The Icelandic authorities have released sales data on ALL alcoholic beverages sold last year.
Top five highlights:
* Spirits remain a minor fraction of an alcolic drinks market exceeding 18 million litres
* The spirits market stood at 580,000 litres in 2012 (excl alcopops) down 3% on 2011
* Vodka is the largest spirits category with a 40% share by volume
* Interestingly Capt Morgan Spiced is the biggest selling rum, NOT Bacardi
* Scotch blends showed the highest growth rate last year at +15%, led by Scottish Leader (an outside bet in most markets)
000 Litres………………………….2012…..2011……% chg
…Pernod (leading brand)…….0.2…….0.2……+/-
Brandy (excl Arm/Cognac)..15.2…..15.0…….1.3%
…Sarpa di Poli………………………0.1…….0.1………..+/-
North American Whiskies…….7.1……….6.8…….4.4%
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Over the past five decades demand for bottled water has rocketed exponentially. According to an article by the British Bottled Water Producers Ltd, 20 million litres of bottled water were consumed in the UK each year back in the mid 1970s. Today annual consumption is approaching 2 billion litres. Meanwhile a report commissioned by the World Wide Fund for Nature (WWFN) states that US per capita consumption was just 5.7 litres (the equivalent of 1.2 billion litres) in 1976. Today average intake is well over 80 litres per head (in excess of 24 billion litres). Comparable historic data on a world level is not so easy to come by across such a wide time span but according to the International Bottled Water Association global consumption was just under 110 billion litres in 2000. Today trade estimates put the volume close to 200 billion litres. Category definitions may vary between sources but rapid growth in the market is undeniable.
As the idea of actually buying water in a bottle, as opposed to turning on the tap (or faucet), has flourished so the number of products joining the widening pool of demand have flooded the market. Just in the UK alone there are easily in excess of one hundred individual brands competing for category share from Abbey Well in England, Highland Spring in Scotland, Rocwell in Northern Ireland and Ty Nant in Wales. Competition is not just home grown either a quarter of all bottled water volume in the country is sourced from abroad. International offerings are a confirmed feature of the market.
It has been said that you can’t take water over water but this has not stopped a number of water brands from becoming truly international. Evian, bottled since the 1820s and owned today by the Danone Group, is available in over 150 countries. It sells in excess of a billion litres a year. Perrier, another French brand, but owned by Nestlé, is available in a similar number of markets. It has been bottled since the 1860s. It sold 10 million bottles in 1914 and according to its website today sells almost a billion bottles annually, nearly half outside of France. Even Fiji water (part of Roll Global), which only saw the light of day in 1996, is already available in over 40 countries selling in excess of 10 million cases. It does not seem to matter that to get the water to some of these markets can take weeks (months?). Stale water, it seems, still carries a premium price tag.
So what is the secret behind the international achievements of such brands? One factor is pedigree. Both Evian and Perrier, for example, have been in existence for well over a century, way before the start of the bottled water boom. Evian began life as a health spring, Perrier originated from a Roman spa. Of course Fiji Water lacks such credentials, being less than twenty years old, but heritage is just one aspect of brand success.
Distinctive, premium packaging is another big plus. Ever noticed how most bottled waters come in clear bottles with a blue plastic lid? Perrier’s approach, with a few exceptions, has been far more unique. Its green bottles are reputably based upon the shape of Indian exercise clubs and are instantly recognisable, even the newer PET options added in 2001 and designed for consumers with a “get up and go” lifestyle. Fiji Water has also adopted PET but in a fairly distinctive square bottle shape which also conveniently aids transportation. Evian is said to be the world’s best selling water but like Fiji Water it has assumed the more standard identity of a bottled water appearing, more often than not, in clear PET (introduced in 1995) with blue screw cap lid. However Evian supplements these with a number of limited edition pack presentations, such as the collectable glass Tear Drop and Origine ice sculpture packs and the 2013 limited edition bottle created by American fashion designer Diane von Furstenberg. These are not volume generators, rather premium image re-enforcers.
