Premium Brand Alcohol - US - March 2008

Table of Contents

• Scope and Themes
• What you need to know
• Definition
• Data sources
• Sales data
• Consumer survey data
• Abbreviations
• Terms
• Executive Summary
• The bottom line
• Distilled spirits face competition
• Segment performance, positive gains for all
• Major manufacturers
• Advertising spending increases and shifts to broadcast media, lifestyle and product attributes are common advertising messages
• The consumer
• Market Size and Forecast
• Key points
• U.S. distilled spirits market grows steadily
  • Figure 1: Total U.S. sales and forecast of distilled spirits at current and constant prices, 2002-10
  • Figure 2: U.S. volume sales of premium and total distilled spirits, 2004-06
• On-premise sales drive growth
• Liquor stores fuel off-premise sales growth
• Competitive Context
• Key points
• Competition from other alcoholic beverages
  • Figure 3: Dollar sales and market share for beer, distilled spirits and wine, 2002-06
  • Figure 4: Trends in Preferred Drinks, among those aged 21-29, 1992-2005
• Shortage of malted barley and hops
• Major suppliers vs. small batch distilleries
• Industry consolidation
• Private label
• Segment Performance
• Key points
• All spirits experience growth
• Consumers trade up driving growth of premium products
  • Figure 5: U.S. sales of distilled spirits, segmented by type, 2006
• Segment Performance--Whiskey
  • Figure 6: U.S. volume sales of Whiskey, 2002-06
  • Figure 7: U.S. volume sales of Whiskey, sub-segments, 2002-06
  • Figure 8: U.S. volume Whiskey sales, premium vs other, 2005 and 2006
• Segment Performance--Vodka
  • Figure 9: U.S. volume sales of Vodka, 2002-06
  • Figure 10: U.S. volume Vodka sales, premium vs other, 2005 and 2006
• Segment Performance--Cordials and Liqueurs
  • Figure 11: U.S. volume sales of Cordials and Liqueurs, 2002-06
  • Figure 12: U.S. volume Cordials and Liqueurs sales, Premium vs other, 2005 and 2006
• Segment Performance--Rum
  • Figure 13: U.S. volume sales of Rum, 2002-06
  • Figure 14: U.S. volume Rum sales, Premium vs other, 2005 and 2006
• Segment Performance--Tequila
  • Figure 15: U.S. volume sales of Tequila, 2002-06
  • Figure 16: U.S. volume Tequila sales, Premium vs other, 2005 and 2006
• Segment Performance--Brandy and Cognac
  • Figure 17: U.S. volume sales of Brandy and Cognac, 2002-06
  • Figure 18: U.S. volume Cognac and Brandy sales, Premium vs other, 2005 and 2006
• Segment Performance--Gin
  • Figure 19: U.S. sales of Gin, 2002-06
  • Figure 20: U.S. volume Gin sales, Premium vs other, 2005 and 2006
• Retail Channels
• Key points
• Liquor and package stores dominant channel
  • Figure 21: U.S. retail sales of distilled spirits, by channel, 2004 and 2006
• Retail Channels--On-premise
  • Figure 22: U.S. on-premise dollar sales of Distilled Spirits, 2002-06
• Retail Channels--Liquor/Package/Mass Merchandisers
  • Figure 23: U.S. sales and forecast of at liquor store/package/mass, 2002-06
• Retail Channels--Supermarkets
  • Figure 24: U.S. sales and forecast of supermarket at retail channel, 2002-06
• Market Drivers
• Echo Boomers have market power
  • Figure 25: Population aged 21 or older, 2003-13
• High income drives consumption of spirits
  • Figure 26: Distribution of households, by income, 1999 and 2006
  • Figure 27: Income distribution of consumers by Distilled Spirits category, 2006
• Leading Companies
• Key points
• Boutique brands fuel premium growth
• Diageo gets heat from Bacardi and Patron Spirits
• Bacardi USA stealing market share from Diageo
• Beam Global Wine & Spirits posts positive gains
• Brown-Forman Beverages holds its own
• Pernod Ricard loses market share
• Distilled spirits
  • Figure 28: Top manufacturer volume sales of distilled spirits in the U.S., 2005 and 2006
