We have never been more spoilt for choice, it would seem, when it comes to white spirits. Jamie Allan investigates how brands are approaching the challenge of making their spirit stand out in an extremely competitive market, and which direction they envisage the category heading next. More importantly, how can bar and restaurant owners capitalise on these trends, maximise white spirits sales and make their business stand out from the crowd?
Vodka, as we all know, dominates the white spirit market, accounting for 87% of all sales in both the on and off trade with sales of £2.54bn last year in the UK. In fact, according to Mintel, it was consumed by 54% of adults in the year to September 2013, with 39% of adults mixing it with soft drinks, 17% imbibing it in a cocktail and 14% of adults drinking it neat.
Because of the sheer volume of sales, the market for house-pour vodkas is extremely competitive, and no brands, including market leader Smirnoff, can afford to sit on their laurels. In fact Smirnoff is currently investing £10m in a sales incentive drive to both bolster the brand’s image and to invigorate the vodka market in general in the on-trade. Russian Standard has been grabbing a slice of its market in the UK with sales increasing £20m over the past year, and Stolichnaya, from Maxxium’s stable, has been more prevalent in the Scottish on-trade too.
There is no doubt about it, over the last few years consumers have become increasingly brand aware and now expect bars, whether in the city centre or more rural areas, to have a good selection of premium brands. Stuart Kay of Vodka Wodka (albeit a vodka bar), comments, “We currently stock eighty different vodkas, and it’s fair to say that over the past few years sales of premium and super-premium brands are on the up, and that trend looks set to continue. Our regulars are always keen to try something new, and don’t seem to mind spending the extra money to do so.”
In an age of financial austerity the success of super-premium white spirits such as Chase Vodka, Ciroc and others may seem surprising, but the market for so-called ‘luxury’ spirits continues to gather apace. Head of Diageo Reserve Brands Nick Temperley told DRAM, “Consumer demand for luxury vodka is growing and in the UK, premium brands are driving category growth. Cîroc is the fastest growing super premium vodka in Great Britain today, and is allowing bars to capitalise on this consumer trend.”
Chase Distillery’s Head of Press, Rachel Tranter, agrees. She told us, “Over recent years, consumers have become more aware of the ‘quality indicators’ of the goods that they procure. They are far more savvy when it comes to spending and are definitely willing to invest in products that can demonstrate additional value, especially when talking about luxury markets such as premium spirits. Provenance is always something that appeals to people, being able to show where raw ingredients are grown and how these are distilled to create the final Chase spirit helps the consumer to understand what the product is all about.”
Super premium vodka’s such as Chase and Belvedere are now reasonably common, but there are new super premiums worth looking out for too, including Konick’s Tail and Czech vodka Babicka – the latter won the Vodka Masters Super premium category, beating 69 other vodkas, with a ranking of more than 90% from every judge.
The importance of provenance in spirits was until recently generally associated with malt whisky and aged rum, yet consumers are attaching increased importance to the origin of their white spirit of choice too. Kieran Haughey, General Manager of Bar Home, told us, “It’s definitely easier to sell a customer on a product that they’re unfamiliar with if you can provide a bit of background information. People are genuinely interested in where new spirits are produced, especially if it happens to be Scotland.”
In many ways the rise of the artisan spirit can be seen to mirror the recent success of craft beer, with the sudden proliferation of speciality beer bars a sure indicator of the public’s increased appreciation and understanding of small-batch, locally produced products.
However, that is not to underestimate the role played by Gordon’s Gin which continues to innovate. It has just launched Gordon’s Elderflower.
New Scottish, small batch, artisan spirits continue to find their way onto back-bars across the country. Jonathan Engels, who launched Pincer Vodka in 2008 says that the key to establishing a brand’s success is developing consumer interest and loyalty, and points to growth in artisan white spirits in general as a key contributor to Pincer’s increased sales. Jonathan also places emphasis on how Pincer is served once in the hands of the nation’s bartenders. He explained, “The balance of elderflower and milk thistle is unique to Pincer, and as such it works exceptionally well when served with either tonic or soda water, as both mixers make the most of the botanical make-up of the vodka without overwhelming it entirely.”
It’s not just artisan vodka’s that are enjoying a moment; gin in particular is undergoing a renaissance. There are a plethora of them now to choose from. The Botanist, Caorunn, Boe Gin, Edinburgh Gin and NB Gin are just some of the many new Scottish craft gins that have hit the market in recent years. Given the abundance of new products available, producers are keen to emphasise the uniqueness of their product. Owner of NB Gin, Viv Muir, believes that the individuality of her product is inherent to its identity. She told us, “Many people presume that there is little difference in taste between one gin and another, but are quite surprised when they’re given the opportunity to try a selection. Distillers want people to try their gin, but to come back and spread the word. They know that consumers are looking for something which has a story behind it, is of high quality and is unique.”
