Is the refillable bottle the next Dodo?

March 9, 2013 Leave a comment

The global soft drinks market is served by a rich profusion of packaging choices to satisfy a broad range of both producer and consumer needs. Cartons are relatively cheap, glass presents an image of quality, metal is robust whilst plastic provides versatility, particularly in the case of PET (polyethylene terephthalate). It is not the selection of packaging materials that is extensive but also the range of shapes and sizes from the petite 100ml bottle, as employed by energy shots, through to the ten and twelve litre tanks used for packaging water.

Yet, in an era of growing environmental concerns, more and more of these packages are becoming non-refillable throwaways. For some pack options, such as cartons and cans, disposal after a single use is the only real solution. Reusable cartons do exist i.e. the ‘Juice in a Box’ concept, the result of a collaboration between designer Leo Corrales and Precidio Design Inc. But these containers are plastic based, not board, and are really designed for the lunch box market, being refilled from home. As far as I am aware no one has gotten round to producing refillable cans yet, apart from the high volume drums which contain the syrups for fountain dispensing of soft drinks. There are bio-degradable eco-cans but these are not cheap and therefore not yet viable for mainstream usage.

Then we come to glass. Glass bottles can, of course, be refillable. In the USA, before World War II, nearly all soft drinks were sold in refillable glass bottles and used as many as fifty times. But, according to the environmental group the Green Roots Recycling Network, the US market share for soft drinks in refillable glass bottles declined from 100% in 1947 to less than 1% in 2000 to be replaced, initially, by aluminium cans and disposable glass and later plastics. There are a number of reasons for this development including the economic cost of setting up and maintaining refillable systems and retailer reluctance in supporting the concept. Then there is the potential problem of high level contamination due to consumer misuse, brand image issues through scuffing, blemishes and general wear and tear plus the fact that one way bottles present greater flexibility in respect of changing a pack design.

Refillable glass is still in wide usage elsewhere in the world but total volumes are not increasing whilst the post recessionary soft drinks market is expanding at around 4-5% per annum. As a result, the importance of refillable glass is flagging.

Much of the trend away from refillable glass and, indeed refillable containers in general, has to do with the rise of the PET bottle, patented in the 1970s. In the four subsequent decades the plastic has succeeded in reshaping the entire soft drinks landscape. It is greatly favoured by soft drink producers especially in respect of carbonated soft drinks (CSDs) and bottled water which, when combined, represent the mainstay of the global soft drinks market. It is versatile, resilient, offers good product clarity, provides consumer convenience, good potential for brand differentiation and has allowed for the creation of larger sized units. PET is available in both non-refillable and refillable formats but the latter face the same problems as refillable glass and similarly have been overtaken by single use options. Drinksinfo Ltd estimates that today non-refillable PET bottles outsell reusable ones by a factor of more than 9:1.

Refillable PET bottles are still available but their application is somewhat limited geographically. In many countries non-refillable PET bottles do not even exist but they do have a high occurrence in Central America, for example, primarily thanks to their application in the Mexican CSD category but refillables still outsell their one-way counterparts here and are growing at a faster pace. Western Europe remains as another refillable stronghold, although under pressure. A number of countries in the region, including Denmark, Germany and Norway, give incentives to encourage one way packaging, a reflection of strong environmental policies region. But this approach has been challenged as favouring local industry and restricting international trade.

Despite the encouragement given towards refillable packaging, to my knowledge, Norway is the only country where refillable PET actually has a stronger position than non-refillable. However, in September last year, Coca-Cola Enterprises Norway produced its last 500ml refillable PET bottle in favour of the new Plantbottle, made from up to 22.5% plant-based material and 25% recycled material. Coke estimates that by moving to recyclable non-refillable bottles from refillables, it will reduce the amount of carbon used in production and transport in Norway by up to 34%. The amount of energy and water currently used to transport, receive, wash and sanitise the refillable bottles will also be reduced. As Coca-Cola controls half the country’s CSD market this should have a rapid and significant effect on the balance between refillable and non-refillable PET, to the benefit of the latter. The race is now on to commercialise a 100% biodegradable bottle.

