Euromonitor’s key spirits trends for 2014By Amy Hopkins
Using its extensive wealth of data and expertise, consumer market research company Euromonitor International identifies eight key spirits trends for 2014.
The recent report, by Spiros Malandrakis, senior alcoholic drinks analyst at Euromonitor, highlights key trends for the whisky, rum, Tequila, Cognac and liqueurs categories, among others.
As a turbulent spirits market made waves in 2013, producers have been forecast to adopt a number of tactics to adjust to the global changes to the market.
While whisky’s verification schemes and billion pound investments will allow the category to retain the spotlight in the months to come, Tequila will venture on new territory in China and vodka will have to seek innovation following its flavoured fall-out in the States.
Cognac has also been forecast to continue to battle its decline in China, while rum will maintain a “healthy trajectory” around the world and gin will endeavour to sustain its hipster appeal.
Click through the following pages to see Spiros Malandrakis’s predicted key spirits trends for 2014.
The Spirits Business also set out to discover the top 10 spirits trends set to dominate in 2014, with the help of an established line-up of industry insiders.
Whiskies: beating the dram
In particular, he highlights verification schemes, such as the Spirits Drinks Verification Scheme introduced by the UK Government in January this year, which was launched to provide more reassurance to consumers about the authenticity of GI protected spirits they buy.
Hefty investments in increasing whisky capacity are also noted. Diageo is currently progressing with its £1 billion to increase Scotch whisky production over five years, having launched the initiative in June 2012. As part of the investment, the UK drinks company announced plans for a £30 million expansion of its Clynelish Distillery in January, completed a £14 million expansion of its Linkwood and Mannochmore malt whisky distilleries in November last year, while work is currently progressing on an £18m expansion of the Mortlach distillery.
The “partial breakaway from the age statement taboo” also features on Euromonitor’s list, as producers such as The Macallan focus on producing younger Scotch with a renewed focus on barrel types due to limited stocks of aged liquid.
Malandrakis adds that “flavour sophistication experiments”, “overproof extensions”, “cocktail forward positioning” and “Japanese varietals” will also be key trends in the whisky segment in 2014.
Tequila/Mescal: entering the dragon
“With the gates of China now finally open following legislative amendments that allow 100% blue agave varietals to be legally sold in the country, super premium tequilas will extend their seemingly unstoppable march beyond Western metropolitan centres,” said Malandrakis.
High-end Tequila Patron has been identified as a brand poised to “lead the race” due to its established position in the luxury segment, followed by Diageo’s recently acquired Deleon Tequila and Don Julio.
However, lower-end expressions are predicted to continue to experiment with flavours, while an agave shortage could “exert extreme pressure on the segment’s profitability and medium-term viability”.
Bartenders are expected to continue to experiment with Mezcal – a spirit which has begun to “carve itself a niche in the market”.
Vodka: a flavour of saturation
Euromonitor, as well as some other spirits analysts, have found that the phenomenally rapid rise of flavoured vodka, which gave birth to fantastical flavours such as bacon, salmon and cake, may now be stalling in its key market – the US.
“With pre-prohibition classics monopolising the upmarket cocktail arena across the West and additional rises planned for minimum prices in the already moribund Russian market, headwinds for this most ubiquitous of spirits are expected to be severe in the short term,” said Malandrakis.
However, he notes that the spirit could be salvaged by its unrivalled mixability, while flavours indicative of its provenance and Eastern European heritage could also sustain short-term interest.
Liqueurs: going where no spirit has gone before
“Premium offerings will also increasingly make an impact, both as cocktail ingredients and exotic local specialties, capitalising on the millennial generation’s adventurous palates and their pursuit of unique narratives,” said Malandrakis.
Cognac: the urgency of diversification
As China’s campaign of austerity continues to cast a shadow over the houses of major Cognac producers, “a sea of change is already underway”.
Malandrakis notes that “a shift in positioning away from bling associations and into craftsmanship-driven propositions will signal the coming of age for the premium end of the category in China.”
VS variants could also push sales of Cognac by appealing to the middle classes with western aspirations.
For western markets, the spirit has been forecast to find an enhanced positioning in the mixology sector, deconstructing the category’s traditionalist connotations and gifting use.
Rum: dark spice
Two brands favoured by the millenials – Kraken and Sailor Jerry – will “spearhead rum’s Western mainstream aspirations”.
Meanwhile, Malandrakis claims that “premiumisation will continue unabated as aged expressions will increasingly jostle with whiskies for a share of mind and wallet in metropolitan centres across developed and emerging nations alike.”
Gin: from lane to palace
“Hipster ambassadors”, “adventurous mixologists” and “a unique, surreal and edgy brand narrative” will boost the spirit’s trajectory, supported by a wave of new craft distillers which will become the “category’s flag bearers”.
Malandrakis added that concerns over the UK’s juniper crisis are “probably exaggerated but should be watched closely for the potential to derail the current boom”, while “diversification will be essential in escaping the potential for macroeconomic headwinds in the category’s limited number of core markets”.
Other Spirits: niche appeal
With a “romanticised view” of the prohibition era still prevalent in the US, which also includes the production processes of such vilified products alongside a “uniquely controversial narrative”, premium versions of moonshine have crept into the mainstream.
“Centerview Capital’s recent investment in Ole Smokey Tennessee Moonshine and Short Mountain Distillery’s recreation of a 100-year-old bootlegger’s recipe are merely the first signs of the trend to come,” said Malandrakis.