  • Figure 29: Top manufacturer volume sales of premium distilled spirits in the U.S., 2005 and 2006
  • Figure 30: Volume sales of Premium Distilled Spirits in the U.S., 2005 and 2006
• Brand Share--Vodka
• Key points
• Market fueled by niche brands
• Flood of flavored vodkas and special ingredients
• Vodka
  • Figure 31: Manufacturer volume sales of Premium Vodka in the U.S., 2005 and 2006
• Brand Share--Whiskey*
• Key points
• American whiskey leads category
• Irish whiskey contributes to growth
• Slight growth from Scotch whiskey
• Whiskey*
  • Figure 32: Manufacturer volume sales of Premium Whiskey in the U.S., 2005 and 2006
• Brand Share--Rum
• Key points
• Bacardi losing market share to Captain Morgan
• Market activity
• Rum
  • Figure 33: Manufacturer volume sales of Premium Rum in the U.S., 2005 and 2006
• Brand Share--Cordials and Liqueurs
• Key points
• Jägermeister drives growth in segment
• Godiva experiences growth due to America' s sweet tooth
• New cordials and liqueurs with exotic flavor profiles emerge
• Cordials and Liqueurs
  • Figure 34: Manufacturer volume sales of Premium Cordials and Liqueurs in the U.S., 2005 and 2006
• Brand Share--Tequila
• Key points
• Patron Spirits experiences phenomenal growth
• Influx of high-end tequila with focus on Mexican crafts incorporated into packaging
• Tequila
  • Figure 35: Manufacturer volume sales of Premium Tequila in the U.S., 2005 and 2006
• Brand Share--Brandy and Cognac
• Key points
• Hennessy and Remy Martin post positive results
• Remy Martin and Hennessey launch new products
• Brandy and Cognac
  • Figure 36: Manufacturer volume sales of Premium Cognac and Brandy in the U.S., 2005 and 2006
• Brand Share--Gin
• Key points
• Bombay fuels growth
• Gin instead of vodka
• Gin
  • Figure 37: Manufacturer volume sales of Premium Gin in the U.S., 2005 and 2006
• Brand Qualities
• Absolut reinvents itself and remains an iconic brand
  • Figure 38: Television ad Absolut Vodka, 2007
• Beam Global Spirits & Wine reach out to male consumers
• Innovation and Innovators
• Key points
• Image conscious
  • Figure 39: New distilled spirits introductions, by product claims, 1/26/07-1/25/08
• Creative packaging
• Distinctive Designs that echo brands image
• Chic Black Bottles
• 24 Karat Gold
• Over the top
• Other unique features
• Celebrity brands and endorsements
• Niche luxury brands
• Vodka
• Tequila
• Cocktail culture
• Lounge life
• Speakeasy style bars
• New flavor introductions
• Berry wild
• Tropical fruits
• Sparkling citrus
• Gin the alternative vodka
• Tequila gets some flavor
• Absinthe the emerging distilled spirit
• Culinary influences
• Mixologists experiment
  • Figure 40: Top 15 preparations of Distilled Spirits, Q3 2007
• Dessert and cocktails
• The flavor and fragrance connection
• Multi-sensorial experience
• Cocktails inspire fragranced products
• Sensory samples
• Green and organic
  • Figure 41: Attitudes about Organic/Natural Food by Premium Spirits Consumers, May-June 2007
• Green awareness
• Organic and natural products
• Locavore influence
• Advertising and Promotion
• Overview
  • Figure 42: Total Distilled Spirits advertising spending, by medium, 2004 and 2006Figure 43: Distilled Spirits TV advertising spending, 2000 and 2007
• Common advertising themes
• Lifestyle and social activity
  • Figure 44: Television ad Grey Goose Vodka, 2007
  • Figure 45: Television ad Tanqueray Gin, 2007
  • Figure 46: Television ad Hennessy Cognac, 2007
• Action and adventure
  • Figure 47: Television ad Bacardi Limon Rum, 2007
  • Figure 48: Television ad Bacardi Rum Superior Original, 2007
• Product focused
  • Figure 49: Television ad Absolut Pears Vodka, 2007
  • Figure 50: Television ad Baileys Irish Cream Hint of Mint Chocolate and Hint of Caramel, 2007
