MORE LUXURY TO COME FROM BACARDI AND DIAGEO

Last week, at the 42nd Annual Impact Marketing Seminar, Bacardi North America regional president Pete Carr discussed the group recent acquisition of Patron Spirits for  $5.1-billion, a deal that lifts Bacardi from the fifth-largest spirits company in terms of U.S. market share to the second-largest.

Moving forward, Carr noted, 75% the company’s business will center on three brands, split between Bacardi rum at 22%, Grey Goose vodka at 26%, and Patrón at 27%.
Turning to Bacardi’s core rum brand, Carr used the occasion to unveil a revamped and expanded upscale portfolio, with new Reserva Añejo Cuatro and Gran Reserva Diez expressions set to join Bacardi’s Reserva Ocho and Reserva Limitada. “We’re placing a huge bet on rum premiumization,” said Carr. “Rum is the last category to premiumize, and we think there’s a $550 million category opportunity.”

Carr went on to detail efforts on several other top-performing Bacardi brands, including Cazadores Tequila and D’Ussé Cognac, and explained the turnaround strategy for Grey Goose, concentrated on plans to hold price, focus on the on-premise, and attract younger LDA and multicultural consumers to the high-end vodka franchise.

Meanwhile, Javier Ferrán, chairman of Diageo, spoke on the topic “Marketing Luxury Spirits In A Changing World.” According to Ferrán, several factors are set to drive luxury spirits growth in the coming years, including a consumer propensity toward “drinking better rather than drinking more,” and the ongoing rise of the middle class in emerging markets like Asia and Africa. He estimates that more than 700 million new consumers in emerging markets will be able to afford international spirits within the next decade.

He also noted the importance of consistently maintaining—and taking—price. “A key driver of perception of quality is price,” said Ferrán. “Luxury goods brand-building is a long-term game.”

Source: ShankenDailyNews.com

CUSTOMERS ARE ORDERING MORE UPSCALE DRINKS

 

I have ran across this article which is very relevant to today's economy and customer trends.
More updscale, more education, more choices ... essentially everyone needs to do more!

ON-PREMISE CONSUMERS ARE ORDERING BETTER QUALITY DRINKS MORE OFTEN
Source: Wine & Spirits Daily
https://winespiritsdaily.com/
March 5th

More consumers are consistently ordering beverage alcohol when they go out to eat. In fact, 84% of the 1,000 consumers surveyed in Next Level Marketing's annual report (conducted in February) said they are ordering alcoholic drinks nearly every time they go out, up 5% from last year's survey. With 87% of consumers surveyed ordering the same or better quality drinks, and just 6% saying they are ordering cheaper drinks.

The number of drinks consumers are ordering per occasion on-premise has consistently stayed around 2.2 drinks the last few years, and that number is a little higher among males and millennials. While consumers may not be drinking more per occasion, the number of occasions has increased. "People are drinking more often, better quality, but in the same amount each time," said Next Level Marketing's Mike Ginley at the VIBE Conference last week.

As for where they're drinking, casual dining chains are the most visited type of bars/restaurants among those surveyed, with local independent casual dining restaurants in second place. The main drivers of determining where to go are food quality, food and drink value prices and service. Beverage programs play a key role in determining where consumers want to spend their money on a night out.

WHAT MAKES A GOOD BEVERAGE PROGRAM?
The survey found that the top five key elements to a beverage program are: (1) good value prices, (2) happy hour specials, (3) great drink quality, (4) great beer selection and (5) drink specials and promotions. A bit lower on the list, you'll find great wine selection and great cocktail selection.

EXPERIMENTATION AND BRAND LOYALTY
Experimentation of new brands is "remarkably high" across beer, wine and spirits, with about 80% of consumers responding that they tried a new brand within the past 90 days, and about 60% tried a new brand in the past month, according to Mike. Though the general consensus is that consumers are less brand loyal these days, Mike suggested that many still are brand loyal based on the fact that consumers said they only consumed about 3 or 4 brands in total over the past 90 days across each category.

