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IT IS QUITE DIFFICULT TO DEFINE a global trend for the liqueurs category. It is such a large universe with an ongoing flow of innovations, says Mario Molinari, the third generation of the brand which claims to be the global leader in the sambuca category.
Running the Molinari business with his brothers, Inge and Angelo, he is chief operating officer, as well as business development manager.
He says: “The long-established sub-categories of liqueurs have been affected by the incursions in the liqueurs universe of flavoured spirits, mainly flavoured vodkas and, more recently, flavoured whiskies, which are appealing to the taste of the liqueurs consumers.”
Marie Brizard Wine & Spirits’ global travel retail director Kevin Baker rejoins: “Liqueurs brands tend to go in and out of fashion from decade to decade, but they always feature prominently in the world of mixology.
“Another resurgence in cocktails – and the revival of many historic, traditional and classic recipes – has created renewed interest in the liqueurs sector. The iconic Marie Brizard Anisette Fine liqueur, dating back to 1755, has thus seen a resurgence.”
According to IWSR statistics, the liqueur category is up 1.7% CAGR (compound annual growth rate, by value) over the past three years (2012-2014). The US and Germany are the largest markets, growing respectively 6.3% and 2% CAGR (by value).
On the one hand you have behemoth brands such as Diageo’s Baileys, Rémy Cointreau with Cointreau and Pernod Ricard with Kahlúa and Malibu.
On the other there are large, more regionally-based companies such as Mast-Jägermeister, with its eponymous shooter brand, Underberg and the likes of Molinari and Rossi D’Asiago.
Then there are the little guys, with small regional/local brands still drunk traditionally as chasers or digestifs.
Among those categorised as liqueurs, some brands vehemently fight the label, which seems to have been handed them because of their traditional image as staid, traditional tipples, only drunk in small measures at the end of an evening, essentially by older people.
Rémy is fighting hard to align Cointreau with luxury and A-list personalities while courting bartenders to make sure its iconic triple sec brand is on the speed rail as a key ingredient for cocktails. Meanwhile, Drambuie has been trying for some time to position itself alongside scotch whiskies as an alternative.
As for Campari, Gruppo Campari strives to keep it as, well Campari. A one-off, which essentially it is.
HEALTHY GAINS
Coming on to the big guns, in its recent results for the six months ended December 31, Diageo reported healthy gains for liqueur giant Baileys.
In its category and brand review, Diageo posted 6% volume growth and 7% net sales growth for liqueurs. Specifically about Baileys, it states: “Net sales increased by 6%, mainly driven by growth in Great Britain and the United States. In Great Britain, Baileys net sales were up 14%, supported by increased media, sampling and in-outlet visibility and promotions during the holiday season. In the US the growth was driven by the launch of Baileys Espresso Crème.”
North America was up 2% in volume and 4% in net sales, while Diageo’s net sales in Spain and Portugal were flat, due mainly to the decline of J&B scotch. Baileys grew, along with Johnnie Walker and Gordon’s.
Baileys doesn’t even get a mention in the review of Africa and Asia Pacific, and only gets an honourable mention for Australia where it “performed strongly and gained share”. For Latin America and the Caribbean, net sales were up 5%, but volume down 1%.
Diageo reports: “Performance in both Mexico and Colombia was strong with net sales up 20% and 24% respectively, driven by scotch and the introduction of Baileys flavours.”
As to Colombia: “Innovation through flavours, plus strong focus behind brilliant execution during peak selling seasons contributed to a 7% increase in Baileys net sales and increased share in a growing category,” the results report states.
Mark Sandys, global head of Baileys, tells Drinks International: “In the five years since the financial crisis, sales have been relatively flat, but Baileys is showing strong growth and Europe is leading the way.”
Diageo’s success in liqueurs is in marked contrast to Pernod Ricard’s. In its half-year 2015/16, it shows Malibu and Kahlúa, two of its top 14 brands, showing 0% growth and sales down 5%.
At the subsequent briefing, Drinks International’s Hamish Smith asked Pernod CEO Alexandre Ricard what the company is doing to turn these liqueurs brands around.
Ricard replied: “You have shipments and you have underlying trends. In the US market Malibu is performing pretty well.
“The latest Nielsen Panels say it’s up 3% in value growth in the US – which, for a brand the size of Malibu, is a strong performance – and is outperforming its category.”
FLAVOUR ADDITIONS
Denis O’Flynn, CEO of Pernod Ricard UK, added: “Malibu is growing at 5% in the on and off-trade and is now at 400,000 cases [in the UK]. The RTD as a mechanic has worked very well. We’ll be launching a few more flavours – Kiwi and Strawberry are the latest – and Malibu Pineapple is coming in for National Piña Colada Day on July 10. In the context of the UK it’s one of our key drivers of growth.”
