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Liqueurs Look To Cocktail Trends To Boost Growth

December 19, 2017

Total liqueurs volumes in the U.S. market are projected to fall by 1.5% to 18.7 million cases this year, according to Impact Databank. But while the category has been slumping in recent years, some of its key brands—including Patrón Citrónge, St-Germain and Grand Marnier—are rising thanks to the popularity of cocktails.

The category’s top brand, Jägermeister, was down 4.6% in the U.S. last year to 1.7 million cases. Earlier this year, Jägermeister unveiled a new “Be the Meister” campaign, including a national TV push. “We set out to reintroduce Jägermeister with a new brand aesthetic and irreverent swagger to a new generation of consumers,” says Chris Peddy, chief marketing officer at Mast-Jägermeister U.S. Jägermeister’s rate of decline in the U.S. is projected to slow to 3% this year. “We still have a lot of work to do,” Peddy acknowledges. “Premiumizing and reintroducing the brand in the U.S. is a multi-year investment.”

While Jägermeiser looks to regain its footing, Baileys is projected to finish the year with 2% growth in the U.S. from its base of 1.27 million cases. Diageo introduced 15 new TV spots behind Baileys this fall, which are running through the holidays. The brand offers five flavor extensions—Espresso Cream, Salted Caramel, Chocolate Cherry and, most recently, Pumpkin Spice and Almande, a non-dairy almond milk version. “Baileys Almande provides an option for consumers that previously weren’t able to enjoy Baileys,” says Nicola Heckles, director of Baileys and Liqueurs at Diageo NA. “The vegan and dairy free community has been very receptive to it.”

Kahlúa is seeing improved trends this year, according to Troy Gorczyca, brand director for Kahlúa and Hiram Walker at Pernod Ricard USA, after falling 1.3% to 810,000 cases last year. Kahlúa Chili Chocolate launched last fall as the newest addition to the brand’s flavor range.

Meanwhile, Patrón Citrónge has expanded by 23% to 165,000 cases over the past two years. “The Margarita helps drive our Patrón Citrónge business,” says Dave Wilson, president, international, and global chief operating officer at Patrón Spirits. “We’re also seeing increased interest in tiki drinks. And the popularity of coffee cocktails, like the Espresso Martini, helps our Patrón XO Café brand.”

Campari, which acquired Grand Marnier in 2016 for about $760 million, plans to heighten awareness that Cognac is the main ingredient in the brand, which is at just under 500,000 cases in the U.S. “We’re setting up to refresh Grand Marnier with a new positioning, new marketing platform, and new go-to-market tools that highlight the heritage of the brand and its luxury roots,” says Melanie Batchelor, Campari America’s vice president of marketing. Grand Marnier’s U.S. net sales grew 15% in the first nine months of this year.

Also at the higher end of the category, Bacardi-owned St-Germain continues to rise and is now at above 100,000 cases. Earlier this year, Bacardi North America president Pete Carr told SND, “One of the trends right now is low-alcohol drinks, which is an opportunity for St-Germain, which can be simply mixed with sparkling water.” St-Germain is at 20% abv.

Among other leading liqueur brands in the U.S., Southern Comfort—which was acquired by Sazerac along with Tuaca from Brown-Forman in 2016 for $544 million—decreased 4.2% to 1 million cases last year. Prestige Wine & Spirits’ Kinky slipped 2.7% to 417,000 cases, and RumChata, which had been on a steep growth curve, inched up 1% to 530,000 cases. New offshoot Frappachata has started fast, however, and is projected to reach 100,000 cases this year, according to brand founder Tom Maas.—Kevin Barry

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