Table of Contents
Scope and Themes
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- What you need to know
- Definition
- Data sources
- Sales data
- Consumer survey data
- Advertising creative
- Abbreviations and terms
- Abbreviations
- Terms
Executive Summary
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- Overall growth flat but off-premise sales show growth
- Vodka and rum performing well as cordials decline
- Off-premise sales are driving market growth
- Overall consumption rises as many young adults report drinking more
- Diageo is the dominant player while Bacardi leads with iconic rum brand
- A closer look at white spirits
- Vodka
- Rum
- Gin
- Tequila
- On the dark side
- Whiskey
- Cordials and Liqueurs
- Brandy and Cognac
- Prepared cocktails
- White spirits most popular
- Liquor and grocery most commonly used channels
- Many prefer mid-range and premium brands over value and super premium
- Mixed drinks are hot but few like it “neat”
- Recommendations key driver of experimentation
- Concerns about weight gain relatively common
Insights and Opportunities
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- Consider online bartending tools
- Help consumers get the party started
- Coupons are a hot item
- Using brand to create gourmet foods and exceptional dining experiences
Inspire Insights
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- Trend: Death of the Middle Ground
- Polarization appears to be relentless in its squeezing out of the middle ground
- Not so fast
- Trend: Corner Store
- Re-imaging the role of the corner store
- The corner liquor store
- From brand to bricks and mortar
Market Size and Forecast
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- Key points
- Sales growth decelerates despite increased usage in 2009
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- Figure 1: Total U.S. retail sales of spirits, at current prices, 2004-14
- Figure 2: Total U.S. retail sales of spirits, at inflation-adjusted prices, 2004-14
- Off-premise sales driving category growth
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- Figure 3: Total U.S. retail sales of off-premise spirits, at current prices, 2004-14
- Figure 4: Total U.S. retail sales of off-premise spirits, at inflation-adjusted prices, 2004-14
Competitive Context
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- Wine poses primary competitive threat
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- Figure 5: Type of alcoholic beverage consumed, by age, May 2009
Segment Performance
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- Key points
- Vodka and rum still most popular
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- Figure 6: Sales of distilled spirits, segmented by type, 2006 and 2008
Retail Channels
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- Key points
- Sales at mass, club and drug rise as consumers seek better value
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- Figure 7: U.S. sales of distilled spirits, by channel, 2006 and 2008
Retail Channels—On-Premise
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- Key point
- On-premise sales decline as Americans party more at home
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- Figure 8: U.S. on-premise sales of distilled spirits, at current prices, 2004-09
Retail Channels—Liquor/Package Stores
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- Key point
- Sales at liquor stores continue to grow as Americans entertain more at home
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- Figure 9: U.S. liquor/package store sales of distilled spirits, at current prices, 2004-09
Retail Channels—Drug, Mass and Other Outlets
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- Key point
- Mass, club and drug stores post strong growth in 2008, but declined in 2009
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- Figure 10: U.S. drug, mass and other outlet sales of distilled spirits, at current prices, 2004-09
Retail Channels—Supermarkets
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- Key point
- Supermarket sales continued to grow in 2009
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- Figure 11: U.S. supermarket sales of distilled spirits, at current prices, 2003-08
Market Drivers
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- Key points
- Young adults much more likely to report drinking more, despite recession
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- Figure 12: Incidence of consumption of distilled spirits relative to a year ago, by age, May 2009
- Baby Boomer segments growing much faster than young adults
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- Figure 13: Population aged 21 or older, 2004-14
- Demographic and cultural shift drives demand for new flavors
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- Figure 14: Population, by race and Hispanic origin, 2004-14
- Obesity and health concerns motivate some to choose low-cal options
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- Figure 15: Age-adjusted prevalence of overweight and obesity among U.S. adults aged 20+, 1988-2006
- Spirits consumption continues to rise
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- Figure 16: Number of gallons of distilled spirits consumed annually, 1978-2008