And Kahlúa? Ricard said: “Kahlúa is down 5%. It’s fair to say from a prioritisation and resources point of view Kahlúa is not a brand behind which we are investing most. It happens.”
Smith asked: “It’s still a top 14 priority brand though?” Ricard said: “Yeah, but… (tails off, shrugs and smiles).” So a non-priority top 14 priority brand, looks like.
Rémy Cointreau’s results for the nine months ended December 31, showed double-digit sell-in and sell-out growth in Germany, led by Rémy Martin cognac and Cointreau.
It reports that Cointreau was hit by competition in the US in the first half, an early Easter in western Europe (first quarter) and changes in distributors in Australia and Canada.
In the meantime, Cointreau has launched “the ultimate party must-have, a cocktail maker that will transform you and your friends into mixologists within minutes”.
It has been launched in the large multiple grocers across the UK as “the perfect addition for a party, BBQ or picnic”.
Cointreau also recently launched a Great ’30s limited edition, celebrating the progressive Parisienne ladies of the 1930s. It is available across global travel retail and domestic (€26 per a litre GTR).
Rémy Cointreau UK marketing director Eleonore Moreau tells DI: “Cointreau is a must-have for cocktails – it is a huge strength for us. Cointreau is a pillar of the cocktail list everywhere in the world. It is to be found in all the most iconic cocktails, such as Sidecar, Cosmopolitan, White Lady and Margarita.
“La Maison Cointreau launched a refreshing and chic cocktail called Cointreau Fizz (5cl Cointreau, 2cl fresh lime juice, 10cl soda water), which has starting doing extremely well.”
She adds that the Cointreau Creative Crew, described as a worldwide philanthropist programme, kicked off in the UK. It is said to reveal and support women’s creativity by encouraging them to make their dreams come true.
GENERATIONAL DEBT
Brizard’s Baker sees the US as one of the healthiest markets, but adds a note of caution. “Even though the US economy is slowly improving, the younger generation is expected to have a lot of debt. They are extremely cautious about their budget and always looking for alternatives. Brands will be built through social media as this is now the platform where consumers are looking for brand validation.
“The legalisation of cannabis in many states in the US will definitely affect the overall consumption of alcohol in the US. Shotka (Marie Brizard’s cannabis-flavoured liqueur) will be positioned as a hemp liqueur, thus allowing it to create a unique niche in the market, away from the hugely competitive vodka category,” says Baker.
Illva Saronno international sales director Domenico Toni is equally bullish about the US.
He says: “Sales have been extremely good in North America through our agent, Webb. Depletions have grown for Disaronno by more than 40% versus last year, so it was a remarkable performance.
“The Caribbean islands (duty free) show some promising trends, with Disaronno growing in high single-digit figures, while Tia Maria has shown very strong growth in Jamaican duty free.”
“We are expecting solid growth for the year ahead as the core North American travellers will continue to travel. But naturally there is uncertainty when you look at the dynamics of South America and its possible impact,” says Toni.
De Kuyper is a huge player in liqueurs. Global marketing director Albert De Heer says: “In our new strategy we are focusing on the cocktail and we see that there are many opportunities to premiumise liqueurs.
“The current cocktail surge focuses heavily on the classic cocktails, and that reflects on our classic flavours such as triple sec, cherry brandy and apricot brandy,” he says.
BARTENDER INITIATIVES
De Kuyper is preparing some new initiatives with bartenders which will launch towards the end of the year.
“While the fruit-flavoured liqueurs are also very popular De Kuyper is especially looking for more complex and layered flavours, traditionally made in our distillery, as this
resonates especially with bartenders,” says de Heer.
Rossi D’Asiago has Antica sambuca, Volare and limoncello. CEO and export director Nicola Dal Toso says Antica is the number one sambuca brand in the UK and number two worldwide.
He says: “The current mission of Rossi D’Asiago is to redefine this old opinion of sambuca and revitalise the liqueur, making it cool again to every generation. To achieve this, we have invested heavily in marketing and have trained our bartenders to develop new recipes to excite and intrigue new and returning consumers.
“The Volare consumer is mainly the bartender, which means we have had to design the bottle in a style that is perfect for the busy barman.
“Last year saw us rejuvenate the Volare brand with an aim to satisfy the bartender – that included extra grip, a restyled label, an elegant cap and Pro-Pour technology,” he says.
“The liqueur market continues to be very competitive and to succeed it is vital to build trustful relationships with the trade in order to understand the real needs of the final consumer.