A major bonus to the development of international brands, and the bottled water industry in general, was the deployment of mass advertising in the 1970s. Perrier was at the forefront of this movement as it took on the massive US market by storm and started the tidal wave of popularity for mineral water in the country. It was around this time that the brand first released its now iconic slogan “Perrier, c’est fou” (Perrier, it’s crazy). Apart from media advertising sponsorships have also played their part. Perrier has sponsored the comedy awards at the Edinburgh Fringe Festival and the French Open tennis championship whilst Evian backs Wimbledon and presents the Evian Championship women’s professional golf tournament in France.
But, when all is said and done, none of the above mentioned attributes are unique to international trademarks. Many localized brands offer heritage, such as the UK’s Malvern Water (renamed Holywell Malvern Spring Water following a change of ownership last year) which was first commercially bottled in the middle of the 19th century. And it is not just international brands that adopt designer bottles or labels, as in the respective cases of Antipodes New Zealand spring water and Mount Franklin semi sparkling water in Australia. Similarly domestic brands are just as likely to engage in sponsorships as international offerings. Buxton Natural Mineral Water in the UK, for example, supports the England cricket teams and most brands advertise where this is viable.
So what actually underlines the success of an international brand? Obviously the backing of a major multinational helps financially but more than money is required. A globally consistent brand identity is a given essential to retain product familiarity. Coupled with this is effective distribution and a unified, consistent marketing approach across borders, though obviously flexibility is necessary to reflect localized features and conditions. But most important of all is to engage with the consumer to create and maintain brand loyalty for, when all is said and done, the market is consumer-driven.
Written by Ray Rowlands of Drinksinfo Ltd with over 30 years experience in researching the international beverage market. Available for market research, feature writing and related projects
The Republic of Ghana, which gained Independence from the United Kingdom in 1957, is in West Africa bordered by the Ivory Coast, Burkina Faso, Togo and the Gulf of Guinea and covers 238,500 sq km. The country places a high dependency on agriculture which accounts for around 30% of GDP and over 50% of employment. Ghana is a leading cocoa exporter but the country is also rich in natural resources.
The population now stands at 25 million with an annual growth rate of just under 2%. Over a third of Ghanaians are under 14 years but less than 5%are over 65 with 15-64 year olds accounting for 60% of all inhabitants. There are over 100 ethnic groups but English, is the official language, a legacy of British colonial rule. Almost 70% of Ghanaians are Christian, 16% are Muslim.
Impressive growth and record poverty reduction over the past 20 years have made Ghana an African success story. GDP has grown between 4-8% annually over the past decade but more rapidly last year. The country is one of the most thriving democracies on the continent today and enjoys political stability and relative safety. It also offers expanding market opportunities due to its liberal policies.
The market place itself is an exotic mixture of traditional, informal market stalls complemented by the rise of modern retail shopping centres, such as the Accra Mall, which opened in 2007/8. Mall retailing is still in its infancy, particularly outside the capital, but is attracting attention both from foreign and local operators and the rising affluent segment of the population with an appetite for international standard shopping environments and products. On-premise, Ghanaians love to socialise and tend to frequent local bars (or “spots”) where prices are cheaper than Western bars, hotels and restaurants. Apart from at beach resorts, western style outlets, such as “The Office”, “Champs”, “Fusion” and “Jokers” are mainly in Accra.
In 1931 the Overseas Brewery Limited was built in Ghana. This was the first brewery built in the European tradition in West Africa. Although Ghana enjoys a heady tradition of brewed and fermented alcohols, prior to this point Western style beer had to be imported.
Beer demand is rising rapidly – at a rate of 5-10% annually by volume. The current Ghana market size is estimated at 1.65 million hectolitres, the equivalent of almost 7 litres per head of population. This level of consumption is actually low by international standards. It is over 130 litres per head in Czech Republic, 60 litres in South Africa and 14 litres in Kenya. This suggests strong continuing future potential.
Today imported beer, such as Carlsberg, is available in Ghana but most beer is brewed domestically as it is cheaper. Some domestic beers employ imported ingredients e.g. barley, malt, sugar though maize (as used by Club lager) and sorghum (as employed by Guinness Ghana Breweries Ltd) are locally grown substitutes to imported grains. However, farmers producing sorghum in the north of the country must contend with erratic rain and poor soil conditions which inhibits the transfer from imported grains to local production. Some local beer is also exported though the main domestic brands – Star, Guinness etc… are also brewed in neighbouring countries, such as Nigeria.