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- Figure 17: Effect of economy on drinking patterns, by age, May 2009
- Trend toward at-home consumption may be driving sales
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- Figure 18: Number of alcoholic beverages consumed, by age, June 2008
- Brand, availability, convenience and health—primary criteria
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- Figure 19: Factors influencing purchasing decision, summary of extremely and very important, by age, June 2008
Leading Companies
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- Key points
- Diageo remains dominant, Bacardi sees slight boost
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- Figure 20: Select manufacturer sales of 9-liter cases of distilled spirits in the U.S., sum of leading brands only, 2007 and 2008
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- Figure 21: Select manufacturer sales measured in dollars and sales of 9-liter cases of distilled spirits in the U.S., all brands, 2008
Brand Share—Vodka
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- Key points
- Diageo dominates with Smirnoff and value-priced brands
- Heaven Hill succeeds with positioning similar to Diageo
- Pernod Ricard, Skyy and Constellation Spirits win with mid-range premium varieties
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- Figure 22: Selected brand sales and market share of vodka in the U.S., 2007 and 2008
Brand Share—Rum
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- Key points
- Bacardi and Captain Morgan remain the dominant rum brands
- William Grant & Sons wins with a new twist on the Caribbean concept
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- Figure 23: Selected brand sales and market share of rum in the U.S., 2007 and 2008
Brand Share—Gin
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- Key points
- Pernod Ricard’s Seagram’s Twisted Gin shows impressive growth
- Gordon’s Gin, Bombay Sapphire and Aristocrat also post growth in 2008
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- Figure 24: Selected brand sales and market share of gin in the U.S., 2007 and 2008
Brand Share—Tequila
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- Key points
- Diageo’s Jose Cuervo on top; Patrón strong in premium segment
- Mid-range brands drive sales
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- Figure 25: Selected brand sales and market share of tequila in the U.S., 2007 and 2008
Brand Share—Whiskey
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- Key points
- Mid-range and premium brands drive growth in whiskey segment
- Success of Jameson and Glenlivet demonstrate demand for high-end and premium offerings
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- Figure 26: Selected brand sales and market share of whiskey in the U.S., 2007 and 2008
Brand Share—Cordials and Liqueurs
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- Key points
- Diageo achieves some growth with sweet premium/high-end liqueurs
- Heaven Hill capitalizes on the Pomegranate craze
- Jägermeister still among the most popular liqueurs in the U.S.
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- Figure 27: Selected brand sales and market share of cordials and liqueurs in the U.S., 2007 and 2008
Brand Share—Brandy and Cognac
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- Key points
- Demand for premium declines as consumers embrace value brands
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- Figure 28: Selected brand sales and market share of brandy and cognac in the U.S., 2007 and 2008
Brand Share—Prepared Cocktails
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- Key points
- Diageo furthers lead with new Seagram’s launches
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- Figure 29: Selected brand sales and market share of prepared cocktails in the U.S., 2007 and 2008
Innovation and Innovators
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- “Better for you” booze?: antioxidants and vitamins mitigate health concerns
- Açaí fruit-infused vodka
- Maximizing appeal with highly-targeted cultural messages
- Caffeinated cocktails
Brands and the Advertising Landscape
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- Familiar, trustworthy, affordable: key elements of recession-proof brands
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- Figure 30: Brand share comparison, 2008
- Diageo and Bacardi maintain top slots with large ad initiatives
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- Figure 31: Leading brands ad expenditures, sales and agencies of record, 2008
- Adding value to Smirnoff: Factual competitive analysis, and cocktail convenience
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- Figure 32: Smirnoff Triple Distilled NYT review ad, 2008
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- Figure 33: Smirnoff Vodka Mojito, 2008
- Diageo’s Ciroc story: On differentiation and pitching the hip-hop community
- The fantasy pitch: Connecting brands with aspirations
- Grey Goose
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- Figure 34: Grey Goose vodka ad, 2009
- Southern Comfort
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- Figure 35: Southern Comfort SoCo and Lime ad, 2008
Who’s Drinking What?