“We are experiencing increased interest in liqueurs from the Asian market, while the UK and German markets continue to see strong growth with more and more consumers enjoying sambuca in the home.
“Due to this, we have developed a 50cl Antica sambuca that has been selling really well in a number of retail chains,” says Dal Toso.
He claims liqueur consumption in Canada is increasing. “We’ve been distributing our limoncello in the region for more than 20 years and last year we recorded double digit-growth,” he says.
Dal Toso goes on to say that the company’s main objective is to grow its presence in travel retail. “We recently exhibited at TFWA World Exhibition, where we had a number of positive meetings, and are in the process of building upon our distribution in Europe, Asia and the Middle East.”
EXPORT MARKETS
For Molinari, the biggest export market is Germany. The average retail price for Molinari in the off-trade is between 15% and 45% higher than other brands, he claims. In 2015 the consumption of sambuca in the off-trade has grown 2% in volume, while Molinari has grown 4.5%, representing more than 30% of the category growth.
“In Italy, sambuca consumption in the MAT to November 2015 has shown a decrease of nearly 2%,” says Mario Molinari. “Other sub-categories of the liqueurs universe suffered negative performance – Limoncello decreased more than 5% and cream liqueurs decreased approximately 4.5%.”
Molinari claims a market share in the Italian on-trade of more than 80%. He talks of a specific initiative – Bartendency, a TV bartender talent show that will broadcasted by Fox.
“Bartendency will have two judges – Alessandro Procoli, bartender and owner of the Jerry Thomas Project in Rome, and La Mario, an Italian radio broadcaster known at national level for her radio programmes on Kiss Kiss and M20 radio channels as well for her collaboration in TV programmes such as Festival of Sanremo, La Talpa and X-Factor. The winner of this edition will be brand ambassador of Molinari for one year,” says Molinari.
Underberg brand manager Michael Griesel confines himself to just talking about two products, one of which is Xuxu, a ‘trend spirit’, described as: “A sinful seduction made of sun-ripened strawberries with a hint of crystal-clear vodka and refreshed with a dash of lime.” Griesel says it is one of the most successful spirits on the German market.
He also extols Tiffin, which is described as a premium tea liqueur said to have been distilled from selected premium teas and offering a “unique bouquet and a light refreshing taste of premium tea”. It has an alcohol content of 24% abv.
SOME LIKE IT HOT
Roberto Hidalgo, managing director of Ancho Reyes, the Mexican chile liqueur made from ancho chillis steeped in a sugar cane spirit, believes it’s an exciting time for the liqueurs category, with bartenders and consumers looking for innovative and quality ingredients in today’s resurgence of cocktail culture.
Ancho Reyes collaborated with cocktail, hospitality, marketing and design firm Bon Vivants on the launch of the brand.
Bon Vivants co-founder Josh Harris, says: “I think the liqueurs sector internationally is a really exciting category, particularly for the cocktail trade.
“Liqueurs are giving cocktail bartenders the tools to layer together nuances of flavour with very assertive flavour profiles to create cocktails that ultimately become much greater than the sum of their parts.
“In each country where the brand (Ancho Reyes) has been launched we have received a great deal of excitement from bartenders and it appears it is being embraced to the degree that we have hoped, giving us the confidence to continue to launch the brand in other countries.”
Harris continues: “I don’t have any aversion to the label of ‘liqueur’ at all. I believe that Ancho Reyes, for example, is contemporary and it is relevant and that young, modern drinkers are excited about this flavour profile being captured in a bottle, that up until now has not existed in this way.
“The intention with Ancho Reyes was to give cocktail bartenders a flavour they could use across a vast array of cocktail making, and therefore the brand’s success in our mind does not rely upon the historic notion that liqueurs are intended to be consumed only as after-dinner drinks in small cordial glasses, for example.”
Going back to Mario Molinari, he concludes: “While liqueurs were traditionally consumed as an after-dinner digestive, often served straight or on the rocks, their consumption is continuously evolving and has become cross-cutting at all levels.
“Liqueurs are consumed in cocktails and as shooters. The moment of consumption is not predominantly after dinner anymore.”
Baker says: “Consumers are looking more and more for handcrafted products – 2015 was the year of craft spirits and craft cocktails.
“They like the idea that their favourite liqueur is made from small batches and are more and more conscious about buying locally produced products. We find new flavoured spirits in the stores every day, which makes the market very competitive.
“We see the next trend as moving towards flavours with organic or health properties.”
It’s a jungle, but to the intrepid marketer with the research equivalent of a machete, there are ways through the labyrinth.