The arrival of the biodegradable bottle provides exciting opportunities for future packaging development but they are still only for one time use whereas, when all is said and done, a single bottle that is filled, say, fifteen times eliminates the need for making fourteen more bottles, avoiding the environmental effects of materials extraction, processing, manufacturing, and recycling or disposal of those fourteen bottles.

Categories: Uncategorized

Icelandic Spirits Market 2012

February 27, 2013 Leave a comment

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
Anis/Ouzo (category)………….0.4…….0.3……33.3%
…Pernod (leading brand)…….0.2…….0.2……+/-
Brandy (excl Arm/Cognac)..15.2…..15.0…….1.3%
…Camus……………………………..11.8…….12.0 …..-1.7%
Genever……………………………….0.9……..0.8 …..12.5%
…De Kuyper…………………………0.6………0.6……+/-
…Sarpa di Poli………………………0.1…….0.1………..+/-
Flav Schnapps/Vodka…………15.8…….16.2……-2.5%
…Bacardi Razz……………………10.8…….11.1…….-2.7%
Irish Whiskey………………………12.8……14.6……-12.3%
North American Whiskies…….7.1……….6.8…….4.4%
…Jack Daniels……………………..5.7……….5.4…….5.6%
…Capt Morgan…………………….23.5……26.2……-10.3%
Scotch Blends………………………60.8……52.7……15.4%
…Scottish Leader…………………19.0…….20.3……-6.4%
Scotch Malts…………………………4.4………4.1……..7.3%
…The Glenlivet…………………….1.7……..1.7…………+/-
Vodka (unflav)……………………230.0……243.2……-5.4%

Drinksinfo Ltd and its associate BFP Beverage Research are available to cover your beverage research needs inexpensively, why not give us a call via website.

Categories: Beverages

Creating an international water brand

February 26, 2013 Leave a comment

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

Categories: Beverages

NL Feels The Squeeze

February 20, 2013 Leave a comment

Popped over to Utrecht for a meeting yesterday. Made an interesting discovery in a Plus supermarket ( There was a Zumex ( orange squeezing machine there. Customers put oranges in the machine to produce freshly squeezed 100% juice. Underneath they place 330ml, 500ml or litre PET bottles carrying the Plus logo on the label. The price is 3.49 Euros per litre.

A colleague of mine (dedication as promised Christina) said that a store staff member had told her that around 100 litres is squeezed per day. Now there are over 260 Plus stores open up to six days a week. Assuming a similar throughput in all stores each day, that works out at well over 5 million litres a year!

The concept is a new one in NL, only introduced into Plus in the middle of last year, but think of the contribution to the ailing juice market! And Zumex (from Spain) don’t just supply supermarkets but institutions as well. Freshly squeezed oranges (or tangerines at least) are a massive volume provider in Thailand available on most street corners. Just think of the impact on the packaged juice market if this squeezing idea spreads Europe wide! Meanwhile, what’s happened to Tropicana in NL. It seems to have disappeared off the shelf.

Categories: beverages

Ghana Beer Market Review (Snippet From New Report)

February 15, 2013 Leave a comment

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:
1. Guinness
2. Star
3. Castle

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.

Categories: Beverages


February 14, 2013 Leave a comment

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.”

VALUE (£m)

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%


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.”

(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


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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Categories: Beverages


February 8, 2013 Leave a comment


Growth driven by product innovations and sophisticated line extensions

According to the Distilled Spirits Council of the United States (DISCUS) review of the US spirits industry, distilled spirits gained market share from beer and wine in 2012 as companies innovated with new, sophisticated line extensions and as a decade of regulatory modernization continued to pay dividends for spirits.

Overall, US supplier sales grew a solid 3.0% in volume to 202 million 9-litre cases, while supplier revenues grew 4.5% to US$21.3 bn. This was as consumers continued to gravitate to higher end premium and super premium product choices. Meanwhile, the distilled spirits industry grew its market share of sales for the third straight year increasing to 34.3% and taking share from both beer and wine.

“Moderate growth driven by product innovations and sophisticated line extensions highlighted 2012 for distilled spirits companies of all sizes,” said Peter Cressy, President and CEO of the Distilled Spirits Council. “The premiumization trend continues to captivate consumers here in the U.S. and around the globe,” he added.

