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Dark Spirits - US - October 2013

SCOPE AND THEMES
What you need to know
Definition
Data sources
Sales data
Consumer survey data
Advertising creative
Abbreviations and terms
Abbreviations
Terms
EXECUTIVE SUMMARY
Overview
The market
Innovation, rise in premium products help dark spirits market grow through 2018
Figure 1: Total U.S. sales and fan chart forecast of dark spirits, at current prices, 2008-18
Whiskey remains the dominant segment, but cordials and liqueurs growing faster
Figure 2: U.S. volume sales of dark spirits, by segment, 2008-13
Still the smallest subsegment, Irish whiskey outgrowing more dominant types
Figure 3: U.S. volume sales of whiskey, by type, 2008-13
The consumer
Whiskey leads category, but cordials and liqueurs have the most ageless appeal
Figure 4: Consumption of dark spirits, by age, August 2013
Dark spirits benefits from at-home, during the week consumption
Figure 5: Locations for spirits and RTDs consumption, by category, August 2013
Brandy and Cognac least likely to be limited to consumption only once a month
Figure 6: Frequency of dark spirits consumption by consumption of dark spirits, August 2013
Trial of new whiskies driven more by price than by flavor
Figure 7: Attitudes toward new whiskey purchases, by gender, August 2013
What we think
ISSUES AND INSIGHTS
What can inspire more frequent consumption of dark spirits?
Issues
Insights
How can manufacturers increase on-premise sales of dark spirits?
Issues
Insights
Can brandy and Cognac capitalize on rise of competitive dark spirits?
Issues
Insights
How can the segment appeal to drinkers who are inactive in dark spirits?
Issues
Insights
TREND APPLICATIONS
Trend: The Real Thing
Trend: Experience Is All
Mintel Futures: East Meets West
MARKET SIZE AND FORECAST
Key points
Dark spirits rebound from recessionary declines to post annual growth
Figure 8: U.S. volume sales of dark spirits, 2008-13
Prices play a part in bright outlook for dark spirits forecast through 2013
Figure 9: Total U.S. sales and forecast of dark spirits, at current prices, 2008-18
Figure 10: Total U.S. sales and forecast of dark spirits, at inflation-adjusted prices, 2008-18
Fan chart forecast
Figure 11: Total U.S. sales and fan chart forecast of dark spirits, at current prices, 2008-18
MARKET DRIVERS
Key points
Nearly three in 10 adults of legal drinking age do not drink or use alcohol
Figure 12: Consumption of alcohol, by gender and age, August 2013
Figure 13: Consumption of alcohol, by race and Hispanic Origin, August 2013
Introduction, education could bring new consumers into category
Figure 14: Consumption of dark spirits, by gender, August 2013
Figure 15: Consumption of spirits and RTDs, by type, August 2013
Dark spirits need to appeal to fast-growing 55+ population
Figure 16: U.S. population aged 21 or older, by age, 2008-18
Figure 17: Consumption of dark spirits, by generations, August 2013
Multicultural population growth brightens dark spirits’ prospects
Figure 18: U.S. population aged 21 or older, by race and Hispanic origin, 2008-18
Figure 19: Consumption of dark spirits, by race/Hispanic origin, August 2013
COMPETITIVE CONTEXT
People are curious about alcohol, but some prefer beer, wine to spirits
Figure 20: Reasons for not drinking spirits or RTDs, August 2013
Beer, wine have appeal over spirits at home or away
Figure 21: Total U.S. retail sales and forecast of alcohol for home-based consumption, by segment, at current prices, 2007-17
Figure 22: Alcohol types typically ordered on-premise, by gender, October 2012
Cross-category consumption limits frequency within spirits, RTDs
Figure 23: Frequency of consumption of spirits and RTDs, by category, August 2013
Figure 24: Diageo coupon ad, September 2013
SEGMENT PERFORMANCE
Key points
Cordials, liqueurs report highest growth of dark spirits segments
Figure 25: U.S. volume sales of dark spirits, by segment, 2008-13
Figure 26: U.S. volume sales of dark spirits, by segment, 2011 and 2013
American straight whiskey, Canadian whisky lead sales, preferences
Figure 27: U.S. volume sales of whiskey, by segment share, 2012
Irish whiskey remains a small subsegment, but outgrowing fellow whiskies
Figure 28: U.S. volume sales of whiskey, by type, 2008-13
Figure 29: U.S. whiskey volume sales, by subsegment, 2012 and forecasted 2017 sales
