premiumisation' pass into everyday use in the years to come? Is 'mainstreamisation' – a neologism arguably even more hideous than the p-word – here to stay? Richard Woodard thinks so.

I can't remember exactly when I first heard a drinks executive use the word 'premiumisation' to describe trends in the US and other key markets (it was before the economic turmoil of 2008/9, that's for sure). My first instinct was to recoil at this bastardisation of the English language. As time passed, however, the term has become a firm part of the industry's lexicon.

Many of the fast-growing success stories of the age, from Grey Goose vodka to Hendrick's gin, encapsulate the 'drink less, drink better' mentality

Despite the downturn of nearly a decade ago, the p-trend has come to be a dominant feature of modern industry thinking. Many of the fast-growing success stories of the age, from Grey Goose vodka to Hendrick's gin, from The Macallan Scotch to Hennessy Cognac, encapsulate the 'drink less, drink better' mentality.

These products marry scale to high levels of profitability. But, that scale has its limits. For every Hendrick's at less than 800,000 cases (2015 figures), there's a Gordon's at 4.5m; for every Grey Goose at 6.6m cases, there's a Smirnoff at 26.5m.

The philosophy of Jean-Noël Reynaud, CEO of Marie Brizard Wine & Spirits, recognises this. The revamped French company has deliberately shunned premiumisation in favour of mainstreamisation, simultaneously playing to the strengths of its brand portfolio and recognising that not all consumers are desperate (or, indeed, financially able) to trade up.

Several factors underpin this thinking: the depressed macroeconomic picture in core market France (as well as elsewhere in the eurozone and, further afield, in Japan and elsewhere); the crowded nature of the premium-and-above space, and the cost of participating in it; advertising restrictions that make it harder to make the emotional connection that engenders brand loyalty and increased spending.

If nobody in Scotch is offering the right product at the right price, consumers will leave the category altogether

It's not just in France that consumers are feeling the pinch; in Brazil and South Africa, disposable incomes have shrunk, prompting a new quest for value for money. And, if nobody in, say, Scotch is offering the right product at the right price, consumers will leave the category altogether.

Nor should we become too fixated on one form of trading up – for instance, that of consumers swapping premium for super-premium. If you're a drinker of cheap vodka in Poland or low-priced local hooch in China or Africa, value products such as Brizard's William Peel Scotch or Sobieski vodka are badges of new-found affluence and status.

It's also unrealistic to expect a consumer of low-priced vodka to make the leap straight to Grey Goose without stopping off at Smirnoff or Sobieski along the way – a point acknowledged recently by Pernod Ricard CEO Alex Ricard when discussing the company's premiumisation strategy.

"In Africa," he said, "we have the Passport standard Scotch brand. Its job is to recruit local spirits consumers into international, western-style spirits. Then, we can start trading them up into Ballantine's Finest, to premium Scotch, and then super-premium Scotch or single malts."

Passport's recent performance – up 16% in 2015 to 1.8m cases (according to The IWSR) thanks to growth in markets such as Mexico – illustrates the point perfectly.

Another comment from Reynaud that resonates is his assertion that "you can drink less and better, but not necessarily at a more expensive price". Trends in the US vodka market suggest that he's on the money here. So-called 'premium standard' vodkas are on the march, thanks to a combination of affordable price-point, perceived higher production values and attractive, expensive-looking packaging. In 2015, Gallo's New Amsterdam sold well over 3m cases in the US, becoming the market's number four vodka brand in the process.

But, let's not be misled here: It's not that mainstreamisation is a new trend. It's always been there, in all of the many forms and for all of the many reasons described above. It's just that the premiumisation-driven drinks industry hasn't been talking about it as much.

In the end, to use Reynaud's words one last time, it amounts to this: "We have answered a very simple question: What does the consumer want? It's true in any FMCG product, including alcohol, that the consumer wants a good product at a good price."

Simple, really.