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Leading Liqueurs Players Embrace Innovation

December 18, 2012

With a growing demographic of experimental, adventurous Millennial consumers, the U.S. liqueurs market has evolved into a hotbed of innovative activity. A bevy of rising stars—including St-Germain and RumChata, among others—has emerged to challenge the market’s established brands, and the category leaders have responded by extending their franchises with additional flavors and other new propositions.

Much of the excitement has centered around the whisk(e)y-based liqueur segment. Brands like Jack Daniel’s Tennessee Honey (Brown-Forman), Wild Turkey American Honey (Campari America) and Evan Williams Honey and Cherry Reserves (Heaven Hill) are thriving after being rolled out over the past few years. Meanwhile, one of the U.S. market’s biggest and fastest-growing whisk(e)y-based liqueurs is Fireball, from Sazerac Co. Priced in the $16 range, the cinnamon-flavored offering has found its niche as a shot option. Fireball rose by 180% to reach 350,000 cases last year.

Brown-Forman’s Southern Comfort brand has responded to the emergence of new competitors by expanding its line. On the heels of last year’s launch of Southern Comfort Fiery Pepper, Brown-Forman introduced its newest flavor entry, Southern Comfort Bold Black Cherry ($16.99 a 750-ml.), to the U.S. in May, and also embarked on its largest-ever TV media buy this year. Brown-Forman’s efforts are starting to pay off. “Southern Comfort lost volume in recent years to these new entries, but we’re starting to see positive signs again,” says Mark Bacon, Brown-Forman’s senior vice president and managing director.

Pernod Ricard USA’s Kahlúa has been particularly active on the marketing and innovation front, hoping to turn around a 1.5% slide from last year. With the support of its “Delicioso” campaign—first launched in 2010—Pernod Ricard USA has worked to reemphasize the brand’s Mexican heritage and use of premium ingredients. More recently, Kahlúa introduced a U.S. repackaging, as well as a new limited edition seasonal, Kahlúa Gingerbread. In November, Pernod Ricard USA announced the rollout of Kahlúa Midnight ($23.99), a higher-proof expression targeting the shot occasion and younger LDA consumers. “Kahlúa has moved away from being seen as a straight, sweet shot,” explained Michelle Sanders, Kahlúa’s brand director, earlier this year. “Consumers don’t necessarily think to call for it since there are so many choices today. We thought it was time to reintroduce it with a new offering.”

Kahlúa and Southern Comfort both lost ground in the U.S. last year, as did most of the top-selling liqueurs. In fact, only two of the top 10 brands enjoyed growth—Grand Marnier (+2.1%) and Di Saronno (+3.9%). Although Jägermeister remains the market’s biggest liqeur brand, it’s been on the decline since 2008. Last year, Jägermeister dropped 4% to roughly 2.5 million cases. The brand rolled out its first-ever television campaign in the U.S. in May, under the tagline “Stronger Bond.” The ads, which target young LDA men, feature celebrities such as football player Keyshawn Johnson, musician Kerry King and boxing trainer Freddie Roach, among others.

 

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