RETAIL CHANNELS
Key points
Retail sales far exceed on-premise sales, but bars and restaurants gaining
Figure 30: U.S. volume sales of dark spirits, by channel, 2008-13
Figure 31: U.S. volume sales of dark spirits, by channel, 2011-13
Cocktails and exclusive offerings could reinvigorate on-premise
LEADING COMPANIES
Key points
Alcohol manufacturers defend market share, post positive sales
Figure 32: Dark spirits leading companies, by volume sales, 2011 and 2012
Amid global goals, Diageo adds marketing, ups prices in North America
Brown-Forman upgrades to distilleries of its leading whiskey brands
BRAND SHARE – WHISKEY
Key points
Jameson, Woodford Reserve, Maker’s Mark perform best in rising segment
Figure 33: Leading brands of whiskey, by volume sales, 2011 and 2012
Increased interest inspires whiskey manufacturers get more creative
Figure 34: U.S. whiskey launches, by launch type, 2011-13*
Top four bourbons appeal across ages, with Jack Daniel’s on top
Figure 35: Consumption of top 10 bourbon whiskey brands, by age, May 2012-June 2013
Jack Daniel’s expands all-age appeal with new expressions
Crown Royal leads Canadian whisky brands, enters flavored arena
Figure 36: Consumption of Canadian whisky brands, by gender and household income, May 2012-June 2013
Scotch whisky not just for men, although not all brands have unisex appeal
Figure 37: Consumption of top 10 Scotch whisky brands, by gender, May 2012-June 2013
Irish whiskey brands find individual appeal between genders, incomes
Figure 38: Consumption of Irish whiskey brands, by gender, May 2012-June 2013
Figure 39: Consumption of Irish whiskey brands, by household income, May 2012-June 2013
BRAND SHARE – CORDIALS AND LIQUEURS
Key points
Whiskey’s popularity reaches and lifts segment performance
Figure 40: Leading brands of cordials and liqueurs, by volume sales, 2011 and 2012
Cordials and liqueurs find their own niches, but usage remains infrequent
Figure 41: Consumption of cordial and liqueur brands, by age, May 2012-June 2013
Figure 42: Cordial and liqueur brand consumption, by gender and household income, May 2012-June 2013
BRAND SHARE – BRANDY AND COGNAC
Key points
Premium brands drive sales, but not enough to keep pace with competition
Figure 43: Leading brands of Brandy and Cognac, by volume sales, 2011 and 2012
Cognac connects with blacks, Hispanics of all ages
Figure 44: Consumption of cognac brands, by race and Hispanic origin and age, May 2012-June 2013
Unlike Cognac, brandy lacks appeal to higher-income drinkers
Figure 45: Consumption of Brandy brands, by gender and household income, May 2012-June 2013
INNOVATIONS AND INNOVATORS
Dark spirits lag in innovation compared to other alcoholic categories
Figure 46: U.S. new alcoholic beverage products, by GNPD subcategory, August 2012-13
Figure 47: U.S. dark spirits launches, by segment, 2008-2013*
Hybrid products blend influence, liquors for broader appeal
Flavor innovations range from sticky sweet to seasonal selections
Packaging also sets products apart in growing category
MARKETING STRATEGIES
Figure 48: Measured ad spending by distilled spirits category, 2011-12
Theme – Craftsmanship
Figure 49: Jack Daniel’s “Barrels” broadcast ad still, September 2012
Figure 50: Gentleman Jack “Secret Meetings” broadcast ad still, April 2013
Theme – Quirky
Figure 51: Southern Comfort “Beach” broadcast ad still, August 2012
Figure 52: Southern Comfort “Karate” broadcast ad still, August 2013
Theme – Celebrity endorsement
Figure 53: Hennessy “Hennessy x Nas” broadcast ad still, June 2013
Figure 54: Hennessy Nas print ad, June/July 2013
Figure 55: Hennessy Wild Rabbit print ad, June/July 2013
SOCIAL MEDIA
Key points
Key social media metrics
Figure 56: Key social media metrics, dark spirits, September 2013
Market overview
Brand usage and awareness
Figure 57: Usage and awareness of selected dark spirits brands, August 2013
Interaction with dark spirits brands
Figure 58: Interaction with dark spirits brands, August 2013
Online conversations
Figure 59: Online mentions around selected dark spirits brands, by day, March 24-Sept. 23, 2013
Where are people talking about dark spirits brands?
Figure 60: Online mentions around selected dark spirits brands, by page type, March 24-Sept. 23, 2013
What are people talking about?