  • Figure 51: Television ad Chivas Regal whiskey, 2007
  • Figure 52: Television ad Jack Daniel' s Old N0 7 Bourbon Whiskey, 2007
• Frequency of Use
• Key points
• Preference for drinking premium and super premium spirits
  • Figure 53: Super Premium and premium Spirits drinking, by gender, February 2008
• Change in consumption of premium and super premium spirits
  • Figure 54: Amount of premium spirits drink relative to last year, by gender, February 2008
• Incidence of drinking spirits
  • Figure 55: Distilled Spirits drinking, by type of spirit, by gender, May-June 2007
  • Figure 56: Distilled Spirits drinking, by type of spirit, by age, May-June 2007
  • Figure 57: Distilled spirits drinking, by type of spirit, by household income, May-June 2007
• Ways of drinking spirits/use of mixers
  • Figure 58: Preparation of distilled spirits most often consumed, by gender, February 2008
• Brand Usage and Loyalty
• Key point
• Frequency of ordering named spirits
  • Figure 59: Frequency of ordering distilled spirits by brand name, by age, February 2008
• Measures of brand loyalty
  • Figure 60: Measures of brand loyalty, by age, February 2008
• Attitudes and Motivations
• Key point
• Motivation for purchasing a new distilled spirit
  • Figure 61: Motivation for purchasing a new distilled spirit, by gender, February 2008
  • Figure 62: Motivation for purchasing a new distilled spirit, by age, February 2008
• Attitudes towards distilled spirits
  • Figure 63: Attitudes towards distilled spirits, by age, February 2008
• Race and Ethnicity
• Key points
• Change in super premium spirits drinking
  • Figure 64: Super Premium Spirits drinking, by race/ethnicity, February 2008
• Type of distilled spirits most often consumed
  • Figure 65: Type of distilled spirits most often consumed, by race/ethnicity, May-June 2007
• Ways of drinking spirits/use of mixers
  • Figure 66: Preparation of distilled spirits most often consumed, by race/ethnicity, February 2008
• Simmons Cohort Analysis
  • Figure 67: Consumption of premium spirits, by cohort, May 2006 -- June 2007
• Appendix: Other Useful Consumer Tables
• Spirits drink most often
  • Figure 77: Type of distilled spirits most often consumed, by gender, February 2008
  • Figure 78: Type of distilled spirits most often consumed, by age, February 2008
  • Figure 79: Type of distilled spirits most often consumed, by race/ethnicity, February 2008
• Preference for drinking premium and super premium spirits
  • Figure 80: Super premium and premium spirits usage, by age, February 2008
  • Figure 81: Super premium and premium spirits usage, by household income, February 2008
• Ways of drinking spirits/use of mixers
  • Figure 82: Preparation of distilled spirits most often consumed, by age, February 2008
  • Figure 83: Preparation of distilled spirits most often consumed, by household income, February 2008
• Change in consumption of premium and super premium spirits
  • Figure 84: Amount of premium spirits drink relative to last year, by age, February 2008
  • Figure 85: Amount of premium spirits drink relative to last year, by household income, February 2008
• Frequency of ordering named spirits
  • Figure 86: Frequency of ordering distilled spirits by brand name, by gender, February 2008
  • Figure 87: Frequency of ordering distilled spirits by brand name, by household income, February 2008
• Measures of brand loyalty
  • Figure 88: Brand loyalty, by gender, February 2008
  • Figure 89: Brand loyalty, by household income, February 2008
• Attitudes towards distilled spirits
  • Figure 90: Attitudes towards distilled spirits by gender, February 2008
  • Figure 91: Attitudes towards distilled spirits, by household income, February 2008
• Appendix: Trade Associations