Head of Instil Drinks, Nick Rodgers, believes that the onus is on bar owners themselves to capitalise on the recent upsurge of consumer interest in craft gins by offering innovative alternatives to traditional serves. Using Citadelle Gin as example, Nick suggests adding a slice of grapefruit or orange and a flamed orange zest with Fever Tree Tonic to compliment Citadelle’s botanical mix and create some theatre around the serve. Nick added, “There is a lot of consumer interest in the category. Rather than just listing different brands on the back bar, why not create a gin and tonic list, with each drink designed to bring out the best from each spirit and create visual interest.”
Of course the idea of a ‘perfect serve’ is nothing new, but its value cannot be underplayed, especially in the highly competitive white spirit market. Research shows that 77% of customers are more likely to purchase another drink if they receive the perfect serve, highlighting the importance of mixers to a brand’s success. One of the reasons that vodka sales are so consistently high is because vodka can be mixed with just about anything while gin is generally perceived by consumers to be only served with tonic.
With the continued growth of premium white spirits it was perhaps inevitable that premium mixers would surely follow. Enter Gloworm, a caffeinated mixer specifically blended to match up with selected spirits. For instance they produce a Cucumber and Apple mix for gin, and a Raspberry and Orris mix for vodka, while Pear, Spice and Lime is said to compliment rum. Gloworm aims to challenge the consumer to consider something a little different when enjoying their drink of choice.
James Sutherland, owner of Edinburgh’s 56 North, stocks Gloworm as a suggested premium mix for his bar’s 127 gins, often converting his customers to ‘Mother’s Ruin’ by encouraging them to move away from the traditional serve. He told us, “Most of our guests who “don’t like gin” actually have nothing against gin as such, it is more that they don’t like tonic! If we show them interesting alternatives such as Gloworm or other premium mixers they tend to end up loving it.”
But while gin and vodka are sold primarily with mixers – tequila is appears, is drunk in the on-trade straight up. Stuart Kay told us that while Vodka Wodka sells through a high volume of tequila each week, the vast majority of their customers enjoy their drink as a shot, rather than with a mix.
Craig Chapman, Brand Manager for Cellar Trends, agrees that while Patron may be enjoying its status as the world’s best selling premium tequila, there is still a well of untapped potential waiting to be exploited. He told us, “The main growth opportunity for tequila in the white spirits market is to offer interesting serves which show off the versatility and mixability of the product range beyond a simple shot – Patrón Silver is delicious served long over ice with tonic and fresh lime and works well in a range of cocktails.”
Tequila is not the only white spirit that has work to do in educating and challenging the on-trade drinker; brand managers agree that white rum also remains somewhat of a mystery to the average consumer. And Bar Home’s Kieran Haughey believes that the majority of his customers who drink Bacardi Original (far and away the market leader in white rum sales) are unaware that the brand is actually a rum.
Having recently launched a new advertising campaign with the strap-line “BACARDÍ: Untameable Since 1862”, Bacardi are aiming to tackle consumer confusion around white rum head on. Brand Director, Lisa Jazwinski, believes, “In the UK market place, consumers have little knowledge about the rum category, especially white rum. It’s considered to be just another white spirit and is often confused with vodka. As the leader in rum, Bacardi has an education job to do around rum credentials and the versatility of the entire rum range including white, gold, darkand aged.”
Ian Sanderson, President of the Glasgow Rum Club and General Manager of The Tiki Bar, who told us that he frequently uses white rum as a base for his cocktails on account of its incredible versatility. He added, “The white rum category is an intriguing one, there are many subcategories; Aged and filtered, Straight from the still, geographical differences and ABV strength. There is movement in each of these subcategories, in my opinion as a whole the ‘White Rum’ category is in a growth period.”
Brazilian national spirit cachaça appears poised to take advantage of this growth. Although there is still some debate on whether cachaça can be included in the rum category due to the absence of molasses in its production, there can be no doubting the scope for the spirits growth in the coming months; although cachaça is the world’s third most consumed spirit, only 1% of its production is exported from Brazil. Having just taken on Ypioca, Brazil’s oldest cachaça brand, Marblehead’s Ross Agnew believes that the time is ripe for bars across the UK to dramatically increase their cachaça sales in the upcoming months with all eyes on Brazil this summer for the World Cup and then Rio in 2016 for the Olympics. Brazil’s national drink, the Caipirinha, looks set to become a firm favourite behind bars.
So what can you do to increase white spirit sales in your bars? Product knowledge would appear to be key – the rise of craft spirits in recent years indicates consumer understanding and appreciation of a product’s origin and individuality, and as such a bartender’s ability to explain a spirit’s uniqueness and recommend a ‘perfect pour’ both piques customer interest and leads to potential repeat purchases. Challenging traditional preconceptions on white spirits is also important when attempting to increase sales. Customers who avoid spirits such as gin or tequila often do so based on assumptions on how they are traditionally served, and by introducing alternative serves or mixers bar can tap in to as-yet unrealised sales potential. Finally, aim to make the most of contemporary news and sporting events by capitalising on organic publicity. This year’s World Cup and Commonwealth Games are fantastic opportunities to encourage creativity in mixing drinks, as large numbers of consumers head out on the town to sample the carnival atmosphere. The white spirit market has never been so interesting – let’s make the most of it!