There's Proof and Profit In New
& On-going Industry Inclinations

It's Easy to identify a new bend in the flow of the spirits industry once it has occurred. The difficult part of predicting the future of this billion-dollar baby is the fact that a trend is not a trend until it is a trend.
    A meaningful forecast is all about knowing which of the anomalies and departures in the day-to day march of the trade reflect new and emerging opportunities and directions worth noting and which ones simply glitter like fool’s gold from a distance.
    It’s impossible to predict the actual future. Yet there is much to be gleaned of tomorrow’s likely market conditions by simply studying a snapshot of today’s on-premise beverage and spirits world, and then using a bit of creative and entrepreneurial imagination. Within this global sphere, there are a number of liquid developments to watch for their ability to influence the big picture of sales and profitability.
    Here are seven trends to watch in 2006 –– representing likely future sales scenarios derived from industry experts, actual brand case examples and news and feature reports extracted from Nightclub & Bar magazine.

1. New Age of the Cocktail
    The New Age of the Cocktail continues in full swing, bringing with it revenues unheard of in times past for bar, club and lounge owners. The unspoken question for any owner or operator with an eye on the future is how long will it last? The boom times that have seen the average price of and profit on a cocktail increase many fold likely will continue for at least another decade. As Bacardi U.S.A. Past-President and CEO Eduardo Sardiña told spirits wholesalers in a convention keynote address last year, the number of patrons in their prime clubing years won’t peak until around 2015.

2. Drinking Better, Not More
    Virtually across all spirits categories, patrons are drinking better spirits than ever before, and doing so with more moderation. And this trend is a sure bet to continue. “Our statistics show that people are drinking better, and the rate of consumption is slack,” says the Distilled Spirits Council of the United States’ Shawn Starbuck Kelley. “You can see it in the spirits statistics. Vodka, rum, tequila and gin are where spirits and super-premiums are growing the most.”

3. The Price of Flavored Spirits  Shall Rise Again
    Flavored vodkas have lifted the category in the way that an incoming tide lifts all boats. That is to say, the segment is awash with launches driving up the volume and driving down the price point for the subcategory.  No foul there. Yet with spirits companies flush with revenue and the market for flavored vodkas saturated with brands and flavors, it was perhaps just a matter of time before someone launched a super-premium vodka designed to jerk the profit back in the pour for flavored cocktails.  That’s precisely the formula behind Moet Hennessy’s launch of Belvedere Cytrus and Belvedere Pomarancza –– created at a cost of $2 million to tempt patrons away from value and premium brands.

4. Capital 'G' in Global
    The spirits industry is one of the most global industries of them all, but there is a new dynamic at work that is putting a capital “G” in global spirits sales. Namely, it’s the tendency of global travelers to impact sales and new launches back home based on spirits and cocktails they enjoyed on vacations and holidays. 
One example is Aperol, the Italian orange liqueur recently launched in the United States by popular demand of tourists returning from visits to Italy, where Aperol is the certified No. 1 drink and cocktail for 3.5 million Italians daily. This cosmopolitan trend cuts both ways, says Kelley of DISCUS.
    “It’s also true with American spirits abroad,” she says. “Whiskies and bourbons are becoming very popular in Asia and Eastern Europe and the UK.”

5. Hedge Your Bets
    The vodka category is far and away the leading spirit in terms of global sales. But, Kentucky bourbons and Tennessee whiskies are gaining respect worldwide. With small-batch, super-premium launches from most if not all of the respected American bourbon and whiskey distilleries, from Jim Beam to Jack Daniel’s to Evan Williams to Wild Turkey, this amber wave of spirits is destined to swell even more in the coming year. The same also goes for Irish whiskies such as Jameson and Knappogue Castle.

6. Getting Fresh and Muddling Through
    When it comes to using fresh, authentic ingredients and labor-intensive methods such as muddling to mix cocktails, the exception is fast becoming the rule in bar, club and lounge settings.
    “Bars are infusing vodkas and rums with different ingredients,” says DISCUS’ Shawn Kelley. “Muddling and infusions are very popular in bars now. Bartenders are stressing this, and it is becoming more widespread nationally. Local bars are using fresh mint as opposed to some sort of artificially flavored ingredient.”
    Frïs Vodka is one example of a premium brand having success with its fusion program launched last year — and look for others to follow suit.

7. Everybody's A Wise Guy
    Consumers are more knowledgeable  about the spirits and cocktails they choose to consume than ever before. As a result of this, bartenders and bar managers must have a higher education about the products they serve.
    “The whole educational progress for bartenders is really coming to the forefront,” Kelley says. “You have bar schools opening, such as Beverage Alcohol Resource LLC, a New York City institute for the appreciation, understanding and service of adult beverages (beveragealcoholresource.com).
    Also, restaurants are doing scotch and bourbon tastings to educate consumers, as well.”     NCB