“Regulatory modernization over the course of the last decade, with the steady repeal of prohibition-era Blue Laws, has paid real revenue dividends for the distilled spirits industry,” Cressy said, calling the sector a key component of the hospitality industry.

He pointed out that since 2002, 16 states have adopted Sunday sales of distilled spirits, making a total of 38 nationally. This is worth US$260 million in new annual sales. In the past two years, the last northeastern state, Connecticut, repealed its Blue Law (usually referred to as the Sunday closing law), and even Georgia voted for the repeal. Cressy attributed the changes to the recognition of the economic benefits of modernization and consumer convenience.

Also, since 2002, 17 more states have passed legislation to allow distilled spirits “tastings” at liquor stores. Today 44 states allow some form of tasting. This has made a significant contribution to the consumer fascination with high end premium and super premium products. Distilled Spirits Council data shows that while supplier sales of value-priced products have grown from US$3.75 bn to US$4.08 bn between 2003-2012 (+24.5%) super premium products have grown from US$1.48 bn to US$3.90 bn, a 163% rate of growth.

“Reasonable access and modern shopping environments have certainly contributed to consumer preferences for premium distilled spirits product choices,” Cressy stated. “When added to a steady fascination with cocktail trends and a wonderfully diverse array of product innovations, the industry has charted a course for steady, sustainable growth.”

The Council also projected a third-straight record year of export growth to US$1.5 bn, showcased by the continuing strength and appeal of American Whiskeys, which represent nearly 70% of distilled spirits exports and have made solid gains in most traditional markets while growing rapidly in emerging markets. U.S. distilled spirits exports now exceed wine exports by nearly a quarter of a billion dollars and are more than triple beer exports in value terms. Policy changes, including free trade agreements that resulted in significant tariff reductions or outright tariff elimination in Korea, Colombia and Panama, and Permanent Normal Trade Relations (PNTR) with Russia in 2012, contributed to the record while providing a springboard for future export growth.

“Free trade agreements like the one in Korea, which resulted in immediate tariff elimination, improved American spirits access to the fifth largest spirits market in the world,” Cressy noted. “These are exciting developments for American spirits exports and, coupled with other market-opening measures such as PNTR for Russia, will provide a springboard for sustained export growth.

“Just as in the U.S. premium drinks are steadily gaining favor, both in traditional export markets and among the rising middle classes in newly open emerging markets,” Cressy said. “American Whiskeys are also well-positioned from a flavour perspective to take advantage of the growing sophistication in cocktail culture.”

Volume Share by Price Category – 2012 Share of U.S. Spirits Volume

Value 38.1% (76.8 million cases)
Premium 36.0% (72.8 million cases)
High End 18.0% (36.3 million cases)
Super Premium 7.9% (15.9 million cases)

Revenue by Price Category – 2012

Value 19.2% (US$ 4.1 Bn)
Premium 34.3% (US$ 7.3 Bn)
High End 28.2% (US$ 6.0 Bn)
Super Premium 18.3% (US$ 3.9 Bn)

Volume Growth by Price Segment – 2012

Value + 1.8%
Premium + 2.1%
High End + 4.8%
Super Premium + 8.9%

Volume Growth by Price Segment

Value + 1.365 million cases (23.6%)
Premium + 1.473 million cases (25.4%)
High End + 1.659 million cases (28.6%)
Super Premium + 1.294 million cases (22.4%)



• Cocktail/culinary trends drive experimentation. This drives product innovation and new flavours
• Flavoured products continue successful line extensions
• Over 40% of products have flavour component beyond traditional category -All categories (Vodka, Rum, Cordials, etc.)
• 220 flavours exist – from Citrus to Wasabi
• New successful flavoured expressions of iconic brands
• Industry’s strength has long been based upon ability to offer product for every taste, budget and occasion

Flavoured Products

2012 U.S. Volume – Flavoured 27%, Traditional 73%
2012 U.S. Growth – Flavoured 46%, Traditional 54%

Top 20 Spirit Flavours – 2012

Orange (163)
Cherry (98)
Coffee (87)
Peach (85)
Apple (84)
Chocolate (82)
Raspberry (82)
Lemon (77)
Anise (75)
Lime (67)
Coconut (59)
Grape (57)
Strawberry (54)
Vanilla (50)
Tea (47)
Citrus (43)
Blackberry (38)
Mango (38)
Peppermint (38)
Amaretto (34)