In Ghana lagers have an average strength of 5% abv. Brands at this strength include Club, Star and Gulder. Most of the remaining beers are stouts which tend to be stronger than lagers. Castle milk stout is 6% abv whilst Foreign Extra stout is 7.5% abv. According to limited press reports, stout, particularly Guinness, appears to be more popular than lager, by a factor of 2:1. Based on these reports the leading beer brands in Ghana appear to be:
Beer is available in glass bottles, cans and on draught. Bottled beers dominate. Bottle sizes vary from single-serve 330/375ml to circa 600ml multi-serve. Cans have been observed in Western hotels but they are far from the norm. A number of brands, including Club, Guinness and Gulder are also available on draught.
On average, a large bottle of domestic beer costs around the equivalent of U$1-2 (Cedi 2-4) but prices can vary considerably depending on where the beer is bought or served. Imported beer is much more expensive.
According to figures released by the Scotch Whisky Association, Scotch whisky exports continued to grow in 2011 hitting a record £4.2 billion in shipment value, up 23% on 2010.
Rising demand in both emerging and more mature markets resulted in export values increasing by an average of 10% a year over the last five years. It now contributes £134 per second to the UK balance of trade.
Exports to the USA, the largest market by value, broke the £600 million barrier for the first time in 2011 to reach £654.9 million – up 31% on 2010. France, the second largest market, saw exports grow by 27% to £535.4 million.
In the full 12 months to the end of June 2012, value of Scotch whisky exports increased by 12% to £4.2 billion from £3.8 billion.
In the first six calendar months of 2012 growth was seen in the USA, Venezuela, Germany and in exports to Russia through the Baltic states. Asia remained steady with good growth in Taiwan. This helped Scotch whisky exports maintain their value in the first half of 2012 at £1.8 billion, despite continuing pressure in some Eurozone countries and the after-effect of an increase of shipments to France last year ahead of a substantial tax rise.
In the first half of 2012, exports to the USA jumped by 13% to £303 million and it remains the biggest market by value for Scotch whisky. According to the Distilled Spirits Council of the United States (Discus) Scotch Malt volume was up 13.0% to 1.6 million cases in 2012, while revenue was up 16.4% to US$515 million. Single Malt Scotch continues its rapid growth, concentrated in high end and super premium products. During 2012 as a whole there were 53 new product introductions. Blended Scotch volume was down by -0.4% to 7.6 million cases, but revenue was up 3.9% to US$1.3 billion. There was strong growth in high end & super premium blended Scotch categories.
Venezuela, the ninth biggest market for Scotch, recorded significant growth – leaping 31% to £42 million. In Europe, Germany saw exports increase 4% to £65 million in the first six months of the year. Latvia and Estonia now appear in the top 20 markets, reflecting a surge in demand in Russia. India saw an increase of 28% to £28m and the Scotch Whisky Association remains hopeful that a conclusion can be reached on the European Union/India Free Trade Agreement (FTA). The FTA would see a gradual reduction of the onerous 150% tariff on imported spirits into India. Reduction in that tariff would allow India to fulfill its potential to be one of the biggest markets for Scotch. Meanwhile Scotch whisky continues to attract younger, affluent consumers in newly emerging markets and this trend is expected to continue.
Gavin Hewitt, chief executive of the Scotch Whisky Association, said:
“Over the past year the value of Scotch whisky exports has continued to increase and we’re delighted to build on our outstanding success in 2011 with 12% growth in the last 12 months. While there has been a leveling off in the first half of this year, the industry remains confident about the future. Recent announcements of investments in new distilleries and the expansion of existing facilities demonstrate the level of confidence producers have in future growth opportunities.”
