DIVERSITY REMAINS THE PROP OF THE INDUSTRY
Today we take our last look at trends in 2006 by giving spirits a brief overview. Once again, thanks to the Nielsen team for providing us with all the data. Here we go.
DRUG STORES TAKE A HIT. Spirits growth was the strongest in the grocery channel with sales up 5.6% and volume up 3.1% in the 52 weeks to January 13, 2007 according to the Nielsen Company. Drug stores saw the most declines, where sales were down 1.1% and volume decreased 3.2%.
Nearly 30% of all spirits dollar volume was sold on promotion, with ultra-premium brands being promoted much less often than others
IT’S ALL ABOUT PRICE AND FLAVOR. Out of the various sub-categories, Irish whiskey sales, believe it or not, saw the most growth from the same period a year ago, up 10.5%. Coming in second place was tequila at 10%, followed by prepared cocktails at 8.5%. As a category, vodka took the cake at 5.2%, with rum up 3.3% and whiskey up 0.2%. Gin’s still feeling the pain, down 0.7% from last year.
The category as a whole increased 3% in 2006, and like everywhere else, premium and ultra-premium brands showed the most growth. Ultra-premium brands jumped 11.9%, while premiums were up 4.4%. Value brands were down 1.8%.
So, let’s break down premiumization by subcategory. Tequila showed highly impressive sales growth (35.3%) when it came to the ultra-premium offering, followed closely by rum (32%). Bourbon was the next highest, up 15%, while queen vodka grew 14.5%. The only one to experience any growth in the value segment was prepared cocktails, with 8.5% growth.
Flavored spirits have been huge in recent years in part, it can be argued, because of the thriving cocktail culture. As a category, flavored spirits grew 3% last year, while flavored tequila sales trumped other flavored spirits categories by an overwhelming amount, a whopping 564%. The next in line was flavored vodka, showing a sales increase of 5.4%. The flavor showing the most sales growth overall was lime/other citrus, up 82.2%, followed by cherry/black cherry (60.6%). Grapefruit and grape show big promise as “emerging” flavors.
“Flavored spirits—duplication and innovation - will continue to be introduced across multiple segments, but with low productivity for the “me too’s” as flavors increasingly saturate the market, and a difficult road to an increasingly crowded shelf, especially for the smaller manufacturers with narrower portfolios,” said Nielsen.
Now for the fun stuff: pricing. As compared to a year ago, bourbon showed the largest average price increase per 750ML, up 4%, followed by tequila at 3.8%, vodka at 3% and with 2.7%. As a whole, the spirits industry’s average price increased 2.6%.
DRUG STORES TAKE A HIT. Spirits growth was the strongest in the grocery channel with sales up 5.6% and volume up 3.1% in the 52 weeks to January 13, 2007 according to the Nielsen Company. Drug stores saw the most declines, where sales were down 1.1% and volume decreased 3.2%.
Nearly 30% of all spirits dollar volume was sold on promotion, with ultra-premium brands being promoted much less often than others
IT’S ALL ABOUT PRICE AND FLAVOR. Out of the various sub-categories, Irish whiskey sales, believe it or not, saw the most growth from the same period a year ago, up 10.5%. Coming in second place was tequila at 10%, followed by prepared cocktails at 8.5%. As a category, vodka took the cake at 5.2%, with rum up 3.3% and whiskey up 0.2%. Gin’s still feeling the pain, down 0.7% from last year.
The category as a whole increased 3% in 2006, and like everywhere else, premium and ultra-premium brands showed the most growth. Ultra-premium brands jumped 11.9%, while premiums were up 4.4%. Value brands were down 1.8%.
So, let’s break down premiumization by subcategory. Tequila showed highly impressive sales growth (35.3%) when it came to the ultra-premium offering, followed closely by rum (32%). Bourbon was the next highest, up 15%, while queen vodka grew 14.5%. The only one to experience any growth in the value segment was prepared cocktails, with 8.5% growth.
Flavored spirits have been huge in recent years in part, it can be argued, because of the thriving cocktail culture. As a category, flavored spirits grew 3% last year, while flavored tequila sales trumped other flavored spirits categories by an overwhelming amount, a whopping 564%. The next in line was flavored vodka, showing a sales increase of 5.4%. The flavor showing the most sales growth overall was lime/other citrus, up 82.2%, followed by cherry/black cherry (60.6%). Grapefruit and grape show big promise as “emerging” flavors.
“Flavored spirits—duplication and innovation - will continue to be introduced across multiple segments, but with low productivity for the “me too’s” as flavors increasingly saturate the market, and a difficult road to an increasingly crowded shelf, especially for the smaller manufacturers with narrower portfolios,” said Nielsen.
Now for the fun stuff: pricing. As compared to a year ago, bourbon showed the largest average price increase per 750ML, up 4%, followed by tequila at 3.8%, vodka at 3% and with 2.7%. As a whole, the spirits industry’s average price increased 2.6%.
posted at 12:56 PM
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