Figure 61: Online conversations around selected dark spirits brands, March 24-Sept. 23, 2013
Figure 62: Online conversations around selected dark spirits brands, by day, March 24-Sept. 23, 2013
Analysis by brand
Hennessy
Figure 63: Social media metrics-Hennessy, September 2013
Key online campaigns
Figure 64: Word cloud representing terms associated with Hennessy’s “White Rabbit” campaign, Sept. 1, 2012-Sept. 25, 2013
What we think
Jack Daniel’s
Figure 65: Social media metrics-Jack Daniel’s
Key online campaigns
What we think
Southern Comfort
Figure 66: Social media metrics-Southern Comfort, September 2013
Key online campaigns
What we think
Crown Royal
Figure 67: Social media metrics-Crown Royal, September 2013
Key online campaigns
What we think
Baileys
Figure 68: Social media metrics-Baileys, September 2013
Key online campaigns
What we think
Maker’s Mark
Figure 69: Social media metrics-Maker’s Mark, September 2013
Key online campaigns
What we think
THE CONSUMER – SEGMENT PREFERENCES AND ATTITUDES
Key points
Whiskey leads category, but cordials and liqueurs have ageless appeal
Figure 70: Consumption of dark spirits, by age, August 2013
Cross-promotion, hybrid spirits could court new drinkers, occasions
Figure 71: Consumption of dark spirits by consumption of dark spirits, August 2013
Figure 72: Consumption of dark spirits by consumption of white spirits and RTDs, August 2013
Dark spirits drinkers less concerned with ‘skinny,’ better see health angle
Figure 73: Attitudes about spirits and health, by spirits consumption, August 2013
Flavors not seen as intriguing in dark spirits as in white spirits
Figure 74: Attitudes about flavored spirits, by dark spirits consumption, August 2013
Product origin more important to dark spirits drinkers than white spirits
Figure 75: Attitudes about spirits consumption on-premise, by dark spirits consumption, August 2013
THE CONSUMER – DRINKING OCCASIONS
Key points
Few times a month or less most likely in dark spirits category
Figure 76: Frequency of dark spirits consumption, by gender, August 2013
Figure 77: Frequency of dark spirits consumption, by race/Hispanic origin, August 2013
Nearly three quarters of drinkers prefer to imbibe dark spirits at home
Figure 78: Locations, timing, and occasions of spirits and RTDs consumption, by category, August 2013
Category at an advantage when it comes to during the week consumption
Figure 79: Timing of dark spirits consumption, by gender, August 2013
Northeast, Midwest dark spirits fans a target for more social drinking
Figure 80: Occasions for dark spirits consumption, by region, August 2013
On-premise opportunities can expand appeal to varying ages
Figure 81: Locations for dark spirits consumption, by age, August 2013
Premium brands, cocktails have entry point in on-premise venues
Figure 82: Attitudes about spirits consumption on-premise, by spirits consumption, August 2013
Higher household incomes influence venue in which spirits are consumed
Figure 83: Locations for dark spirits consumption, by region, August 2013
Dark spirits could be tied in with meal times for new usage occasion
Figure 84: Occasions for dark spirits consumption, by age, August 2013
Figure 85: Occasions for dark spirits consumption, by gender, August 2013
THE CONSUMER – PREFERENCES FOR OTHER DARK SPIRITS
Key points
Brandy, Armagnac, and Cognac least likely to be limited to once a month
Figure 86: Frequency of dark spirits consumption by consumption of dark spirits, August 2013
Education, new recipes could expand brandy, Armagnac, Cognac usage
Figure 87: Brandy, Armagnac, and Cognac consumption by preferred drink type, August 2013
Variations in types of cordials, liqueurs influences preferred drink types
Figure 88: Cordial and liqueur consumption by preferred drink type, by gender, August 2013
Figure 89: Cordial and liqueur consumption by preferred drink type, by age, August 2013
Cream liqueurs favored by lower incomes, non-cream by more affluent
Figure 90: Adult consumption of cordials and liqueurs, by form, by household income, May 2012-June 2013
Cordials and liqueurs have opportunity to court more affluent drinkers
Figure 91: Consumption of dark spirits, by household income, August 2013
THE WHISKEY CONSUMER – DRINKING OCCASIONS
Key points
Men like whiskey neat, while women prefer it with mixers
Figure 92: Whiskey consumption by preferred drink type, by Gender, August 2013
Figure 93: Whiskey consumption by preferred drink type, by age, August 2013
Neat, on the rocks consumers likely part of the quality-conscious segment
Figure 94: Attitudes toward whiskey, by drink type, by gender, August 2013
Brands hold sway in consumer choice, but process gaining influence
Figure 95: Important attributes influencing whiskey purchases, by gender, August 2013
Figure 96: Attitudes toward whiskey production, by gender, August 2013
Recommendations connect with women, younger whiskey buyers
Figure 97: Important attributes influencing whiskey purchases, by age, August 2013
Trial of new whiskies driven mostly by price then by flavor
Figure 98: Attitudes toward new whiskey purchases, by gender, August 2013