TOP 20 SCOTCH WHISKY EXPORT MARKETS
YEAR TO END OF JUNE 2012
MARKET JAN-JUNE 2012 JAN-JUNE 2011 %CHANGE
USA £303.6 £267.6 +13%
FRANCE £188 £219.8 -14%
SINGAPORE £146.2 £148.5 -1.5%
TAIWAN £80 £70.3 +14%
SPAIN £74 £97.1 -24%
SOUTH KOREA £65.7 £66.7 -0.06%
GERMANY £66 £62.4 +4.48%
SOUTH AFRICA £54.8 £65.5 -16.4%
VENEZUELA £42 £32 +31%
UAE £39.5 £41.9 -5.9%
BRAZIL £35 £44.8 -22%
MEXICO £32 £30.3 +5%
LATVIA £32 £17.8 +77%
JAPAN £31.6 £40.2 -21%
CHINA £31 £30.6 +1.6%
AUSTRALIA £28.6 £27.8 +2.5%
INDIA £28.3 £22 +28%
CANADA £26.3 £24.4 +8%
ESTONIA £24.8 £18.4 +35%
ARUBA £22.7 £17.3 +31%
SOURCE : SCOTCH WHISKY ASSOC
Diageo, the biggest distiller of Scotch whisky has reported strong sales growth in the second half of 2012. Volumes were up 6%, with their value rising by 10%. Spearheaded by Johnnie Walker, the rise was led by a big growth in emerging markets, including China, Mexico and South Africa. That offset a sharp fall in Scotch sales, particularly the J&B brand, in France, Spain and Greece.
The already growing market for Scotch whisky in Latin America received a further boost in December with the signing of two agreements to create fairer market conditions.
The European Union’s Free Trade Agreement (FTA) with Colombia/Peru and its Association Agreement with Central America(*), ratified by the European Parliament, will create a more level playing field for Scotch whisky imports in these growing markets.
Direct Scotch whisky exports to Central and South America reached £489m in 2011, up 38% on 2010. Exports to Peru increased by 97% to £18m in 2011 and to Colombia they were up by 74% to £24m. However, Scotch whisky is still a relatively small part of the spirits markets in these countries, meaning there is great potential for more growth.
(*)The Central America Association Agreement covers the markets of Costa Rica, El Salvador, Guatemala, Honduras, Nicaragua and Panama.
The main benefits of the above agreements for Scotch whisky are:
• The gradual elimination of the tariffs on EU spirits, including Scotch whisky. The tariff on whisky is currently 15% in Colombia and 9% in Peru. In Central America, tariffs range from 5% in Honduras to 30% in El Salvador.
• New mechanisms to tackle discriminatory taxation, such as excise taxes that favour locally produced spirits in Colombia and Peru.
• Robust legal protection for the Scotch whisky Geographic Indication (GI) – this recognises Scotch whisky as a product only made in Scotland.
David Williamson, deputy director of international affairs at the Scotch Whisky Association, said: “We have been pushing hard in favour of these trade agreements with Central America, Peru and Colombia. We are delighted they have now been ratified. The agreements will help deliver a more predictable and level playing field for Scotch whisky producers.
“Tariff elimination, new mechanisms to tackle discriminatory taxes, and better legal protection for Scotch whisky will all support industry growth in the region, and therefore the UK economy which is looking for an export-led recovery.”
