Bitters: Wind back in its sales

These versatile brews are growing in popularity at a rate of knots as they become a vital part of the bar call. Patience Gould investigates

THE BITTERS MARKET boasts one extraordinary anomaly and that is despite the taste of these bitter brews, it is big business and, more importantly, a growing one. Indeed, these herbal concoctions are a reminder of the close links alcohol used to have with the world of medicine – and that’s a nice way of putting it. Nevertheless the sector continues to grow. Over the decade 2002 to 2012, the global bitters category posted very solid 3.39% growth moving from 17.619 million cases to 23,117 million cases (IWSR).

The leading mights championing bitters are the German brew, Jägermeister and the Italian brand Fernet Branca. In the five-year period 2009 to 2013 their respective volumes grew from 6.4 million cases and 3.3 million to 7.2 million and 6.2 million cases, and growth in 2013 was 12.5% and 88% respectively (Drinks International’s Millionaires').

Clearly there’s a goodly head of wind in Fernet Branca’s sails, furthered by the huge amount of work the company has put into the cocktail arena, highlighting Fernet’s versatility. Also its distilling hub in Argentina has performed well in recent years and Fernet & Coke has become so popular that the mix actually has its own dedicated song, while over in the US the brand has something of a cult following, notably in its chief stamping ground of San Francisco.

Fernet’s success underlines the necessity for bitters to move out of the traditional digestif serve at the end of the meal, indeed it would seem that in the old strongholds in east and western Europe the category is increasingly under pressure. In short bitters’ consumers are ageing and producers must find ways of attracting newcomers to the fold. 

“Exploring alternative occasions and ways of drinking bitters rather than as a digestif has created a nice way out of this bottleneck,” says Averna’s export director Michel Jordens. “Versatility is the name of the game but not all of them have these mixology essentials. A new world is opening up for a beautiful liquid such as ours with lots of heritage, authenticity and nice narratives thanks to a growing international cocktail trend. 

“Bartenders liking for products underpin this development and we see that more and more embrace us. We have started to make inroads in that direction and have it as a foundation for those markets where no real bitter tradition exists such as Britain for example. The US is obviously in the driving seat when it comes to mixology and cocktail trend. The flavour explosion is in full swing and we have made the Italian bitter, amaro prominent in the bar scene due to its fresh flora, anis and bitter orange notes and warm, bittersweet medley of herbal, spicy and earthy flavours. We are flooded daily by new interesting cocktail serves cropping up around the country.”

Averna has of course been in the news recently following its acquisition by its Italian compatriot Gruppo Campari. The move enriches the company’s Italian specialities range which, along with Averna now, includes Aperol a low alcohol bitters aperitif and the more traditional bitters brand in which artichoke is at the fore, Cynar. “We do believe that this good cultural fit and their stronger route-to-market will give us several opportunities in all the international regions that they cover,” says Jordens. “Notably the strength of their distribution network in North America, will position us to benefit from the market’s growth potential, particularly in the US, where mixologists and local consumers are showing growing 

interest in Italian bitters and liqueurs in the on-premise channel.”

Significantly Averna has enjoyed double digit growth in the US for the last five years now and is confident that they can do even better. “We are sure that more dormant markets in Europe will soon wake up from their relative stability and Britain will be the bridge between the States and the European market,” says Jordens. The good news is that the international bartending community ‘embraces’ brands, regardless of marketing, and being interconnected their enthusiasm spills into many countries round the world giving new impetus to brands, like Averna, in the spotlight. “So we are very positive that pollination will soon take place,” says Jordens.

Bombing the market 

Interestingly this move to emphasise the versatility of bitter brands has yet to influence the global number one that is Jägermeister. Instead through dint of its instant icing machine and frozen serve the brand has attracted a huge band of new younger consumers to the category. The frozen serve was forged Stateside by the legendary Sidney Frank Importing – and 

it has established the US as Jäger’s prime stronghold, where it sells well in excess of 2.4 million cases and is now ranked in the top 30 millionaire brands (The Millionaire’s Club 2014). 

Its home turf, Germany, follows suit accounting for 20% of annual volume, and then it’s the UK – and that’s why Jäger has been making the headlines yet again. 

Aside from its continued export expansion – it’s now available in more than 100 markets – and the launch of Jägermeister Spice last year the company has decided to set up its first wholly owned distribution subsidiary in the UK. “It’s a first and a big step forward,” says Guy Lawrence CEO of MAST Jägermeister UK. “In the UK Jägermeister is the third largest brand in the on trade, behind Smirnoff and Jack Daniels.”  