Value whiskies could counter premiumization by emphasizing ordinariness
Quality-conscious whiskey drinkers likely drivers of craft distilling boom
Figure 99: Attitudes toward whiskey, by drink type, by gender, August 2013
THE WHISKEY CONSUMER – SUBSEGMENT PREFERENCES
Key points
American, Irish whiskies only subsegments to have unisex appeal
Figure 100: Consumption of whiskey by type, by gender, August 2013
Older whiskey drinkers more willing to consume across segments
Figure 101: Consumption of whiskey by type, by age, August 2013
Whiskey fans more aware of subsegments than white spirits drinkers
Production processes, price hold sway in particular subsegments
Whiskey drinkers experiment with subsegments from similar places
Figure 102: Consumption of whiskey by type, by consumption of whiskey by type, August 2013
Irish whiskey drinkers open to new products, Scotch fans cue in on quality
Figure 103: Attitudes toward spirits by consumption of whiskey by type, August 2013
RTDs could be new frontier for various subsegments
Figure 104: Consumption of whiskey by type, by consumption of spirits and RTDs, August 2013
KEY DRIVER ANALYSIS – AMERICAN STRAIGHT WHISKEY
Methodology
American whiskey drinkers a young, active, and patriotic group
Figure 105: Key drivers of drinking American straight whiskey and/or bourbon consumption, October 2013
CORRESPONDENCE ANALYSIS
Methodology
Dark spirits fans have versatile approach to drink styles in the category
Figure 106: Correspondence Analysis, October 2013
Figure 107: Dark spirit consumption by preferred drink type, October 2013
APPENDIX – OTHER USEFUL CONSUMER TABLES
Segment Performance
Figure 108: Total U.S. volume sales of whiskey, at current prices, 2008-13
Figure 109: U.S. volume sales of cordials and liqueurs, at current prices, 2008-13
Figure 110: U.S. volume sales of brandy and Cognac, at current prices, 2008-13
Retail Channels
Figure 111: U.S. on-premise volume sales of dark spirits, at current prices, 2008-13
Figure 112: U.S. off-premise volume sales of dark spirits, at current prices, 2008-13
The Consumer – Segment Preferences and Attitudes
Figure 113: Consumption of alcohol, by household income, August 2013
Figure 114: Consumption of dark spirits, by region, August 2013
Figure 115: Consumption of dark spirits, by consumption of white spirits, August 2013
Figure 116: Consumption of dark spirits by consumption of RTDs, August 2013
Figure 117: Agreement with attitudes and behaviors toward spirits, by consumption of spirits and RTDs, August 2013
The Consumer – Drinking Occasions
Figure 118: Locations dark spirits consumption, by gender, August 2013
Figure 119: Timing for dark spirits consumption, by age, August 2013
Figure 120: Timing of dark spirits consumption, by region, August 2013
Figure 121: Locations, timing, and occasions of dark spirits consumption, by consumption of dark spirits, August 2013
The Consumer – Other Dark Spirits Preferences
Figure 122: Adult consumption of cordials and liqueurs, by form, by age, May 2012-June 2013
Figure 123: Adult consumption of cordials and liqueurs, by kind, by household income, May 2012-June 2013
The Whiskey Consumer: Drinking Occasions
Figure 124: Spirits consumption by preferred drink type, by segment, August 2013
Figure 125: Important attributes influencing whiskey purchases, by region, August 2013
Figure 126: Attitudes toward whiskey, by region, August 2013
APPENDIX – SOCIAL MEDIA
Brand usage or awareness
Figure 127: Brand usage or awareness, August 2013
Figure 128: Southern Comfort usage or awareness, by demographics, August 2013
Figure 129: Crown Royal usage or awareness, by demographics, August 2013
Figure 130: Jack Daniel’s usage or awareness, by demographics, August 2013
Figure 131: Maker’s Mark usage or awareness, by demographics, August 2013
Figure 132: Baileys usage or awareness, by demographics, August 2013
Figure 133: Hennessy usage or awareness, by demographics, August 2013
Activities done
Figure 134: Activities done, August 2013
Figure 135: Southern Comfort – Activities done, by demographics, August 2013
Figure 136: Crown Royal – Activities done, by demographics, August 2013
Figure 137: Jack Daniel’s – Activities done, by demographics, August 2013
Figure 138: Maker’s Mark– Activities done, by demographics, August 2013
Figure 139: Baileys – Activities done, by demographics, August 2013
Figure 140: Hennessy – Activities done, by demographics, August 2013
Online conversations
Figure 141: Online mentions around selected dark spirits brands, by day, March 24-Sept. 23, 2013
Figure 142: Online mentions around selected dark spirits brands, by page type, March 24-Sept. 23, 2013
Figure 143: Online conversations around selected dark spirits brands, March 24-Sept. 23, 2013
Figure 144: Online conversations around selected dark spirits brands, by day, March 24-Sept. 23, 2013
APPENDIX – KEY DRIVER ANALYSIS
Figure 145: American Straight Whiskey and/or bourbon consumption-key driver output, October 2013
APPENDIX – TRADE ASSOCIATIONS

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