The liqueur story has long been one of back-bar obscurity, but now brands are finally beginning to step out of the shadows by tapping into the transformative power of the serve, writes Claire Dodd.
Despite the huge global cocktail renaissance, the category has somehow been left behind
*This article was first published in the August 2016 edition of The Spirits Business
“Liqueurs will always be the bridesmaid, never the bride,” says John Parsons, Bols brand ambassador. “They are that supporting cast to whatever the dominant spirit in a drink is. Liqueurs will always play second fiddle.”
Poor old liqueurs. A bit uncool? A little dated? Ignored by bartenders? Or just a tad reminiscent, for many consumers, of the strong stuff Aunt Marjorie reaches for every Christmas eve?
Outpaced by the dynamism seen elsewhere in the spirits market in recent years, it’s fair to say the liqueur category at-large has suffered something of an image problem if you will. And it’s a problem that’s stifling sales.
Crunching the numbers
Despite the huge global cocktail renaissance – of which, on paper, liqueurs should play an integral part – the category has somehow been left behind. Data from The Spirits Business’s own Liqueur Brand Champions report found that among the world’s million case-plus selling brands, only one achieved growth in 2015.
While the top global brands – Malibu, De Kuyper, Kahlúa, Amarula, Lubelska, Zoladkowa Gorzka and Cointreau – all lost volume (with Stock Spirits-owned Lubelska’s terminal decline continuing and Pernod Ricard’s Kahlúa achieving its lowest volumes since 2010), Diageo’s Baileys Irish cream was the only brand back in growth.
And while global liqueur volumes are in growth, according to data from Euromonitor, they claim a relatively small piece of the overall spirits pie at just 4.5% of total volumes. Cream-based liqueurs in particular are in global decline, led by a slump in US sales.
But why? Customer confusion is one factor. With a huge and disparate array of products on offer, and the lack of a distinct bar call in some areas, many consumers in developed drinks markets have simply moved on to more innovative categories that shout a little louder.
And though the collective consumer sweet-tooth has hitherto worked in the category’s favour, the ‘war on sugar’ has drinkers seeking out low-calorie alternatives and ‘real’ flavours. More on this later.
“Liqueurs is a huge category that in recent years has not had the level of interest or innovation that other categories, in particular gin, have seen,” says Ceri Lewis, product controller at Matthew Clark.
While some brands, such as Aperol, have been backed by weighty marketing campaigns and NPD, many brands have simply not been so well cared for. Make no mistake about it, we’re now living in a visual age, and image is everything. Having cool, modern packaging is important. And though cocktail photos or bottle shots of ‘cool’ booze brands are the new food porn of social media channels, liqueurs are being left out.
A recent report by Havas Media Group and Evolve Media found that knowledge of spirits is becoming social currency among millennials, who will order name brands to impress their peers.
And mainstream will no longer do: 28% said they ordered a premium brand to impress their peers, compared with 20% of generation Y and just 11% of baby boomers. In short, they’re visual creatures, looking for photogenic, high-quality products to share over social media.
This is something Diageo has realised and embraced. Baileys’ growth has stemmed from an image overhaul, with a global relaunch, new packaging and a “rebooted” innovation strategy.
In the US, the brand has its own Instagram account filled with recipe ideas and lifestyle imagery. Other established brands are following suit. Both Marie Brizard and Tia Maria are set for a redesign this year, according to their brand owners.
Knowledge of spirits is becoming social currency among millennials
But a redesign isn’t enough. Liqueur brands are having to tap into other mega-trends to grow and evolve. “For Tia Maria this is a moment of total revolution,” says Fabio Boldini, general manager at Illva Saronno. “Changes involve a whole new brand strategy harnessing the global coffee trend. Tia Maria will lead a new coffee cocktail culture, supported by a series of communication tools (social media, advertising, PR, digital influencers) which will involve all coffee lovers.”
Rediscovering tradition is another route being followed to breathe new/old life into brands. Bols released Parfait Amour, a floral liqueur traditionally served in the Netherlands to celebrate either an engagement or marriage, in the US in January. Sazerac also recently revived anise liqueur Legendre Ojen to satisfy demand in the New Orleans cocktail scene. Regional flavours and editions are one way brands are coping with fragmented demand.