Initially the bitters brand was handled by the powerful agency house Cellar Trends and, while the UK does not boast a highly-tuned bitters markets, Jägermeister has gone from strength-to-strength as the figures demonstrate.  The distributor used the US marketing approach as its template – that is a heavyweight programme of promotional party nights in key on-premise outlets up and down the UK, starring the Jägermeister Tap machine which serves frozen shots. It’s at these nights that the Jäger Bomb, a mix of Jäger and Red Bull, became hugely popular. 

“Growth has been phenomenal, with volume increasing by more than 58% between 2002 and 2012 to 454,000 compared to a category growth of just a tad over 42%,” says Lawrence. “Jägermeister is driving the category.”

Clearly the UK subsidiary is going to have its work cut out to maintain this momentum but this is the company’s number one priority. To this end a massive £4m TV and cinema advertising campaign has been unleashed under the banner “It runs deep”. 

The main target is the ambitious urban male between 25 to 35-years-old, a notoriously fickle audience when it comes to brands, but the whole message of the advertising seems to point to a subtle change of direction – far from the party night spectacular this ad underlines the importance of bonds and friendship. It shows a group of surfers on a shot-fuelled trip in Iceland. It is clever stuff and quite thought-provoking.

“Considering Jägermeister is still in only 50% of UK on-trade outlets the potential is obvious and it’s one of the few spirits which has brand call,” says Lawrence. “We also have a lot to do developing it in the off trade – as we’ve taken the classic route by building a brand in the on-trade first.” This is underlined by the fact that 75% of Jägermeister’s volume is skewed in favour of the on-trade.

Brand focus is this company’s mantra and Jägermeister is the centrifugal force – so there is little likelihood of broadening the distribution base by adding other brands. “We are great believers in focus – it’s very, very powerful and we have no intention of doing any other agency business,” says Lawrence.

Sticking with tradition

Another bitters force which is welded to the single brand focus is Underberg – the only bitters to be solely marketed in the distinctive single serve bottle. “Our portion bottle will never change. A big Underberg bottle is out of question,” says Andrea Baumgartner, international marketing director. 

The little bottle makes Underberg the perfect travelling partner so it’s no surprise that the travel retail and global duty free arena is the brand’s best market along with Scandinavia and the US. “The global duty free market is very important to us. Underberg is perfect for travellers. Firstly it does help to digest any kind of food and secondly it is an ideal travel size. We work hard on duty-free gifting and have come up with a new 15-bottle tin and an eight-bottle travel case for Dubai DF,” says Baumgartner. “We have an exclusive travel retail range which you will not find on domestic markets. We even do some items exclusively for certain customers.”

Consistency is the name of the game when it comes to the Underberg teams marketing approach and over the years – over 165 of them – the brand has developed a loyal band of consumers, which has held it in good stead during the economic downturn. “It’s a unique product which has many loyal fans around the world and that’s why we have not been affected by the economic situation,” says Baumgartner. “We were increasing our distribution and sales over the recent years and could win new partners worldwide.”

As to the coming year, this autumn will see the launch of the annual Underberg collector tin. The tin Edition 2015 is dedicated to the Netherlands, and the company is sticking with its Tops & More loyalty programme which has been hugely successful, since its inception back in 2002.  

In the scheme consumers collect tops which – when enough is in the pot – can be exchanged for Underberg glass table wear. Apparently the most popular item is the long stemmed Underberg glass.

So much like the product itself the bitters category is full of surprises. While there are successful signs of underlining bitters’ mixability using the cocktail as a springboard – even Jägermeister is now stressing what a good mix it is with either tonic or ginger beer – traditional brands like Underberg have remained true to the digestif slot. However, unless the company does move into the ‘big bottle’ it is hard to imagine bartenders attempting to flare with the single portion miniature.  

Just one word of caution though on the Jägermeister front. This brand is clearly the business on the club and bar scene across both sides of the channel at the moment – but it’s vulnerable. Copycat competitors are coming into the fray – like a brand called Fireball Stateside – which has been likened “to liquid cinnamon” – but it is beginning to raise its head above the parapet. 

Jägermeister’s prime target audience knows nothing of brand loyalty and the brand must stay at the top of its game in order to continue to attract its core consumers. This is a category, as the brand might say, that ‘runs deep’.