THE LEADING SCOTCH WHISKY BRANDS
(millions of nine-litre cases)
BRAND OWNER 2007 2008 2009 2010 2011
Johnnie Walker Diageo 15.80 16.30 15.30 16.90 18.00
Ballantine’s Pernod Ricard 6.17 6.50 5.76 6.18 6.47
Grant’s William Grant & Sons 4.79 4.97 4.78 4.99 4.97
Chivas Regal Pernod Ricard 4.37 4.57 3.87 4.50 4.89
J & B Rare Diageo 5.90 5.90 5.10 4.80 4.80
Dewar’s Bacardi 3.50 3.41 3.24 3.27 3.19
William Peel Belvedere 1.78 2.12 2.35 2.50 2.90
Famous Grouse Edrington 2.90 2.70 2.50 2.70 2.80
Bell’s Diageo 2.30 2.20 2.30 2.40 2.50
Label 5 La Martiniquaise 1.91 1.98 2.16 2.27 2.50
William Lawson’s Bacardi 1.30 1.50 1.59 1.69 2.29
Teacher’s Beam Inc 1.98 1.96 1.73 1.89 2.05
Clan Campbell Pernod Ricard 1.64 1.72 1.76 1.76 1.96
Whyte & Mackay United Spirits na na na 1.50 1.80
100 Pipers Pernod Ricard 2.50 2.25 2.03 1.73 1.71
Buchanan’s Diageo 1.60 1.50 1.30 1.40 1.60
Sir Edwards Bardinet 1.27 1.05 1.09 1.19 1.35
Cutty Sark Edrington 1.80 1.70 1.40 1.40 1.30
White Horse Diageo na na na na 1.20e
Clan MacGregor William Grant & Sons 1.26 1.32 1.32 1.15 1.14
Passport Pernod Ricard na na na 0.90 1.10
Black Horse Diageo na na na na 1.06e
lenfiddich Malt William Grant & Sons 0.88 0.85 0.80 0.95 1.03
Old Parr Diageo na na na na 1.03e
SOURCE : TRADE
The above article was sourced by Drinksinfo Ltd’s associate company BFP Beverage Research. BFP Beverage Research is a UK based boutique market consultancy specialising in the international beverage industry and is available for consultation in respect of your bespoke research needs.
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The UK beverage industry appears to be in turmoil this week as the the Wine and Spirit Trade Association (WSTA) launched a new UK industry campaign aimed at highlighting “unfair” minimum pricing and galvanising public opposition to the measure. This follows the Home Office Alcohol Strategy consultation which is currently seeking views on a number of measures set out in the government’s alcohol strategy which was published on 23 March 2012. The consultation runs for 10 weeks from 28 November 2012 until 6 February 2013. The ‘Why Should Responsible Drinkers Pay More?’ campaign, set up by the Wine & Spirit Trade Association, is being supported by a bespoke website. The site invites users to sign a petition against minimum pricing and e-mail or tweet a pre-written letter to their MP. The UK and Scottish Governments are currently embroiled in a legal battle with the Scotch Whisky Association (SWA) over the measure in Scotland. The SWA launched a judicial review against the measure in July, which has already gained Royal Assent in the country.
Also, today leading medical bodies are calling for a 20p-per-litre levy on soft drinks to be included in this year’s Budget. More than 60 organisations, including the Academy of Royal Medical Colleges, which effectively speaks for the entire medical profession and the Royal College of Paediatrics and Child Health, are backing the recommendation by food and farming charity Sustain. They say it would raise £1bn a year in duty to fund free fruit and meals in schools to improve children’s health. The soft drinks industry says raising taxation is unnecessary.
Gavin Partington, director general of the British Soft Drinks Association, said a fat tax on fizzy drinks would not reduce obesity. “Over the past ten years, the consumption of soft drinks containing added sugar has fallen by 9% while the incidence of obesity has increased by 15%.”.
Meanwhile, calls are being made for the government to scrap the controversial beer duty escalator to help struggling pubs across Cumbria and the rest of the UK. The tax was introduced by Labour in 2008 to tackle the problem of binge drinking and sees tax on beer increase by 2% above inflation every year.
According to new research by the British Beer and Pub Association (BBPA) beer sales have fallen for the eighth year in a row with 381 million fewer pints drunk last year. The BBPA has said the figures showed how the Government’s “damaging” tax policy was hitting the pub trade. More than 100,000 people have signed a petition in protest at the extra tax, urging the Chancellor to announce in the March Budget that it will be scrapped. Pub beer sales slumped by 4.8% n the final quarter of 2012 compared with a year earlier, with total beer sales down by 4.7% over the year. Around 138 million fewer pints of beer were drunk in the final quarter of 2012. Sales of beer in supermarkets and shops fell by 7.5% in the final three months of 2012 compared to the previous year, while sales in pubs, bars and restaurants were down by 4.8%.
Brigid Simmonds, chief executive of the BBPA, said: “These figures show that the Government needs to stop its full-on tax assault on our vital beer and pub industry. We’ve had tax hikes of 42% since March 2008, which is hugely damaging and completely unacceptable for such an important manufacturing sector.”