And though we’re seeing flavour fatigue in other categories, liqueurs are shedding their indulgent, calorific image by shifting to ‘wellbeing’-centric flavours. Pernod Ricard added a matcha green tea variant to its coffee-liqueur Kahlúa, in February, while Diageo went gluten and dairy-free in June with the exceptionally on-trend almond milk Baileys Almande.
However, the mega-trend liqueur brands might find it a little harder to get used to demand for moderation. “Go back 10 years and it was all about the party,” says Craig Chapman, marketing manager for Luxardo’s UK distributor, Cellar Trends. “And millennials, their drinking habits have changed. They’re not going to the bar drinking shots, they’re going to the gym on a Friday night. The key drivers for them are health, wellbeing and appearance.”
So how does a category based around sugar cope with that? Bols is tackling the war on sugar and issues of accessibility in one fell swoop, gradually replacing ‘Crème de’ descriptors with simple flavours such as blackcurrant.
“When you have those designations on there, there’s an increase in sugar level to meet regulations,” says Bols’ Parsons. “We’ve abandoned that in quite a few markets now and we’re rolling it out where demand dictates. It helps from a shopper point-of-view, in that you can easily see the flavour. It’s a loaded decision that actually goes against us in some ways, as a bar looking for a crème de mure may think we don’t have one. But Bols is thinking much more long-term and acknowledging the mentality on sugar, and is looking to produce liqueurs that are more reflective of their natural flavour, which is not quite as sweet. Blackberries are not sickly sweet, they’re sharp.”
That’s a notable shift and a sign of where other brands may need to head to stay relevant, even to mainstream consumers.
However, brands centred on late-night occasions are having to rethink too. There’s been a move away from shooters in some markets, notably the UK, and brands are having to act to stem long-term declines.
Looking to long drinks
Cellar Trends has achieved growth this year with Luxardo Sambuca, by focusing on winning back share from competitors, as well as its range of more ‘traditional’ products, such as Luxardo Limoncello and Maraschino. It is currently trialling an Italian apricot liqueur from the brand to determine whether there is UK demand.
Meanwhile, other shooter brands are looking to long drinks. And if there’s anything the success of Aperol has taught us, it’s that nailing a signature serve can be vital when it comes to reaching new consumers. Matthew Clark’s Lewis says: “If a brand can become inextricably linked with a popular cocktail then it will thrive.”
One brand having a go at this is Jägermeister. Mast-Jägermeister UK marketing director, Nicole Goodwin, says it has seen 5.9% growth in both the UK on-trade and off-trade over the year to April 16 thanks to a flurry of marketing campaigns, new serves and launches.
It has now put £300,000 behind marketing its Root56 long serve this summer, which sees the liqueur served over ice with ginger beer, a wedge of lime and a slice of cucumber. Fast-casual chain Gourmet Burger Kitchen has also added a Jäger milkshake to its menu. Goodwin says she hopes Root56 will become “a staple summer serve”.
The key drivers for millennials are health, wellbeing and appearance
The transformative power of the serve is something Boldini attests to as well, saying Disaronno Terrace events and Sour Hour have helped transform the brand into a bar call again among target consumers.
“We can’t speak about liqueurs as a category like we do with gin and vodka,” he says. “The liqueur category doesn’t exist but rather single brands do. It isn’t the category which has image problems, but rather the single brands. With Disaronno we have cracked the problem by renewing the brand image and bringing it closer to consumer needs through consistency and our signature cocktail strategies.” Partnerships with high-profile fashion houses Versace and Roberto Cavalli haven’t hurt either.
So what’s next in this brave new fragmented market? Craft brands, led by the likes of Kamm & Sons, are undoubtedly starting to make their mark, thriving as distinct, recognisable, standalone brands. Bitter flavours and apéritifs continue to rule, as the continued thirst for Aperol testifies to. And unusual distillates that imply ‘naturalness’, such as the liqueur range from The Sweet Potato Spirit Company or ‘earthy-tasting’ Wenneker 24 Carrot, are providing a talking point, though their longevity has yet to be proved. And of course, brands that create serves that are all about them will garner the most consumer attention.
One thing’s for sure, to be successful in 2016 and beyond, liqueur brands need to put themselves to the front of the back-bar and stop playing second fiddle.