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- Key points
- Most drinking the same amount as last year; young adults drinking more
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- Figure 36: Incidence of consumption of distilled spirits relative to a year ago, by age, May 2009
- White spirits especially popular, particularly among heavy users
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- Figure 37: Distilled spirits category usage, by age, October 2007-December 2008
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- Figure 38: Distilled spirits category usage, by household income, October 2007-December 2008
- Vodka and rum usage in line with strong sales in these segments
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- Figure 39: Overall incidence and average number of distilled spirit drinks consumed in the last 30 days, October 2007-December 2008
- Unflavored vodka more popular than flavored or most other distilled spirits
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- Figure 40: Type of distilled spirit consumed most often, by age, May 2009
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- Figure 41: Type of distilled spirit consumed most often, by household income, May 2009
Where Consumers Purchase Distilled Spirits
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- Key points
- Liquor, grocery and club are the primary channels
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- Figure 42: Distilled spirit channels for at-home consumption, by age, May 2009
- Target affluents in the club channel
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- Figure 43: Distilled spirit channels for at-home consumption, by income, May 2009
Premium vs. Value—the Role of Location
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- Key points
- Mid-range formulations especially popular, particularly for parties and restaurants
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- Figure 44: Types of spirits consumed at various locations/occasions, May 2009
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- Figure 45: Incidence of consumption of mid-range distilled spirits on particular occasions, by age, May 2009
- Premium/high-end popular for at-home consumption
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- Figure 46: Incidence of consumption of premium/high-end distilled spirits on particular occasions, by age, May 2009
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- Figure 47: Incidence of consumption of premium/high-end distilled spirits on particular occasions, by household income, May 2009
- Affluent respondents no more likely to consumer super-premium
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- Figure 48: Incidence of consumption of super premium/top shelf distilled spirits on particular occasions, by hh income, May 2009
- Young adults more likely to use inexpensive brands, especially at parties
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- Figure 49: Incidence of consumption of value priced distilled spirits on particular occasions, by age, May 2009
Drinking Styles
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- Key points
- Few consumers drink spirits “straight up,” preferring cocktails instead
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- Figure 50: Method of consumption for distilled spirits, by gender, May 2009
- Young adults often prefer mixed drinks and shots
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- Figure 51: Method of consumption for distilled spirits, by age, May 2009
Generating Trial
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- Key points
- Recommendations, free samples, low prices and packaging drives experimentation
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- Figure 52: Motivation for purchase of new distilled spirits, by age, May 2009
Health-related Concerns and Drivers
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- Key points
- Women more likely to be influenced by health and weight concerns
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- Figure 53: Attitudes towards distilled spirits related to health, by gender, May 2009
- Appeal to young adults with better-for-you formulations
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- Figure 54: Attitudes towards distilled spirits related to health, by age, May 2009
Thinking Outside the Two-Ingredient Box
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- Key point
- Young adults interested in experimenting and learning how to create interesting cocktails
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- Figure 55: Behavior and distilled spirits, by age, May 2009
Race and Hispanic Origin
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- Asians less likely to drink liquor than whites, blacks and Hispanics
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- Figure 56: Net spirit category use, by race/Hispanic origin, October 2007-December 2008
- Preferences reflect heritage, roots and relationship with pop culture
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- Figure 57: Overall distilled spirit usage, by race/Hispanic origin, October 2007-December 2008
- Blacks tend to be somewhat less price sensitive
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- Figure 58: Purchasing motivation for new distilled spirits, by race/ethnicity, May 2009
Cluster Analysis
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- Liquor Enthusiasts (28%)
- Moderates (36%)
- Light Drinkers (35%)
- Cluster characteristics
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- Figure 59: Sprits clusters, May 2009
- Figure 60: Incidence of consuming various types of alcoholic beverages, by sprits clusters, May 2009
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- Figure 61: Incidence of consuming specific types of distilled spirits, by sprits clusters, May 2009
- Figure 62: Preferred method of consumption, by sprits clusters, May 2009
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- Figure 63: Spirits consumed at various locations/occasions, by sprits clusters, May 2009
- Figure 64: Amount consumed compared to last year, by sprits clusters, May 2009
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- Figure 65: Channel liquor is consumed within, by sprits clusters, May 2009
- Figure 66: Influence of recommendations and marketing on purchase, by sprits clusters, May 2009
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- Figure 67: Alcohol-related attitudes and behaviors, by sprits clusters, May 2009
- Cluster demographics
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- Figure 68: Sprits clusters, by gender, May 2009
- Figure 69: Sprits clusters, by age, May 2009
- Figure 70: Sprits clusters, by household income, May 2009
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- Figure 71: Sprits clusters, by race/Hispanic origin, May 2009
- Cluster methodology
Custom Consumer Groups
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- Demand for distilled spirits higher among 21-34s and affluent Hispanics
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- Figure 72: Incidence of consuming various types of alcoholic beverages, by custom consumer groups, May 2009
- Young males and single parents more likely to report increased drinking during recession
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- Figure 73: Change in drinking patterns during recession, by custom consumer groups, May 2009
- Young males, affluents more likely to be influenced by advertisements
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- Figure 74: Influence of recommendations and marketing on purchase, by custom consumer groups, May 2009
Appendix: Other Useful Consumer Tables
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- Differences in spirit consumption among men and women
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- Figure 75: Distilled spirits category usage, by gender, October 2007-December 2008
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- Figure 76: Overall distilled spirit usage, by gender, October 2007-December 2008
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- Figure 77: Trial and research of distilled spirits, by gender, May 2009
- The lower-income like to experiment while affluents enjoy cocktail parties
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- Figure 78: Behavior and distilled spirits, by hh income, May 2009
Appendix: Trade Associations
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