60% of the Nigerian population live in abject poverty, surviving on less than one dollar a day (or under 10 Naira in local currency terms). That’s not my valuation it comes from the country’s own National Bureau of Statistics. Meanwhile a 600ml (most popular size) bottle of beer costs upwards of 100 Naira in retail. So beer is a luxury item, consumed by the elite, right? Wrong. Average per capita of beer is over 8 litres a year (and growing) making Nigeria the second largest beer market in Africa.
There are reliable published statistics on either beer production or consumption and as imports are technically banned there are no import statistics either. However all three main brewers in the country (Consolidated Breweries, Guinness Nigeria and Nigerian Breweries) generally agree that the market is in excess of 15 million hectolitres. It is difficult to get a really firm fix on volumes as the local industry tends to include non-alcoholic, (sickly to my mind), malt drinks like Guinness Malta, and Maltina in their estimations. These malt drinks are an important market component in this semi Muslim country.
So a massive market with huge potential and with all international brewers enjoying a share, right? Wrong again. As I mentioned above imports are prohibited. This is in order to protect the domestic industry, although brands like Corona still manage to find their way behind the counter in selective on-premise outlets. So that leaves only local production. Unfortunately two particular pioneering brewers gained advantage over the competition several decades ago and they ain’t in any the mood to share their nest egg.
Heineken achieved their first foothold way back in 1946 and Guinness Nigeria was established in 1962. They have subsequently ruled the roost. Whilst Guinness has been happy to maintain its single market entity Heineken operates through both Consolidated Breweries (concentrating on discount brands) and Nigerian Breweries. The Dutch brewer further strengthened its position last year when it bought control of the brewing interests of the Sona Group. This added a production capacity of 3.7 million hectolitres to Heineken’s existing 12 million hectolitres. As a result Heineken and Guinness now control an estimated 90-95% of Nigeria’s beer market. Anheuser-Busch InBev doesn’t get a look in, Carlsberg is only available as a licensed brand and poor old SABMiller is more or less trapped in a regional back water operating through Pabod Breweries in which it has a majority interest.
Okay, maybe that’s a little hard. SABMiller opened a new greenfield brewery in south-eastern Nigeria in August 2012 with an annual capacity of up to 500,000 hectolitres for an investment of over U$100 million. This brings SABMiller’s total number of sites in Nigeria to four, having first entered the market in 2009 through a strategic alliance with Castel.
But its capacity is still way, way behind Guinness (circa 5 million hectolitres) and by allowing Heineken to acquire the Sona breweries the Dutch top dog was able to increase its capacity by a massive 30%. Surely it would have been more prudent for SABMiller, or Anheuser-Busch InBev come to that, to spend the €500 million+ that Heineken paid to the Sona Group (SNS Securities estimate) in order to gain an immediately operational production framework and prevent Heineken from strengthrening its already dominating position.
With the spectre of obesity hanging over the soft drinks industry, big names like Coca-Cola and PepsiCo are at pains to introduce more consumer friendly sweetening agents into their drinks. A number of artificial sweeteners have been employed over the years including aspartame, cyclamate and saccharin but the public are wary of actual or perceived side effects. This has led to attention focusing on more natural low calorie sweeteners and this, in turn, has opened the door for stevia.
Stevia extracts have up to 300 times the sweetness of sugar with the major advantage that stevia is natural, not artificial, being a member of the sunflower family (Asteraceae). However, stevia is not finding an easy path to success. It has been employed by Schweppes Australia and by Fanta in Turkey but it was only in December 2008 that it received FDA approval in the US. The European Food Safety Authority subsequently gave a positive safety assessment of stevia in early 2010 and full EU approval was formally approved in November 2011.
And it is here that the tumble weeds roll weightlessly across the desert plain. Full EU approval was achieved over a year ago, so where is the eagerly anticipated avalanche of stevia based soft drink launches? Europe is crucial to their development. According to Pure Circle Ltd, the region accounts for a quarter of the global sweetener market. This represents an even larger contribution than the US. However, stevia is not exactly projecting headline news as a soft drinks sweetener. In Belgium, for example, I am only aware of it being adopted by Lipton iced tea in 2011 and Nestea this year.
