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Major Spirits Players Innovate To Keep Pace With Consumers’ Changing Tastes

August 9, 2018

With consumers drawing from an increasingly varied repertoire of drinks choices across different venues and occasions, key spirits suppliers have been ramping up their innovation activity. A large part of that innovation has come through line extensions, as marketers look to draw newer consumers into their established brand franchises.

Flavored line extensions continue to proliferate across all categories, with Diageo and Pernod Ricard leading the charge. Diageo’s Cîroc ($31 a 750-ml.) has released a slew of flavored line extensions over the past two years, including Mango, Summer Colada, and French Vanilla expressions. The Summer Colada and French Vanilla labels both launched in 2017, accounting for 113,000 cases and 101,000 cases, respectively, in their debut year on the market, according to Impact Databank. The Mango variant was introduced in 2016 and rose to 200,000 cases last year.

Portfoliomate Smirnoff vodka is also innovating in the flavor sphere with summer seasonal Smirnoff Red, White & Berry, which sold 68,000 cases last year on a rise of 65%. “Flavors continue to be a priority for us,” says Jay Sethi, vice president of brand marketing for Smirnoff. “We know that we must continue to innovate and push the boundaries in the flavors category in order to stay relevant with our target consumers.” Elsewhere in the flavored vodka segment, Pernod Ricard’s Absolut Lime ($20) enjoyed a fast start in its first year on the market, reaching 173,000 cases.

Flavored whiskies also continue to hit the market at a rapid pace—overall, the category grew by 8.5% last year to 10.8 million cases. Diageo-owned Crown Royal remains the preeminent player in flavored whiskies’ super-premium tier, with its Vanilla variant ($25) cresting 400,000 cases last year after launching in 2016. Crown Royal has also had success with its limited Salted Caramel offering, which rolled out over the holiday season and sold 50,000 cases in just a short time on the market. In the American whiskey segment, Jim Beam has also had success with its launch of a Vanilla expression. Jim Beam Vanilla ($16) reached 113,000 cases last year in its debut.

Rum, too, is betting on flavors. Pernod Ricard is contributing to the category’s growth via its Malibu label. “Malibu represents 52% of the flavored rum category and is driving 125% of category growth,” says Malibu brand director Daniel Clarke. The brand has launched such diverse flavors as Malibu Upside Down Cake as well as pre-mixed, rum-based cocktails like its Malibu Rum Cans, which run the gamut from Strawberry Kiwi to Mango. Diageo added the shot-friendly, coconut-flavored Captain Morgan LocoNut ($15) in 2017, and it hit 103,000 cases in its debut. Captain Morgan also recently introduced Watermelon Smash and Apple Smash rums geared toward the shot occasion.

But flavors aren’t the only innovations making their mark with consumers. Bacardi has mounted a new push in the aged rum segment with the recent launch of four-year-old Bacardi Añejo Cuatro ($20) and 10-year-old Gran Reserva Diez ($40). In whisk(e)y, established brands are using different mash bills and wood finishes to draw interest. In Canadian whisky, Proximo Spirits is building on the early success of Pendleton whisky’s Midnight expression, which is at 90 proof and retails around $35, about $10 higher than the core brand. In Scotch, William Grant’s Glenfiddich recently introduced Fire & Cane ($50), aged in ex-Bourbon casks before maturing an additional three months in rum casks. Meanwhile, in Irish whiskey, Pernod’s Jameson has been experimenting with its Caskmates series of craft beer barrel-aged whiskies, most recently with a Caskmates IPA edition.—Julia Higgins

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