DIAGEO IS TARGETING EXPERIENTIAL CONSUMPTION WITH TECHNOLOGY

Diageo Consumer Research

Diageo's report released this week presents research gathered by a team of professional cultural ethnographers into three key trends that will shape the way we socialise in 2017 and beyond.

These trends can be seen in a wide range of activity around the world from the growing popularity of immersive entertainment to the advent of technology than can transform the home.

1. the growing desire for “exceptional” experiences among younger consumers,
2. the ongoing trend toward more at-home drinks consumption, and
3. and consumers’ desire to “optimize” their drinks repertoire with products tailored to a specific lifestyle or diet.

One example of how Diageo is targeting the “experiential” piece is through its foray into virtual reality programming with The Singleton brand, in which consumers are virtually transported to the Scottish Highlands region where the whisky is produced.

Meanwhile, it’s catering to the at-home entertainment trend by partnering with delivery services like Drizly in the U.S. and Deliveroo in the U.K., and with the recent launch of a new Johnnie Walker “digital mentorship” program leveraging digital platforms to encourage consumers to further their whisky knowledge from within their own homes. On the specialty product front, Diageo touts the potential of recent offerings like dairy- and gluten-free Baileys Almande and low-carb and zero-sugar Smirnoff Spiked Sparkling Seltzer.

In conclusion:

Exceptional becomes the rule.
Solutions right at your Home.
Taking control of our choices.

Sources: ShankenDailyNews.com, DIAGEO

K&L WINES IS A GOOD SOURCE FOR SPIRITS' TRENDS

Here are quotes from the 2015 Newsletter sent by K&L wines (www.klwines.com) at the end of 2015 to thousands of followers.

They are predicting Brandy to become the next best thing in the spirit category.

In particular, they are very enthusiastic about Copper & Kings Brandy from Kentucky.

I found K&L Wines to be a good source for trends in the US for Spirits.

K&L Wines Logo

===> David Driscoll, K&L Spirits Buyer, said:
"Welcome to the biggest story of 2015 for the K&L spirits department—the discovery of an incredible new distillery right smack in the heart of Louisville, Kentucky.

That is Copper & Kings Brandy.
As you may or may not know, we’ve immersed ourselves in the world of French brandy over the past few years. We’ve been traveling to Cognac and Armagnac, working directly with small producers ... The reaction has been quite positive from spirits fans across the nation and it was exactly that commotion that caught Joe Heron’s attention. He’d been following our foray into grape-distillates with close attention, hoping that one retailer out there would understand the incredible value that brandy possessed. You see, Joe had started a micro-distillery in the middle of Kentucky that made brandy instead of Bourbon.
The next big thing is here, spirits fans.
It's a brandy that will change the way you think about brandy. It's a brandy that will change the way you think about spirits in general."

===> David Orthenin-Girard, Spirit Buyer, said:
"Maybe it's those big old pot stills or just the Kentucky Magic, but this is brandy that will change your mind about the whole category."

Copper & Kings Brandy, Made in USA, Kentucky

===> Ryan Woodhouse, Spirit Specialist, said:
" If this was Bourbon it would be three times the price and sold out...don't sit around waiting for shortage to end (it's gonna be a long time comin') get with the program and drink smart."

===> Heather Vander Wall, Spirit Specialist, said:
"I love it when I find an unexpected spirit that changes my conception of the category."

Source: K&L Wines

HOW USING CONSUMER TRENDS TO LAUNCH NEW SPIRITS?

Launching new products can be a big revenue driver, but it can also be a big cost to companies. The beverage industry is well-positioned for new products that capitalize on consumer trends, but there are several things companies should keep in mind when launching new beverage products, a panel of experts said during a recent Beverage Industry webinar.

Old metal iron with new tag

1st Key element = Value:
Consumers are willing to pay more for products they find valuable and that make their lives better.

2nd Key element = Identifying Innovators and Early Adopters:
These consumers are looking for new products and if they like them they quickly tell others.

3rd Key element = Understanding Millenials:
They look for details and unique points of differentiation.

4th Key element = Planning beyond the Launch year.
A great deal of companies fail has they plan for resources just for the first year and cannot keep the momentum year 2. Example, lesser media exposures, lesser cash flow to replenish the shelves, etc.

Source: SmartBlogs