Pure Circle had calculated that worldwide consumption of stevia should be more than 50% higher at the end of 2011 than it was in 2010. But there remain reservations about how large the market could actually become. With criticisms in respect of previous sweeteners, consumer education is a fundamental issue that must be addressed to support its rise. After four years exposure in the US, it is doubtful that the majority of the country’s population are even aware of stevia. Then, there is the price hurdle, especially when economies are still feeling the backlash of recession. To me, the main concern remains the bitter after taste. But if we can (reputedly) send men to the moon, surely we can overcome a little matter of taste?
Vodka represents almost a third of all spirits consumed in the USA. New vodka expressions abound, with flavours and brands from around the world still proliferating. Indeed, vodka flavours are getting even more prolific and edgier. Still, the reasons for vodka’s huge popularity remain primarily the easy mixability of the spirit and the continued popularity of cocktails made with vodka. In 2011, David Ozgo, senior vice president of economic and strategic analysis at the industry’s trade group, the Distilled Spirits Council, counted 115 different flavours in the vodka market.
Flavoured vodka is one of the fastest growing segments in the United States spirits industry and accounts for approximately 27% of leading branded vodka volume, and continues to grow in popularity as total vodka sales also increase. It was reported that almost three-quarters of new vodka products introduced in the USA in 2011 were flavoured vodka products. Virtually all of the flavoured vodka portfolios grew in 2011 with Diageo’s Smirnoff the market leader.
During 2012 nearly three-quarters of the vodkas introduced were flavoured offerings. While raspberry and citrus remained the most popular flavours, vodkas with sweeter profiles gained traction; whipped cream vodkas surged in volume to rank as the third largest flavour. Pinnacle Whipped Cream grew 324.5% to rank as the leading flavoured vodka brand and significant volume increases were achieved by several other imported brands.
Pinnacle vodka was launched in the USA in 2002 by White Rock Distilleries. It is distilled in France from French wheat then exported to the USA where it is flavoured and bottled. Pinnacle has become well-known for its wide range of flavours. Since its launch the brand has become one of the fastest growing brands in the vodka segment of the distilled spirits industry in the USA. The brand’s sales exploded in 2011, increasing sales by 92.9% to 2.7 million cases.
On April 23, 2012 it was announced that Beam Inc. was set to acquire the Pinnacle brand together with the Calico Jack rum brand along with related assets, for $605 million in cash, from White Rock Distilleries.
Beam which produces Jim Beam whisley, Courvoisier cognac and Sauza tequila, said the addition of Pinnacle vodka brand would boost its presence in the large and growing vodka category and increase the company’s overall shareholder value.
Beam has said that it does not expect the acquisition to affect 2012 earnings, but said it will boost its 2013 results by between 5 cents and 10 cents per share and more in the next year and beyond. The company said it also expects the deal to result in cost savings that should exceed 20% of the brand’s sales.
Pinnacle’s 2012 sales volumes are expected to exceed 3 million 9-litre cases and Beam has just launched a new advertising and marketing campaign designed to let consumers know “It’s More Fun On Top”.” Since its introduction, Pinnacle has continued to change what consumers expect from their premium vodka with innovative never-been-done-before flavours. In addition to the original unflavoured Pinnacle, the brand portfolio includes more than 30 flavours from Pinnacle Whipped and Pinnacle Cake to Pinnacle Tropical Punch.
Communicating Pinnacle Vodka’s fun, playful, innovative personality and imported, premium quality, the multi-million dollar 360-degree advertising campaign for “It’s More Fun On Top” spans broadcast, print and digital mediums including mobile formats. The campaign also combines a step change in on- and off-premise promotion, innovative social media-driven consumer engagement and public relations, and reflects a significant increase in brand investment from the previous year. The television commercials for Pinnacle Vodka begin running in primetime on cable channels such as E!, Bravo, Discovery Channel and the Food Network through the end of the year and in 2013.
