Germany key to Europe’s flagging spirits volumes

10th April, 2013 by Chris Mercer

Jim Beam Hot-punch

Jim Beam Hot Punch is one RTD innovation driving sales for Beam Global in Germany

Bourbon booming

Germany is the world’s number three Bourbon market after the US and Australia, and Jus believes the country “is on track to become Jim Beam’s third million-case market in 2013”. Not bad for a brand founded by a German immigrant. Jus highlights “significant share gains” and double-digit growth for Jim Beam, driven by the original Jim Beam White and a series of innovations such as Red Stag, Devil’s Cut, Jim Beam Honey, (RTD line) Jim Beam Lime Splash and the recently launched Jim Beam Hot Punch.

Brown-Forman-backed Jack Daniel’s is also salivating at Germany’s dynamics, after separating from Bacardi in the country in 2010. “For many years, although one of our largest volume markets, Jack Daniel’s growth was relatively small,” says John Hayes, senior vice president at Brown-Forman (B-F) and managing director of Jack Daniel’s. “Since Brown-Forman established our own company, the growth of Jack Daniel’s has accelerated and we remain very optimistic.”

The group estimates volume depletions – sales from distributors to retailers – on Jack Daniel’s Tennessee Whiskey and Jack Daniel’s & Cola RTD were growing in strong double digits through December 2012. With upwards of 80% of American whiskey sales in Germany currently JD or Jim Beam, watch out for growing diversity as this category develops.

Irish future

There is already evidence that smaller sized foreign distillers can slip between the cracks of industry juggernauts to build scale in Germany. Stuart Nickerson, managing director of Scotland’s Glenglassaugh Distillery Co, says: “Since we started selling our whisky in 2009, Germany has been our largest export market in each year and continues in the number one position to this day with sales increasing year on year.”

Glenglassaugh’s success is related to broad-based growth for Scotch whisky in Germany. Scotch exports to the country rose by 4.5% in the first half of 2012, hitting £66m and nearly displacing South Korea as the spirit’s sixth largest export market, according to Scotch Whisky Association figures.

Meanwhile, never one to miss a party, Irish whiskey is one of the fastest rising spirits segments in Germany. Unusually, Jameson plays second fiddle to Tullamore Dew. “They sell three or four times more than us and we recognise that they’ve done a very, very good job,” says Simon Fay, international brand development director at Jameson’s owner; Irish Distillers.

Yet, within Irish whiskey’s growth trajectory, Fay says: “Jameson is one of the strongest drivers, with monthly annual trend (MAT) data to the end of November showing us up 32%”. Does Jameson have designs on Tullamore Dew’s crown? Fay is cool on the idea. “What we won’t do is compete from a price perspective. If they wanted to get into a market share game, we won’t do that.”

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