( )= Products

New Product Development

739 new products brought to market in 2012
–353 flavoured
–386 traditional

Accounted for 2.4 million cases – 41% volume growth
–2.2 million flavoured
–240 thousand traditional




– Accounts for 32% of all spirits volume, 26% revenue
– Volume up 4.0% to 65 million cases, revenue up 5.1% to US$5.5B

Price category growth
Value 1.7% to 26.6 million cases, largest price/product segment
Premium up 5.7% to 19.8 million cases, revenue up 5.4% to US$1.5B
High End up 3.5% to 12.5 million cases, revenue up 4.0% to US$1.6B
Super Premium up 10.0% to 6.3 million cases, revenue up 9.5% to US$1.3B

New products
171 new products, 122 flavoured
New flavoured products accounted for nearly 1 million cases


– Largest whiskey category 16.9 million cases, US$2.2B revenue
– Volume up 5.2%, revenue up 7.3%, 46 new Bourbons / 3 flavoured whiskeys
– Recent growth shows consumer’s willingness to experiment

Performance by price segment
Value, volume up 2.9% to 2.8 million cases, revenue up 4.8% to US$157M
Premium, volume up 7.5% to 5.0 million cases, revenue up 9.4% to US$499M
High End, volume up 3.8% to 8.1 million cases, revenue up 5.7% to US$1.3B
Super Premium, volume up 12.4% to 1.0 million cases, revenue up 14.4% to US$222M

Category growth has spurred interest in other American Whiskeys
Rye volume up 50%+ to 275k (22 new Ryes)
Several white whiskeys now on market


– Volume up 13.0% to 1.6 million cases, revenue up 16.4% to US$515M
– Single Malt Scotch continues rapid growth
– Concentrated in High End and Super Premium
– 53 new product introductions in year
– Blended Scotch strong growth in High End & Super Premium


– Volume up 22.5% to 2.2 million cases, revenue up 23.7% to US$415M. fastest growing category
– Pernod Ricard’s Jameson Irish Whiskey brand has passed the 4 million case mark in the past year


– Volume up 4.7% to 21.2 million cases, revenue up 3.1% to US$2.5B
– 163 new products introduced, 143 flavoured

Performance by price segments
Value, volume up 9.8% to 8.1 million cases, revenue up 9.8% to US$481M
Premium, volume 0.4% to 11.3 million cases, revenue -0.6 to US$1.6B
High End, volume up 10.7% to 1.8 million cases, revenue up 10.9% to US$421M
Super Premium, volume up double digit, less than 100,000 cases


– Tequila volume grew 2.9% to 12.3 million cases
– Tequila revenue up 4.6% to US$1.9B
– 40 new tequilas introduced

Performance by price segments

Value, volume up 1.8% to 2.9 million cases, revenue up 1.8% to US$221M
Premium, volume 1.0% to 6.4 million cases, revenue flat US$749M
High End, volume up 7.0% to 1.1 million cases, revenue up 6.4% to US$205M
Super Premium, volume up 9.1% to 1.9 million cases, revenue up 10.3% to US$707M


-Rum volume up 1.5% to 25.5 million cases, revenue up 1.9% to US$2.3B
-Second largest product category after vodka
-Strong growth in Value, volume up 3.3%
-Super Premium up 8.1%, but small segment
-63 new Rums, 22 flavoured


-Gin volume up 1.5% to 10.7 million cases, revenue up 2.7% to US$873M
-Category volume concentrated in Value segment, 7.4 million cases
-Growth driven by Premium segment, 19.2%
-36 new gins introduced, 4 flavoured
-Popular product with craft distillers



– Revenue up 4.5% to US$21.3B
– Volume up 3.0% to 202 million 9-litre cases
– Premium+ products driving revenue growth
– Super Premium volumes up 8.9%
– 34.3% revenue market share, 31.9% volume market share
– Strong product development meeting consumer demand


Adapted/Reproduced by: BFP Beverage Research a UK based boutique market consultancy specialising in the international beverage industry

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Categories: beverages