“In the large and growing vodka category, Pinnacle has always looked to be an innovator and not follow the pack,” said Beam General Manager Deb Boyda. “We had the chance to create an iconic integrated brand campaign from the ground up focusing on the fun of the product. While Pinnacle has achieved enormous success in a few short years, with this campaign we intend to take the brand to the next level.”
The campaign was created by Ogilvy & Mather Chicago. “In a category full of serious, Pinnacle has the opportunity to lighten the mood,” said Lee Newman, President, Ogilvy & Mather Chicago. “This work aims to position Pinnacle as the brand that understands that vodka can be both premium and fun.”
Source: Pat Brazzier, fellow beverage specialist
Jameson Irish Whiskey is playing a key role in the export led recovery of the Irish economy. According to owner Pernod Ricard, the brand has achieved another significant landmark, with global sales attaining an annual level of 4 million cases – including over one million cases sold in the United States, the largest market for the company’s strategic brand.
Anna Malmhake, CEO of Irish Distillers, commented, “We are delighted and proud to have reached the 4 million case milestone. To think in 1988, when Irish Distillers joined Pernod Ricard, Jameson sold just 466,000 cases globally, with Ireland as its main market. Since then, Jameson has witnessed consistent and sustained investment, with a long-term strategic outlook based on Premiumisation and Innovation, coupled with strong and targeted marketing. The result has been an incredible global success with 50 markets now in double digit growth worldwide.”
Jameson now counts an astounding twenty-three years of successive growth. It has been distilled since 1975 in Midleton, Co Cork, where a recent €100 million investment was made by Irish Distillers to expand the distillery in order to cater for future growth.
Jameson is the world’s No. 1 selling Irish Whiskey, accounting for 64% of the Irish Whiskey category. The brand is a consistent award winner and a truly global whiskey brand. Loved for its great smooth taste and style, Jameson is sold in over 120 counties worldwide. The brand’s leading markets are United States, Travel Retail, Russia, Ireland, South Africa, France, United Kingdom, Australia, Canada, Portugal and Spain.
Earlier this year Jameson announced that it was entering the Australian ready-to-drink market with two new premium RTD products. The two RTDs, Jameson Cloudy Apple and Jameson Raw Cola, have been developed off the back of extensive testing amongst consumers. The new range aims to create a new premium dark RTD segment, and targeted at males aged 25 to 34 who are tired of the traditional beer category. The launch is backed by a $5.3 million marketing campaign, with a further $1.6 million to be spent on media, advertising on bus shelters and billboards, to ensure consumer awareness of the product.
Source: Pat Brazzier, fellow international beverage specialist
It always strikes me as amazing how a product or brand can be so highly successful in one market but fail to impact in a neighbouring country, even where the resident populations are of a similar ethnic, social, political and religious background.
Look at Glaceau vitamin water: a massive success in the United States but only recently making a cameo appearance in Canada.
Okay, perhaps that’s not fair.
Glaceau has an established and highly successful historic track record in the US but was only launched north of the border in 2008 after Coca-Cola took ownership.
So let’s take a more traditional item, like fruit powders. You know what a mean, that stuff that often comes in sachets and which school kids delight in poking their sticky fingers in or pouring down their throat straight from the packet rather than mixing with water. A bit like coloured sherbet without the fizz.
Still not sure? If you don’t know what I mean then ask your mum or dad. Fruit powders were a tuck shop favourite back in their day and continue to bring refreshment to a welcoming market audience in various countries across they globe.
They still enjoy a thriving existence in New Zealand, for example, but barely see the light of day just across the Tasman and never were of any major size there. Yet at the same time the per capita consumption of squashes in Australia (or cordials to give them their local name tag) is ten times that of New Zealand. And it’s not just the product that is at odds, sometimes it’s the packaging. Why, for example, is 70% of the Australian RTD market (FABs or alcopops to the European reader) served in ring pull cans whilst it’s the single serve glass bottle that hold sway in New Zealand. How come PET has established a presence in the UK beer and cider market but is barely visible in Australia? Perhaps this state of affairs can be put down to national rivalry or perhaps its just down to local idiosyncrasies. After all no Aussie Sheila would bat an eyelid at a pub sign that blatantly banned thongs whilst a British woman would be outraged.